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Income Tax Appellate Tribunal, HYDERABAD ‘SMC-B’ BENCH : Hyderabad
Before: Smt. P. Madhavi Devi
O R D E R This is assessee’s appeal for A.Y. 2013-14 against the orderss of the Ld.CIT(A)-9, Hyderabad dated 14.05.2019 dismissing assessee’s appeal by not condoning the delay of 523 days in filing of the appeal electronically and also against the confirmation of the AO’s order.
Brief facts of the case are that the assessee, an individual, filed his return of income for the relevant A.Y. on 04.04.2014 declaring total income of Rs.3,22,240/-. During the assessment proceedings u/s 143(3) of the I.T.Act, 1961 (the Act), the AO found that there were cash deposits in the bank statements. Since the assessee could not explain the sources of these cash deposits aggregating to Rs.8,61,025/-, the AO added the same to the returned income of the assessee as unexplained cash credits and the assessee also agreed to the said addition. 2.1. Thereafter, penalty proceedings u/s 271(1)(c ) of the Act were initiated by issuance of notice u/s 271(1)(c ) of the Act on 30.03.2016. Since there was no response from the assessee the AO levied minimum penalty of Rs.2,04,956/- and aggrieved, the assessee filed an appeal before the CIT(A) AY 2013-14 Sh. Samad Mohammed Abdul, Sec. manually on 29.10.2016 i.e. within the time allowed under the Act. However, subsequently when the assessee came to know that the appeal has to be filed electronically, he filed it on 29.05.2016 along with an application for condonation of delay of 523 days in filing the appeal electronically. The CIT(A) observed that the assessee has not filed any affidavit, nor is there any proof to substantiate the claim to condone the delay, the CIT(A), thus, did not admit the appeal. Regarding merits of the levy of penalty also the CIT(A) observed that the assessee has not filed any reply before the AO against the levy of penalty nor has any details been filed before the CIT(A), and, therefore, he confirmed the penalty.
Assessee is in second appeal before the Tribunal by raising the following grounds of appeal. “1. The CIT(A) ought to have appreciated the fact that the addition to the returned income was on agreed basis and hence, penalty u/s 271(1)(c) is not warranted.
2. The assessing officer and CIT(A) ought to have considered the well established juris prudence that penalty cannot be imposed on an addition made on an estimated basis and therefore the penalty is bad in law.
3. Your appellant submits that the notice u/s 271(1(c) does not specify the charge as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income, hence, the imposition of penalty is bad in law.
4. Your appellant submits that the CIT(A) ought to have accepted the appeal filed manually as the same was filed in time and condoned the delay with respect to the appeal filed electronically.
5. Your appellant submits that the assesssing officer as well as the CIT(A) erred in law and facts of the case in levying penalty U/S 271(1)(c) without appreciating the fact that penalty proceedings are independent from assessment proceedings and mere addition in assessment proceedings does not give rise to penalty.
6. Your Appellant submits that in the assessment order there is no finding as to concealment of income or furnishing of inaccurate particulars, in absence of which, levy of penalty is bad in law.
7. For these grounds and such grounds as may be urged at the time of hearing, your appellant prays that the penalty u/s 271(1)(c ) may be deleted.”
Heard both the parties.
Having regard to the rival contentions and material placed on record, I find that the since none appeared before the AO, minimum penalty was levied by the AO. Before the CIT(A), I find that the appeal has been filed manually within time. The delay is only in filing of the appeal electronically. The assessee has explained the reason that he was not aware that the appeal AY 2013-14 Sh. Samad Mohammed Abdul, Sec. has to be filed electronically and on coming to know he immediately filed the appeal which has resulted in a delay of 523 days. I find that the reason given by the assessee is reasonable and justifiable to condone the delay. The fact that assessee has filed appeal manually within the time itself, proves the bonafides of the assessee. Had he known that the appeal has to be filed electronically, he would have filed it electronically within time. Therefore, the CIT(A)’s reason for rejecting the application for condonation of delay is not sustainable. Therefore, I condone the delay of 523 days in filing of the appeal before the CIT(A), and direct the CIT(A) to decide the appeal on merits after giving the assessee a fair opportunity of hearing. 6. In the result, assessee’s appeal is partly allowed for statistical purposes. Order pronounced in Open Court on 08th January, 2020. Sd/- (P MADHAVI DEVI) JUDICIAL MEMBER Dated: the 08th January, 2020. *GMV