SUJEET GUPTA,BAREILLY vs. ITO WARD-2(2), BAREILLY NEW

Per G. D. Padmahshali, AM; This present appeal has been instituted by the aggrieved assessee u/s 253(1) of the Income Tax Act, 1961 [‘Act’ hereinafter], assailing the order of the National Faceless Appeal Centre, Delhi [Now onwards ‘NFAC/CIT(A)’] passed u/s 250 of the Act dt. 07/02/2024, which confirmed the order of penalty passed u/s 270A of the Act for the assessment year 2018-19 [Now onwards ‘AY’].

Sujeet Gupta Vs ITO Ward-2(2)

AY:2018-19 2. The case was called twice; none appeared at the behest of the assessee. On the primary briefing from the Ld. DR Mr Sharma, we deem it fit to advance ex-parte u/r 24 of the ITAT-Rules, 1963 and adjudicate the ex-parte dismissal of appeal by the Ld. NFAC.

In response to aforestated notice, the assessee filed his ITR declaring 3.2 taxable income at ₹29,22,030/- consisting of business income, long term capital gain and income from other sources etc. Subjecting to scrutiny assessment u/s 143(3) of the Act was completed accepting the returned income.

Pin pointing assessee’s failure to file original ITR & non-payment of 3.3 tax within stipulated due date of filing u/s 139(1) of the Act, the Ld. AO ITAT-Lucknow Page 2 of 6

Sujeet Gupta Vs ITO Ward-2(2)

AY:2018-19 initiated penalty proceedings u/s 270A of the Act for non-reporting of income holding as arising out of misreporting u/s 270A(9) of the Act.

In response thereto the assessee has e-filed Form-68 dt. 29/04/2023 u/s 3.4 270AA(2) of the Act seeking immunity from imposition of penalty. The Ld. AO however rejected the assessee’s application holding the case of the assessee falling outside the ambit of immunization available u/s 270AA of the Act owning to misreporting of income by the assessee.

The Ld. CIT(A) upheld the order of penalty & rejection to grant 3.5 immunity drawing out the conclusion as the incidence of default liable for penalty u/s 270A of the Act. Aggrieved by the order of the Ld. CIT(A) the assessee came in present appeal on as many of twelve grounds which are argumentative in nature involving repetitive narration of facts and contentions etc. As a result, for the sake of concision following rule 8 of ITAT-Rules, 1963 it is decided to avoid reproducing thereof. However, for the purpose of adjudication it would suffice to mention that the grounds of appeal collectively are seeking justice for not providing adequate opportunity of heard by the Ld AO and alleging the under-reporting of income cannot said to be misreporting of income.

Sujeet Gupta Vs ITO Ward-2(2)

AY:2018-19 raises core issue craving addressal as to ‘whether the Ld AO was right in rejecting the application for immunization filed by assessee u/s 270AA(2) of the Act without providing him the opportunity of being heard u/s 270AA(4) of the Act?’

Sujeet Gupta Vs ITO Ward-2(2)

AY:2018-19 the Hon’ble Apex court described importance of providing bonafied opportunity to distressing party by issuance of notices and need to note down reasons before passing of order by quasi-judicial authorities as under; ‚The principle of natural justice has twin ingredients; firstly, the person who is likely to be adversely affected by the action of the authorities should be given notice to show cause thereof and granted an opportunity of hearing and secondly, the orders so passed by the authorities should give reason for arriving at any conclusion showing proper application of mind. Violation of either of them could in the given facts and circumstances of the case, vitiate the order itself. Such rule being applicable to the administrative authorities certainly requires that the judgment of the Court should meet with this requirement with higher degree of satisfaction. The order of an administrative authority may not provide reasons like a judgment but the order must be supported by the reasons of rationality. The distinction between passing of an order by an administrative or quasi-judicial authority has practically extinguished and both are required to pass reasoned orders.‛ (Emphasis supplied) 6. Careful consideration of above decision leads to a prima-facie conclusion that it is spectacularly linear direction of the Hon’ble Apex Court in asserting the importance of serving notices to the concerned person adequately informing the rationale for the purpose of issuance of notice and aptly giving sufficient effective opportunity to present case in due course. Further the quasi-judicial authorities are assigned the responsibility to pass an order under the provisions of law only after observing the principle of audi alteram partem and deducing the reasons invoking the course of actions as laid down in those provisions adversely affecting the concerned person. We are of the view that all other grounds of appeal alleging the imposition of penalty u/s 270A of the Act as relied upon by the assessee are ITAT-Lucknow Page 5 of 6 secondary to the primordial issue of not being conferred with the statutory right of opportunity of being heard before passing the penalty order under the Act. While dealing with the application of provisions of the Act, the intensions of the lawmaker must be taken into consideration wherein granting the real, reasonable and effective opportunity to concerned person needs to be acknowledged and any act of side-stepping tantamounts to deprivation of the person’s right to contest findings/observation of Ld. AO which in result leads to deprivation of constitutional rights of natural justice in limine. In view of the aforestated observation & judicial precedents, the order of penalty culminated in-violation of principle of natural justice and which perfunctory confirmed in appeal cannot continue to stand. Therefore, we set-aside the impugned order & remand the file to the Ld. AO with a direction to re-adjudicate application for immunity after giving reasonable opportunity to assessee and decide the same in accordance with law.

-S/d- -S/d- SUBHASH MALGURIA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER ददनाांक / Dated : 19th day of September, 2024 आदेश की प्रनिनलनप अग्रेनषि / Copy of the Order forwarded to :

1. 1. अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent.