MAHESHKUMAR LALJIDAS PATEL,VISNAGAR V. INCOME TAX OFFICER, WARD 1 PATAN, PATAN

ITA 1021/AHD/2025

AI Insights

The case involves Maheshkumar Laljidas Patel, the appellant, contesting a penalty imposed under Section 271E of the Income-tax Act, 1961, for the Assessment Year 2013-14. The penalty was related to the alleged repayment of a loan in cash amounting to Rs.5,79,075 to Shri Jagdishkumar Laljibhai Patel. The appellant argued that the penalty was imposed without a reasonable opportunity to be heard, violating the principles of natural justice. The Income Tax Officer, Ward-1, Patan, was the respondent. The tribunal noted the interrelation between the proceedings under Sections 271D and 271E and decided to remand the case for a de novo hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771838 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATEEK SHARMA
• Assessee Lawyers: VIPUL GOHIL
• Keywords: Opportunity of being heard

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No.1021/Ahd/2025 (Assessment Year: 2013-14) Maheshkumar Laljidas Patel, Market Yard Visnagar, Visnagar-384315. [PAN :AGTPP7220 Q] Vs. The Income Tax Officer Ward-1, Patan. (Appellant) .. (Respondent) Appellant by : Shri Vipul Gohil, AR Respondent by: Shri Prateek Sharma, Sr. DR Date of Hearing 05.08.2025 Date of Pronouncement 25.08.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- Delay Condoned The present appeal filed by the assessee is directed against order dated 09.01.2024 passed by the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)” in short], arising out of penalty order under Sections 271E of the Income-tax Act, 1961 [“the Act”] for Assessment Year 2013-14. 2. The submissions of the assessee before the Ld. CIT(A) are as under:- “……. [8] That penalty was imposed without giving reasonable opportunity of being heard in nature of equity and justice. Hence, it may therefore be deleted. On 17/05/2019, Appellant received show cause notice u/s 271E of the Act requesting to give explanation about alleged loan repaid in cash of Rs.5,79,075/- to Shri Jagdishkumar Laljibhai Patel after lapse of more than 3 years on conclusion of assessment proceedings. Your appellant received show cause notice Dt. 10/5/2019 issued by Jt. CIT, Patan Range, Patan to attend on Dt.14/5/2019. It is observed by your appellant from the postal authorities record that the said show cause was dispatched only on Dt.14/5/2019 at 12.50 Printed from counselvise.com ITA Nos. 1021/Ahd/2025 Maheshkumar L PatelVs. ITO Asst. Year : 2013-14 - 2– pm and received by the appellant only on Dt.17/5/19 at the time when the first hearing as fixed had already gone. Your appellant consulted the known income-tax practitioner of the town and briefed the facts of the case. Till the time a suitable objection can be filed, your appellant received order imposing penalty u/s271E of the Act on Dt. 10/6/2019. No further opportunity was given to put forth the facts of the case and argue the matter. Sub-section (1) of section 274 imposes a condition that no order imposing a penalty shall be made unless the assessee has been heard or has been given a reasonable opportunity of being heard. In your appellant's case, there is gross violation of principles of nature justice and hence forth it is urged to delete the penalty. [9] That once for alleged penalty u/s 271D for alleged contravention of accepting loan in cash is not sustainable, then penalty u/s 271E could not survive. It be held so. …..” 3. The order in the case of the assessee pertaining to levy of penalty u/s 271D stands remanded to the JCIT for de novo proceedings. Since, in the instant case, the proceedings u/s 271D & 271E are interrelated, in the fitness of things, the matter is remanded to the file of the JCIT for de novo proceedings for levy of penalty or for dropping off the penalty proceedings after considering the submissions/reply of the assessee. 4. In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open Court on 25.08.2025 Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 25.08.2025 btk Printed from counselvise.com ITA Nos. 1021/Ahd/2025 Maheshkumar L PatelVs. ITO Asst. Year : 2013-14 - 3– आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 11.08.2025 2. Date on which the typed draft is placed before the Dictating Member 20.08.2025 3. Other Member 20.08.2025 4. Date on which the approved draft comes to the Sr.P.S./P.S 21.08.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 25.08.25 6. Date on which the fair order comes back to the Sr.P.S./P.S 25.08.25 7. Date on which the file goes to the Bench Clerk 25 .08.25 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "