Ahmed Altaf Sayeed Vs ITO (ITAT, Hyderabad Bench)
Wrong Sanction Sinks Reassessment, Penalty Goes Down With the Ship: Hyderabad ITAT Quashes Penalty u/s 270A Where Notice u/s 148 Lacked Approval of Specified Authority u/s 151
The controversy
The Hyderabad Bench of the ITAT dealt with an important question concerning whether an assessee, in an appeal against a penalty order u/s 270A, can challenge the legality of the underlying reassessment proceedings. The Tribunal held that where the reassessment order constitutes the very foundation of the penalty, its validity can be examined even in collateral penalty proceedings. Finding that the notice u/s 148 had been issued with the approval of an incompetent authority, the Tribunal quashed both the reassessment order & the consequential penalty.
The assessee, Shri Ahmed Altaf Sayeed, had filed the appeal against the order of the CIT(A) confirming a penalty of ₹2,13,664 u/s 270A for AY 2018-19.
Delay caused by professional lapse condoned
There was a delay of 110 days in filing the appeal before the Tribunal. The assessee explained that he had entrusted the matter to his Chartered Accountant before travelling to Saudi Arabia for pilgrimage. He genuinely believed that the appeal would be filed within the prescribed period. However, owing to pressure of audit work & return filing, the Chartered Accountant inadvertently lost sight of the limitation date.
