Date of Order: August 16, 2023
Case Number: ITA 2818/DEL/2022
Assessment Year: 2011-12
This case involves an appeal filed by Poonam, Ghaziabad, challenging the order of the ITO, Ward-2(1), Ghaziabad, which imposed a penalty under Section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2011-12.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘F’, consisting of Vice-President Shri Saktijit Dey and Accountant Member Shri M Balaganesh, reviewed the case. The appellant had purchased immovable property worth Rs.75,84,000 in the assessment year 2011-12 but had not filed any return of income. Consequently, the Assessing Officer (AO) initiated proceedings under Section 147 of the Act by issuing a notice under Section 148. Due to non-compliance from the appellant, the AO completed the assessment ex parte under Section 144, adding back the amount of Rs.75,84,000 as unexplained investment.
This appeal was against the imposition of penalty under Section 271(1)(c) of the Act. Given the remand of the quantum proceedings, the tribunal set aside the penalty order as well, directing the AO to reconsider penalty initiation based on the outcome of the reassessed quantum proceedings.
The tribunal observed that the appellant did not participate in the assessment proceedings, resulting in an ex parte assessment based on best judgment. The appellant contended that the notices under Sections 148 and 142(1) were not received and that the actual investment in the property was Rs.34,00,000, as she was a co-owner. The Commissioner (Appeals) dismissed the appeal for non-prosecution, which lacked a detailed, reasoned order.
Upon review, the tribunal decided to remand the case back to the AO for de novo adjudication, providing the appellant a fresh opportunity to present her case and evidence.
The ITAT allowed both appeals for statistical purposes, emphasizing procedural fairness and the right to a reasoned decision. The AO was directed to provide a reasonable opportunity to the appellant for fresh adjudication of the case.
This case underscores the importance of procedural compliance and fair opportunity in tax proceedings. The tribunal’s decision to remand the case highlights the need for detailed and reasoned orders from appellate authorities and ensures that genuine mistakes or non-receipt of notices do not unduly penalize taxpayers.
Order pronounced in the open court on August 16, 2023.
Vice-President: Shri Saktijit Dey
Accountant Member: Shri M Balaganesh
Assessee Representation: None
Department Representation: Shri Vivek Vardhan, Sr. DR
Appeal of Poonam, Ghaziabad Against ITO, Ward-2(1), Ghaziabad for Rejection of Penalty Proceedings
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