Artcraft Sales vs Assessment Unit Income Tax Department

PER SUDHIR KUMAR, JUDICIAL MEMBER:

This is appeal filed by the assessee against the order dated 09-04-2026 of the National Faceless Appeal Centre (NFAC)Delhi [hereinafter referred to as “Ld. NFAC”] relevant to penalty order dated 29-03-2025 passed under section 270A of the Income Tax Act, 1961(in short “the Act”).

The brief facts of the case are that the assessee filed return of income declaring total income at Rs. Nil. The case of assessee was selected for complete scrutiny under CASS for the reason “Excess contribution to Provident Fund, Superannuation Fund or Gratuity Fund”. In the assessment proceeding the Assessing Officer disallowed the contribution to Gratuity Fund of Rs.4,35,225/- and added to the total income. The Assessing Officer also initiated the penalty proceedings and notice under section 270 A of the Act issued to the assessee. The assessee did not file any reply in the response of the notices. The Assessing Officer levied the penalty of Rs.2,71,584/- @ of 200%. Aggrieved the order of the Assessing Officer the assessee filed the appeal before the Ld. NFAC, who dismissed the appeal of the assessee. Being aggrieved the order of the Ld. NFAC the assessee is in appeal before the tribunal.

We have heard both parties and gone through the material available on record.

The Ld. AR of the assessee stated that quantum appeal which was filed by the assessee has been restored before the Ld. CIT(A)/NFAC. To prove this fact that the quantum appeal has already been restored before the Ld. CIT(A)/ NFAC, the assessee has filed the copy of order passed in ITA no. 6312/Del/2026 for A.Y. 2020-21.

Since, the quantum appeal of the assessee has been restored before the Ld. NFAC, therefore, the totality of the facts and circumstances of the case and in the interest of justice, we deem fit it proper to restore the issue to the files of the Ld. NFAC with a direction to decide the appeal on merit to grant one final opportunity to the assessee. The assessee is also directed to appear before the NFAC and substantiate its case without seeking any adjournment. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purpose.