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Facts
The AO passed an ex-parte assessment under Section 144, making additions for unexplained investment under Section 69B and cash credit under Section 68. The CIT(A) dismissed the assessee's subsequent appeal due to a delay of over 7 years in filing, without condoning it, despite the assessee's claim of late receipt of the order.
Held
The Tribunal found the delay in filing the appeal before the CIT(A) condonable, acknowledging the assessee's argument of late order receipt. It remanded the quantum assessment (ITA No. 1989/Kol/2024) back to the AO for fresh adjudication with full opportunity for the assessee. Consequently, the penalty levied under Section 271(1)(c) (ITA No. 1990/Kol/2024) was deleted, with liberty for the AO to initiate fresh penalty proceedings if additions are sustained.
Key Issues
The key issues were the condonability of delay in filing appeal before the CIT(A), the validity of quantum additions for unexplained investment and cash credit, and the legality of penalty under Section 271(1)(c) when quantum additions are under dispute.
Sections Cited
250, 144, 69B, 68, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH KOLKATA
Appearances by: Assessee represented by : Manoj Kataruka, Advocate Department represented by : S.B. Chakraborthy, JCIT, Sr. DR Date of concluding the hearing : 05.02.2025 Date of pronouncing the order : 07.02.2025 O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
The present two appeals arise from order u/s 250 of the Income Tax Act, 1961 (hereafter ‘the Act’), passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereafter ‘the Ld. CIT(A), dated 02.09.2024. The appeal in 02.09.2024 involving a penalty levied u/s 271(1)(c) of the Act. Since, both appeals have similar facts, they are being disposed of through a common order.
& 1990/Kol/2024 M/s Moonlight Residency Pvt. Ltd. 1.1 In this case, the Ld. Assessing Officer (AO) passed an order dated 25.03.2015 u/s 144 of the Income Tax Act, 1961 (hereafter ‘the Act’), primarily because there was admittedly no compliance at the level of AO. Accordingly, the Ld. AO passed an exparte order adding Rs. 1,29,96,784/- as unexplained investment u/s 69B; and also, two additions of Rs. 3,69,450/- and Rs. 3,65,75,550/- as unexplained cash credit u/s 68 of the Act. Before the Ld. CIT(A) also the assessee could not succeed primarily because there was an alleged delay of more than 7 years in the filing of first appeal. The Ld. CIT(A) did not condone the delay and thereafter dismissed the assessee’s appeal.
2. Aggrieved with the action of Ld. CIT(A), the assessee has filed the present appeal with the following grounds:
“1. That on the facts and in the circumstances of the case the action of the Ld. CIT(A) to confirm the addition made by the A.O. on the reason that the appeal filed was beyond the statutory time limit and therefore, not maintainable is arbitrary, excessive, illegal and bad in law.
That without prejudice to the Ground No. 1 and on the facts and in the circumstances of the case the action of the Ld. CIT(A) to confirm the addition made by the A.O. by rejecting the condonation of delay petition is in violation of the principles of natural justice and therefore the order passed is bad in law.
3. That without prejudice to the above grounds, the action of the Ld. CIT(A) to confirm the addition made by the A.O. of Rs. 3,69,450/- and Rs.3,65,75,550/- as unexplained cash credit u/s 68 of the I.T. Act, 1961 is arbitrary, excessive and bad in law.
That the action of the Ld. CIT(A) confirm the addition made by the AO of Rs.1,29,96,784/- as unexplained investment u/s 698 of the I.T. Act, 1961 contrary to the material evidences on record and the addition is arbitrary, excessive and bad in law.
That the order of the Ld. CIT(A) confirming the addition made by the A.O. is arbitrary. excessive and illegal.
That the above grounds of appeal will be argued in details at the time of hearing and the appellant craves leaves to submit additional grounds of appeal if any and or alter, vary. modify or rectify the statement of facts and grounds of appeal at or before the time of hearing.”
& 1990/Kol/2024 M/s Moonlight Residency Pvt. Ltd. 2.1 Before us, the Ld. AR pointed out that in Para No. 2 of the impugned order, it is mentioned that the assessee has received the order only on 17.06.2022 and thereafter he has filed the said appeal on 07.07.2022. The Ld. AR vehemently argued that the Ld. CIT(A) fell in error in computing the said delay from the date of the order (25.03.2015) and did not consider the date on which the assessee actually received the said order. Further, the Ld. AR requested that the assessee has a reasonably good case on merit and hence in case the same is remanded back to the file of the Ld. AO, then there would be an opportunity to present the documents and evidences before him for a fair assessment of income.
2.2 The Ld. DR relied on the order of authorities below.
We have carefully considered the facts of the case, the documents before us and the averments of Ld. AR. It is clear from Para No. 2 of the impugned order that the delay was certainly condonable on the basis of claim of the assessee about the date of receipt of order being 17.06.2022. Additionally, it is felt that since the issues involved demand considerable fact finding hence, we deem it fit to remand the matter back to the file of Ld. AO for fresh adjudication at his level. Needless to say, the Ld. AO would give ample opportunity and the assessee would do well to avail of such opportunities for presenting his case.
Ld. AO, this penalty cannot survive and the same is directed to be deleted. However, in case, there is any addition at the level of Ld. AO, which merits the initiations of penalty proceedings, then the Ld. AO would be at liberty to take necessary action as per law.