MMC Carbon Private Limited vs ITO

PER YOGESH KUMAR, U.S. JM:

The present appeals are filed by the Assessee against the orders of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 06/08/2025 for the Assessment Year 2016-17 wherein the Ld. CIT(A) dismissed the quantum Appeal as well as Appeal filed against the order of penalty.

Brief facts of the case are that, an assessment orders came to be passed on 26/12/2018 u/s 144 of the Income Tax Act, 1961 ('Act' for short) by making certain additions. The Assessee preferred an Appeal before the Ld. CIT(A) which has been dismissed on 06/08/2025 vide order impugned.

Consequent to the assessment order dated 26/12/2018, an order of penalty came to be passed on 21/06/2019 u/s 271 (1)(c) of the Act and as against order of penalty dated 21/06/2019, Assessee preferred an Appeal before the Ld. CIT(A) which has been dismissed on 06/08/2025. Aggrieved by the orders of the Ld. CIT(A) dated 06/08/2025, Assessee preferred the captioned Appeals.

The Ld. Counsel for the Assessee submitted that both the orders of the A.O. as well as Ld. CIT(A) are ex-parte and the Ld. CIT(A) has not decided on the grounds of the Appeals of the Assessee and the order impugned came to be passed in violation of principals of natural justice. Thus, sought for allowing the Appeals.

Per contra, the Ld. Department's Representative submitted that the Assessee is a chronic defaulter who has not appeared before the Lower Authorities, therefore, both the A.O. as well as the Ld. CIT(A) have passed the respective orders in accordance with law which requires no interference, thus by relying on the orders of the Lower Authorities sought for dismissal of the Appeals.

We have heard both the parties and perused the material available on record. Both the order of the A.O. as well as order of the Ld. CIT(A) are ex-parte, wherein the Assessee has not participated in any of the proceedings. Even the Ld. CIT(A) has not decided all the grounds of Appeal on its merits. In view of the above, in the interest of justice, we restore the issue to the file of the A.O. for de-novo assessment. Needless to say, the A.O. shall provide opportunity of being heard to the Assessee before passing the assessment order in accordance with law. The Assessee is also directed to participate in assessment proceedings without fail.

In the result, the Appeal of the Assessee in ITA No. 5938/Del/2025is partly allowed for statistical purpose.

Since we have set aside the assessment order and the order of the Ld. CIT(A) and remand the matter to the file of the A.O. for de-novo assessment, the order of penalty is required to be deleted. Accordingly, we set aside the order of penalty dated 26/12/2018 and the order of the Ld. CIT(A) dated 06/08/2025 and reserve the liberty to the A.O. to initiate fresh penalty proceedings if so required after framing the de-novo assessment.

In the result, Appeal of the Assessee in ITA No. 5939/Del/2025 is allowed.