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Facts
The assessee, a cooperative society, filed a return declaring nil income after claiming a deduction under Section 80P. The assessment was completed determining a higher income, and penalties were levied under Sections 270A and 271AAC. The assessee filed appeals before the NFAC with a significant delay.
Held
The Tribunal held that the NFAC erred in dismissing the appeals as not maintainable on grounds of delay without adjudicating on merits. The Tribunal condoned the delay, finding sufficient cause, and directed the NFAC to admit the appeals for fresh adjudication on merits.
Key Issues
Whether the NFAC was justified in dismissing the appeals as not maintainable on grounds of delay without considering the merits, and whether the delay in filing the appeals ought to have been condoned.
Sections Cited
80P, 143(3), 144B, 69, 115BBE, 69A, 270A, 270A(9)(c), 274, 271AAC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI YOGESH KUMAR U.S.
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in & 4546/Del/2024 for AY 2020-21, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2024-25/1068217513(1) dated 31.08.2024 against the order of assessment passed u/s 270A of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 02.03.2023 by the Assessing Officer, NFAC, Delhi (hereinafter referred to as ‘ld. AO’). These two appeals preferred by the assessee are challenging the levy of penalty under section 270A and 271AAC of the Act for the Assessment Year 2020-21.
We have heard the rival submissions and perused the materials available on record. The assessee is a cooperative society and had filed its return of income for Assessment Year 2020-21 declaring nil income after claiming deduction under section 80P of the Act. The assessment was completed under section 143(3) read with section 144B of the Act on 25- 09-2022 determining total income at Rs. 5,85,20,439/- after making addition of Rs. 4,21,05,997/- on account of unexplained investment under section 69 read with section 115BBE of the Act; addition of Rs. 10,20,921/- on account of unexplained income under section 69A read with section 115BBE of the Act; disallowance of deduction under section 80P of the Act amounting to Rs. 1,28,94,829/- and addition of Rs. 23,79,982/- on account of bogus expenses. Penalty proceedings stood initiated under section 271AAC of the Act for additions made under section 69 and 69A of the Act and under section 270A(9)(c ) read with section 274 of the Act for underreporting of income which is in consequence of misreporting of income. Accordingly, penalty under section 270A was levied in the sum of Rs. 1,06,83,400/- at the rate of 200% of underreporting of income in consequence of misreporting of income vide order dated 2-3-2023 and penalty under section 271AAC of the Act was levied in the sum of Rs 33,63,900/- vide order dated 2-3-2023.
The assessee preferred an appeal before the Learned NFAC with a delay of 67 days for appeal against penalty under section 270A of the Act and with a delay of 87 days for appeal against penalty under section 271AAC of the Act. The assessee filed a delay condonation petition stating that due to the illness of its authorized representative, the appeals could not be preferred in time before the Learned NFAC. The Learned NFAC did not heed to this contention of the assessee and proceeded to dismiss the appeals as not maintainable on the ground of delay. The Learned NFAC having treated the appeals as not maintainable on the ground of delay, further proceeded to adjudicate the issue on merits and upheld the levy of penalty on all counts. Aggrieved, the assessee is in appeals before us.
At the outset, we hold that the Learned NFAC having decided to treat the appeals as not maintainable, ought not to have proceeded to adjudicate the issue on merits. Hence, this action of the Learned NFAC is hereby rejected. With regard to the delay in filing of appeals by 67 and 87 days respectively as stated supra before the Learned NFAC, on perusal of the reasons adduced in the condonation petition filed before the Learned NFAC, we find that assessee was indeed prevented from sufficient cause in not filing the appeals in time. Hence, in the interest of substantial justice, we hold that this is a fit case for condonation of delay. Accordingly, we direct the Learned NFAC to condone the delay, admit the appeals of the assessee for adjudication and decide the issues in dispute before it afresh uninfluenced by earlier observations made in this regard. Needless to mention that the assessee be given reasonable opportunity of being heard. The assessee is at liberty to file fresh evidences and additional grounds, if any, in support of its contentions. With these observations, the grounds raised by the assessee are allowed for statistical purposes.
In the result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 09/05/2025.