Loading judgment…
No AI summary yet for this case.
आयकर अपील�य अ�धकरण,च�डीगढ़ �यायपीठ “ए” , च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH (VIRTUAL COURT) �यायमू�त� �ी पी.पी. भ�, अ�य� एवं �ी एन.के.सैनी, उपा�य� BEFORE: JUSTICE SHRI P.P. BHATT, PRESIDENT & SHRI. N.K.SAINI, VICE PRESIDENT आयकर अपील सं./ ITA No. 1254/Chd/2019 �नधा�रण वष� / Assessment Year : 2015-16 M/s Shaheed Kartar Singh Sarabha The CIT(A)-4 बनाम Charitable Trust (Regd.) Ludhiana VPO Sarabha, Distt. Ludhiana �थायी लेखा सं./PAN NO: AAATS4168H अपीलाथ�/Appellant ��यथ�/Respondent
�नधा�रती क� ओर से/Assessee by : Shri Ashwani Kumar, C.A Shri Aditya Kumar, C.A Shri Bhawesh Jindal, C.A Miss Uditi Jain, C.A राज�व क� ओर से/ Revenue by : Shri Sandeep Dahiya, CIT सुनवाई क� तार�ख/Date of Hearing : 02/12/2020 उदघोषणा क� तार�ख/Date of Pronouncement : 02/12/2020 आदेश/Order PER BENCH:
This is an appeal by the Assessee against the order dt. 27/03/2019 of Ld. CIT(A)-4 Ludhiana.
The Registry has pointed out that the appeal filed by the assessee is barred by limitation by 63 days. The Assessee moved an application dt. 21/09/2019 for condonation of the delay by stating therein as under:
Sub: Request for condonation of delay in filing the appeal bearing No. 1254/ Chandi/2019 in the case of M/s Shaheed Kartar Singh Sarabha Charitable Trust (Regd.) for A/Y 2015-16
Sir,
Respectfully the following is submitted for sympathetic consideration of the Hon'ble Bench.
Order u/s 271(1)(c) r.w.s. 250(6) of the Income Tax Act, 1961 was passed by the Ld. Commissioner of Income Tax (Appeals)-4, Ludhiana on 27.03.2019 which was received by the appellant on 16.05.2019. The appellant is Charitable Trust and considering the fact that an appeal before the Hon'ble Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh was already filed on 13.02.2019 (bearing No. 174/Chandi/2019) with respect to the quantum with respect to the said notice and was under the bonafide belief that no appeal is required to be filed against this order as an appeal is already pending before the Hon'ble Bench (Quantum appeal). Subsequently, as a part of filing the documents, the appellant shared the said order with its Counsel whereby it came to the attention that this is a penalty order to be dealt with separately. As soon as this fact came to their notice, the Counsel of the appellant got the appeal prepared and filed. It was due to these unavoidable circumstances that the delay in filing the appeal has occurred which is highly regretted.
It is prayed that the delay in filing the appeal kindly be condoned and the appeal be adjudicated on merits.
During the course of hearing the Ld. Counsel for the Assesee reiterated the contents of the aforesaid application and submitted that due to lack of knowledge the assessee could not file the appeal in time, since the appeal on quantum of the assessee was pending before the ITAT and the assessee was under this impression that the order passed by the Ld. CIT(A) was on quantum. However, when it came to the knowledge of the assessee that the order passed by the Ld. CIT(A) was penalty order, thereafter, immediately the counsel of the assessee got the appeal prepared and filed it. He requested to condone the delay.
In his rival submissions the Ld. CIT DR opposed the condonation of delay and submitted that ignorance of law cannot be an excuse for condoning the delay and that the assessee was a willful offender since it remained absent before the Ld. CIT(A).
In his rejoinder the Ld. Counsel for the Assessee submitted that the then counsel for the assessee sought adjournment before the Ld. CIT(A), however instead of granting the adjournment, the Ld. CIT(A) decided the appeal. He again requested to condone the delay in filing the appeal.
We have considered the submissions of both the parties and perused the material available on the record. In our opinion the assessee has a plausible explanation for delay in filing the appeal which occurred under the bonafide belief that no appeal was required to be filed against the order against which appeal was already pending before the ITAT and when this mistake came to the knowledge of the assessee, a step was taken immediately to file the appeal before the ITAT. We therefore by considering the peculiar facts of this case and keeping in view the principles of natural justice condone the delay and appeal is admitted.
Following grounds have been raised in this appeal:
That order passed u/s 271(1)(c) read with section 250(6) by the Learned Commissioner of Income Tax (Appeals)-4, Ludhiana is against law and facts on the file in as much as she was not justified to direct the levy of penalty u/s 271(1)(c) at Rs. 11,98,68,227/-. 2. That order levying penalty is unjustified as no proper and reasonable opportunity was provided to the appellant for offering their explanation and as such, the levy of penalty is in gross violation of principles of natural justice.
7.1 From the aforesaid grounds it is gathered that only grievance of the assessee relates to the direction of the Ld. CIT(A) to levy the penalty under section 271(1)(c) of the Income Tax Act, 1961 (for short the ‘Act’).
The facts of the case in brief are that the assessee filed the return of income on 25/09/2015 declaring NIL income. Later on the case was selectd for scrutiny and the A.O. framed the assessment vide assessment order dt. 03/11/2017 and made the addition of Rs. 1,13,41,361/- by invoking the provisions of Section 11(1), 13(1)(c) r.w.s 13(3) of the Act. Against the said order the assessee preferred an appeal before the Ld. CIT(A) who dismissed the same vide order dt. 19/12/2018 and while deciding the appeal of the assessee the Ld. CIT(A) further enhanced the income by an amount of Rs. 11,98,68,227/- and assessed the assessee as AOP, the benefit of claim under section 11 of the Act was also denied. The Ld. CIT(A) initiated the penalty proceedings vide notice dt.
19/12/2018 under section 274 r.w.s 271 of the Act. The Ld. CIT(A) mentioned in the impugned order that inspite of the service of notice, neither anyone attended the penalty proceedings nor filed any reply.
8.1 Ld. CIT(A) directed the A.O. to issue demand notice for determining the quantum of penalty @ 100% of the tax sought to be evaded on account of furnishing of inaccurate particulars of income to the extent of Rs. 11,98,68,227/-. The reliance was placed on the judgment of the Hon'ble Delhi High Court in the case of CIT Vs. Zoom Communication Private Limited reported in 327 ITR 510.
Now the assessee is in appeal.
Ld. Counsel for the assessee at the very outset stated that enhanced income on the basis of which the penalty under section 271(1)(c) of the Act was directed to be levied has been deleted by this Bench of ITAT in ITA No. 174/Chd/2019 for the A.Y. 2015-16 vide order dt. 10/11/2020. It was further submitted that since the addition on the basis of which the penalty under section 271(1) (c) of the Act was levied, is not in existence, therefore no penalty is leviable under section 271 (1)(c) of the Act in the assessee’s case. The reliance was placed on the decision of the Hon'ble Supreme Court in the case of K. C. Builders & Others Vs. Asst. CIT reported in 265 ITR 562.
In his rival submissions the Ld. CIT DR reiterated the observations made by the Ld. CIT(A) in the impugned order and strongly supported the same.
We have considered the submissions of both the parties and perused the material available on the record. In the present case it is an admitted fact that the addition made by the A.O. as well as the income enhanced by the Ld. CIT(A) were deleted by this Bench of the ITAT vide order dt. 10/11/2020 in ITA No. 174/Chd/2019 for the A.Y. 2015-16 in assessee’s own case. Therefore, the addition which was the basis for levying the penalty under section 271(1)(c) of the Act is not in existence now.
12.1 On a similar issue the Hon'ble Apex Court in the case of K. C. Builders & Others (supra)held as under:
“Where the additions made in the assessment order on the basis of which penalty for concealment is levied, are deleted, there remains no basis at all for levying penalty for concealment and, therefore, in such a case no penalty can survive and the penalty is liable to be cancelled. Ordinarily, penalty cannot stand if the assessment itself is set aside.” In view of the above, by respectfully following the ratio laid down by the Hon'ble Apex Court in the aforesaid referred to case the penalty under section 271(1)(c) of the Act directed to be levied by the Ld. CIT(A) is deleted.
In the result, appeal of the assessee is allowed.
(Order pronounced in the Court on 02/12/2020)
Sd/- Sd/- पी.पी. भ� एन.के.सैनी, (P.P. BHATT ) ( N.K. SAINI) अ�य� / PRESIDENT उपा�य� / VICE PRESIDENT AG Date: 02/12/2020 आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File