SANJAY TYAGI,DELHI vs. DCIT, CENTRAL CIRCLE- 1, NEW DELHI

ORDER PER BHAVNESH SAINI, J.M.

All the Appeals by the same Assessee are directed against different Orders of the Ld. CIT(A)-11, New Delhi, Dated 06.04.2017, 07.04.2017, 03.05.2017 for the A.Ys.

2 ITA.No.6859/Del./2017 Shri Sanjay Tyagi, Delhi. 2005-2006 to 2009-2010, challenging the levy of penalty under section 271(1)(b) of the I.T. Act, 1961.

3.1. The assessee has filed an application for condonation of delay for all these years consolidatedly supported by affidavit of the assessee.

3.2. Learned Counsel for the Assessee contended that in all these years penalty was levied penalty under section 271(1)(b) of the I.T. Act, 1961, for failure to comply with notices issued under section 142(1) at the assessment proceedings. He has submitted that the A.O. in the assessment orders in absence of assessee passed the ex-

3 ITA.No.6859/Del./2017 Shri Sanjay Tyagi, Delhi. parte Orders under section 153A/144 of the I.T. Act, 1961 and determined the income of assessee on estimate basis. He has submitted that assessee preferred appeals before the Ld. CIT(A) against the quantum additions made in ex-parte assessment orders and the Ld. CIT(A) vide Order Dated 02.05.2017 for above assessment years deleted the entire additions holding that the additions are made in absence of any material found during the course of search under section 132 of the I.T. Act, 1961, following the decision of Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla [2016] 380 ITR 573 (Del.), copies of the Orders Dated 02.05.2017 are placed on record. Learned Counsel for the Assessee, therefore, submitted that since quantum does not survive, therefore, there is no tax liability upon the assessee and as such, no penalty is leviable against the assessee. Learned Counsel for the Assessee as regards condonation of delay, submitted that impugned orders were not served personally upon the assessee as the same were delivered to his wife and because assessee was involved in several round of litigations including the criminal cases and 4 ITA.No.6859/Del./2017 Shri Sanjay Tyagi, Delhi. even could not get salary, therefore, he was unable to file the appeals challenging the levy of penalty under section 271(1)(b) of the I.T. Act, 1961. He has submitted that since quantum addition have been deleted, therefore, for substantial cause of justice, the delay in filing the appeals may be condoned and penalty may be cancelled.

5 ITA.No.6859/Del./2017 Shri Sanjay Tyagi, Delhi. issued under section 142(1) at the assessment proceedings. Since there was default on the part of the assessee, A.O. passed the ex-parte assessment order and determined the income of assessee on estimate basis. Since the case of the assessee are connected with the search, therefore, assessment orders were passed under section 153A/144 of the I.T. Act, 1961. The Ld. CIT(A) vide Order Dated 02.05.2017 for the above assessment years deleted the entire additions following the Judgment of Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla (supra). Thus, no additions stand against the assessee and the estimated additions did not survive against the assessee. Thus, technically, on deletion of all the additions as per the Judgment of Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla (supra), there may not be any default on the part of the assessee to comply with the statutory notices. It may now be a technical and venial default on the part of the assessee and as such, the penalty may not be leviable against the assessee under section 271(1)(b) of the I.T. Act. Considering the above facts in the light of explanation of 6 ITA.No.6859/Del./2017 Shri Sanjay Tyagi, Delhi. assessee, we are of the view that assessee was prevented by sufficient cause in not filing the appeals within the period of limitation and assessee has a bonafide explanation for not filing the appeals within the period of limitation and further for substantial cause of justice, when additions stand deleted by the Ld. CIT(A), penalty is not leviable. Further, even if assessee may not be strictly able to support the explanation for condonation of delay, we are of the view that for taking a pragmatic view in the facts and circumstances explained above, the delay shall have to be condoned. In view of the above, we condone the delay in filing the appeals before the Tribunal in all the above years. Since the additions on merit have already been deleted by the Ld. CIT(A) and no further appeals are pending as per contention of the Ld. D.R. on merit, therefore, there may not be a default on the part of the assessee and at best it could be considered as a technical default, for which, in our view, penalty should not be levied by the authorities below for failure to comply with the notices under section 142(1) of the I.T. Act, 1961. In view of the above discussion, we set

7 ITA.No.6859/Del./2017 Shri Sanjay Tyagi, Delhi. aside the Orders of the authorities below and cancel the penalty under section 271(1)(b) of the I.T. Act in all the above impugned assessment years. Appeals of the Assessee are allowed.

Order pronounced in the open Court.