Bhim Singh Dagar vs Income Tax Officer

PER MAHAVIR SINGH, VICE PRESIDENT :

This appeal by the assessee is directed against the order dated 24.04.2026 of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(E)”]. Penalty was imposed under section 271D of the Income Tax Act, 1961 (hereinafter referred as Act) vide order dated 13.2.2022 relevant to assessment year 2017-18.

The brief fats of the case are that assessment u/s. 143(3) of the Act for theAY 2017-18 was completed on 26.12.2019 assessing the total income at Rs. 3,29,525/-. During the assessment proceedings, it was found by the AO that the assessee had sold four pieces of agricultural lands during the year under consideration and received sum amount of Rs. 53,00,000/- as sale consideration. Out of total sale consideration, the assessee had received Rs. 29,00,000/- in form of cash. Subsequently, due to the contravention of provisions of section 269SS of the Act, notice initiating the penalty proceedings u/s. 271D was issued to the assessee. However, the assessee did not comply with the issued notice. Further the case of was referred to Verification Unit through Insight Portal. During the penalty proceedings, the assessee was provided sufficient opportunities to represent his case but the assessee failed to establish that the transactions were genuine and bonafide which were dealt in case. Consequently, the AO levied a penalty of Rs. 29,00,000/- as per the provisions of section 271D of the Act. Against the penalty order, assesse appealed before the Ld. CIT(A), who dismissed the appeal of the assessee on account of limitation. Aggrieved, assessee is in appeal before us.

None appeared on behalf of the assessee. We have heard the Ld. DR and gone through the facts and circumstances of the case. We find that the impugned penalty order was originally passed on 13.2.2022 through digital mode, whereas the appeal was filed on 20.4.2023. Accordingly, the appeal has been filed with a delay of 1 year 36 days. Ld. CIT(A) noted that once an assessment order is passed through digital mode, on the Income Tax Portal, it is deemed to have been served electronically. Ld. CIT(A) further noted that in Form No. 35, under Column 2(c), the date of service of order/notice of demand has been mentioned as on 19.3.2023 after 1 year 4 days from the passing the date of the impugned penalty order dated 13.2.2022, which cannot be corrected. Further, in Form NO. 35, under column 14, the assessee has selected ‘No’, which means it has not accepted that there was any delay. As a result, column no. 15, which requires a statement of reasonable cause for the delay has been left blank, nor any request/evidences have been filed to condone such delay at the subsequent stage in the appellate proceedings. Therefore, Ld. CIT(A) observed that in such circumstances, though prima facie the appeal appears to have been filed beyond the statutory period of limitation reckoned from the date/service of the penalty order, the delay is not explained since the assessee has not taken the columns of Form 35 with due seriousness, thus, he dismissed the appeal of the assessee on account of limitation. Before us, it was the contention of the assessee made in the grounds of appeal that penalty order u/s. 271D is bad in law, illegal and void ab inito as the same was exparte without affording adequate and reasonable opportunity of hearing to the assessee, in gross violation of the principles of natural justice. It was the further contention that even otherwise, the Ld. CIT(A) dismissed the appeal of the assessee on account of limitation. Ld.DR relied upon the orders of the authorities below. We find that it is undisputed fact that AO has passed the exparte penalty order, on account of non-prosecution on the part of the assessee and also Ld. CIT(A) dismissed the appeal of the assessee on account of limitation and not decided the appeal on merits. Therefore, in the background of the aforesaid factual matrix and in the interest of justice, we deem it fit to condone the delay in dispute before the Ld. CIT(A) and restore back the matter to the file of the Ld. CIT(A) with the directions to adjudicate the issues in dispute afresh, in accordance with law, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly.

In the result, the Assessee’s appeal is allowed for statistical purposes.