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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order dated 30.09.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A), Delhi-23.
This is a case of penalty u/s 270A of the Act, whereby the assessee has challenged the action of Ld. AO in levying a penalty of Rs.9,54,810/-, which was admittedly levied through an ex parte order dated 23.09.2024. It is seen that even the original assessment dated 28.03.2024 was passed in an ex parte manner.
The assessee approached the CIT(A) where she could not succeed on the basis of a finding that since no return of income was filed, hence, there was definitely an under-reporting of income and thus, penalty u/s 270A was leviable. It was also noted that the assessment order itself was passed in an ex parte manner, where it was presumed that the assessee had no explanation to offer for not filing any return of income in spite of having taxable income.
Further aggrieved, the assessee has approached the ITAT with several grounds challenging the action of authorities below. Through these grounds the assessee has challenged the action of Ld. CIT(A) on grounds of denial of opportunity, arbitrarily ignoring the submissions of the assessee and also challenging the presumption that since no appeal has been filed against the quantum assessment, hence, penalty is leviable on the under-reported income. It has also been challenged that grounds 3, 4 and 5 raised before the Ld. CIT(A) challenging the validity of jurisdiction have not been specifically adjudicated. It has also been challenged through the grounds that the Ld. CIT(A) did not keep the proceedings in abeyance as the assessee had filed an RTI application the response to which would have some bearing on the outcome of the case.
Before us, the Ld. AR argued that the penalty was levied by the AO totally ignoring the explanation of the assessee and the Ld. CIT(A) also ignored the challenge to the jurisdiction of the AO and simply went by the presumption that once no return of income is filed then penalty u/s 270A was leviable. The Ld. AR took us through each of the grounds of appeal and briefly put forth his arguments on the same. It was also submitted that notwithstanding and without prejudice to the grounds of appeal challenging assumption of jurisdiction one more point that was not considered by the authorities below pertained to the provision contained in Section 270A(6) of the Act, whereby bona fide explanation submitted by the assessee for not filing the return of income was totally disregarded and the benefit that was due to the assessee under 270A(6)(a) of the Act was never even considered. It was the submission that either the impugned penalty should be quashed or the matter may be remanded back to the AO to consider the reasons mentioned by the assessee which would be considered reasonable u/s 270A(6) of the Act.
The Ld. DR relied on the orders of the authorities below and stated that the challenge to jurisdiction was something that the assessee could not validly raise at this stage and since she had not filed the return of income in spite of having taxable income, the penalty was correctly levied.
We have considered the rival submissions and have gone through the records before us. A plain reading of the impugned order reveals that the Ld. CIT(A) has been overly influenced by the fact that the assessee did not file any return of income and, therefore, there was under reporting of the same. It is seen that the Ld. CIT(A) has not considered the submissions of the assessee requesting to keep the proceedings in abeyance since the assessee had filed an RTI for obtaining relevant documents from the AO. It is also clear that the Ld. AO has disregarded the averment of the assessee regarding financial hardship etc. as a reason for not filing the return of income. Since the relevant section itself provides for a potential escape route to an assessee for pleading reasonable cause, then the Ld. AO and the Ld. CIT(A) should have tested the claim of the assessee against this particular provision. Thus, it is clear that on the one hand the Ld. AO has not considered the submissions of the assessee but the Ld. CIT(A) has also passed the impugned order in an ex parte manner, without benefit of any substantive submission filed by the assessee. This fact is clear from a perusal of page 3 of the impugned order. Considering the totality of facts and circumstances of the case, we deem it fit to set aside the impugned order and remit this matter back to the file of Ld. CIT(A) for fresh adjudication. The assessee would file her submissions and the Ld. CIT(A) would fairly consider them and pass a speaking order on all the grounds raised by the assessee.
In the result, the appeal is allowed for statistical purposes.