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2024 (6) TMI 1202 - AT - Income TaxEx-parte order levying penalty u/s 270A - assessee submitted that the CIT (A) NFAC had not granted proper opportunity to the assessee to substantiate its case - HELD THAT - From the perusal of the order of the CIT (A) NFAC we find learned CIT (A) NFAC had issued notice on 17.05.2022, however, there was no compliance. On the next date of hearing on 6.7.2023, the assessee filed an application for adjournment and the matter was adjourned 23.07.2023 and again there was also non-compliance for which the learned CIT (A) NFAC dismissed the appeal filed by the assessee for want of prosecution. As assessee submitted that given an opportunity in the interest of justice, the assessee is in a position to substantiate its case by producing the relevant details before the learned CIT (A) NFAC - For interest of justice we deem it proper to restore the issue to the file of the learned CIT (A) NFAC with a direction to grant one final opportunity to the assessee to substantiate its case by filing the necessary documents and decide the issue as per fact and law. Appeal filed by the assessee is allowed for statistical purposes
Issues:
Appeal against ex-parte order confirming penalty under section 270A of the Income Tax Act, 1961. Analysis: The appeal was filed against the ex-parte order of the CIT (A)-NFAC confirming a penalty of Rs.22,78,444 levied by the Assessing Officer under section 270A of the Act for the assessment year 2018-19. The Assessing Officer initiated penalty proceedings due to underreporting/misreporting of income by the assessee, a partnership firm engaged in manufacturing and trading bio-agricultural products. The firm's expenses related to foreign tours were questioned, specifically sales promotion expenses paid to entities for tours to Russia and Thailand without proper substantiating evidence. The Assessing Officer disallowed these expenses and initiated penalty proceedings under section 270A for underreporting income. Additionally, a violation of section 40A(3) was noted. The CIT (A)-NFAC upheld the penalty in an ex-parte order as the assessee failed to appear despite opportunities granted. The assessee appealed to the Tribunal, arguing that proper opportunity was not granted by the CIT (A)-NFAC to substantiate its case. The Tribunal considered the arguments, reviewed the AO and CIT (A)-NFAC orders, and noted that the assessee had filed the return declaring income but faced penalty proceedings due to misreporting. Citing non-appearance before the CIT (A)-NFAC despite multiple opportunities, the Tribunal referred to relevant legal precedents and decided to restore the issue to the CIT (A)-NFAC for granting one final opportunity to the assessee to present necessary documents. The assessee was directed to participate without seeking adjournments, with non-compliance leading to appropriate action. The grounds raised by the assessee were allowed for statistical purposes, and the appeal was allowed accordingly. Therefore, the Tribunal allowed the appeal for statistical purposes, directing the issue back to the CIT (A)-NFAC for the assessee to substantiate its case with necessary documents and participate in the proceedings without seeking adjournments.
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