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Facts
The assessee filed an appeal against penalty orders levied under sections 270A and 271AAC(1). The appeals were filed with significant delays, which the CIT(A) did not condone, leading to dismissal of the appeals. The assessee had also filed a quantum appeal which was remanded by the Tribunal to the CIT(A) for fresh adjudication on merits.
Held
The Tribunal, following the decision of the Coordinate Bench in the quantum appeal, set aside the orders of the CIT(A) that had dismissed the appeals due to delay. The matter was remanded to the CIT(A) for fresh adjudication on merits after considering the condonation of delay and grounds of appeal.
Key Issues
Whether the CIT(A) was justified in dismissing the appeals filed by the assessee due to inordinate delay without considering the reasons for delay and the merits of the case, especially when a coordinate bench had remanded a related quantum appeal.
Sections Cited
270A, 271AAC(1), 250, 68, 143(3), 144B, 80C, 56(2)(x)
AI-generated summary — verify with the full judgment below
Before: SMT. BEENA PILLAI & SMT.RENU JAUHRI
“ITA No. 5622/M/2025 The appellant prefers an appeal against the Order u/s.250 dated 28/07/2025 passed by Ld. Commissioner of Income Tax (Appeals), National Faceless Appeals Centre, Delhi on following amongst other grounds, each of which are without prejudice to any other :-
P a g e | 2 ITA NO. 5622/mum/2025.
1.0 On facts and circumstances of the case and in Law, Ld. CIT(A) erred in not condoning the delay in filing the penalty appeal of 722 days and ought to have considered the bonafide reasons and compelling circumstances, that had precluded the appellant to file the appeal in time; 2.0 On facts and circumstances of the case and in law, Ld. CIT(A) ought to have deleted the Penalty levied u/s.271AAC(1) of Rs.8,88,375/- in respect of addition made u/s.68 of unsecured loans and creditors of Rs. 1,15,00,000/-; 3.0 The Ld. CIT(A) ought to have deleted the Penalty u/s.271AAC(1) of Rs.8,88,375/- on considering the bonafide explanation of the appellant, disclosure of material facts and existence of debatable issues, under which circumstances, the levy of penalty is unjustified. The appellant craves leave to add, amend, alter and/or withdraw any of the grounds of appeal at the time of hearing.”
The appellant prefers an appeal against the Order u/s.250 dated 28/07/2025 passed by Ld. Commissioner of Income Tax (Appeals), National Faceless Appeals Centre, Delhi on following amongst other grounds, each of which are without prejudice to any other :- 1.0 On facts and circumstances of the case and in Law, Ld. CIT(A) erred in not condoning the delay in filing the penalty appeal of 740 days and ought to have considered the bonafide reasons and compelling circumstances, that had precluded the appellant to file the Penalty appeal in time; 2.0 On facts and circumstances of the case and in law, Ld. CIT(A) ought to have deleted the Penalty levied u/s.270A of Rs.1,19,660/- for under- reporting of income, in respect of understated additions/disallowances :-
Sr. Particulars Amount No. a) Addition u/s. 56|(2)(x) of Gift received from Rs. 3,00,000/- Mother b) Disallowance of rent expense Rs. 3,24,500/- c) Disallowance of deduction u/s. 80C Rs. 1,50,000/- -------------- Rs. 7,74,500/-
3.0 The Penalty levied u/s.270A in respect of disallowance of rent expense of Rs.3,24,500/-is erroneous, since the initiation of penalty, in assessment order, had been made for 'mis reporting of income', whereas the penalty is levied for 'under reporting of income'; 4.0 The Ld. CIT(A) ought to have deleted the Penalty u/s.270A of Rs.1,19,660/-on considering the bonafide explanation of the appellant, disclosure of material facts and existence of debatable issues, under which circumstances, the levy of penalty is unjustified. The appellant craves leave to add, amend, alter and/or withdraw any of the grounds of appeal at the time of hearing.
P a g e | 3 ITA NO. 5622/mum/2025.
Facts of the case being same, both the appeals are being disposed off vide a common order.
Brief facts of the case are that the assessee filed his return for A.Y. 2018- 19 on 07.10.2018 declaring total income of Rs. 38,92,000/-. The case was selected for scrutiny and assessment u/s. 143(3) r.w.s 144B was completed vide order dated 23.04.2021 at total assessed income of Rs. 1,61,66,500/- after making various additions. Penalty proceedings u/s. 270A and 271AAC(1) were also initiated. The assessee preferred an appeal against the assessment order which was dismissed by the ld. CIT(A) vide order dated 19.06.2025 due to inordinate delay which was not condoned.
Against this, assessee filed appeal before the Tribunal and vide order dated 29.09.2025, the order of ld. CIT(A) has been set aside by the co- ordinate bench. Meanwhile, ld. AO had levied penalties of Rs. 1,19,660/- u/s. 270A and Rs. 8,88,375/- u/s. 271AAC(1) vide orders dated 27.01.2022 and 14.02.2022 respectively.
Aggrieved, the assessee preferred appeals against the penalty orders before ld. CIT(A). Since the appeals were delayed by 740 days and 722 days respectively, ld. CIT(A) dismissed both the appeals vide separate orders dated on 28.07.2025 in view of the inordinate delay after holding that the reasons of delay submitted by the assessee were not convincing. Aggrieved, the assessee is in appeal before the Tribunal.
Before us, ld. AR has submitted that the assessee had filed an affidavit explaining the reasons of delay. Similar affidavit was filed with regard to delay in filing of quantum appeal also. After considering the entirety of P a g e | 4 ITA NO. 5622/mum/2025. facts and circumstance Hon’ble Co-ordinate Bench had remanded the matter to ld. CIT(A) in relating to the quantum appeal, with the following observations:
“5. On perusal of the above it emerges that the Assessee had explained that the delay in filing the appeal before the Ld CIT(A) was occasioned on account of (a) Covid-19 Pandemic, (b) books of accounts and records of the Assessee were seized by GST Authorities, (c) attending to medical condition of brother-in-law of the Assessee who was suffering from throat cancer and ultimately passed away on 20/08/2022, (d) non-service of Assessment Order since the residential premises had gone in re-development, and (e) the email addresses on record pertain to earlier chartered accountant who had stopped attending the matters of the Assessee on account of non- payment/dispute of professional fees. However, on perusal of the impugned order passed by the Ld. CIT(A), we find that the impugned order does not deal with any of the reasons/explanation furnished by the Assessee for delay in filing the appeal before the Ld. CIT(A). Given the facts of the present case, we deem it appropriate set aside the Order, dated 19/06/2025, passed by the Ld. CIT(A) with the directions to adjudicate the application seeking condonation of delay, and the grounds raised by the Assessee in appeal on merits, as the case may be, along with application for bring on record additional evidence afresh after taking into consideration the explanation offered by the Assessee and after granting the Assessee sufficient opportunity of being heard in relation to the same.”
5. After hearing the rival submissions and respectfully following the decision of the Hon’ble Co-ordinate Bench in the quantum, we hereby set aside the orders of ld. CIT(A) dated 28.07..2025 for fresh adjudication on merits.
In the result, both the appeals of the assessee are allowed for statistical purposes.
Order Pronounced in Open Court on 19.11.2025