Case Law Details
Cardamon Planters Marketing Co-op Society Ltd. Vs DCIT (ITAT Cochin)
The Cardamon Planters Marketing Co-op Society Ltd. faced a penalty levied under Section 270A of the Income Tax Act, 1961, due to a discrepancy in the deduction claimed under Section 80P and the deduction allowed by the Assessing Officer (AO). The AO had initiated penalty proceedings following an assessment that increased the society’s total income. The core issue revolved around the society’s application for immunity from this penalty, which was denied because they failed to file Form 28, the prescribed application, within the stipulated one-month period after receiving the assessment order. Consequently, the AO imposed a penalty of Rs. 10,81,197. The society then appealed this decision to the Commissioner of Income Tax (Appeals) [CIT(A)]. However, the CIT(A) upheld the penalty without addressing the society’s plea for immunity, effectively ignoring the crucial aspect of their appeal.
The Income Tax Appellate Tribunal (ITAT) in Cochin, upon hearing the case, found that both the AO and the CIT(A) had neglected to consider the society’s application for immunity from the penalty. The ITAT observed that neither authority had dealt with the merits of this application, which was a critical component of the society’s defense. Given this oversight, the ITAT determined that the appropriate course of action was to restore the matter to the AO. This decision was made to ensure that the society’s application for immunity would be properly evaluated. The ITAT emphasized that all arguments and contentions raised by the society during the appeal were to remain open for consideration by the AO. The ITAT’s decision effectively directs the AO to re-examine the case, specifically focusing on the society’s eligibility for immunity from the penalty under Section 270A, thereby providing the society an opportunity for a fair hearing on this crucial issue. The appeal was therefore partly allowed, and the case was sent back to the AO for reconsideration of the immunity application.
FULL TEXT OF THE ORDER OF ITAT COCHIN
This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 26.06.2024 for Assessment Year (AY) 2018-19.
2. Brief facts of the case are that the appellant AOP filed its return of income for AY 2018-19 on 18.10.2018 declaring total income of 1,20,22,050/-. Against the said return of income, the assessment was completed by the National e-Assessment Centre (hereafter “the AO) vide order dated 20.04.2021 passed u/s. 143(3) .w.s. 144B of the Income Tax Act, 1961 (the Act) at a total income of Rs. 1,82,70,297/- by making and addition of Rs. 62,48,247/- being the difference between the 80P deduction claimed by the assessee and the 80P deduction allowed. The AO also initiated penalty proceedings u/s. 270A of the Act. The application moved by the appellant for grant of immunity from levy of penalty was denied for the failure of the assessee to file the prescribed application before the jurisdictional AO in Form 28 within one month from the end of the month in which the order was received. Therefore the AO proceeded with the levy of penalty u/s. 270A of the Act vide order dated 03.02.2022 by levying penalty of Rs. 10,81,197/-.
3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the penalty without dealing with the issue of immunity sought by the assessee.
4. Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.
5. We have heard the rival contentions of both the parties and perused the material available on record. The appellant sought immunity from levy of penalty in terms of provisions of section 270A of the Act. Either the AO or the CIT(A), without dealing with the issue of immunity, had merely levied and confirmed the penalty.
In the circumstances, we are of the considered opinion that the ends of justice would be met if the matter is restored to the file of the AO to consider the application for immunity filed by the assessee on merits. We make it clear that all the contentions that are raised before us by the assessee are kept open before the AO.
6. In the result, the appeal filed by the assessee stands partly allowed.
7. Order pronounced in the open court on 21st January, 2025.
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