2019 (5) TMI 344 - AT - Income Tax

Levy of penalty u/s 271 (1) (c) - CIT(A) confirmed the penalty so levied by the Assessing Officer for both the years in the exparte order passed by him since none appeared before him despite service of notice - HELD THAT - It is an admitted fact that due to non appearance before the CIT(A) despite sufficient opportunities granted by him, CIT(A) in the exparte order passed by him confirmed the penalty so levied by the AO. Considering to restore the issue to the file of the CIT(A) with a direction to grant one final opportunity to the assessee to substantiate his case. The assessee is hereby directed to appear before the CIT(A) and explain his case failing which the CIT(A) is at liberty to pass appropriate orders as per law. We hold and direct accordingly. - Appeal of assessee allowed for statistical purpose.

Summary

Issues Involved:
Levy of penalty under section 271(1)(c) of the IT Act based on non-appearance before the CIT(A) despite sufficient opportunities granted.

Analysis:
The appeals were filed by the assessee against separate orders of the CIT(A) for the assessment years 2005-06 and 2006-07. Despite service of notice, no one appeared on behalf of the assessee during the hearing. The only issue raised by the assessee in the grounds of appeal was the levy of penalty under section 271(1)(c) of the IT Act, which was upheld by the CIT(A).

The assessee, engaged in the business of manufacturing and export, had their assessments completed by the Assessing Officer for both years. The CIT(A) provided partial relief to the assessee, following which the assessee appealed to the Tribunal. The Tribunal then directed the Assessing Officer to determine the total income of the assessee for both years. Subsequently, penalty proceedings were initiated under section 271(1)(c), resulting in penalties imposed for both assessment years.

The CIT(A) confirmed the penalties in an ex parte order due to the non-appearance of the assessee despite notice. The assessee, aggrieved by this decision, appealed before the Tribunal. During the Tribunal hearing, it was noted that the CIT(A) confirmed the penalties in the absence of the assessee. In the interest of justice, the Tribunal decided to restore the issue to the file of the CIT(A) with a direction to grant one final opportunity to the assessee to present their case. The assessee was instructed to appear before the CIT(A) and explain their case, with the CIT(A) authorized to pass appropriate orders as per law if the assessee failed to do so. The grounds raised by the assessee were allowed for statistical purposes, and both appeals were allowed accordingly.

In conclusion, the Tribunal's decision focused on providing the assessee with a final opportunity to substantiate their case before the CIT(A) regarding the levy of penalties under section 271(1)(c) of the IT Act. The restoration of the issue to the CIT(A) aimed at ensuring procedural fairness and adherence to principles of natural justice.