The present appeal was filed by the assessee, Marut Paper Products Pvt. Ltd., for the Assessment Year 2016-17, challenging the appellate order dated 03.10.2023 passed by the Commissioner of Income Tax (Appeals). The appeal arises from the confirmation of a penalty levied by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961, amounting to ₹47,21,400.

The penalty imposed by the Assessing Officer was upheld by the learned CIT(A) through the impugned appellate order. Aggrieved by the said confirmation of penalty, the assessee preferred the present appeal before the Income Tax Appellate Tribunal.

During the course of hearing, the learned authorised counsel for the assessee submitted that the impugned appellate order was not a speaking order passed on merits. It was contended that the learned CIT(A) dismissed the appeal in limine for non-prosecution without adjudicating the issues involved. The counsel submitted that such dismissal was contrary to law and prayed that the matter relating to the levy of penalty under section 271(1)(c) be restored to the file of the CIT(A) for fresh adjudication after granting reasonable opportunity of being heard.

The learned Departmental Representative relied upon the orders passed by the Assessing Officer and the CIT(A), but left the matter to the discretion of the Bench.

Upon consideration of the material available on record and after hearing both parties, the Tribunal observed that the order passed by the learned CIT(A) was merely a summary dismissal and did not deal with the merits of the case. The Tribunal noted that such an order failed to comply with the mandatory requirement of section 250(6) of the Income-tax Act, which obligates the appellate authority to pass a reasoned and speaking order.

In view of the above, the Tribunal set aside the impugned appellate order and restored the matter relating to the levy of penalty under section 271(1)(c) to the file of the learned CIT(A). The CIT(A) was directed to pass a de novo appellate order in accordance with law, after providing reasonable opportunity to the assessee and by strictly adhering to the statutory requirement of passing a speaking order on merits.

Accordingly, the appeal filed by the assessee was partly allowed for statistical purposes.

Source Link:

https://itat.gov.in/public/files/upload/1767607995-JTKwfd-1-TO.pdf

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