Case Law Details
Marut Paper Products Pvt. Ltd. Vs ACIT (ITAT Lucknow)
Penalty u/s 271(1)(c) Cannot Be Confirmed by Non-Speaking Order—Matter Remanded
In Marut Paper Products Pvt. Ltd. v. ACIT, Central Circle-1, Kanpur (ITA No. 393/LKW/2023; AY 2016-17), the ITAT Lucknow Bench examined the validity of an appellate order whereby the CIT(A) confirmed a penalty of ₹47,21,400 under Section 271(1)(c).
The assessee contended that the CIT(A) dismissed the appeal in limine for want of prosecution, without examining the merits of the penalty or passing a reasoned order. The Revenue left the matter to the discretion of the Tribunal.
The Tribunal held that:
- The CIT(A)’s order was non-speaking and summary in nature, and
- Such dismissal violates Section 250(6), which mandates a speaking order dealing with merits of each ground in appellate proceedings, especially in penalty matters.
Decision & Directions:
- Impugned order of the CIT(A) set aside.
- Issue of penalty under Section 271(1)(c) restored to CIT(A) for de novo adjudication.
- CIT(A) directed to pass a reasoned, speaking order on merits after granting reasonable opportunity of hearing to the assessee.
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
This appeal vide I.T.A. No.393/Lkw/2023 has been filed by the assessee for Assessment Year 2016-17 against impugned appellate order dated 03/10/2023 (Appeal No. CIT(A)-IV/KNP/10788/2015-16 of Commissioner of Income Tax (Appeals) [“CIT(A)” for short].
2. In this case, penalty levied by the Assessing Officer (AO) under Section 271(1)(c) of the Income Tax Act, 1961 (in short the ‘Act’) amounting to Rs.47,21,400/- was confirmed by the learned CIT(A) vide impugned appellate order dated 03.10.2023.
3. The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 03.10.2023 of learned CIT(A).
4. At the time of hearing, learned Authorized counsel for the assessee submitted that the impugned appellate order passed by learned CIT(A) is not speaking order on merits. He further submitted that the learned CIT(A) has dismissed the assessee’s appeal in limine for want of prosecution without going into the merits of the case. In view of foregoing, he submitted that the dispute regarding levy of penalty u/s. 271(1)(c) of the Act should be restored back to the file of learned CIT(A) with a direction to pass denovo appellate order, in accordance with law after providing reasonable opportunity to the assessee.
5. The learned Departmental Representative (DR) relied on the penalty order passed by the learned AO and on the impugned appellate order of the learned CIT(A), but left the matter to the discretion of the Bench.
6. After perusing the materials on record and after hearing of both sides, we find that impugned order passed by learned CIT(A) is not a speaking order on the merits of the case. Instead, he has passed a summary order dismissing the assessee’s appeal in limine without going in to the merits of the case. This is in violation of requirements described u/s. 250(6) of the Act.
7. In view of the foregoing, the impugned appellate order of the learned CIT(A) is set aside and the dispute regarding levy of penalty u/s 271(1)(c) of the Act is restored back to the learned CIT(A) with a direction to poass denovo order in accordance with law after providing reasonable opportunity to the assessee and duly adhering to requirements of passing a speaking order on merits which contained in Section 250(6) of the Act. All grounds of appeal are treated as disposed of in accordance with law with aforesaid directions and order.
8. In the result, the appeal of the assessee stands partly allowed for statistical purposes.
(Order pronounced in the open court on 05/01/2026)
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