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Facts
The assessee's appeal was against the CIT(A)'s order for AY 2017-18, which rejected the application for condonation of delay in filing the first appeal and consequently dismissed the penalty appeal. The assessee raised grounds regarding the erroneous rejection of the delay condonation application and the failure to decide the penalty issue on merit.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A), considering the pandemic period and the assessee's bonafide belief on legal advice. Similarly, the delay in filing the appeal before the Tribunal was also condoned. The matter was restored back to the CIT(A) to decide the grounds of appeal on merit.
Key Issues
Whether the delay in filing the appeal before the CIT(A) and the Tribunal should be condoned, and whether the CIT(A) erred in not deciding the penalty appeal on merit.
Sections Cited
254(1), 270A, 270AA(2)
AI-generated summary — verify with the full judgment below
PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of Ld. CIT(A) dated 31.03.2024 for assessment year (AY) 2017-18. The assessee has raised following grounds of appeal:
”1. On the facts and circumstances of the case and in law, Ld. CIT Appeal erred in rejecting the application for condonation of delay of 255 days on ground of there is no sufficient cause for condoning the delay, without application of the mind and without proper reason.
2. On the facts and in circumstances of case and in law Ld. CIT Appeal erred in not deciding the penalty issue on merit of case.
3. CIT(A) erred in dismissed the penalty appeal.
4. CIT Appeal failed to consider the ground numbers : - (b)(c)(d)
5. On the facts and in circumstances of case and in law Ld. Assessing Officer erred in invoking both the limb and levied the penalty which is illegal, incorrect, bad in law, which was dismissed by CIT(A).
6. AO erred on levied penalty Rs. 7,33,714/- appellant prays that penalty Rs. 7,33,714/- to be cancelled.
Levying penalty 200% of income tax payable where there is no misreporting of the income by appellant, income Rs. 11,87,240/- was voluntarily offered in the scrutiny assessment and accepted by Assessing Officer. The assessed income was below original, return of income offered, it is not concealed income.
AO failed to consider Form No. 68 under section 270AA(2) of the Income Tax Act, 1961 (for immunity from imposition penalty under section 270A of the Income Tax Act) and rejected application without proper reason as even condition laid down u/s 270AA(2) are satisfied.
The Honourable ITAT may please be considered the filing of the appeal before Honourable ITAT delayed 172 days and delay may please be condoned (separate petition is filed).
Appellant craves, leave to add, alter, amend, vary, modify and/or withdraw any grounds of the appeal at or before the time of hearing.”
Rival submissions of the parties have heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that there is delay of 160 days in filing appeal before Tribunal. The delay in filing appeal is neither intentional nor deliberate. The assessee has filed application for condonation of delay. The assessee could not file any time due to ill advice of his earlier consultant and the assessee has not aware about the consequence of non-filing of appeal, when the matter was referred to another consultant, he advised to file appeal before Tribunal immediately with application for seeking condonation of delay. The ld. AR of the assessee further fairly submits that there was delay of 225 days in filing appeal before ld. CIT(A).
The ld. CIT(A) dismissed the appeal of assessee by not condoning the delay in filing first appeal. The assessee has shown reasonable cause for filing appeal belatedly. The assessee before ld. CIT(A) explained the fact that order under section 270A dated 01.09.2021 was downloaded only on 30.04.2022 and appeal was filed on 14.05.2022. The assessee made a prayer to consider the date of service of penalty order as on 30.04.2022 for the purpose of filing first appeal. All such facts are recorded in para 4 of order of ld. CIT(A). The ld. AR of the assessee reiterated that delay in filing appeal was not intentional or melafide, rather, due to the facts that the assessee was not aware of the penalty order. The assessee is really interested in pursuing the appeal on merit. The ld. AR of the assessee submits that substantial right of assessee are involved in the present appeal as the assessing officer levied penalty for technical reason. If the matter / case of assessee heard on merit, no penalty under section 270A is leviable. There was no misreporting of income as held by assessing officer. The ld. AR for the assessee prayed to condone the delay in filing appeal before ld. CIT(A) as well as before Tribunal and to allow him to make submission on merit.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of ld. CIT(A). The ld. Sr. DR for the revenue submits that assessee is always remained non-compliant. The assessee not contested the penalty proceeding. Appeal before ld. CIT(A) was filed beyond period of limitation, again there is a delay of 160 days in filing appeal before Tribunal. The assessee does not deserve any leniency. Thus, delay in filing appeal may not be condoned and the appeal may be dismissed straightway.
We have considered the rival submissions of both the parties and perused the record of case carefully. Firstly, we are considering the delay in filing appeal before ld. CIT(A). We find that in para 4 of his order, the ld. CIT(A) recorded the contention of assessee that penalty order under section 270A dated 01.09.2021 was down loaded only on 30.04.2022 and assessee requested to consider such date as date of service. We find that when penalty order dated 01.09.2021 was passed; it was a period of severe Covid pandemic period of Covid-2019. The Hon’ble Supreme Court in Suo Moto Writ Petition No. 3 of 2021 extended the time period for taking recourse of law by ordinary Citizens upto 28.02.2022 and further, 90 days grace period was allowed to take recourse of law. Thus, majority of time period of alleged delay falls in such time which is already condoned by Hon’ble Apex Court.
Thus, considering the overall facts of the present case and considering the fact that assessee is interested in pursuing his case on merit. Delay in filing appeal before ld. CIT(A) is condoned.
Adverting to further delay in filing appeal before Tribunal. Solitary submission of ld. AR of the assessee is that assessee was advised by his consultant not to file appeal and later on when he consulted another consultant, he was advised to file appeal. Considering the fact that assessee acted bonafide on the advice of his consultant, such fact is supported by affidavit of assessee. we find that Kolkata High Court in Chandra & Sons (P) Ltd Vs UOI (1991)1991 taxmann.com 841 (Kol) held that when assessee acted on bonafide belief on the advice of consultant and there is no intentional delay, delay could be condoned. Thus, considering the principal of law on limitation that when technical consideration and cause of substantial justice are kept against each other, cause of substantial justice may be preferred, hence delay of 160 days in filing appeal before Tribunal is also condoned. Now, adverting to merits of the case. We find that ld. CIT(A) has not considered the grounds of appeal on merit, therefore, matter is restored back to the file of ld. CIT(A) to reconsider the matter and passed the order in accordance with law. The assessee is also given liberty to raise in other or further factual or legal plea before ld. CIT(A). Needless to direct that before passing the order, the ld. CIT(A) shall allow reasonable opportunity to the assessee. In the result, the grounds of appeal of the assessee are allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order was pronounced in the open Court on 07/07/2025.