This appeal, filed by Sanjeev Gupta, challenges the penalty order by the National Faceless Appeal Centre (NFAC), Delhi, dated August 23, 2022, pertaining to Assessment Year 2017-18. The appellant faced penalties under Section 271D of the Income-tax Act, 1961, for violation of Section 269SS, involving cash transactions over the permissible limit during the sale of a property.
The primary issues raised in the appeal were centered around the lack of a fair hearing due to the COVID-19 pandemic and the procedural improprieties in how the penalty was levied. The appellant argued that the CIT (A) had passed the order without giving him an opportunity to be heard, citing health issues due to the pandemic as a major hindrance.
The hearing, initially delayed, finally proceeded on June 22, 2023. During the proceedings, both sides presented their arguments. The appellant’s lawyer contended that the CIT (A)’s decision was procedurally flawed and disregarded the principles of natural justice by not allowing the appellant a fair hearing.
The Tribunal’s order, pronounced by Shamim Yahya, Accountant Member, and Anubhav Sharma, Judicial Member, on July 10, 2023, addressed these concerns. It noted that the CIT (A) should not have dismissed the appeal for non-prosecution without considering the merits of the case. The Tribunal remanded the matter back to the CIT (A), directing a speaking order after giving the appellant an opportunity to be heard.
The decision underscores the importance of ensuring that all parties in a tax appeal receive a fair hearing, particularly under extraordinary circumstances like a pandemic. It also highlights the procedural obligations of tax authorities to adhere to the principles of natural justice.
The case of Sanjeev Gupta vs. ITO, Ward 29(8), New Delhi, serves as a significant precedent for handling cases where procedural lapses occur due to unforeseen circumstances. The final decision, allowing the appeal for statistical purposes, offers a deeper insight into the judicial processes underpinning tax law enforcement in India.
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