TaxTMI 
TaxTMI 
2024 (12) TMI 1794
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....National Faceless Appeal Centre ('NFAC') under section 250 of the Income tax Act, 1961 ('IT Act) is erroneous, devoid of facts and contrary to the provisions of the law and accordingly, liable to be quashed. 1.2 The NFAC failed to appreciate that the Appellant had requested for a video conference hearing during the proceedings before NFAC which was not granted to the Appellant. 2. Ground no. 2 1.1 On the facts and in the circumstances of the case and in law, the NFAC erred in upholding the action of the Assessing Officer in initiating the penalty proceedings under section 270A of the I. T. Act. 1.2 The Appellant prays that the learned Assessing Officer be directed to drop the penalty proceedings initiated under section 270A of the I. T. Act. 4. Brief facts of the case are that the assessee is Private Company and had filed its return of income on 29.03.2019, declaring total income at Rs. 3,30,07,37,660/-. The return of income was processed u/s. 143(1) of the Act and the assessee's case was selected for scrutiny under CASS and notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. The learned Ass....
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.... upheld the initiation of penalty proceedings u/s. 270A of the Act. The ld. DR relied on the order of the ld. CIT(A). 10. We have heard the rival submissions and perused the materials available on record. It is observed that the ld. AO has initiated the penalty proceedings u/s. 270A of the Act but has not levied penalty in the assessee's case even after the lapse of the time after the completion of the assessment proceedings. It is observed that Section 270A was not mandatory in nature and the ld. AO before levying of penalty is required to issue show cause notice and the assessee is to be given a reasonable opportunity of hearing for its defense. It is also the requirement that the ld. AO has to specify that as to under which clause of 270A of the Act, the assessee was liable for penalty. The ld. AO in the present case has specified that Section 270A of the Act will be initiated separately for under reporting of income. The assessment order was passed on 10.12.2019 and it is to be noted that no show cause notice was issued subsequent to the passing of the assessment order. 11. The ld. CIT(A) has upheld the initiation of penalty for under reporting of income by the assess....
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.... 3- Ground no. 3 4.1 On the facts and in the circumstances of the case and in law, the NFAC erred in remanding the matter back to the learned AO to verify the claim of short-grant of credit of tax deducted at source amounting to Rs. 24,067. 4.9 The Appellant prays that the learned AO be directed to allow claim as per law. 4 Ground no. 4 4.1 On the facts and in the circumstances of the case and in law, the NFAC erred in upholding the action of the learned AO for levy of interest under section 234A of the IT Act amounting to Rs. 20,23,482 without appreciating the fact that the return of income for the impugned AY was filed within the due date prescribed under section 139(1) of the IT Act. 4.2 The Appellant prays that the learned AO be directed to delete the interest under section 234A of IT Act. 5- Ground no. 5 5.1 On the facts and in the circumstances of the case and in law, the NFAC erred in upholding the action of the learned AO in initiating the penalty proceedings under section 270A of the IT Act. 5.2 The Appellant prays that the learned Assessing Officer be directed to drop the penalty proceedings initi....
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....ved that the ld. AO has nowhere in the assessment order passed u/s. 143(3) of the Act has discussed the issue of the non- reduction of profit on sale of fixed assets amounting to Rs. 10,85,026/- which was credited to the profit and loss account while determining the taxable income. The ld. CIT(A) has also not adjudicated these grounds of appeal for the reason that it does not form part of the assessment order. This fact has not been controverted by both sides. It is a settled proposition of law that the intimation u/s. 143(1) and the subsequent assessment order passed u/s. 143(3) would not merge with each other automatically, where the ld. AO has not adjudicated the issue on the merits which emanates from the intimation u/s. 143(1) and during the scrutiny assessment u/s. 143(3) of the Act. It is also evident that the assessee cannot challenge the addition made u/s. 143(1) in an appeal preferred against the order u/s. 143(3) of the Act merely for the reason that the ld. AO has concluded the assessment by incorporating the adjustments made vide intimation u/s. 143(1) of the Act. The doctrine of merger would not be applicable unless the assessment order is passed with the discussions ....
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....the Act. The finding of ground no. 2 given in ITA No. 927/Mum/2024 shall apply mutatis mutandis to this ground also. 30. In the result, the appeal filed by the assessee is partly allowed for statistical purpose. ITA No.928/Mum/2024 (Assessment Year: 2020-21) 31. The assessee has raised the following grounds of appeal: 1. Ground no. 1 1.1 On the facts and in the circumstances of the case and in law, the order passed by the National Faceless Appeal Centre (NFAC) under section 250 of the Income-tax Act, 1961 (IT Act) is erroneous, devoid of facts and contrary to the provisions of the law and accordingly, liable to be quashed. 1.2 The NFAC failed to appreciate that the Appellant had requested for a video conference hearing during the proceedings before NFAC which was not granted to the Appellant. 2. Ground no. 2 1.1 On the facts and in the circumstances of the case and in law, the NFAC erred in dismissing/ rejecting the ground of the Appellant related to double disallowance of Rs. 57.55.676 as infructuous and hence, is liable to be dismissed. 1.2 The NFAC failed to appreciate the fact: ● that the starting poi....