2022 (5) TMI 1455 - AT - Income Tax

Ex parte order passed by CIT -A - Denial of natural justice - Penalty proceedings u/s 271(1)(b) - addition u/s 69A - failure on part of the assessee comply with the notice u/s 142(1) - HELD THAT - Since the matter had been passed ex parte. Despite of the fact that assessee had sought adjournment for hearing of the above matter but the learned CIT(A) did not consider the adjournment application. Since the order of the CIT(A) is an ex parte order and has lack of reasoning did not pass order on merit and to our opinion same is amount to miscarriage of justice. We set aside this matter back to the file of the CIT(A) subject to the condition that assessee shall deposit a cost of Rs.1000/- with the department within 60 days from the receipt of this order. Thereafter learned CIT(A) shall decide the matter as per law. Appeal filed by the Assessee is allowed for statistical purposes.

Summary

Issues:
1. Appeal against penalty order under s. 271(1)(b) of the Income Tax Act, 1961 concerning AY. 2007-08.
2. Non-compliance with notices u/s. 142(1) leading to penalty imposition.
3. Lack of adequate reasoning in the order of the CIT(A).
4. Ex parte order by the CIT(A) without considering adjournment application.

Analysis:
1. The appeal was filed against the penalty order under s. 271(1)(b) of the Income Tax Act, 1961 for AY. 2007-08. The assessee raised multiple grounds challenging the penalty imposition, alleging errors in law and facts by the CIT(A). The issues raised included lack of consideration of the assessee's reply, absence of legal service of notice, inadequate time provided, and passing a common order for multiple non-compliances. The appellant also contended that the penalty order was time-barred and should be canceled due to reasonable cause and legal inconsistencies. The Tribunal reviewed these contentions in detail.

2. The primary issue revolved around non-compliance with notices u/s. 142(1), leading to the penalty imposition. The AO initiated penalty proceedings during the assessment, as the assessee failed to respond to various notices and furnish required details. The CIT(A) upheld the penalty, emphasizing the non-compliance with the final notice issued on 24.03.2015. The order highlighted that the appellant did not offer any reasons for the non-compliance, leading to the penalty imposition of Rs. 10,000. The Tribunal examined the grounds raised by the appellant against this penalty and found merit in the arguments challenging the lack of specificity in the penalty order.

3. The Tribunal noted that the CIT(A)'s order lacked adequate reasoning, as it was passed ex parte without considering the adjournment application by the assessee. The Tribunal deemed this a miscarriage of justice and set aside the matter back to the CIT(A) for a fresh decision. The Tribunal emphasized the importance of providing a fair opportunity to the assessee for a proper hearing and reasoned decision-making by the appellate authority.

4. In light of the above analysis, the Tribunal allowed the appeal filed by the assessee for statistical purposes, highlighting the procedural lapses in the CIT(A)'s order. The Tribunal directed the assessee to deposit a cost of Rs. 1000 with the department within 60 days for further proceedings. The decision aimed to ensure a fair and just consideration of the matter in accordance with the principles of natural justice and procedural fairness.

This detailed analysis of the issues raised in the appeal against the penalty order under s. 271(1)(b) provides a comprehensive understanding of the legal proceedings and the Tribunal's decision to set aside the CIT(A)'s order for a fresh determination.