THE SASWAD MALI SUGAR FACTORY,SOLAPUR V. DCIT CIRCLE 1, SOLAPUR, SOLAPUR

ITA 312/PUN/2025

AI Insights

The case involves The Saswad Mali Sugar Factory appealing against a penalty order under section 270A of the Income Tax Act, which was confirmed by the Ld. CIT(A)/NFAC. The penalty was levied for under-reporting of income related to the reversal of excess gratuity provision for the Assessment Year 2017-18. The primary legal contention raised by the assessee was the lack of specificity in the penalty notice regarding the exact clause under which the penalty was imposed. The Tribunal decided to remit this legal issue back to the Ld. CIT(A)/NFAC for further examination, emphasizing the need for a detailed adjudication on the legal grounds raised.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396349 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Other Referred Cases: National Thermal Power Co. Ltd. vs. CIT, 229 ITR 383 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A.D.KULKARNI
• Assessee Lawyers: B. D. BHIDE
• Keywords: Set aside

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.312/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year : 2017-18 The Saswad Mali Sugar Factory, Malingar Tal. Malshiras, Dist. Solapur- 413108. PAN : AAACT9821D Vs. ACIT, Circle-1, Solapur. Appellant Respondent आदेश / ORDER PER MANISH BORAD, AM: This appeal filed at the instance of assessee is directed against the order of Ld. CIT(A)/NFAC u/s 250 of the Act dated 06.01.2025 which is arising out of the penalty order u/s 270A of the Act for Assessment Year 2017-18 framed on 15.09.2021 by the ITO, NFAC, Delhi. 2. Though the assessee has raised various grounds of appeal but all are directed against the findings of the Ld. CIT(A)/NFAC Assessee by : Shri B. D. Bhide Revenue by : Shri A. D. Kulkarni Date of hearing : 02.04.2025 Date of pronouncement : 30.05.2025 ITA No.312/PUN/2025 2 confirming the levy of penalty u/s 270A of the Act at Rs.15,37,754/- levied by the Assessing Officer for under-reporting of income of Rs.1,02,96,316/- for reversal of excess gratuity provision. 3. At the outset, Ld. Counsel for the assessee referring to the legal issue raised in ground of appeal no.1(ix) that Ld. Faceless Assessing Officer (FAO) in the notice u/s 270A r.w.s. 274 of the Act dated 26.08.2021 failed to state the specific reason for which penalty u/s 270A of the Act has been charged. It is also submitted that this legal issue being raised for the first time remained to be adjudicated by Ld. CIT(A)/NFAC. 4. Ld. DR, on the other hand, stated that since this legal issue has been raised for the first time, the same may be remitted back to the file of the Ld. CIT(A)/NFAC for necessary adjudication. 5. We have heard rival contentions and perused the records placed before us. We observe that the assessee claimed gratuity expenses of Rs.1,20,92,766/- and paid a gratuity at Rs.17,96,450/-. The assessee failed to furnish any explanation about the excess claim during the assessment proceedings for A.Y. 2017-18 completed on 24.12.2019. Ld. FAO initiated the penalty ITA No.312/PUN/2025 3 proceedings by the penalty notice issued on 26.08.2021, a copy of which is reproduced below :- ITA No.312/PUN/2025 4 6. Referring to the above show-cause notice, Ld. Counsel for the assessee has raised a legal ground claiming that the impugned penalty proceedings deserves to be quashed as no proper notice has been issued to the assessee because Ld. FAO has not specified as the case of the assessee falls under which clause i.e. clause 2(a) to 2(g) for the alleged under-reporting of income. The said legal ground challenging the assumption of jurisdiction for carrying out the impugned penalty proceedings has been raised for the first time before this Tribunal. Since legal ground can be raised at any stage of legal process if they are based on the facts already on record and does not require any fresh evidence then in light of the judgement of Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. vs. CIT, 229 ITR 383 (SC), such legal issue deserves to be admitted for adjudication. However, since this legal issue has been raised for the first time before this Tribunal, Ld. CIT(A)/NFAC could not dealt with this legal issue. Therefore, being fair to both the parties and in the larger interest of justice, we remit back this legal issue to the file of Ld. CIT(A)/NFAC for necessary adjudication to be carried out in light of settled judicial precedent which shall be referred to by the assessee in set aside proceedings for which ITA No.312/PUN/2025 5 reasonable opportunity of hearing shall be granted to the assessee. If needed Ld. CIT(A)/NFAC may call for the remand report from the Ld. FAO regarding the show-cause notice u/s 270A of the Act dated 26.08.2021 about not specifying the specific limb provided u/s 270A(2) for the alleged under-reporting of income. Since the legal ground has been restored to Ld. CIT(A)/NFAC, dealing with other grounds would be premature and academic in nature. 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on 30th day of May, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 30th May, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "