SNG Microns Private Limited Vs National Faceless Assessment Centre (ITAT Kolkata)
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Kolkata has canceled a ₹20,000 penalty imposed on SNG Microns Private Limited by the National Faceless Assessment Centre (NFAC). The penalty, issued under Section 272A(1)(d) of the Income Tax Act, 1961, was deemed unjust by the tribunal, which highlighted issues concerning the proper service of notice and effective communication.
The case stems from an appeal filed by SNG Microns concerning the Assessment Year 2017-18. The appeal challenged an order issued by the Commissioner of Income Tax (Appeals) (CIT(A)) on March 29, 2023. The CIT(A) upheld the penalty following a scrutiny assessment under the Centralized Scrutiny Assessment Scheme (CASS).
SNG Microns argued several grounds in its appeal, including the CIT(A)’s failure to properly consider the service of notices, which they claimed violated the principles of natural justice. The company contended that the CIT(A) had affirmed the penalty without acknowledging that all communications were directed to its consultant, who failed to inform the company about the ongoing proceedings.
The tribunal heard arguments from both sides. The Authorized Representative (AR) for SNG Microns maintained that the notices issued under Sections 142(1) and 143(2) of the Act were never adequately served on the company. It was noted that the initial notice was issued on September 25, 2018, and the assessment order was passed on December 11, 2019, with no further communication received until the penalty notice was issued in November 2019.
