Paramjeet Singh vs DCIT Central Circle, Ghaziabad: Penalty Dismissal Due to Defective Appeal for AY 2017-18

Case Overview: Paramjeet Singh vs DCIT Central Circle, Ghaziabad

Case Number: ITA 6222/DEL/2019

Appellant: Paramjeet Singh, New Delhi

Respondent: DCIT Central Circle, Ghaziabad

Assessment Year: 2017-18

Case Filed On: 2019-07-22

Order Type: Final Tribunal Order

Date of Order: 2023-02-16

Pronounced On: 2023-02-16

Introduction

The case of Paramjeet Singh vs DCIT Central Circle, Ghaziabad pertains to an appeal filed by Paramjeet Singh, a resident of New Delhi, challenging the imposition of penalties under section 271(1)(b) of the Income Tax Act, 1961, for the assessment year 2017-18. The penalties were levied due to the non-compliance with notices issued during the assessment proceedings. The appeal was eventually dismissed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘F’, due to defective filing, with an opportunity provided to the appellant to rectify the defect and file fresh appeals.

Background of the Case

A search and seizure operation was conducted on 03.11.2016 under section 132 of the Income Tax Act, 1961, as part of an investigation into the VVIP & SSG group of cases. This operation led to the initiation of assessment proceedings against Paramjeet Singh. During these proceedings, the Assessing Officer (AO) issued a notice under section 142(1) on 26.09.2018, requiring compliance by 04.10.2018. However, the appellant failed to respond to the notice, leading to the issuance of a penalty notice under section 271(1)(b) on 08.10.2018.

The appellant did not comply with the penalty notice either, resulting in the AO imposing a penalty of Rs. 10,000 for each of the seven assessment years from 2011-12 to 2017-18. Paramjeet Singh appealed against these penalties before the Commissioner of Income Tax (Appeals)-IV, Kanpur, who upheld the penalties. Consequently, the appellant filed a consolidated appeal with the ITAT, challenging the penalty orders for all seven years.

The Issue of Defective Appeal

In the appeal filed before the ITAT, Paramjeet Singh raised the issue that the penalties were imposed without granting a reasonable opportunity to present his case. He argued that he had cooperated fully during the assessment proceedings and that the penalties were unjustified. However, the appeal filed was treated as defective because it was a single appeal for multiple assessment years, contrary to the procedural requirements that mandate separate appeals for each assessment year.

The ITAT scheduled hearings for the case on multiple occasions—14.06.2022, 23.11.2022, and 08.02.2023. Despite these opportunities, the appellant did not attend any of the hearings, nor did he rectify the defect by filing separate appeals for each assessment year. As a result, the tribunal was left with no choice but to dismiss the appeal due to the unresolved procedural defect.

Tribunal’s Decision

The ITAT, comprising Accountant Member Shri Shamim Yahya and Judicial Member Ms. Astha Chandra, delivered the order on 16.02.2023. The tribunal noted that the appellant had failed to comply with the procedural requirement of filing separate appeals for each assessment year, despite being given multiple opportunities to do so.

In its order, the tribunal acknowledged the appellant’s right to challenge the penalties but emphasized the importance of adhering to the procedural rules. The tribunal dismissed the appeal as defective but provided a caveat that allowed the appellant to file fresh appeals for each assessment year, thereby preserving the right to contest the penalties on substantive grounds.

Conclusion

The case of Paramjeet Singh vs DCIT Central Circle, Ghaziabad underscores the critical importance of complying with procedural requirements in tax litigation. While the appellant had a substantive grievance regarding the imposition of penalties, the failure to adhere to the procedural rules led to the dismissal of the appeal. The tribunal’s decision reflects a balanced approach, dismissing the defective appeal while providing an opportunity for the appellant to rectify the procedural error and seek redress.

This case serves as a reminder to taxpayers and their representatives to ensure that all procedural requirements are meticulously followed when filing appeals. Adherence to these rules is essential to prevent the dismissal of appeals on technical grounds, which can result in delays and additional legal costs.

Final Tribunal Order

The final order, pronounced on February 16, 2023, by Accountant Member Shri Shamim Yahya and Judicial Member Ms. Astha Chandra, officially dismissed the appeal filed by Paramjeet Singh due to the unresolved defect. The tribunal’s order concluded the case, with the provision for the appellant to file fresh appeals in accordance with the law.

Order Pronounced in the Open Court on 16th February, 2023.

Judicial Member: Astha Chandra

Accountant Member: Shamim Yahya

Paramjeet Singh vs DCIT Central Circle, Ghaziabad: Penalty Dismissal Due to Defective Appeal for AY 2017-18