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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI VIJAY PAL RAO & SHRI GAGAN GOYAL
ORDER Per Vijay Pal Rao (JM):
This appeal by the assessee is directed against the order dated 11/08/2021 of Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, arising from the penalty order passed under section 271(1)(c) of the Income-tax Act for the assessment year 2010-11. 2. The assessee has raised the following grounds :- “1. Not condoned the delay in filing the Appeal.
1.1 The Hon'ble C.I.T. (A) (NFAC) has erred in law and facts of the case in not entertaining the Appellant's Request /application for condonation of delay in filing the appeal and on that ground rejected the Appellant's appeal. 1.2 Your Appellant has genuine reason for delay in filing the appeal, which has not been properly appreciated by the Hon'ble C.I.T. (A) (NFAC). 1.3 Your Appellant has not been given enough time and opportunity to file affidavit and/or other documentary evidence to substantiate genuine ground for delay in filing the appeal. 1.4 Your Appellant prays that the delay in filing the appeal has to be condoned and appeal dismissed by the Hon'ble C.I.T. (A) (NFAC) is incorrect and bad in law, so the Hon'ble C.I.T. (A) (NFAC)'s order dismissing the appeal is to be set aside and delay in filing the appeal has to be condoned and appeal is to be admitted and appeal is to be decided on merit.
Penalty appeal is decided without waiting for disposal of quantum (main) appeal. 2.1 The Hon'ble C.I.T. (A) (NFAC) has erred in law and facts of the case in deciding the penalty appeal when quantum (main) appeal is pending before the Hon'ble C.I.T. (A) (NFAC). 2.2 The Hon'ble C.I.T. (A) (NFAC) has not followed the established procedure for hearing and disposing off appeal pending for same assessment year, i.e. Asst. Year 2010-11. 2.3 When penalty proceedings u/s. 271(l)(c) is initiated on the basis of order u/s. 144 r.w.s. 147 of the IT. Act, 1961 dated 12.12.2017, the said order itself has been challenged in appeal proceedings before the Hon'ble C.I.T. (A) (NFAC). The said appeal is pending. 2.4 It is established practice that first quantum appeal is decided and thereafter appeal against penalty proceedings u/s. 271(l)(c) is decided. 2.5 Your Appellant prays that the Hon'ble C.I.T. (A) (NFAC) dismissed the penalty appeal on technical ground of delay in filing appeal, without considering the fact that main (quantum) appeal is still pending. 2.6 Your Appellant prays that disposing off penalty appeal when main (quantum) appeal is pending is incorrect and bad in law, so the said appeal order in penalty proceedings is incorrect and bad in law and the same is required to be cancelled.
Appeal is not decided on merit. 3.1 The Hon'ble C.I.T. (A) (NFAC)has erred in law and facts of the case in not considering the the merits of the case. 3.2 In order u/s. 144 r.w.s. 147, the Ld. A.O. has considered the purchase of flat transaction as a "sale of flat" transaction and made addition to total taxable income. Thus the addition is actually and apparently wrong and incorrect. On the basis of such incorrect order u/s. 144 r.w.s, 147, the Ld. A.O. in ex-parte order levied penalty of Rs. 7,66,3207-u/s.271(l)(c). * 4. Serious violation of natural justice.
4.1 The Hon'ble C.I.T. (A) (NFAC), has erred in law and facts of the case in disposing of the appeal in complete haste and without giving sufficient time and opportunity and erred in law in ignoring of the evidence and proof and documents available on record. 4.2 Your Appellant has made specific request for personal hearing before disposing off the appeal. 4.3 The Hon'ble C.I.T. (A) (NFAC) has not granted the opportunity for personal hearing to your Appellant in serious violation of natural justice. 4.4 The Hon'ble C.I.T. (A) (NFAC) has dismissed the appeal without giving enough time and opportunity to your Appellant to put the submission of Appellant before the Hon'ble C.I.T. (A) (NFAC), for which specific request has been made by your Appellant. 4.5 Your Appellant prays that the appeal dismissed by the Hon'ble C.I.T. (A) (NFAC) on technical ground of delay in filing the appeal and without giving enough time and opportunity to your Appellant is serious violation of natural justice and the same is required to be cancelled and set aside.”
3. The Ld.AR of the assessee has submitted that the CIT(A) has dismissed the appeal of the assessee as barred by limitation after declining to condone the delay of 35 days in filing the appeal. He has further submitted that the quantum appeal is still pending before the CIT(A); however, the penalty appeal was dismissed in limine despite the fact that the assessee has explained the cause of delay which is reproduced by the CIT(A) in the impugned order. Thus, the Ld.AR has submitted that the delay of 35 days in filing the appeal before the CIT(A) may be condoned and the matter may be remanded to the records of CIT(A) for deciding the appeal on merits after the disposal of the quantum appeal of the assessee.
On the other hand, the Ld.DR has objected to the condonation of delay. 5. We have considered the rival submissions and carefully perused the impugned order of CIT(A). The CIT(A) has reproduced the reasons as explained by the assessee for condonation of delay of 35 days in filing the appeal as under:- “Condonation of Delay:
I have received Penalty Order u/s.271(1)(c) for A.Y 2010-11 dated 27.06.2018 along with Demand Notice for Rs.7,66,320/- on 12.07.2018.
2. On receipt of the said Penalty Order for the first time The Appellant become aware of assessment proceeding for A.Y 2010-11 and Assessment Order passed by the Ld. A.O. 3. Immediately on receipt of Penalty Order the Assessee came to know that there was some assessment proceeding and Assessment Order passed for A.Y 2010-11 and approached Chartered Accountant for doing further proceeding in the matter. 4. Immediately Appeal has been e-filed before CIT(A)-28 on 11.092018 vide Transaction ID 6183871279. 5. Further the Appeal is to be e-filed compulsorily for which digital signature of the Appellant is required. 6. To obtain digital signature there are various documents and procedures is to be complied. Further as a non-resident and stay in Dubai it is more difficult time consuming to obtain digital signature which is compulsorily required to e-file Appeal. Due to above facts and circumstances there is delay in filing of Appeal within 30 days from the date of receipt of Order i.e 12.07.2018. Due to above facts and circumstances there was delay in filing of Appeal which is due to genuine reason and unavoidable circumstances. So I pray your Honour to condone the delay in filing of Appeal. Thanking you Yours faithfully Fatyaz M. Mithani.”
Thus, it is manifest from the record that the assessee explained the delay and submitted that the assessee came to know about the orders passed by the Assessing Officer only when the assessee received the demand notice on 12/07/2018 and thereafter the assessee immediately took the steps to file the appeal before the CIT(A). the delay in filing the appeal is further explained by the assessee due to requirement of digital signatures and cumbersome process as the assessee is a non resident and staying in Dubai. The CIT(A) has accepted this fact of 35 days delay in filing the appeal in paras 6 to 6.3 as under:- “6. Delay in filing appeal not condoned. 6.1 As per the information given in Form No.35, the appellant received the Penalty Order dt 27/6/2018 on 12/7/2018. Hence the appeal should have been filed on or before 11/8/2018. However the appellant filed the appeal on 15/9/2018 with a delay of 35 days. 6.2 In the Application for condonation of delay the appellant stated that delay was due to the time taken to obtain the Digital Signature and various documents required to file the appeal. 6.3 The assessee did not bring any material on record in support of the reasons stated i.e when did he apply for the Digital Signature, when did he receive the Digital Signature, what were the documents and when did he receive them.”
The CIT(A) declined to condone the delay of 35 days for want of explanation of day-to-day delay which, in our considered opinion, is not justified.
Having considered the facts and circumstances of the case, when assessee is an NRI and explained the cause of delay which is found to be reasonable and, therefore, the delay of 35 days in filing the appeal before the CIT(A) is condoned. Since the CIT(A) has not decided the appeal on merits and further, the quantum appeal is still pending disposal before the CIT(A), therefore, the impugned order of CIT(A) is set aside and the matter is remanded to the record of CIT(A) for adjudication of the same on merits after the disposal of the quantum appeal. 9. In the result, appeal allowed for statistical purpose. Order pronounced in the open court on 07/042022