BT global communications india pvt ltd v. the assessment unit national faceless penalty centre income tax department new delhi &anr

​An assessment order for the assessment year 2018-19 was passed against the petitioner under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961 on 28 July 2022.  

​On the same day (28 July 2022), the Assessing Officer recorded satisfaction and issued a notice for penalty under Section 270A of the Act.  

​The petitioner filed a reply on 17 August 2022 and subsequently filed an appeal before the Income Tax Appellate Tribunal under Section 253 of the Act on 29 August 2022, duly informing the Assessing Officer.  

​Despite the pendency of the appeal, the respondent-Assessing Officer proceeded to pass an impugned penalty order on 24 March 2023 under Section 270A.  

​The petitioner approached the High Court via a writ petition challenging the penalty order as being contrary to Section 275(1)(a) of the Act.  

​Issues For Consideration:

​Whether the Assessing Officer has the jurisdiction to pass a penalty order under Section 270A of the Income Tax Act, 1961 while an appeal against the assessment order is pending before the Income Tax Appellate Tribunal under Section 253.

​Submissions Of Parties:

​Petitioner / Appellant:

​Argued that the impugned penalty order is void and without jurisdiction because it was passed during the pendency of an appeal before the Income Tax Appellate Tribunal.  

​Invoked Section 275(1)(a) of the Income Tax Act, 1961, submitting that the provision explicitly mandates that penalty proceedings must be kept in abeyance during the pendency of such appeals.  

​Asserted that explicit intimation regarding the filing of the appeal was communicated to the Assessing Officer.  

​Respondent / State:

​Invited the Court's attention to paragraph 3 of the assessment order, noting that the assessee's initial reply indicated they were merely in the process of filing an appeal.  

​Court's Observations & Analysis:

​Re: Issue: Jurisdiction to pass penalty order during pending ITAT appeal

​The Court observed that while paragraph 3 of the impugned order stated the petitioner was in the process of filing an appeal (drawn from the initial reply dated 17 August 2022), it was undisputed that the appeal was formally filed on 29 August 2022 and intimation was provided.  

​The Court emphasized that whether or not an intimation was given is ultimately immaterial, as Section 275(1)(a) of the Act unconditionally provides that penalty proceedings must be kept in abeyance when an appeal under Section 253 is pending.  

​On the date the impugned penalty order was passed, the petitioner's appeal was active and pending before the Tribunal.  

​Held: The impugned penalty order is contrary to Section 275(1)(a) of the Income Tax Act, 1961 and is therefore quashed and set aside (Para 14).

​Decision & Directions:

​The writ petition is allowed, and the impugned penalty order dated 24 March 2023 is quashed and set aside.  

​The Assessing Officer is granted the liberty to initiate penalty proceedings afresh, should the Tribunal decide the pending appeal against the petitioner-assessee and if permitted by law.

​Separate Opinions: None.

​Legal Provisions Discussed & Precedents Cited:

​Income Tax Act, 1961 - Section 143(3): Assessment provisions.  

​Income Tax Act, 1961 - Section 144C(13): Reference to dispute resolution panel.  

​Income Tax Act, 1961 - Section 253: Appeals to the Appellate Tribunal.  

​Income Tax Act, 1961 - Section 270A: Penalty for under-reporting and misreporting of income.  

​Income Tax Act, 1961 - Section 275(1)(a): Bar on passing penalty orders during the pendency of appeals before the Appellate Tribunal.  

​Precedents Cited: None discussed.