ASHOK KUMAR JAIN,MUMBAI vs. INCOME TAX OFFICER , MUMBAI
Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI OM PRAKASH KANT () & MS. KAVITHA RAJAGOPAL () Assessment Year: 2009-10
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated
31.05.2024 passed by the Ld. Commissioner of Income-tax
(Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld.
CIT(A)’] for assessment year 2009-10, raising following grounds:
1. “The First Appellate Authority has erred on facts and in law by affirming the imposition of penalty by the Learned AO under section 271(1)(c) of the Income Tax Act, 1961 of 11,67,391/- (Rupees Eleven
Lakhs Sixty-Seven Thousand Three Hundred and Ninety One only).
Ashok Kumar Jain
2
On the facts and in the circumstances of the case and in law the penalty levied is unsustainable and is liable to be deleted as such.
Hence it is prayed to Your Honor to give due directions to delete the penalty on the grounds of natural justice.
That the appellant craves leave for reserving the rights to amend, modify, alter, add, or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”
At the threshold, the learned counsel appearing for the assessee drawn our attention to the application seeking condonation of delay in preferring the present appeal. It is submitted that the appeal has been filed with a delay of 195 days. Learned counsel, in support of the application, has placed reliance upon the affidavit filed by the appellant, wherein it has been averred that the Chartered Accountant (CA) entrusted with the responsibility of handling the appellant's income-tax matters was, during the relevant period, afflicted with serious medical issues. Owing to such personal circumstances, the said professional was unable to attend to the timely filing of the appeal. It is further stated that the appellant became aware of the impugned order only upon receipt of notice of demand from the Income-tax department. Thereafter, alternative professional assistance was sought, and the appeal was duly instituted. Learned counsel has urged that the delay is not deliberate but occasioned by bona fide and unavoidable circumstances and, therefore, prays that the same be condoned in the interest of justice.
Ashok Kumar Jain
3
4. We have carefully considered the submissions advanced by the learned counsel for both sides on the issue of delay. Upon perusal of the affidavit and the explanation furnished therein, we are satisfied that the appellant has shown sufficient cause for the belated filing of the appeal. The reasons disclosed are found to be bona fide and do not reflect any negligence or disregard for the process of law. In the circumstances, the delay of 195 days in filing the appeal stands condoned. The appeal is accordingly admitted for hearing on merits.
5. In relation to grounds of appeal raised, the Ld. Counsel for the assessee submitted that the appeal against quantum addition has been restored by the Tribunal to the file of the assessing officer and, therefore, this appeal against the penalty order might also be restored back to the assessing officer for deciding consequent to the assessment order.
6. We have heard rival submission of the parties on the issue of the levy of the penalty. We find that the addition made in the quantum proceeding have been restored to the file of the Assessing Officer by the Tribunal in ITA No. 932/Mum/2025 observed as under:-
“We have perused the submissions advance by both sides in the lights of records placed before us.
It is noted that, the additional evidences produced by the, Ld.AR are necessary to be verified in the light of the ratio by Hon'ble Bombay High Court in case of Pr.CIT-5 vs Kanak Impex, (Ind) Ltd (Supra). By the consent of Ld.AR we deem it proper to remit this issue back to the Ld.AO to carry out necessary verification in the light of the decision of by Hon'ble Bombay High Court. Needless to say that proper opportunity of Ashok Kumar Jain 4 being heard must be granted to the assessee and the assessee is at liberty to furnish all the necessary evidence to substantiate its claim which shall be subjected to verification by the Ld.AO.
Accordingly the grounds raised by the assessee stands partly allowed for statistical purpose.
In the result the appeal filed by the assessee stands allowed for statistical purpose.” 7. In view of the fact that the addition made in the quantum proceedings, forming the very basis of the penalty under challenge, has already been set aside and the matter remanded to the Assessing Officer for a fresh adjudication, the penalty, as presently levied, cannot be sustained. It is a settled principle of law that when the foundation for imposition of penalty is unsettled or rendered non-existent, the penalty cannot independently survive. Accordingly, the present penalty proceedings are also restored to the file of the Assessing Officer, who shall consider the question of initiation and imposition of penalty, if so warranted, in accordance with law, in the course of passing the fresh assessment order in pursuance of the directions issued by the learned Tribunal in the quantum appeal. The grounds of the appeal of the assessee are accordingly allowed to the statistical purposes.
Ashok Kumar Jain
5
8. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 02/05/2025. (KAVITHA RAJAGOPAL)
ACCOUNTANT MEMBER
Mumbai;
Dated: 02/05/2025
Disha Raut, Stenographer
Copy of the Order forwarded to :
The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.
BY ORDER,
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