2022 (4) TMI 1675 - HC - Income Tax

Revenue must verify assessee's appeal; penalty u/s270A and demand u/s156 quashed, s.274 notice preserved

HC held that the Revenue should verify whether the assessee had filed a valid appeal against the assessment order for AY 2018-19 and not adopt a ... Penalty order u/s 270A and the notice of demand u/s 156 - petitioner’s grievance with the impugned order and the notice of demand is that these are notwithstanding the petitioner’s appeal as against the subject assessment order dated 16.04.2021 - assessee could not file such appeal immediately because of the Covid-19 pandemic and certain technical reasons - petitioner’s case is that for the reasons that the petitioner cannot explain, a common acknowledgement has been generated for the AY 2018-19 and 2019-20 HELD THAT:- Fact whether the petitioner has filed necessary appeal in time for the Assessment Year 2018-19 can be easily verified and there need not be any hyper-technical approach. Therefore, the petition is disposed of quashing the impugned order dated 29.03.2022 and the consequential notice of demand under Section 156 of the I.T. Act dated 29.03.2022 vide Annexures A1 and A2 with the observation that notice under Section 274 read with Section 270A of the I.T. Act is saved for further decision upon ascertaining whether a valid appeal has been filed or not. Petitioner challenged a penalty order dated 29.03.2022 under Section 270A of the Income Tax Act, 1961 and the consequential notice of demand under Section 156, contending that these were issued despite a pending appeal against the assessment order dated 16.04.2021 under Section 143(3) for AY 2018-19. The petitioner asserted that an appeal in Form 35 was filed on 03.09.2021 but, due to system issues, a common acknowledgement was generated for AYs 2018-19 and 2019-20, leading the authority to treat the appeal for AY 2018-19 as invalid and to proceed with penalty. The respondent submitted that the existence and timeliness of the appeal for AY 2018-19 could be easily verified and that a hyper-technical approach was unnecessary. The Court quashed the penalty order and demand notice, but expressly 'saved' the notice under Section 274 read with Section 270A, permitting the Assessing Officer to verify the validity of the appeal and thereafter proceed in accordance with law.