Income Tax Dispute Appeal Allowed: Savita vs ITO Hapur for AY 2011-12

In a recent judgment by the Income Tax Appellate Tribunal (ITAT) Delhi Bench, the appeal filed by Smt. Savita against the Income Tax Officer (ITO), Ward-(3)(5), Hapur, for the assessment year 2011-12, marked as ITA No. 1127/DEL/2022, was allowed for statistical purposes. This case highlights the procedural aspects and the application of law in the realm of income tax assessments, particularly focusing on the issues surrounding ex parte orders and penalty impositions under Section 271(1)(c) of the Income Tax Act, 1961.

Background and Case Filed

The appellant, Smt. Savita, a resident of 387, Shivaji Nagar, Pilkhuwa, Hapur, Uttar Pradesh, challenged the outcomes of her income tax assessments for the year 2011-12. Based on the information from AIR indicating significant cash deposits made by the appellant in a bank account, the ITO initiated proceedings to reassess her taxable income under Section 147 and subsequently issued notices under Sections 148 and 142(1) of the Act. The non-compliance with these notices led the ITO to complete the assessment ex parte under Section 144, resulting in a determined taxable income significantly higher than the appellant’s declaration.

Appeal to the ITAT

In the course of appealing against both the quantum of income assessed and the penalty imposed under Section 271(1)(c), Smt. Savita’s legal representative argued before the ITAT that the assessment was carried out without affording a reasonable opportunity of being heard, making a strong case for the procedural injustice faced by the appellant. Emphasizing the principle of fairness in judicial and quasi-judicial proceedings, the Tribunal found merit in the appellant’s grievances.

Judgment and Implications

Upon reviewing the submissions and the evidence, the ITAT, led by Shri Saktijit Dey, Judicial Member, decided to set aside the ex parte orders and directed a de novo assessment by the ITO, ensuring that the appellant would be given a fair opportunity to present her case. This restoration also led to the setting aside of the penalty imposed under Section 271(1)(c), with a note that such a penalty could be reconsidered post the fresh assessment.

The case of Savita vs ITO Hapur sheds light on the critical aspects of justice and fairness in the administration of tax laws, serving as a significant precedent for cases where taxpayers face procedural discrepancies. The judgment underlines the importance of providing a fair hearing to the assessees and maintaining the integrity of judicial processes.

Conclusion

This detailed account of ITA No. 1127/DEL/2022 demonstrates the complexities involved in tax litigation and the crucial role of appellate tribunals in ensuring justice. The verdict not only provided relief to Savita but also reaffirmed the values of fairness and due process in the domain of tax administration.

Income Tax Dispute Appeal Allowed: Savita vs ITO Hapur for AY 2011-12