MAYANK GUPTA,PATIALA V. INCOME TAX OFFICER, WARD-1, PATIALA, PATIALA

ITA 1009/CHANDI/2025

AI Insights

The case involves Mayank Gupta, the appellant, who filed an appeal against the order of the CIT(A) for the Assessment Year 2016-17, which upheld a penalty of Rs. 47,83,078 under section 271(1)(c) of the Income Tax Act. The penalty was imposed due to non-compliance with notices regarding unexplained cash deposits totaling Rs. 97,68,814. The CIT(A) dismissed the appeal due to a 30-day delay in filing, without addressing the merits. The Tribunal, considering the principles of natural justice, remanded the penalty order back to the AO for a fresh assessment, emphasizing the need to evaluate the case on its merits rather than procedural lapses.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846503 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Chandigarh
• Assessment Year: 2016-2017
• Appeal Filed On: 11-08-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: . RANJIT KAUR LD. VIRTUAL
• Assessee Lawyers: TEJMOHAN SINGH
• Keywords: Principle of natural justice
• Section: 142(1); 271(1)(c)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI KRINWANT SAHAY, AM आयकरअपीलसं./ ITA No.1009/CHANDI/2025 (िनधाŊरणवषŊ / Assessment Year: 2016-17) Mayank Gupta C/o Tejmohan Singh, Advocate #527, Sector 10-D, Chandigarh 160011 बनाम/ Vs. ITO Ward-1 Patiala ˕ायीलेखासं./जीआइआरसं./PAN/GIR No. AVJPG-6378-B (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. Tej Mohan Singh (Advocate) ŮȑथŎकीओरसे/Respondent by : Sh. Dr. Ranjit Kaur (Addl. CIT) Ld. Sr. DR (Virtual Mode) सुनवाईकीतारीख/Date of Hearing : 23-03-2026 घोषणाकीतारीख /Date of Pronouncement : 24-03-2026 आदेश / O R D E R Krinwant Sahay (Accountant Member) 1. The appeal has been filed against the order dated 30.06.2025 passed by the Ld. CIT(A) NFAC Delhi for the Assessment Year 2016-17. 2. The Grounds of appeal are as under: 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in dismissing the appeal only on the ground that the appellant has failed to provide any Printed from counselvise.com sufficient cause for the delay in filing of appeal by 30 days without issuance of any show cause notice to explain the delay which is arbitrary and unjustified. 2. Without prejudice to the above, the Ld. Commissioner of Income Tax (Appeals) has erred in not deciding the appeal on merits leading to upholding of the penalty of Rs.47,83,078/- imposed under section 271(1)(c) of the Act which is arbitrary and unjustified. 3. That the appellant craves leave to add OR amend the ground of appeal before the appeal is finally heard OR disposed off. 4. That the order of Ld. Commissioner of Income Tax (Appeals) Officer is arbitrary, opposed to the facts of the case and thus untenable. 3. The brief facts of the case are as under:- 1. Return declaring income of Rs. 2,79,670/- was filed on 15.06.2016 by the assessee. Thereafter, the case was selected for limited scrutiny through CASS for examination of source of cash deposits. It is pertinent of mention here that as per ITS statement placed on record the assessee has deposited cash in saving bank account with two banks i.e. Rs. 83,57, 500/- with Bank of Baroda, Tripri Town Patiala, Rs. 14,11,314 with HDFC bank Leela Bhawan, Patiala. The aggregate amount of cash deposit comes to Rs. 97,68,814/- for which assessee was liable to prove the source alongwith documentary evidence. Therefore, Notice u/s 143(2) and 142(1) of the I.T. Act dated 18.08.2017 was issued which was served upon the assessee through ITBA. Further, questionnaire dated 08.01.2018 was issued for furnishing basic information alongwith notice u/s 142(1) of the Act to the assessee fixing the case for 15.01.2018. Thereafter, reason relevant questiuonnaire dated 28.06.2018 for 12.07.2018 was issue alongwith notice u/s 142(1) of the Act. In response to these notices, the assessee has not complied with. Accordingly, the AO made addition of above mentioned amount in the assessment order and issued notice for penalty u/s 271(1)(c). The AO levied penalty of Rs. 47,83,078/- u/s 271(1)(c). Against the penalty order of the AO the assessee preferred an appeal before the Ld. CIT(A). Printed from counselvise.com 4. The AO has passed in this penalty order under Section 271 (1)(c) against which an appeal was filed by the Assessee before the Ld. CIT(A). The Ld. CIT(A) has dismissed the appeal because there was a delay of 30 days in filing of the appeal. 5. During the proceedings before us the Ld. Counsel of the Assessee brought it to the notice of the Bench that the order passed by the AO is an ex-parte order against which the Assessee filed an appeal before the Ld. CIT(A) which was delayed by 30 days. The Ld. CIT(A) did not condone the delay stating that no reasons have been mentioned for the delay in filing of the appeal either in Form-35 or in the submissions filed, therefore, he dismissed the appeal without giving any finding on merit. 6. The Ld. Counsel of the Assessee submitted that the Assessee could not bring on record either any detailed document before the AO or before the Ld. CIT(A). Per contra, Ld. DR relied on the orders of the authorities below. 7. We have considered the findings given by the AO and the reason for dismissing the appeal by the Ld. CIT(A), we have also heard the arguments of the Ld. AR. Ld. Counsel of the Assessee and the Ld. DR we find that the CIT(A) have dismissed the appeal simply because the appeal was filed belatedly by 30 days. Printed from counselvise.com 8. Though the CIT(A) has dismissed the appeal, but he should have given his findings on the basis of material available on record on merit that he has failed to do. In any case, we have already remanded the quantum appeal in this case to the AO for fresh assessment. Therefore, keeping in view the element of natural justice we are of this considered view that the penalty order should also be remanded back to the AO. 9. Accordingly, the Assessee appeal is allowed for statistical purpose. Order pronounced on 24-03-2026 -Sd- -Sd- (LALIET KUMAR) (KRINWANT SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 24-03-2026 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "