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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K & SHRI LAXMI PRASAD SAHU
Per Bench:
These appeals at the instance of the assessee are directed against three orders of the CIT(A) (all orders are dated 20.09.2023), passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Years are 2009-10, 2010-11, 2011-12.
The orders of the CIT(A) arise out of the orders of the AO imposing penalty under sections 271(1)(c) and 271AAA of the Act, of Rs.2,76,354/-, Rs.4,78,950/- and Rs.40,000/- for Assessment Years 2009-10, 2010-11, 2011-12 respectively.
At the very outset, we notice that CIT(A) has dismissed the appeals of the assessee in limine without adjudicating on merits for all the three Assessment Years. The CIT(A) was of the view that there is no “sufficient cause” for condoning the delay of 6.3 years in filing the appeals before him.
The common affidavit filed by the assessee before the CIT(A) for condoning the delay is placed on record. The CIT(A), after extracting the relevant portion of the aforesaid affidavit for condonation of delay, held that there is no justifiable cause for condoning the huge delay in filing the appeals, and dismissed all the appeals. The relevant finding of the CIT(A) for Assessment Year 2009-10 reads as follows:
“6.0 The main reasons for the substantial delay as per the submission dated11.09.2023 are that the Appellant was in judicial custody arid that he received wrong professional advice. The Appellant has filed also an affidavit for con oration of delay only on 12th September, 2023. The contents of the affidavit are the also same as mentioned in the written submissions. After perusal of affidavit, it is noticed that the Appellant has not mentioned the period of judicial custody. Further, the affidavit was filed with an inordinate delay of 3 years after the filing of appeal, which itself is delayed by 6.3 years. This is an indication of the Appellant's casualness and indifference to the proceedings. It also shows that filing, of affidavit was only an afterthought. 6.1 It is stated in the affidavit that the Appellant was in judicial custody when penalty order dated 20.09.2013 was passed and also when the order u/s 143(3) dated 26/03/2013 was passed However, in the affidavit, there is no mention of the dates when the Appellant was in judicial custody, the periods or duration for which he was in judicial custody and whether he was out on interim bail during the intervening period, whereas the written submission states ,he Appellant was released on bail on 10/12/2014. In the petition for condonation of delay in Para 10, it is stated that Appellant was in judicial custody for two years. If as per the written submission, the Appellant was out on bail by 10/12/2014, the appeal against order of penalty should have been filed atleast after 10/12/2014, and therefore there is no justification for not filing the appeal till 11.02.2020. Hence, judicial custody cannot be the reason for the Appellant filing the appeal with the substantial delay of 6.3 years and therefore the claim of the Appellant is without basis. The affidavit it silent regarding the efforts made by the Appellant after he was out on bail by 10/12/2014 and whether there was a sufficient cause that prevented him for filing appeal till 11/02/2020. 6.2 In para 6 of the affidavit, the Appellant is silent regarding the fact that the appeal against the order u/s 143(3) dated 26/03/2013, was itself filed with a delay of 125 days. This fact is not mentioned in the affidavit, even though it was stated in para 5 that the Income Tax Practitioner ("HP"), Shri Sudhindra appeared on behalf of the appellant during the assessment proceedings before the AO. In addition, the fact that same ITP also appeared before the AO during the penalty proceedings, is not stated in the affidavit. 6.3 Para 8 of the affidavit is reproduced below for reference: "8. That, after the impugned order of penalty wider section 271 [1][c] of the Act was passed by the learned assessing officer, my relatives approached the then authorised representative Sri. Sudhindra, ITP 10 check the next course of remedy available against the order of penalty passed. The said ITP appraised my relatives, that since a statutory appeal under section 246A of the Act is already filed against the impugned order of assessment passed under section 143 [3] r. w.s. 153A of the Act which is pending adjudication. the impugned order of penalty passed wider section 271 [1][c] oldie Act, dated 20/09/2013 is dependent on the outcome of the appellate proceedings against the impugned order of assessment passed under section 143[3] r. w.s. 153.4 of the Act.” Even assuming that Appellant had strictly followed the advice of the ITP, then appeal should have been filed immediately after the CIT(A) passed the common order dated 12/02/2016 in to 403/DCIT,CC-1(3)/CIT[A]- VI/2013-14, dismissing the appeal against the order of the AO. However, no appeal was against the penalty order in February 2016, even alter disposal of order by CIT(A). Additionally, no reason has been given in the affidavit for not following the advice of the ITP regarding the filing of appeal against the penalty order after disposal of appeal by CIT(A). It is be noted that though the Appellant had engaged ITP Shri Sudhindra for the assessment proceedings and penalty proceedings, there was no appearance on behalf of the appellant during the appellant proceedings before CIT(A), though as per the written submission the Appellant was out on bail by 10/12/2014. This is an indication of the fact that the Appellant was negligent and ignored the provisions of the Act. 6.4 Para 11 of the affidavit is reproduced below for reference: "That, the appeals which were filed by me against the order of assessment passed under section 143[3] r.w.s. 153A of the Act, before the Hon'ble Commissioner of Income-tax [Appeals], came to be disposed off by the Hon'ble Commissioner of Income-tar [Appeals], vide his co111111017 appellate order for the Assessment Years 2009-10, 2010-11 & 2011-12 in ITA No's 401 to 403/DC1T, CC-1[3]/C1T[A]-1,7/2013-14, dismissing the appeals preferred by me." It is evident from the above paragraph that the fact of disposal of appeals by CIT(A) is stated, however the reason for disposal being delay in filing of appeal of 125 days that was not condoned and the failure to pay admitted tax is not at all mentioneci in the affidavit. 6.5 Para 12 of the affidavit is reproduced below for reference: "That, the then IT? engaged the services of Senior Tax Consultant Sri. S. Venkateshan, Chartered Accountant at Bengaluru fur preferring appeals before the Hon'ble Tribunal. The then ITP during the discussion with the Senior Tax Consultant Sri. S. Venkateshan, Chartered Accountant, did not bring to the notice as regard to the order of penalty passed" The date on which the ITP engaged the services of Senior Tax Consultant Sri S Venkateshan is not mentioned in the affidavit. The place and the dates on which ITP discussed the case with Senior Tax Consultant is not stated in the affidavit. As per the submissions of the Appellant, he was out on bail by 10/12/2014. Therefore, Appellant could have informed the Senior Tax Consultant regarding the penalty order, if as per the affidavit. ITP failed to inform the Senior Tax Consultant. It is very difficult to accept the reason that the ITP, who appeared on behalf of the Appellant during, the penalty proceedings, did not care to inform the Senior Tax Consultant about the penalty order. Thus, the affidavit does not reveal the details of the "sufficient cause" that prevented the Appellant from informing the Senior Tax Consultant about the penalty order. The engagement of Senior Tax Consultant by the 1TP is not supported by documents and other details, such as fees paid for service rendered. 6.6 Para 13 of the affidavit is reproduced below for reference: " That, thereafter, the Senior Tax Consztltant,Sri. S. Venkateshan, Chartered Accountant, prepared the appeal papers and filed the appeals before the Hon'ble Income-tax Appellate Tribunal, Bangalore Benches, Bengalurtt, against the common appellate order passed for the Assessment Years 2009- 10, 2010-11 & 2011-12, by the Hon'ble Commissioner [-Appeals], which was disposed off by the Hon'ble Tribunal vide its C0111111011 order passed in 1TA No's 670 to 672/13ang/2016, dated 30/09/2016, remitting the matter back to the files of the Hon'ble Commissioner of Income-tax [Appeals], directing to hear the matter afresh.”
It is to be noted that after Hon'ble ITAT passed the order on 30/09/2016, remitting the matter back to the file of CIT(A), no efforts were made even at this stage to file the appeal against the penalty order, even though he was out on bail by 10/12/2014. The. Appellant had engaged the services of Senior Tax consultant to file appeal against the order of ITAT. Appellant also engaged an Advocate Shri V Srinivasan, to appear on his behalf before the Hon'ble ITAT, on his behalf. However, the affidavit does not mention this fact. The affidavit is silent as to whether the Advocate was consulted regarding filing, of further appeal against penalty order. It is therefore amply clear that the Appellant had been engaging several professionals at different stages of proceedings, but strangely was not able to get proper advice regarding filing of further appeal against penalty order. 6.7 Para 14 & 15 of the affidavit are reproduced below for reference: "14. That, a letter from the learned assessing officer i.e. Assistant Commissioner of Income-tar, Central Circle — 1131 Bengaluru, dated 29/01/2020 was served on me, wherein the details of payment of outstanding taxes were given and 1 was asked to make the payment of outstanding demands.
That, after the receipt of the said letter for payment of arrears outs-twitting demands. 1 approached Sri. Sudhindra, 177) who was then my authorised representative, suggested to consult the Senior Tax Consultant for his advice in relation to the letter sent by the learned assessing officer dated 29/01/2020.” It is apparent from the above paragraphs, that Appellant did not bother to pay the outstanding demand even after the knowledge c f demand being in existence after the passing of assessment order, penalty order, dismissal of appeal by CIT(A) and Hon'ble ITAT remitting matter back to CIT(A) in its order dated 30/09/2016. It also appears that the Appellant realised about the pending income tax proceedings only after receiving letter dated 29/01/2020 from the Assistant Commissioner of Income-Tax, Central Circle -1(3). Bengaluru, though he was out on bail on 10/12/2014. This fact only demonstrates that the Appellant was callous and reckless towards income tax proceedings at each stage. The above paragraphs also reveal the fact that no efforts were made by the Appellant during the period from passing of order by Hon'ble ITAT dated 30/09/2016 till the receipt of letter dated 29/01/2020, from AO. regarding outstanding demand. The affidavit is totally silent regarding the efforts made by the Appellant to file appeal against the penalty proceedings, in this period of more than 3 years. It only demonstrates the fact that all along the Appellant has been deliberately inactive and negligent during this period. There is no reasonable explanation for not filing appeal during this period. 6.8. Para 16 to 19 of the affidavit is reproduced below for reference: “16. That, I approached the Senior Tax Consultant, Sri. S. Venkateshan, Chartered Accountant and showed bin, the letter sent by the learned assessing officer dated 29/01/2020.Alter perusi»g the said notice, noticed that apart franc the demands raised against the orders of assessment passed under section 143[3J rw.s. 153.4 of the Act, the demands against the penalty orders for the three years under section 271[1)74 & 271.4.AA of the Act, wus also mentioned.
That, when it was enquired by Sri. S. lienkatesan, Chartered Accountant, about the status of action taken against the orders of penalty passed for the impugned three years, I stated that I was advised hi. his the then Authori:ed Representative, that since an appeal against the orders of assessments for the three years have already been prepared and filed and pending adjudication, there was no necessity to file any separate appeals against the order of penalty passed for the three years, as the imposition of penalty is consequential and dependent on the outcome of the appeal filed against the impugned order of assessments and stated that based on the advice and guidance given by the said ITT, appeal against the order of penalo. were not preferred.”
That, Sri. S. Venkatesan, Chartered Accountant, explained me that the appeal against assessment proceedings are independent with that of the appeal against penalty proceedings, and he staled that I. ought to have preferred statutory appeal against the said impugned orders ofpenalo, passed and suggested to prefer a statutory appeal before the Hon 'ble Commissioner of Income-tax [Appeals] against the impugned orders of penalty under section 246A of the Act, by filing a condonation petition, narrating the entire facts and circumstances leading for delay in filing the statutory appeals against the impugned order of penalty passed, by way of a separate condonation petition along with the appeal memo.
That, after obtaining proper professional advice and guidance from Sri. S. Venkatesan, Chartered Accountant, with the help and guidance of Sri. S. Venkatesan, Chartered Accountant, the appeal papers for the three years were prepared against the penalty orders passed and the same were filed and instituted before the Hon 'hle Commissioner of Income-tax [Appeals]." The above paragraphs of the affidavit do not reveal the date and the place of meeting between the Appellant and the Senior Tax Consultant. There is no convincing reason given for the failure on part of Appellant to discuss the demands raised against the Appellant with the same Senior Tax Consultant whose help was taken earlier, (refer para 12 of the affidavit), even though he was out on bail on 10/12/2014. The affidavit does not clarify what prevented the Appellant from informing the Senior Tax consultant, whose services were engaged earlier in 2016, about the demands raised in assessment and penalty orders. 6.9 In the instant case the affidavit of the professionals dealing with file, i.e ITP and Senior Tax Consultant, was not filed. The Appellant could have submitted an affidavit by the ITP which would state that he gave wrong professional advice to the Appellant. The affidavit filed by the Applicant does not state all the facts and is silent on many aspects. The claim in Para 21 of the affidavit that he was the victim of wrong professional advice is not correct as the Appellant was consulting different professionals in respect of the proceedings at different stages. Thus based on the detailed analysis of the affidavit in the preceding, paragraphs it is concluded that the affidavit does not state all the facts correctly and therefore it is not acceptable. 7.0 In the present case, the reasons advanced by the Appellant do not show any good and sufficient reason to condone the delays of 2308 days (6.3 years). The Appellant was required to file appeal on or before 19.10.2013, however, the appellant didn't act promptly. Hence the delay of 6.3 years in the instant case can be condoned only if there is no gross negligence or deliberate inaction or lack of bona fide. Secondly, Appellant should have furnished acceptable and cogent reasons to explain the delay. These are the pre-requisites for condoning delay. 7.1 However, as discussed above, the Appellant has not been able to prove with facts and evidence that there was no gross negligence or deliberate inaction or lack of bona fide. The Appellant has not been able to prove beyond the shadow of doubt that he was diligent in his efforts to file appeal and that he was not guilty of negligence. The reasons given by the Appellant are not only generic and vague but also unsubstantiated. It has been amply demonstrated in the preceding paragraphs that the Appellant being a senior Forest Officer of IFS cadre failed to exercise caution and due diligence with regard to the Income Tax proceedings………..”
The CIT(A), thereafter, relied on the various judicial pronouncements to hold that assessee was not diligent and was guilty of negligence.
Aggrieved by the orders of the CIT(A), assessee has filed the present appeals before the Tribunal. Assesee has filed a Paper Book enclosing therein the written submissions filed before the CIT(A), copies of the FIR lodged against the assessee before the Hon’ble CBI Court, order of bail, order of the Tribunal remitting the matter in quantum assessment to the files of the CIT(A), the affidavit filed before the CIT(A) for condonation of delay in penalty proceedings, etc. The learned AR reiterated the submissions made before the CIT(A).
The learned DR supported the findings of the CIT(A) and submitted that there is no sufficient cause for condoning the huge delay of 6.3 years in filing the appeal before the CIT(A). Therefore, the order of the CIT(A) dismissing the appeals in limine is to be upheld.
We have heard the rival submissions and perused the material on record. The chronology of events and brief facts as stated by the assessee before First Appellate Authority (FAA) reads as follows: Sl.No. Particulars Date [i]. The Appellant i.e. Muthaiah Sannasurayya is an individual and was a state government employee, working as a Deputy - Conservator of Forests, Bellary Division, Bellary. The appellant was deriving salary from the state government. [ii]. The appellant for the impugned assessment year 2009-10 filed return of income reporting a total taxable income of Rs. 03/11/2009 4,17,240/-. Copy of the acknowledgement for having filed the return of income along with the Computation of total income filed by the appellant on 03/11/2009, is enclosed herewith and marked as ANNEXURES – 1 and 2. [iii]. A search under section 132 of the Act was conducted in the case of one Sri. Madhu, Smt. Renuka, Sri. Raghavacharyulu 25/10/2010 and others. [iv]. As an off shoot of the above search, the premises of the appellant and DCF Bungalow was also searched on the very 25/10/2010 same day. [v]. During the course of search, certain documents belonging to the appellant were found and cash of Rs. 4,00,000/- were - seized.
[vi]. Post search, the case of the appellant was centralised and a notice under section 153A of the Act, was issued calling for 14/05/2012 the return of income to be filed. [vii]. In response to the above notice issued under section 153A of the Act, the appellant vide letter requested to treat the return 18/03/2013 of income already filed on 03/11/2009, declaring a total income of Rs. 4,17,240/-, as a return in response to the notice issued under section 153A of the Act. [viii]. In connection to the investigation on Sri. Madhu, Smt. Renuka, Sri. Raghavacharyulu and others, a false criminal case was foisted upon the appellant and for which he was arrested by CBI and was taken to judicial custody. Copies of the FIR lodged against the appellant before the Hon’ble CBI Court is enclosed herewith and marked as ANNEXURE – 3. [ix]. During the judicial custody of the appellant, an order of assessment was passed under section 143 [3] r.w.s. 153A of 26/03/2013 the Act, determining the total income of the appellant at Rs. 27,17,240/- as against the income declared by the appellant of Rs. 4,17,240/- wherein an addition of Rs. 23,00,000/- was made as Income from other sources based on the statement given by the computer operator Shri. Nagaraj Eti and not with any corroborative evidences.A copy of the order of assessment passed under section 143 [3] r.w.s. 153A of the Act dated 26/03/2013, is already enclosed as Annexure alongwith the appeal memo filed before your Honour. [x]. When the appellant, continued to be in the Judicial Custody, the then authorised representative Sri. Sudhindra, ITP of the - appellant, brought to his notice about order of assessment passed under section 143 [3] r.w.s. 153A of the Act dated 26/03/2013 that too after few months of passing the impugned order of assessment. [xi]. It is submitted that during his jail visit to meet the appellant and when it was brought the notice of the appellant about the - impugned order of assessment being passed under section 143 [3] r.w.s. 153A of the Act, when asked about the next course of remedy available with him, he suggested that a statutory appeal before the Hon’ble Commissioner of Income-tax [Appeals] requires to be filed. Learning from that, the appellant requested him to arrange to prepare the papers and support him by filing the appeal before the Hon’ble Commissioner of Income-tax [Appeals].
[xii]. Thereafter the appeal papers were prepared by the then authorised representative Sri. Sudhindra, ITP and the same 05/09/2013 were brought to the prison where the appellant was imprisoned under judicial custody and as an under-trail prisoner, the appellant signed the appeal papers and thereafter a statutory appeal was lodged before the Hon’ble Commissioner of Income-tax [Appeals] against the order of assessment passed under section 143[3] r.w.s. 153A of the Act. [xiii]. Subsequent to filing statutory appeal before the Hon’ble Commissioner of Income-tax [Appeals], against the impugned 20/09/2013 order of assessment passed under section 143 [3] r.w.s. 153A of the Act, the impugned order of penalty was passed under section 271 [1][c] of the Act, imposing a penalty of Rs. 7,76,354/-. A copy of the order of penalty passed under section 271[1][c] of the Act dated 20/09/2013, is already enclosed as Annexure alongwith the appeal memo filed before your Honour. [xiv]. After the impugned order of penalty under section 271[1]c] of the Act was passed by the learned assessing officer, the - relatives of the appellant approached the then authorised representative Sri. Sudhindra, ITP to check the next course of remedy available against the order of penalty passed. The said ITP appraised the relatives of the, he suggested and guided that since, a statutory appeal under section 246A of the Act is already filed against the impugned order of assessment passed under section 143 [3] r.w.s. 153A of the Act which is pending adjudication, the impugned order of penalty passed under section 271[1][c] of the Act, dated 20/09/2013 is dependent on the outcome of the appellate proceedings against the impugned order of assessment passed under section 143[3] r.w.s. 153A of the Act. [xv]. Therefore, the appellant was suggested by the then Sri. Sudhindra, ITP who was his authorised representative, that no - appeal against the impugned order of penalty passed under section 271[1][c] of the Act is required to be filed, since the imposition of penalty is consequential and dependent on the outcome of the appeal filed against the impugned order of assessment. [xvi]. It is submitted that based on the advice received by the appellant, he did not prefer statutory appeal against the - impugned order of penalty passed under section 27 [1][c] of the Act, within the statutory time allowed as per the statute coupled with the fact that the appellant was still under Judicial custody. The appellant was completely dependent on the guidance and suggestion given by his the then authorised representative, as he was in judicial custody. [xvii]. Thereafter, the appellant was released from the prison after obtaining bail order dated 10/12/2014 granted by the Hon’ble 10/12/2014 XLVI Additional Civil & Sessions Judge & Special Judge, for CBI Cases [CCH-47], Bengaluru. Copies of the order of bail dated10/12/2014, ordered for release by the Hon’ble XLVI Additional Civil & Sessions Judge & Special Judge, for CBI Cases [CCH-47], Bengaluru, is enclosed herewith and marked as ANNEXURE - 4. [xviii]. From, the date of release on bail, the appellant was running from pillar to post, meeting his advocates and also attending - the regular hearings before the Hon’ble CBI Court. The appellant was completely involved in sorting out the cases foisted against him by various agencies and enquires conducted by the agencies. [xix]. Thereafter, the appeals which were filed by the appellant against the order of assessment passed under section 143[3] r.w.s. 153A of the Act, before the Hon’ble Commissioner of 12/02/2016 Income-tax [Appeals], came to be disposed off by the Hon’ble Commissioner of Income-tax [Appeals], vide his common appellate order for the Assessment Years 2009-10, 2010-11 & 2011-12 in ITA No’s 401 to 403/DCIT, CC-1[3]/CIT[A]- VI/2013-14, dismissing the appeals preferred by the appellant. A copy of the common order passed by the Hon’ble Commissioner of Income-tax [Appeals]-11, Bengaluru, dated 12/02/2016 is enclosed herewith and marked as ANNEXURE – 5. [xx]. That, after the receipt of the common appellate order passed by the Hon’ble Commissioner of Income-tax [Appeals]-11, - Bengaluru, dated 12/02/2016, the appellant approached the then authorised representative as regard to the next course of remedy available against the appellate orders passed by the Hon’ble Commissioner [Appeals]. [xxi]. Since, the then authorised representative who was practicing in the mousfil area of Davangere, stated that he would consult - the professionals handing litigation work and Bengaluru and take their guidance in this regard. For the suggestion given the appellant requested the then authorised representative to do the needful and get proper professional advice from Bengaluru. [xxii]. The then authorised representative of the appellant approached Senior Tax Consultant Sri. S. Venkateshan, - Chartered Accountant at Bengaluru and appraised him about the facts of the case. During the course of discussion, the said authorised representative did not bring to the notice of the Senior Tax Consultant about the passing of the order of penalty under section 271[1][c] of the Act, as he had not brought the penalty papers for the purpose of discussion with Senior Tax Consultant. [xxiii]. Thereafter, the Senior Tax Consultant at Bengaluru, suggested the appellant to prefer a statutory appeal before the Hon’ble - Income-tax Appellate Tribunal, Bangalore Benches, Bengaluru, against the common appellate order passed by the Hon’ble Commissioner [Appeals]. [xxiv]. Based on the advice and with the help of the Senior Tax Consultant, the appeal papers were prepared for all the three 30/03/2016 years and the same was filed before the Hon’ble Tribunal and the appeals were numbered as ITA No’s 670 to 672/Bang/2016, for the A.Y’s 2009-10 to 2011-12. [xxv]. The Hon’ble Tribunal after hearing the appeals preferred by the appellant for the aforesaid three assessment years, 30/09/2016 disposed off the said appeals vide its common order passed in ITA No’s 670 to 672/Bang/2016, remitting the matter back to your Honour’s files directing to hear the matter a fresh. A copy of the common order of the Hon’ble Tribunal passed dated 30/09/2016, is enclosed herewith and marked as ANNEXURE – 6. [xxvi]. It is relevant to bring to your Honour’s kind notice that subsequent to the order of the Tribunal, remanding the matter - back to the files of your Honour, the matter is still pending disposal, which fact may kindly be considered and appreciated by your Honour. [xxvii]. It is submitted that, a letter from the learned assessing officer i.e. Assistant Commissioner of Income-tax, Central Circle – 29/01/2020 1[3], Bengaluru, was served on the appellant wherein the details of payment of outstanding taxes were given and the appellant was asked to make the outstanding payments. A copy of the letter dated 29/01/2020, issued by the learned assessing officer asking to make the outstanding payments is enclosed herewith and marked as ANNEXURE – 7. [xxviii]. The appellant after the receipt of the said letter for payment of arrears outstanding demands, Sri. Sudhindra, ITP who was - then authorised representative of the appellant, suggested the appellant to consult the Senior Tax Consultant to his advice in relation to the letter sent by the learned assessing officer dated 29/01/2020. [xxix]. The appellant approached the Senior Tax Consultant, Sri. S. Venkateshan, Chartered Accountant and showed him the letter - sent by the learned assessing officer dated 29/01/2020. [xxx]. Sri. S. Venkateshan, Chartered Accountant, after perusing the said letter dated 29/01/2020, noticed that apart from the - demands raised against the orders of assessment passed under section 143[3] r.w.s. 153A of the Act, the demands against the penalty orders for the three years under section 271[1][c] & 271AAA of the Act, was also mentioned. [xxxi]. When it was enquired by Sri. S. Venkateshan, Chartered Accountant, about the status of action taken against the status - of the orders of penalty passed for the impugned three years, the appellant stated that he was advised by his the then Authroised Representative, since an appeal against the orders of assessments for the three years have already been prepared and filed and pending adjudication, there was no necessity to file any separate appeals against the order of penalty passed for the three years, as the imposition of penalty is consequential and dependent on the outcome of the appeal filed against the impugned order of assessments and stated that based on the advice and guidance given, appeal against the order of penalty were not preferred. [xxxii]. Sri. S. Venkatesan, Chartered Accountant, explained the appellant that the appeal against assessment proceedings are - independent with that of the appeal against penalty proceedings, and he stated that the appellant ought to have preferred statutory appeal against the said impugned orders of penalty passed and suggested the appellant to prefer a statutory appeal before the Hon’ble Commissioner of Income- tax [Appeals] against the impugned orders of penalty under section 246A of the Act, by filing a condonation petition, narrating the entire facts and circumstances leading for delay in filing the statutory appeals against the impugned order of penalty passed, by way of a separate condonation petition along with the appeal memo. [xxxiii]. After obtaining proper professional advice and guidance from Sri. S. Venkateshan, Chartered Accountant, the appellant - requested Sri. S. Venkateshan, Chartered Accountant, to guide, assist him in preparation and filing the appeals against the order of penalty passed for the three years. [xxxiv]. Thereafter, with the help and guidance of Sri. S. Venkateshan, Chartered Accountant, the appeal papers for the three years 12/02/2020. were prepared against the penalty orders passed and the same were filed and instituted before the Hon’ble Commissioner of Income-tax [Appeals], within a reasonable time after obtaining proper professional advice. [xxxv]. It is submitted that by the time the appellant received a proper professional advice from Sri. S. Venkateshan, Chartered - Accountant, there arose a delay in filing the present appeals against the order of penalty for the three years of about 2,308 days. [xxxvi]. It is submitted that the delay about 2,308 days in not filing the present appeal within time is not deliberate or intentional, it - was due to reasonable cause which was beyond the control of the appellant, and by not filing the appeal in time, the appellant would not gain any benefit and for the reasons as stated above, the appeals were not filed within the time stipulated in the statute. [xxxvii]. Wherefore, the appellant humbly pray and submit that considering the facts, circumstances and events as brought in - the earlier paragraphs, the appellant humbly pray before your Honour to condone the delay in filing the present appeal of about 2,308 days and hear the same on merits of the matter, for the advancement of substantial cause of justice.
The reasons stated by the assessee for not filing the appeal before the FAA within the prescribed time was that assessee was wrongly advised by the then Authorized Representative (AR) Shri. Sudhindra. It was submitted that the AR had advised the assessee that since the appeal against the orders of assessment for the impugned three Assessment Years already has been prepared and filed, there is no necessity to file any separate appeal against the penalty order passed for the three Assessment Years, as imposition of penalty is consequential and dependent on the outcome of the appeal filed against the impugned orders of assessment. It is stated that assessee had approached the office of Sr. Tax Consultant Shri. S. Venkateshan, Chartered Accountant, who had filed the appeal in the quantum assessment before the Tribunal for the relevant Assessment Years. It is also stated that the Tribunal in quantum assessment in to 672/Bang/2016 (order dated 30.09.2016) had directed the CIT(A) to pass fresh orders. It is submitted that even at the time of filing appeals before the Tribunal on quantum assessment, assessee did not apprise the Sr. Tax Consultant as regards orders imposing penalty for the Assessment Years 2009-10, 2010-11 and 2011-12. It is further stated in the chronology of events that it is only on receipt of the letter dated 29.01.2020, directing the assessee to pay the outstanding tax arrears which included also the penalty imposed, the then ITP Shri. Sudhindra had suggested the assessee to consult the Sr. Tax Consultant. Thereafter, the assessee approached Sr. Tax Consultant Shri. S. Venkateshan and showed him the letter of AO dated 29.01.2020. Shri. S. Venkateshan, CA, after perusing the said letter of AO dated 29.01.2020, noticed that apart from demand raised against the orders of assessment passed under section 143(3) r.w.s. 153A, the demand is also raised against the penalty orders for the three Assessment Years under section 271(1)(c) and 217AAA of the Act. Shri. S. Venkateshan, CA, enquired about the status of the action taken against the penalty orders passed for the impugned three Assessment Years. Then assessee informed Shri. S. Venkateshan, CA, that no appeal has been preferred against orders imposing penalty on the advice of the ITP, since according to him the orders of penalty are dependent and consequential to the outcome of the appeals filed against the quantum assessments. Further, it is stated that the Sr. Tax Consultant Shri. S. Venkateshan advised the assessee that penalty proceedings are separate from quantum assessment and separate appeals needs to be filed before CIT(A). Thereafter appeals were filed immediately before the FAA on 12.02.2020 with a petition for condonation of delay. Assessee has also filed an affidavit stating therein the reasons for belated filing of the appeal (which is same as the reasons stated in the condonation petition).
In the instant case, it is a strange situation where the CIT(A) has first disposed off the penalty order when appeals against the quantum assessments are still pending before him (as ITAT had remanded the issues raised in quantum assessment to files of CIT(A) on 30.09.2016.). The penalties are dependent on the quantum assessment and by virtue of section 275(1A) of the Act, the quantum of penalty vary depending upon the reduction of the addition / disallowance made in the appellate orders arising out of quantum assessment. It is admitted fact that assessee has filed the appeals before the CIT(A) against the quantum assessment though belatedly by 125 days. Therefore, we fail to understand how CIT(A) concluded that assessee was not diligent and is guilty of negligence in not filing the appeals before him within the prescribed time limit (when appeals against quantum assessments were already filed by the assessee). In all probability, the wrong advice of the then ITP only would have made the assessee to believe that appeals are not required to be filed against the penalty orders. On query from Bench whether ITP has given an affidavit, the learned AR submitted that the ITP has been changed and at present he is not willing to give an affidavit stating that he has given a wrong advice to the assessee. Be it as it may, we find that the CIT(A) had dismissed the appeals of the assessee in quantum assessment for two reasons : (i) the assessee did not represent the case before the FAA (ii) there is a delay of 125 days in filing the appeal and the delay cannot be condoned. As mentioned earlier, as against the order of the CIT(A) in quantum assessment, assessee preferred appeal before the Tribunal in to 672/Bang/2016. The Tribunal, vide its order dated 30.09.2016, had restored the matter to the CIT(A). The relevant finding of the Tribunal reads as follows:
6. After hearing rival submissions, we are of the considered opinion that the CIT(A) had passed an ex-parte order for non-prosecution of the appeal. However, we are satisfied that the assessee was prevented by sufficient and reasonable cause for not causing appearance before the CIT(A) as he was in judicial custody in a criminal proceedings against him. Therefore, we remand the matters back to the file of the CIT(A) for fresh disposal in accordance with law.
It is admitted by both parties that subsequent to the remand by the ITAT, the CIT(A) is yet to adjudicate the appeals arising from the quantum assessments. Since the penalties are consequential and dependent on the outcome of the appeals filed against the quantum assessments, necessarily, the issues raised in these appeals needs to be restored to the CIT(A) (since the quantum assessment is still pending adjudication before him). Therefore, we restore the issues raised before us in these appeals to the files of the CIT(A). The CIT(A) is directed to consider the matter afresh preferably after deciding the appeals as against the quantum assessment. The CIT(A) shall afford a reasonable opportunity of hearing to the assessee. It is ordered accordingly.
In the result, appeals filed by the assessee are allowed for statistical purposes.