Savera Construction Co. Vs ACIT (ITAT Mumbai)
Mumbai ITAT Remands Assessment and Penalty Appeals Where Assessee Claimed Income Was Already Offered Under a Different PAN
The Mumbai ITAT set aside the ex parte appellate orders confirming both the quantum addition and the penalty under section 271(1)(c), holding that the assessee’s claim required proper factual verification. The assessment had been reopened on the basis of information that the assessee had sold an immovable property for ₹67.25 lakh, and, in the absence of compliance, the Assessing Officer completed the assessment ex parte by taxing the entire sale consideration as short-term capital gains and subsequently levied penalty for concealment. Before the Tribunal, the assessee contended that the disputed income had already been disclosed in a return filed under a different PAN, as the PAN used for the impugned assessment had earlier been surrendered. Observing that neither the Assessing Officer nor the first appellate authority had examined this crucial contention and that there was no clarity whether a reasonable opportunity of hearing had been granted before disposal of the appeals, the Tribunal restored both the quantum and penalty matters to the file of the first appellate authority for de novo adjudication after providing the assessee with an adequate opportunity to present its case.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Captioned appeals by the assessee arise out of two separate orders passed by National Faceless Appeal Centre (‘NFAC’ for short), Delhi for the assessment year (A.Y. for short) 2016-17.
2. ITA No. 2577/Mum/2026 arises out of quantum proceedings, whereas, ITA No. 2580/Mum/2026 is against imposition of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (‘the Act’ for short). The basic grievance of the assessee is against ex parte disposal of the appeals by learned first appellate authority without providing adequate opportunity of being heard.
3. Having considered rival submissions and perused the materials on record, it is noticed that the assessee is a partnership firm. As stated by the Assessing Officer (A.O. for short), the assessee did not file any return of income for the assessment year under dispute. However, based on information received in the INSIGHT portal of the department, the A.O. found that in the year under consideration the assessee had sold an immovable property for a consideration of Rs.67,25,000/-. Based on such information, the A.O. reopened the assessment u/s. 147 of the Act. As observed by A.O., though various statutory notices were issued to the assessee from time to time, however, the assessee failed to comply even to a single notice. Thus, ultimately, the A.O. proceeded to complete the assessment ex parte to the best of his judgement. While doing so, he added back the alleged sale consideration received of Rs.67,25,000/- as short term capital gain. On completion of assessment, the A.O. also initiated proceedings for imposition of penalty u/s. 271(1)(c) of the Act for concealment of income/furnishing of inaccurate particulars of income.
4. Against the assessment order so passed, the assessee preferred an appeal before learned first appellate authority.
5. In the meanwhile, the A.O. also passed an order imposing penalty u/s. 271(1)(c) of the Act.
6. The assessee challenged the order imposing penalty before learned first appellate authority. However, both the appeals were dismissed by learned first appellate authority through decision taken ex parte in absence of assessee. It is the say of the assessee before us that income has been disclosed by the assessee in the return of income filed under a different Permanent Accountant Number (‘PAN’ for short). Whereas, it is submitted, the PAN in which the assessment order has been passed had been surrendered by the assessee earlier. If this be the factual position, in our view, the departmental authorities were not justified in making the addition without providing adequate opportunity of hearing to assessee. In case, the assessee had offered the income, which is subject matter of challenge in the present proceedings, in a return of income filed under a different PAN, such fact is required to be examined without dismissing assessee’s appeal at the threshold. Since, neither of the authorities have factually examined assessee’s claim that the disputed addition has been offered to tax, in a return of income filed using a different PAN, we are inclined to set aside the impugned orders of learned first appellate authority and restore the issues back to his file for de novo adjudication after providing due and reasonable opportunity of being heard to the assessee. The primary reason for restoring the issue to learned first appellate authority is, there is no clarity in the order of learned first appellate authority as to whether the assessee was provided reasonable opportunity of being heard before deciding the appeals. With the aforesaid observations, the impugned orders of learned first appellate authority are set aside with a direction for de novo adjudication of the issues.
7. In the result, both the appeals are allowed for statistical purpose.
Order pronounced in the open court on 27.07.2026
