WALIA AGNI INDUSTRIES PRIVATE LIMITED,PUNE V. ITO WARD-10(1), PUNE

ITA 1534/PUN/2024

AI Insights

The case involves Walia Agni Industries Private Limited, which appealed against the penalty of Rs.1,45,33,399 levied under section 271(1)(c) of the Income Tax Act, 1961 by the Assessing Officer for the Assessment Year 2014-15. The penalty was based on additions and disallowances made during an ex-parte assessment under section 144, which the assessee contested. The Commissioner of Income Tax (Appeals) dismissed the appeal, leading to the current appeal before the Tribunal. The Tribunal noted that the quantum appeal for the same assessment year was still pending and decided to set aside the penalty order, restoring the matter to the CIT(A) for a decision post the quantum appeal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 836537 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 23-07-2024
• Other Referred Cases: Union of India and others Vs. Dharmendra Textile Processors and others, CIT Vs. Altron Electronics India Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRADDHA NICHAL
• Assessee Lawyers: NINAD KULKARNI
• Keywords: Set aside; Opportunity of being heard; Reasonable cause; Unexplained cash credit; Principle of natural justice; Audi alteram partem
• Section: 144; 271(1)(c)

Judgement Text

" आयकर अपीलीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE MS. ASTHA CHANDRA, JUDICIAL MEMBER AND SHREE DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1534/PUN/2024 धििाारण वर्ा / Assessment Year : 2014-15 Walia Agni Industries Private Limited, 30/25, D li Block, Chinchwad MIDC, Chinchwad, Pune-411019 PAN : AAACW9910E Vs. Income Tax Officer, Ward – 10(1), Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Ninad Kulkarni Department by : Smt. Shraddha Nichal Date of hearing : 02-02-2026 Date of Pronouncement : 09-02-2026 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 24.05.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] wherein he has confirmed the penalty of Rs.1,45,33,399/- levied by the Ld. Assessing Officer (“AO”) u/s 271(1)(c) of the Income Tax Act, 1961 (the “Act”) pertaining to Assessment Year (“AY”) 2014-15. 2. The assessee has raised the following grounds of appeal :- “1. That, on facts and in the circumstances of the case, the order of CIT(A). NFAC in dismissing the appeal filed by the appellant is arbitrary. erroneous, contrary to law and is opposed to the principles of natural justice, equity & fair play. 2. That, on facts and in the circumstances of the case, the Ld. CIT(A) has passed the order u/s 250 without giving sufficient opportunity of being heard and thus violating the principles of 'audi alteram partem. 3. That, on facts and in the circumstances of the case, the Ld. CIT(A) has erred in confirming the penalty u/s 271(1)(c) of the IT Act, imposed by Printed from counselvise.com 2 ITA No.1534/PUN/2024, AY 2014-15 the Ld. AO to the tune of Rs. 1,45,33,399/- for FY 2013-14 relevant to AY 2014-15. 4. That, on facts and in the circumstances of the case, the Ld. CIT(A) has erred in not appreciating the submission made by the appellant on 30.04.2024 wherein the appellant had requested to keep the matter in abeyance as the original assessment order being contested before the CIT(A) was being heard. 5. That, on facts and in the circumstances of the case, the Ld. CIT(A) has erred in passing the impugned order u/s 250 which is in respect of order u/s 271(1)(c), without considering the fact thatthe decision in respect of the assessment order passed u/s 144 on 17.10.2016 was still pending before the Ld. CIT(A) which is the very foundation of this penalty order. 6. That, on facts and in the circumstances of the case, the Ld. CIT(A) has erred in not appreciating the fact that the assessment order passed u/s 144 which is the very foundation of this penalty order being contested is an Ex parte order wherein sufficient opportunity of being heard was not granted to the appellant. 7. That, on the facts and in the circumstance of the case, the Ld. CIT(A) has passed the order u/s 250 without bringing any cogent material to substantiate the findings so recorded in the appellate order. 8. That, on facts and in the circumstances of the case, the Ld. CIT(A) has passed the order u/s 250 in a mechanical way, without application of mind and without appreciating the overall facts of the case. 9. The appellant may kindly be allowed to add, alter or modify any other modify any other points to the grounds of appeal at any time before or at the time of hearing. 10. Any other order in the interest of justice may kindly be passed.” 3. At the outset, the Ld. AR submitted that the quantum appeal of the assessee for AY 2014-15 is pending for adjudication before the Ld. CIT(A)/NFAC and the assessee has filed the requisite submissions along with the relevant documentary evidences in support of its claim before the Ld. CIT(A)/NFAC. He further submitted that the observation of the Ld. AO in the impugned assessment order that the assessee has not filed an appeal against the quantum assessment before the Ld. CIT(A)/NFAC is incorrect. He, therefore, urged that the matter may be sent back to the file of the Ld. CIT(A)/NFAC for adjudication once the quantum appeal of the assessee is decided by him. 4. The Ld. DR had no objection to the above request of the Ld. AR. 5. We have heard the Ld. Representatives of the parties and perused the material available on record. The assessee filed its return of income for Printed from counselvise.com 3 ITA No.1534/PUN/2024, AY 2014-15 AY 2014-15 on 29.11.2014 declaring loss at Rs.6,94,29,461/-. The case of the assessee was selected for scrutiny through CASS. The Ld. AO completed the assessment ex-parte u/s 144 of the Act on 17.10.2016 on total assessed loss of Rs.2,23,95,803/- thereby making total additions/disallowances of Rs.4,70,33,658/- comprising of-(i) unexplained credit of Rs.3,36,13,000/- u/s 68 of the Act; (ii) expenses of Rs.1,30,90,658/- being unsubstantiated by the supporting documents and (iii) Rs.3,30,000/- towards payments made to related parties being unsubstantiated by evidence. Thereafter, penalty proceedings were initiated by the Ld. AO u/s 271(1)(c) of the Act for concealment of particulars of income as well as furnishing inaccurate particulars of income to the extent of Rs.4,70,33,658/- without any reasonable cause. During the penalty proceedings the various notices as well as the final show cause notice issued by the Ld. AO remained un-complied with by the assessee which resulted in levy of penalty on the assessee of Rs.1,45,33,399/- being minimum penalty leviable u/s 271(1)(c) of the Act. During the appellate proceedings before the Ld. CIT(A)/NFAC, there was non-compliance to some of the notices issued by his office. The Ld. CIT(A)/NFAC dismissed the appeal of the assessee observing that despite ample opportunity provided to the assessee both during the assessment and penalty proceedings, the assessee could not offer any logical or genuine explanation for the discrepancies between the assessed income and the returned income by relying on the decision of the Hon’ble Supreme Court in the case of Union of India and others Vs. Dharmendra Textile Processors and others and in the case of CIT Vs. Altron Electronics India Ltd. Before us, the Ld. Counsel for the assessee has submitted that the quantum appeal filed by the assessee for the relevant AY 2014-15 is still pending before the Ld. CIT(A)/NFAC and has therefore requested that the matter may be restored to the file of the Ld. CIT(A)/NFAC to decide the issue afresh once the quantum appeal of the assessee is adjudicated by him. In this view of the matter, we deem it fit, in the interest of justice and fair play, to set aside the impugned penalty order and restore the matter back to the file of the Ld. CIT(A)/NFAC for adjudication afresh as per fact and law once the quantum appeal is decided by him, after affording reasonable opportunity of hearing to the assessee. We hold and direct accordingly. The effective grounds raised by the assessee are accordingly allowed for statistical purposes. Printed from counselvise.com 4 ITA No.1534/PUN/2024, AY 2014-15 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 09th February, 2026. Sd/- Sd/- (Dr. Dipak P. Ripote) (Astha Chandra) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 09th February, 2026. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, पुणे / DR, ITAT, “B” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com "