Mohd Husain Vs ITO (ITAT Lucknow)
Income Tax Appellate Tribunal (ITAT), Lucknow Bench, has set aside a penalty of Rs. 3,34,447 imposed under Section 270A of the Income Tax Act, 1961, on assessee Mohd Husain for the assessment year 2017-18. The Tribunal’s decision, delivered today, rules in favor of the assessee, citing a critical lack of reasonable opportunity provided by both the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)].
The dispute began with a penalty order issued by the AO on September 21, 2022, which was subsequently upheld by the CIT(A) in an order dated February 21, 2023. Mohd Husain subsequently challenged the CIT(A)’s decision before the ITAT.
During the ITAT hearing, the assessee’s representative highlighted significant procedural irregularities. It was contended that Mohd Husain had specifically opted out of receiving notices via e-mail by making a clear request in Form-35. Despite this explicit instruction, the CIT(A) proceeded to issue crucial communications electronically. Furthermore, the assessee argued that the CIT(A) failed to provide adequate time for compliance, issuing two notices on February 6 and February 15, 2023, before hastily passing the appellate order just six days later on February 21, 2023. A similar grievance of denied reasonable opportunity was also raised concerning the initial penalty proceedings conducted by the Assessing Officer. The assessee sought to have the matter remanded back to the Assessing Officer for a de novo assessment, ensuring due process is followed. The Revenue’s Departmental Representative expressed no objection to this request.
