Case Law Details
Ashadeep Industries Vs ITO (ITAT Ahmedabad)
In the case of Ashadeep Industries vs. Income Tax Officer (ITAT Ahmedabad), the assessee appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), concerning penalties imposed under Section 271(1)(c) of the Income Tax Act for Assessment Years 2007-08 to 2009-10. The core grievance was the CIT(A)’s decision to confirm the penalty without adequately considering the facts and submissions, as well as the failure to address a timely adjournment request made by the assessee. Despite the short notice period, the CIT(A) proceeded to pass the order, allegedly violating the principles of natural justice.
The ITAT acknowledged that the lack of response to the adjournment application resulted in a denial of the opportunity to be heard. The tribunal noted that allowing the assessee to present their case would not prejudice the revenue. Accordingly, the ITAT remanded the matter back to the CIT(A) for a fresh decision, directing the assessee to cooperate and avoid unnecessary adjournments. This case underscores the importance of procedural fairness and adherence to natural justice principles in appellate proceedings.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
These appeals have been filed by the Assessee against the separate order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, vide order dated 20.02.2024 passed for the Assessment Years (2007-08 to 2009-10). Since the issue involved in all the three appeal are common we extract the grounds of appeal raised in ITA No.778/Ahd/2024 for AY 2007-08.
2. The Assessee has taken the following grounds of appeal:-
1. The learned CIT (A) has erred in law and on facts in confirming the penalty u/s 271(1) (c) of the Act without considering merits of the facts and circumstances of the case emerging from the record before him and in particular the submissions reproduced in the order imposing penalty passed by the AO and also in the impugned appellate order.
2. CIT (A) has also incorrectly mentioned that the notice of hearing dt.08-02-2024 was not complied with. As a matter of fact the notice was issued after three years and which reached the AR the next day. being Friday and compliance was due on Monday. 12-02-2024. Since time for compliance was too short, application for adjournment was uploaded on 12-02-2024 seeking time up to 27-02-2024. The CIT (A), without informing the appellant the fate of his application proceeded to pass the appellate order.
3. On the facts and in the circumstances of the case and in law the learned CIT (A) ought to have cancelled the order u/s. 271(1)(c) imposing penalty of Rs.9,15,100/-passed by the AO.
4. It is therefore prayed that the orders of the lower authorities imposing and confirming the penalty imposed u/s. 271(1) (c) of the Act may be cancelled.
3. The pertinent facts required for adjudication of the case are that the Ld.CIT(A) has issued notice of hearing on 08.02.2024 to comply by 12.02.2024. Due to paucity of time for compliance the assessee sought adjournment of the hearing to 27.02.2024. However, the Ld.CIT(A) passed the order on 20.02.2024 without considering the adjournment application of the assessee. It was argued that it is a case of denial of justice and opportunity of being heard and violation of principles of natural justice. The Ld. Counsel prayed that given an opportunity, due compliance will be made before the Ld.CIT(A). The ld. DR fairly accepted the proposal. We find that no prejudice will be cause to the revenue if an opportunity of being heard is given to the assessee to file their submission. Hence, the matter is remanded to the Ld.CIT(A) to pass the order afresh after due issue of notice to the assessee. The assessee shall comply to the notices issued by the Ld.CIT(A) without seeking unnecessary adjournments.
4. In the result, the appeals of the assessee are allowed for statistical purposes.
This Order pronounced in Open Court on 22.11.2024
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