The case ITA 1582/DEL/2020 was filed by MD Metro Transit Pvt Ltd, New Delhi against ITO WARD – 16(4), New Delhi concerning the assessment year 2014-15. The appellant, MD Metro Transit Pvt Ltd, faced an ex-parte assessment order dated 27/12/2016, which assessed the company’s income at Rs. 96,35,040/- as opposed to the returned income of Rs. 27,89,360/-. The assessment was conducted without the appellant’s presence.
The appeal was initially dismissed by the Commissioner of Income Tax (Appeals) [CIT(A)] on 29/11/2019, due to a delay in filing. The CIT(A) did not examine the merits of the case and dismissed it solely on the grounds of the late filing. Subsequently, the appellant filed the current appeal before the Income Tax Appellate Tribunal (ITAT) under ITA No. 1582/DEL/2020.
Additionally, proceedings under section 271(1)(c) of the Income Tax Act were initiated, resulting in a penalty of Rs. 21,12,981/- levied by the Assessing Officer (AO) on 28/06/2017. This penalty was also appealed and dismissed by the CIT(A) on 22/02/2019 without examining the merits, as the CIT(A) observed that the appellant was not pursuing the appeal actively.
At the hearing, the appellant’s representative, Mr. Sachin Jain (CA), argued that the assessment order dated 27/12/2016 was not served to the appellant due to it being sent to an incorrect address. The appellant obtained a certified copy of the assessment order later, which delayed the filing of the appeal. It was contended that the delay should be condoned as the appeal was filed within the prescribed time limit once the correct address was updated and the order was received.
The appellant also argued that under section 250(6) of the Income Tax Act, the CIT(A) is required to pass appellate orders stating the points for determination and the reasons for the decision. The CIT(A) failed to do this, and thus the orders dated 29/11/2019 and 22/02/2019 should be set aside.
The tribunal, comprising Shri Kul Bharat (Judicial Member) and Shri Anadee Nath Misshra (Accountant Member), agreed with the appellant’s arguments. The tribunal noted that both parties agreed on the necessity of setting aside the CIT(A)’s orders. Consequently, the tribunal set aside the appellate orders dated 29/11/2019 and 22/02/2019 and directed the Assessing Officer to pass a fresh assessment order after providing reasonable opportunity to the appellant.
In light of the foregoing, the tribunal directed that the quantum additions made in the assessment order should be re-examined. Consequently, the penalty imposed under section 271(1)(c) of the Income Tax Act was also set aside. The tribunal clarified that the Assessing Officer could initiate penalty proceedings again if deemed fit after the fresh assessment.
The appeal under ITA No. 1581/DEL/2020 was treated as partly allowed, and the appeal under ITA No. 1582/DEL/2020 was treated as allowed.
This order was pronounced in the open court on 07/02/2023, in the presence of representatives of both sides.
Signed:
(KUL BHARAT)
JUDICIAL MEMBER
(ANADEE NATH MISSHRA)
ACCOUNTANT MEMBER
Dated: 07/02/2023
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