LIC GOLDEN JUBILEE FOUNDATION,MUMBAI vs. DCIT(EXEMPTION) 1 (1) , MUMBAI

These are two appeals filed by the Assessee against the separate orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeals Centre [hereinafter referred to as „the CIT(A)‟], dated 29.03.2021 and 30.03.2021 pertaining to assessment years 2010-11 and 2011-12, respectively, whereby the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟) has been confirmed. & 1433/Mum/2021 Assessment Year: 2010-11 & 2011-12 2. Since, the facts are identical and common issue is involved, both the appeals were heard together and for the sake of convenience, are being disposed by way of common order. 3. By way of the present appeals the Appellant/Assessee has challenged the order, dated 29.03.2021, passed by the CIT(A) in appeal [CIT(A)-1, Mumbai/10612/2017-18] for the Assessment Year 2010-11, whereby the CIT(A) had dismissed the appeal filed by the Assessee against the penalty order, dated 30.03.2017, passed under Section 271(1)(c) of the Act. 4. Brief facts of the case are that the Appellant, a public charitable trust registered under the Mumbai Public Trust Act, 1950, filed its return of income for the Assessment Year 2010-11 on 09.09.2010 declaring „Nil‟ income. In the assessment proceedings, under Section 143(3) of the Act total income of the Appellant was determined that INR 2,11,47,230/-, and penalty proceeding was initiated under Section 271(1)(c) of the Act for incorrectly treating an amount of INR 2,11,47,228/- donated to other trusts and institutions carrying charitable objects as the amount spent towards charitable purposes for which the same was accumulated. The aforesaid penalty proceedings culminated into order, dated 30.03.2017, whereby a penalty of INR 65,34,493/- was levied under Section 271(1)(c) of the Act. 5. Being aggrieved, the Appellant herein filed appeal before the CIT(A) which was dismissed vide order, dated 29.03.2021, on the ground that that the appeal was filed after delay of 295 days and was not accompanied by application seeking condonation of delay. Further, the CIT(A), taking note of the fact the additions made by the Assessing Officer have been confirmed in the quantum appeal filed by the Assessee before the First Appellate Authority, concluded that the penalty has been correctly levied by the Assessing Officer. & 1433/Mum/2021 Assessment Year: 2010-11 & 2011-12

In the present appeal, the following grounds have been raised challenging the levy of penalty under Section 271(1)(c) of the Act and dismissal of appeal by CIT(A):

The Commissioner of Income Tax (Appeal) erred in not considering application for condonation of Delay, attached along with Form 35.

The Commissioner of Income Tax (Appeal) erred in confirming the penalty of Rs. 65,34,493/- levied by the AO.

The Commissioner of Income Tax (Appeal) erred in not considering the fact that 2nd Appeal against the quantum order was filed before I.T.A.T and the I.T.A.T. has passed order dated 21/05/2019 and copy of the order is sent to CIT(A).

The Commissioner of Income Tax (Appeal) erred in not sending the communication at proper address/email provided in Form No. 35.”

At the outset, the Ld. Authorized Representative of the Appellant submitted that the additions made by the Assessing Officer, which were confirmed by the First Appellate Authority, stood deleted on the date of which the CIT(A) passed the order impugned herein since the Tribunal had, vide consolidated order dated 21.05.2019 passed in respect of (A.Y. 2010-11), 83/Mum/2016 (A.Y. 2011-12) and 6613/Mum/2016 (A.Y. 2013-14), allowed the quantum appeals. As regards the delay in filing the appeal before the CIT(A), the Ld. Authorized Representative submitted that the application for condonation of delay was filed along with Form 35. ITA. Nos. 1432 & 1433/Mum/2021 Assessment Year: 2010-11 & 2011-12 Ld. Departmental Representative verified the fact that vide order, dated 21.05.2019, the quantum additions made by the Assessing Officer stands deleted. He submitted that since the Appellant had stated that there was no delay in filing the appeal, the CIT(A) was justified in dismissing the appeal on account of delay. In rejoinder the Ld. Authorized Representative, fairly conceded that in Form No. 35, it was incorrectly mentioned that there was no delay in filing the appeal, however, he submitted that the penalty order was passed by CIT(A) summarily without giving opportunity of being heard and/or confronting the Appellant regarding delay in filing the appeal.

We have considered the rival submissions and perused the record including the decisions of the Tribunal, dated 21.05.2019, disposing ITA No. 5281/Mum/2015 (A.Y. 2010-11), 83/Mum/2016 (A.Y. 2011-12) and 6613/Mum/2016 (A.Y. 2013-14) and copy of application seeking condonation of delay filed before CIT(A) placed on record. We note that the appellant is a public charitable trust. In our considered view, in the facts of the present case, no fruitful purpose would be served in remitting the matter to the file of the CIT(A) to adjudicate the issue of delay in filing appeal when the additions made in the assessment proceedings forming the very basis of levy of penalty under Section 271(1)(c) of the Act stands deleted. Vide order dated 21.05.2019, the Tribunal has disposed off the quantum appeal [ITA No. 5281/Mum/2015] pertaining to A.Y. 2010-11 and deleting the addition of INR 2,11,47,228/- made by the Assessing Officer. The levy of penalty under Section 271(1)(c) of the Act cannot be sustained. In view of the aforesaid, the penalty of INR 65,34,493/- levied under Section 271(1)(c) of the Act is deleted and present appeal is allowed. 9. For the Assessment Year 2011-12, in the facts and circumstances identical to those pertaining to Assessment Year 2010-11, a penalty of ITA. Nos. 1432 & 1433/Mum/2021 Assessment Year: 2010-11 & 2011-12 INR 79,56,034/- was levied under Section 271(1)(c) of the Act by the Assessing Officer vide order, dated 30.03.2017, which was confirmed by the CIT(A) vide order, dated 30.03.2021. Since the facts and circumstances of the case, issue for consideration and the grounds of appeal are identical, for the reasons stated in paragraph 8 above, the appeal for the assessment year 2011-12 is allowed and penalty of INR 79,56,034/- was levied under Section 271(1)(c) is deleted. In the result, both the appeals are allowed.