Ex-Parte order passed for Non-Appearance of Assessee: ITAT grants another opportunity giving relief to Oriental Bank [Read Order]

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) granted another opportunity while giving relief to Oriental Bank as an ex-parte order was passed for non-appearance of the assessee.

The assessee is a government bank engaged in banking activities. The Assessing Officer (AO) passed an order under Sections 201(1) & 201(1A) of the Income Tax Act, 1961 treating the assessee in default for non/short deduction of Tax Deducted at Source (TDS) under Section 194A of the Income Tax Act and raised a demand of Rs.2,67,763/- under Section 201(1) and interest of Rs.2,24,921/- under Section 201(1A) of the Income Tax Act totaling Rs.4,92,684/-.

The case was fixed for hearing but no information/ details were furnished by the assessee, thereafter Jt. Commissioner of Income Tax (TDS) Jaipur imposed a penalty amounting to Rs.2,67,763/-vide order being equivalent to the amount of tax which the assessee failed to deduct.

Notice for hearing under Section 250 of the Income Tax Act was issued to the appellant by the Commissioner of Income Tax (Appeal) [CIT(A)]. The assessee neither responded to the notices nor filed any written submission, thus the CIT(A) passed an ex parte order by confirming the penalty order.

The Two-member bench comprising of Sandeep Gosain (Judicial member) and Rathod Kamlesh Jayantbhai (Accountant member) held that since the impugned order of the CIT(A) was passed ex parte by upholding the penalty order passed under Section 271C of the Income Tax Act and thereby sustained the levy of penalty under Section 271C of the Income Tax Act of Rs. 2,67,763/- being equivalent to the amount of tax which the appellant failed to deduct, therefore, in the totality of facts and circumstances of the case and in the interest of justice, the ex-parte order of the CIT(A) was set aside

The matter was remanded back to the file of the AO for fresh adjudication after providing a reasonable opportunity of being heard to the assessee. The assessee was granted one more opportunity to represent his case before the AO and directed to file necessary documents/evidence as required by the AO. In case the assessee fails to appear before the AO, the AO may decide the appeal on the basis of the material available on record.

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