LATA PRAKASH MARADIA,MUMBAI vs. ITO WARD - 42(1)(2), MUMBAI

2.1 But no documentary evidence no documentary evidence or any material to substantiate or any material to substantiate the above claim was filed and therefore filed and therefore, the ld AO made addition for made addition for the said amount in the in the assessment order passed u/s. 143(3) of the u/s. 143(3) of the Act ct dated dated 29.11.2016. 29.11.2016. The The Ld.CIT(A) Ld.CIT(A) vide vide order order dated dated 09.03.2018upheld the addition made by the AO upheld the addition made by the AO. On On further appeal the Income-Tax Appellate T Tax Appellate Tribunal( in short the ‘ITAT ITAT’) setaside the order of the lower authorities and restore order of the lower authorities and restored the matter back to the the matter back to the file of AO for limited purpose of verification file of AO for limited purpose of verification from sale agreement sale agreement as to whether the sale consideration for sale of flat was only Rs. the sale consideration for sale of flat was only Rs. the sale consideration for sale of flat was only Rs. 37,00,000/- and credit of capital gain d and credit of capital gain declared by the assesse eclared by the assessee of Rs. 4,00,000/- was over and was over and above Rs. 37,00,000/-. I . In assessment order passed in compliance to the order of the ITAT, the ld AO order passed in compliance to the order of the ITAT order passed in compliance to the order of the ITAT restricted the addition to Rs. 10 restricted the addition to Rs. 10,96,000/- by granting relief of Rs by granting relief of Rs 4,00,000/- in his order dated 29 in his order dated 29.09.2021 passed under section .09.2021 passed under section 143(3) r.w.s 254 of the Act and initiated penalty p s 254 of the Act and initiated penalty p s 254 of the Act and initiated penalty proceeding u/s 271(1)(c) of the Act for ct for furnishing inaccurate particulars of income inaccurate particulars of income. Subsequently, the ld AO ld AO issued show-cause notice for furnishing notice for furnishing explanation/reply for explanation/reply for levying penalty u/s. 271(1)(c) of the Act 271(1)(c) of the Act. The assessee filed a return submission dated 26.1 assessee filed a return submission dated 26.10.2021. 0.2021. Thereafter, the matter of levying penalty was assigned to the the matter of levying penalty was assigned to the Faceless P Faceless Penalty unit and accordingly unit and accordingly again show-cause notices were were issued on two occasions i.e. on 25.11.2021 and 21.12.2021 but said notice e. on 25.11.2021 and 21.12.2021 but said notice e. on 25.11.2021 and 21.12.2021 but said notices remained non-complied complied on the part of the assessee, however, the ld , however, the ld AO considered submission dated 26.1 submission dated 26.10.2021. According According to the ld AO the assessee fail failed to offer an explanation relating to the to offer an explanation relating to the addition sustained by the ained by the Assessing officer. The initial burden of he initial burden of discharging the onus onus was on the assessee but in view of the failure was on the assessee but in view of the failure on the part of the assessee on the part of the assessee, the ld AO levied the penalty for levied the penalty for furnishing inaccurate particulars of income in respect of addition of furnishing inaccurate particulars of income in respect of addition of furnishing inaccurate particulars of income in respect of addition of Rs. 10,96,000/- at the rate of at the rate of 100% of tax sought to be tax sought to be evaded, which was work out to which was work out to be Rs. 3,38,664/-. On further appeal n further appeal, the Ld. CIT(A) noted that the assesse Ld. CIT(A) noted that the assessee opted for Vivad Vivad-se-Vishwas scheme,2024 for the settlement of dispute for the addition of Rs. for the settlement of dispute for the addition of Rs. for the settlement of dispute for the addition of Rs. 10,96,000/-. The Ld. CIT(A) Ld. CIT(A) further noted that Form no. 3 dated further noted that Form no. 3 dated 23.04.2021 determining determining balance demand payable by the assessee balance demand payable by the assessee was issued but issue of verificatio was issued but issue of verification of challan was restore n of challan was restored to the file of the ld AO and appeal was allowed. AO and appeal was allowed.

2. The learned Counsel appearing for the assessee submitted The learned Counsel appearing for the assessee submitted The learned Counsel appearing for the assessee submitted that there was a delay of 781 days in filing the present appeal. In that there was a delay of 781 days in filing the present appeal. In that there was a delay of 781 days in filing the present appeal. In support thereof, reliance was placed on the application for support thereof, reliance was placed on the applicati support thereof, reliance was placed on the applicati condonation of delay accompanied by an affidavit sworn by the condonation of delay accompanied by an affidavit sworn by the condonation of delay accompanied by an affidavit sworn by the assessee as well as by the concerned Chartered Accountancy firm. assessee as well as by the concerned Chartered Accountancy firm. assessee as well as by the concerned Chartered Accountancy firm. It was explained that upon receipt of the order of the learned CIT(A) It was explained that upon receipt of the order of the learned CIT(A) It was explained that upon receipt of the order of the learned CIT(A) through e-mail, the matter for filing of appeal had mail, the matter for filing of appeal had been entrusted to been entrusted to a Chartered Accountant of the said firm. However, the professional a Chartered Accountant of the said firm. However, the professional a Chartered Accountant of the said firm. However, the professional concerned proceeded on maternity leave and thereafter tendered concerned proceeded on maternity leave and thereafter tendered concerned proceeded on maternity leave and thereafter tendered resignation from the firm without taking steps for filing of the resignation from the firm without taking steps for filing of the resignation from the firm without taking steps for filing of the assessee’s appeal. The assessee became awar assessee’s appeal. The assessee became aware of this lapse only at e of this lapse only at a subsequent stage, when another Chartered Accountant was a subsequent stage, when another Chartered Accountant was a subsequent stage, when another Chartered Accountant was engaged to look after the matter. engaged to look after the matter.

2.1. It was further submitted that the delay also stood compounded 2.1. It was further submitted that the delay also stood compounded 2.1. It was further submitted that the delay also stood compounded by the assessee’s family health problems and the prolonged by the assessee’s family health problems and the prolonged by the assessee’s family health problems and the prolonged unavailability of the concerned Chartered Accountant for reasons of the concerned Chartered Accountant for reasons of the concerned Chartered Accountant for reasons beyond the assessee’s control. According to the learned Counsel, beyond the assessee’s control. According to the learned Counsel, beyond the assessee’s control. According to the learned Counsel, these circumstances constituted a “sufficient cause” preventing the these circumstances constituted a “sufficient cause” preventing the these circumstances constituted a “sufficient cause” preventing the assessee from filing the appeal within the prescribed period of assessee from filing the appeal within the prescribed period of assessee from filing the appeal within the prescribed period of limitation.

2.2. We find merit in the explanation so tendered. The assessee has 2.2. We find merit in the explanation so tendered. The assessee has 2.2. We find merit in the explanation so tendered. The assessee has supported supported the plea with affidavit evidence which supported the plea with the plea with affidavit evidence which remains affidavit evidence which remains remains uncontroverted, inasmuch as no counter affidavit has been filed by uncontroverted, inasmuch as no counter affidavit has been filed by uncontroverted, inasmuch as no counter affidavit has been filed by the Revenue. It is settled law that in the absence of rebuttal from the Revenue. It is settled law that in the absence of rebutt the Revenue. It is settled law that in the absence of rebutt the other side, the averments made in the affidavit are to be the other side, the averments made in the affidavit are to be the other side, the averments made in the affidavit are to be accepted as true.

2.3. The coordinate Bench of this Tribunal in 2.3. The coordinate Bench of this Tribunal in Bajaj Hindustan Ltd. Bajaj Hindustan Ltd. v. JCIT [2005] 92 ITD 11 (Mum) has observed that in the absence of [2005] 92 ITD 11 (Mum) has observed that in the absence of [2005] 92 ITD 11 (Mum) has observed that in the absence of any counter affidavit by the Revenue, delay in filing the appeal any counter affidavit by the Revenue, delay in filing the appeal any counter affidavit by the Revenue, delay in filing the appeal deserves to be condoned. Similarly, the Hon’ble Supreme Court in deserves to be condoned. Similarly, the Hon’ble Supreme Court in deserves to be condoned. Similarly, the Hon’ble Supreme Court in Sandhya Rani Sarkar v. Sudha Rani Debi [1978] AIR 537 (SC) held [1978] AIR 537 (SC) held Sandhya Rani Sarkar v. Sudha Rani Debi that non-filing of affidavit in opposition to an application for filing of affidavit in opposition to an application for filing of affidavit in opposition to an application for condonation of delay may itself constitute a ground to condone condonation of delay may itself constitute a ground to condone condonation of delay may itself constitute a ground to condone delay. The Hon’ble Apex Court in delay. The Hon’ble Apex Court in Sreenivas Charitable Trust v. DCIT Sreenivas Charitable Trust v. DCIT [2006] 280 ITR 357 (SC) has further held that the expression [2006] 280 ITR 357 (SC) has further held that the expression [2006] 280 ITR 357 (SC) has further held that the expression “sufficient sufficient sufficient cause” must cause” cause” must must be be be liberally construed to liberally liberally construed construed to to advance advance advance substantial justice, which is of paramount importance. Likewise, in substantial justice, which is of paramount importance. Likewise, in substantial justice, which is of paramount importance. Likewise, in Concord of India Insurance Co. Ltd. v. Nirmala Devi [1979] 180 ITR Concord of India Insurance Co. Ltd. v. Nirmala Devi 507 (SC), it was held that unless mala fides or recklessness is 507 (SC), it was held that unless mala fides or recklessness is 507 (SC), it was held that unless mala fides or recklessness is discernible, legal advice honestly sought and acted upon constitutes discernible, legal advice honestly sought and acted upon constitutes discernible, legal advice honestly sought and acted upon constitutes sufficient cause for condonation. sufficient cause for condonation.

2.4. The object of limitation is not to defeat substantial justice but 2.4. The object of limitation is not to defeat substantial justice but 2.4. The object of limitation is not to defeat substantial justice but to ensure expeditious conduct of proceedings. In the facts of the to ensure expeditious conduct of proceedings. In the facts of the to ensure expeditious conduct of proceedings. In the facts of the present case, there is nothing on record to suggest any mala fide or ere is nothing on record to suggest any mala fide or ere is nothing on record to suggest any mala fide or dilatory intent on the part of the assessee. We, therefore, are of the dilatory intent on the part of the assessee. We, therefore, are of the dilatory intent on the part of the assessee. We, therefore, are of the considered view that the assessee was prevented by sufficient cause considered view that the assessee was prevented by sufficient cause considered view that the assessee was prevented by sufficient cause from filing the appeal within the limitation period. Accordingly, the from filing the appeal within the limitation period. Accordingly from filing the appeal within the limitation period. Accordingly delay in filing the appeal is condoned. The appeal is, therefore, delay in filing the appeal is condoned. The appeal is, therefore, delay in filing the appeal is condoned. The appeal is, therefore, admitted for adjudication on merits. admitted for adjudication on merits.

3.1. Having considered the rival submissions, we find merit in the . Having considered the rival submissions, we find merit in the . Having considered the rival submissions, we find merit in the plea of the assessee. Since the assessee opted for assessee. Since the assessee opted for assessee. Since the assessee opted for settlement of additions made in assessment proceedings under additions made in assessment proceedings under Vivad se Vishwas Vivad se Vishwas Scheme, 2024 but did not deposit the tax did not deposit the tax determined determined under the scheme, the immunity , the immunity provided under the scheme provided under the scheme from penalty under section 271(1)(c) could not be extended. Consequently, the (1)(c) could not be extended. Consequently, the (1)(c) could not be extended. Consequently, the learned CIT(A) ought to have decided the issue on merits rather learned CIT(A) ought to have decided the issue on merits rather learned CIT(A) ought to have decided the issue on merits rather than remitting the matter to the Assessing Officer for verification of than remitting the matter to the Assessing Officer for verification of than remitting the matter to the Assessing Officer for verification of challan.

3.2. Further, it is evident from the record that the learned CIT . Further, it is evident from the record that the learned CIT . Further, it is evident from the record that the learned CIT(A) did not provide sufficient opportunity to the assessee before passing did not provide sufficient opportunity to the assessee before passing did not provide sufficient opportunity to the assessee before passing the impugned order. Principles of natural justice mandate that a the impugned order. Principles of natural justice mandate that a the impugned order. Principles of natural justice mandate that a reasonable opportunity of hearing must be afforded before any reasonable opportunity of hearing must be afforded before any reasonable opportunity of hearing must be afforded before any adverse view is taken. adverse view is taken.

3.3. In view of the above, we de . In view of the above, we deem it appropriate to set aside the em it appropriate to set aside the order of the learned CIT(A) and restore the matter to his file with a order of the learned CIT(A) and restore the matter to his file with a order of the learned CIT(A) and restore the matter to his file with a direction to decide the issue afresh, in accordance with law, after direction to decide the issue afresh, in accordance with law, after direction to decide the issue afresh, in accordance with law, after granting adequate opportunity to the assessee to present its case on granting adequate opportunity to the assessee to present its case on granting adequate opportunity to the assessee to present its case on merits.

3.4. Accordingly, Ground No. 1 of the assessee’s appeal is allowed ccordingly, Ground No. 1 of the assessee’s appeal is allowed ccordingly, Ground No. 1 of the assessee’s appeal is allowed for statistical purposes. for statistical purposes.

Order pronounced in the open Court on nounced in the open Court on 26/0 /08/2025.