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Judgment
Per Kavitha Rajagopal, JM:
This is an appeal filed by the assessee challenging the order passed by the Ld. Commissioner of Income Tax (Appeals) [‘the Ld. CIT(A)’, for short] passed under Section 250 of the Income Tax Act, 1961 ('the Act' for short) for Assessment Year (‘AY’, for short) 2016-17.
The assessee has raised the following grounds of appeal:-
“1.That under the facts & circumstances of the case, the Ld. CIT (A) has erred to considered the appeal file u/s 143(3) on the basis of column no. 2 in which details of assessment order were mentioned without providing an opportunity to modify the section and date of order for which the appeal was filed u/s 271(1)(c). By not providing to modify the column no. 2 on which the appeal was filed u/s 271(1)(c) and all the statement of facts, grounds of appeal related to section 271(1)(c), the finding of CIT (A), that appeal was for assessment order u/s 143(3) and not u/s 271(1)(c). The finding, observation and decision is arbitrary, unjust, uncalled for, and against the equity and natural justice.
2.That under the facts and circumstances of the case, the Ld. CIT (A) has erred not to provide any opportunity to modify and hold that assessee has preferred an appeal against assessment order whereas neither in the statement of facts nor in grounds of appeal, the facts was related to the assessment order. Dismissal of appeal without taking substance of the appeal and opportunity to modify the mistake is arbitrary, unjust, uncalled for and against the natural justice.
3.That under the facts and circumstances of the case, the Ld. CIT (A) has erred, not to decide the appeal u/s 271(1)(c) on the basis of statement of facts and grounds of appeal, order of penalty order and arguments placed by the Ld. counsel. Non adjudication of appeal but rejecting the same on technical ground is arbitrary, unjust, uncalled for and against the natural justice.
4.That under the facts and circumstance of the case, the Ld. CIT (A) has erred to confirm the imposition of penalty u/s 271(1)(c) at Rs. 2197900/-. The confirmation of the penalty u/s 271(1)(c) of Rs. 2197900/- is therefore arbitrary, unjust, uncalled for, illegal and against the equity and natural justice.”
The brief facts are that the assessee is an individual and has filed his return of income for the year under consideration dated 14.03.2017 declaring total income at Rs.1,60,190/-. The assessee’s case was selected for limited scrutiny under CASS and the assessment order dated 19.11.2018 was passed u/s 143(3) of the Act where the Ld. AO determined the total income at Rs.1,01,61,566/-, after making an addition of Rs.1,01,00,376/- towards long-term capital gain which arose out of sale of immovable property. The Ld. AO also initiated penalty proceedings u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. The Ld. AO, then, passed the penalty order u/s 271(1)(c) of the Act dated 22.05.2019 levying penalty amounting to Rs.21,97,900/- on the ground that the assessee has been non-compliant during the penalty proceedings. Aggrieved, the assessee was in appeal before the first appellate authority, who, vide order dated 10.02.2026, dismissed the appeal filed by the assessee on the ground that the assessee has filed Form No.35 by mentioning the wrong order u/s 143(3) of the Act dated 19.11.2018 instead of specifying the same as penalty order u/s 271(1)(c), without getting into the merits of the case. Aggrieved, the assessee is in appeal before us challenging the order of the Ld. CIT(A) on the above-mentioned grounds.
We have heard the rival submissions and perused the material available on record. It is observed that the assessee has filed rectification application before the Ld. AO u/s 154 of the Act in which the Ld. AO is said to have given due credit of tax paid by the assessee as self-assessment tax, subsequent to which the assessee contends that the assessee was not liable to pay any tax over and above the same. This fact was also raised before the Ld.CIT(A), who, had failed to adjudicate the same merely on the technical defect that in Form 35, the assessee has erroneously mentioned that the appeal was against order u/s 143(3) of the Act dated 19.11.2018 instead of the penalty order u/s 271(1)(c) of the Act. The Ld. AR argued that the Ld.CIT(A) has failed to grant the assessee opportunity to rectify the error in Form 35 and had also not adjudicated the issue on the merits. The Ld. DR had nothing to controvert the said fact.
In the above facts of the case, we deem it fit to remand this issue back to the file of the Ld. CIT(A) for adjudicating the issue on the merits and on the basis of the submissions made by the assessee. The Ld.CIT(A) is also directed to grant the assessee opportunity to rectify the error crept in Form 35 and grant the assessee sufficient opportunity of hearing before adjudicating the issue de novo. The assessee is also directed to strictly comply with the proceedings before the Ld.CIT(A) without any undue delay from his side. Hence, the grounds of appeal raised by the assessee are hereby allowed for statistical purpose.
In the result, the appeal filed by the assessee is hereby allowed for statistical purpose.