AO Denies Immunity from Penalty for Late Filing of Form 28: ITAT Restores Matter as CIT(A) fails to decide on merits [Read Order]

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter, stating that the Commissioner of Income Tax (Appeals) [CIT(A)] failed to decide the immunity application regarding the penalty on its merits.

The Cardamon Planters Marketing Co-op Society Ltd., (assessee) filed an income tax return for the Assessment Year (AY) 2018-19 on October 18, 2018, declaring a total income of Rs. 1,20,22,050. The Assessing Officer (AO) completed the assessment determining a revised income of Rs. 1,82,70,297 by disallowing a portion of the deduction claimed under Section 80P of the Act.

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The AO initiated penalty proceedings under Section 270A of the Income Tax Act. The assessee filed an application for a grant of immunity under Section 270A(6) of the Income Tax Act. The AO rejected the immunity due to the late filing of Form 28. The AO levied a penalty of Rs. 10,81,197

Aggrieved by the penalty order, the assessee approached the Commissioner of Income Tax (appeals)[CIT(A)]. The CIT(A) dismissed the appeal and confirmed the penalty without dealing with the issue of immunity sought by the assessee.

Aggrieved by the order, the assessee filed an appeal before ITAT. The tribunal heard the parties and examined the materials on record.

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The two-member bench comprising Shri Inturi Rama Rao (Accountant Member) and Shri Prakash Chand Yadav (Judicial Member), observed that the assessee sought immunity from penalty in terms of provisions of section 270A of the Income Tax Act.

The tribunal observed that both the AO and the CIT(A) failed to address the immunity application on its merits. The Tribunal held that justice would be served if the matter were remanded to the AO for a fresh examination of the assessee's claim for immunity.

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The tribunal also held that all arguments raised before it remained open for reconsideration before the AO.

Therefore, the tribunal set aside the CIT(A)’s order and restored the case to the AO for a fresh decision on the assessee’s immunity application. Thereby, the appeal of the assessee was partly allowed. 

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