2019 (7) TMI 433 - AT - Income Tax

Ex parte order of the CIT(A) - non-appearance on the date fixed for hearing - Penalty u/s 271(1)(c) - defective notice - variation in the charge levied for imposition of penalty in the notice issued U/s 274 r.w.s. 271(1)(c) vis a vis charge levied in the penalty order passed U/s 271(1)(c) - HELD THAT - A.O. has levied penalty for the addition so made in the quantum order. However, the ld. CIT(A) has confirmed the penalty by passing ex parte order. CIT(A) has mentioned three occasions when the appeal was fixed for hearing. On first occasion, notice was issued fixing the date of hearing on 30/12/2018 wherein the assessee did not attend. On the date fixed for hearing on 08/01/2019, the assessee asked for adjournment. When the appeal was again fixed for hearing on 06/2/2019 then no body appeared before the ld. CIT(A), therefore, the ld. CIT(A) after considering the material placed on record, dismissed the appeal filed by the assessee. As per the reasons advanced for non-appearance, we are satisfied that the assessee has reasonable ground for non-appearance on the date fixed for hearing. We also found that the ground raised before us with regard to defect in notice so as to invalidate the entire penalty order by having a variation in the charge levied for penalty in the show cause notice U/s 274 vis a vis charge levied in the penalty order so passed U/s 271(1)(c) of the Act was not before the CIT(A). Therefore, in the fitness of things and in the substantial interest of justice, we set aside the ex parte order of the CIT(A) and the matter is restored back to the file of ld. CIT(A) for deciding afresh on merit - Appeal of the assessee is allowed for statistical purposes only.

Summary

Issues involved:
Appeal against ex parte order of ld.CIT(A) for imposition of penalty U/s 271(1)(c) of the Income Tax Act, 1961. Variation in charge levied for penalty. Validity of penalty order.

Analysis:

1. Variation in Charge Levied for Penalty:
The appellant argued that there was a discrepancy in the charge specified in the notice issued under Section 274 r.w.s. 271(1)(c) of the Act compared to the charge mentioned in the penalty order under the same section. Citing relevant precedents, the argument was made that such variation renders the penalty order invalid. The Tribunal referred to a specific case and emphasized the importance of the Assessing Officer (AO) clearly specifying the nature of the charge at the initiation of penalty proceedings and in the penalty order. It was highlighted that the AO cannot be uncertain or change the charge from concealment to furnishing inaccurate particulars of income, or vice versa, during the penalty proceedings. The Tribunal stressed that the charge must be clearly stated to ensure the validity of the penalty order.

2. Validity of Penalty Order:
The Department, represented by the ld DR, supported the penalty imposed by the AO based on additions made in the quantum order and upheld by appellate authorities. However, the Tribunal noted that the penalty confirmation by the ld. CIT(A) was done through an ex parte order. The Tribunal observed that the appellant had valid reasons for non-appearance during the appeal hearings before the ld. CIT(A) and that the issue regarding the defective notice, which could invalidate the penalty order due to the charge variation, was not raised before the ld. CIT(A). In the interest of justice, the Tribunal set aside the ex parte order and remanded the matter back to the ld. CIT(A) for fresh consideration on merit, specifically addressing the issue of the defective notice.

3. Judgment Outcome:
After considering the contentions and reviewing the orders of the authorities below, the Tribunal allowed the appeal of the assessee for statistical purposes only. The Tribunal directed the matter to be reconsidered by the ld. CIT(A) in light of the defective notice issue raised by the appellant, emphasizing the importance of clarity in specifying charges in penalty proceedings to maintain the legality of the penalty order.

This detailed analysis of the judgment provides insights into the issues raised, arguments presented, and the Tribunal's decision, ensuring a comprehensive understanding of the legal aspects involved in the case.