2023 (8) TMI 290 - AT - Income Tax

Maintainability of appeal against Penalty u/s 270A - Scope of orders appealable before the CIT(Appeals) u/s 246A - penalty levied for not reporting/ misreporting of income - CIT(A) dismissed appeal filed by the assessee as he held that the same did not fall within the realm of the orders which were appealable before him - HELD THAT - As stated by the Ld. AR and, rightly so, penalty imposed u/s. 270A clearly falls within the realm of orders appealable before the CIT(Appeals) u/s. 246A. We, say so, for the reason that as per Clause (q) to sub-section (1) of Section 246A an order imposing penalty under Chapter XXI of the Act finds place in the orders which are appealable before the CIT(Appeals). Thus on the basis of the aforesaid clear mandate of law, we are of the considered view that as an order imposing penalty u/s. 270A which in turn finds place in Chapter XXI of the Act, is in clear and unequivocal terms an order appealable before the CIT(A), therefore, a view to the contrary taken by the CIT(Appeals) in the present case before us cannot be sustained and is liable to be vacated. Also, on a careful perusal of the order of the CIT(Appeals), it transpires that he had while concluding as hereinabove wrongly referred to provisions of Section 246(1) which we may herein observe are no more applicable after 01.06.2000. We restore the matter to the file of the CIT(Appeals) with a direction to re-adjudicate the same afresh - Assessee appeal allowed for statistical purposes.

Summary

Issues Involved:
1. Opportunity of being heard and abeyance of penalty proceedings.
2. Misreporting and suppression of facts.
3. Validity of penalty order under section 270A.
4. Jurisdiction of CIT(A), NFAC.
5. Show cause notice issued on a public holiday.
6. Non-adjudication of specific grounds by CIT(A), NFAC.

Summary:

1. Opportunity of Being Heard and Abeyance of Penalty Proceedings:
The assessee contended that the Assistant Commissioner erred in passing the penalty order without providing an opportunity of being heard and without considering the request to keep penalty proceedings in abeyance.

2. Misreporting and Suppression of Facts:
The assessee argued that there was no misrepresentation or suppression of facts, and the penalty for misreporting was invoked without proper appreciation of the consistent position taken by the assessee, supported by judicial precedents.

3. Validity of Penalty Order Under Section 270A:
The impugned penalty order dated 31 March 2020, levying penalty under section 270A, was contested as bad in law and liable to be quashed.

4. Jurisdiction of CIT(A), NFAC:
The CIT(A), NFAC, was criticized for misinterpreting its jurisdiction and not adjudicating the grounds of appeal, despite the impugned order being covered under the list of appealable orders specified in section 246A(1)(q) of the Act.

5. Show Cause Notice Issued on a Public Holiday:
The assessee argued that the show cause notice requiring appearance on a public holiday rendered the penalty proceedings invalid.

6. Non-Adjudication of Specific Grounds by CIT(A), NFAC:
The CIT(A), NFAC, failed to adjudicate multiple grounds raised by the assessee related to various disallowances and expenses, including mine closure, OBR expenses, grants to schools, power and fuel expenses, environment and tree plantations, coal transportation, depreciation on railway siding, compensation to employees, TDS credit, amortization of leased land compensation, deferred grant, land crop compensation, guest house expenses, and depreciation on hospital building.

Additional Grounds:
The assessee raised additional grounds, asserting that the penalty order under section 270A was passed during the pendency of the appeal against the assessment order, violating section 275(1)(a), and that the penalty was levied without specifying circumstances under section 270A(9).

Judgment:
The Tribunal found merit in the assessee's claim that the CIT(A) erred in dismissing the appeal as infructuous. It was clarified that penalty imposed under section 270A falls within the orders appealable before the CIT(A) under section 246A. The Tribunal set aside the order of the CIT(A) and restored the matter to his file for fresh adjudication, directing him to afford a reasonable opportunity of being heard to the assessee. The other contentions regarding the sustainability of the penalty were left open for future consideration.

Conclusion:
The appeal of the assessee company was allowed for statistical purposes, and the matter was remanded to the CIT(A) for re-adjudication.