Dheeraj Kumar vs Revenue

“ 1. That on the facts and circumstance of the case, Ld. NFAC grossly erred in facts and in law by summarily dismissing the appeal under the patently false premise that the appellant was "non-responsive" and only sought adjournments. The Ld. CIT(A) arbitrarily ignored the detailed written submission along with seven annexures submitted on the e-proceedings portal on 09/03/2026 against Notice dated 23/02/2026 vide communication Ref. ID 100109856835, whereas the impugned order was passed on 31/03/2026 i.e. after a substantial period. Therefore, assering that the appellant sought an adjournment is factually perverse, rendering the ex-parte impugned appeal order legally unsustainable and liable to be set aside.

2.

That on the facts and circumstance of the case, the impugned order unimpeachably demonstrates a complete absence of mind by not only ignoring the substantive submissions already placed on record, but by also mechanically concluding the order by confirming a penalty of Rs. 30,000/-, whereas factually the penalty was imposed for Rs. Rs. 10,000/-. This ex-facie mechanical disposal of appeal vitiates the entire appellate proceedings and renders the impugned order liable to be set aside.

3.

That on the facts and circumstances of the case, Ld. NFAC arbitrarily disregarded the voluminous medical evidence demonstrating the Appellant's severe medical hardship, debilitating effect of continuous medication, which critically incapacitated the Appellant during the compliance window for the notice dated 12/01/2022, it is pertinent to note here that Ld. AO had duly accepted the health/medical grounds to drop the penalty for the first two notices dated 22/11/2021 and 24/12/2021, but inexplicably rejected the exact same continuing medical constraints for the third notice issued a mere 19 days later on 12/01/2022, and Ld. NFAC also failed to consider the said very fact while culminating its impugned penalty order which renders the penalty imposed liable to be deleted.

4.

That on the facts and in the circumstances of the case, and in law, both the lower authorities grossly erred in penalizing a purely technical and venial breach stemming from the assessee's bona fide unawareness of the newly implemented electronic assessment regime. That the authorities below failed to appreciate that the assessment Year under consideration marked the very first instance the assessee was subjected to scrutiny proceedings, during this unprecedented transitional phase, wherein the Department shifted to a strictly digital and faceless mode of communication, the assessee remained genuinely unversed in the procedural necessity of continuously monitoring the e-filing portal, resulting in an inadvertent, non-contumacious failure to respond. Reliance is placed on the Hon’ble ITAT, Mumbai Bench, in the case of Triumph International Finance India Limited v. DCIT (ITA No. 1870/MUM/2020, AY 2017-18), which categorically held that a taxpayer cannot be penalized for bona fide non-compliance arising out of ignorance of the paradigm shift to mandatory e-proceedings.

5.

That on the facts and circumstance of the case, Ld. NFAC has failed to adjudicate the ground no. 4 which is reproduced below wherein appellant has contended inadequate opportunity i.e. only two days were provided in concluding the penalty proceeding.

“That the Ld. AO has passed the impugned penalty order by violating the principle of natural justice mandated in the procedure provided in section 274(1) wherein it is clearly mandated that before imposition of penalty assessee has to be given a reasonable opportunity of being heard. That the Ld. AO has issued only one show cause notice dated 26.09.2022 of which reply is required to be made on 28.09.2022 i.e. only two days however assessee has made the reply on 28.09.2022, thereafter no further opportunity of being heard is provided to the assessee and on 29.09.2022 Ld. AO has pass the penalty order due to time barring of same, hence it clearly shows the haste and mechanical passing of the penalty order which otherwise requires the judicial application of mind which in the present case is wholly and squarely missing.

6.

That on the facts and circumstances of the case, the Ld. NFAC has failed to adjudicate Ground No. 5, reproduced below, wherein the appellant had specifically pointed out that the Ld. AO failed to strike off irrelevant limbs or inapplicable provisions in the notice, thereby fatally failing to convey the specific legal allegation to the assessee.

“5.

That in the SCN dated 26.09.2022 the Ld. AO mentioned that assessee has not complied with the notice issued u/s 142(1)/143(2)/ and direction issued u/s 142(2A) and thus failed to point out specifically which notice/direction assessee has not been complied with. It is incumbent in law upon the Ld. AO to strike off the irrelevant or inapplicable provisions in order to appropriately convey the specific applicable legal provision or allegation upon assessee. That the copy of impugned notice is enclosed for your perusal. Reliance may be made to the following Judgement para 13 DCIT, CC-2(3) vs Ms. Preity Zinta (I.T.A. No. 6823/Mum/2019 (Assessment Year 2014-15)

7.

That on the facts and circumstances of the case, the Ld. NFAC has failed to consider the COVID-19 outbreak and DDMA restriction in January 2022 raised in ground no. 6 which is reproduced below, as reasonable cause which makes practically impossible to comply with the notice issued on 12/012022.

“That the relevant notice for non-compliance of which impugned penalty is imposed was issued on 12/01/2022. We are aware that corona virus breakout emerged which disturbed the routine and normal life of everyone, and still persisting, however, Ld. AO haven’t considered the fact, that on 11.01.2022 Delhi Disaster Management Authority (DDMA) has reviewed Delhi COVID-19 situation and have order to close all the private offices, on odd even basis. Therefore, imposing the penalty for noncompliance of notice issued u/s 142(1) in this atmosphere, is against the principle of natural justice, hence the penalty order required to be deleted. Reference may be made to para 11 of M/s. Madanthyar Primary Vs DCIT, CPC-TDS, Ghaziabad. ITA Nos.163 to 170/Bang/2022.”

8.

That on the facts and circumstances of the case, the Ld. NFAC has failed to adjudicate Ground No. 7, reproduced below, wherein the appellant had raised the issue of inordinate delay in initiating impugned penalty proceedings, by explicitly mentioning that the Ld. AO concluded the assessment on 13.03.2022 but inexplicably remained inactive and issued the penalty SCN only on 26.09.2022, and finally culminated its order on 29.09.2022, it is trite law that initiation of penalty proceedings (via the issuance of an SCN) must be done contemporaneously with the assessment order or within a strictly reasonable time thereafter, failure to do so makes such notice and order invalid and illegal.

“That though assessment order dated 13.03.2022 mentioned issue of penalty notice u/s 272A(1)(d) but till 26.09.2022 no such show cause notice was issued. It is legally required to issue penalty show cause notice at the time of issue of the assessment order or with in some reasonable time, however in the present case SCN has been issue after 6 months which violates the said legal requirement hence such notice is invalid and illegal.”

9.

Without prejudice to the above, it is submitted that the Ld. NFAC by exercising the power under the proviso to clause (a) of sub-section (1) of section 251 of the Act towards the quantum appeal has set aside the ex-partie assessment order and restored de novo assessment before the AO for fresh adjudication. Therefore, in view of de novo restoration of the assessment the penalty imposed should be deleted.

10.

That the appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of appeal and all the above grounds are without prejudice to each other.”