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Facts
The appeal was filed by the assessee against an order of the Ld. CIT(A) which confirmed the penalty levied under Section 271(1)(c) of the Act. The original quantum proceedings for the assessment year had been restored to the file of the Ld. CIT(A).
Held
The Tribunal noted that the quantum proceedings were restored and, in the interest of justice, set aside the penalty proceedings to the file of the Ld. CIT(A) after condoning the delay. The Ld. CIT(A) was directed to decide the matter on its merits.
Key Issues
Whether the penalty proceedings can be restored to the file of the Ld. CIT(A) when the quantum proceedings are restored, and whether the delay in filing the appeal should be condoned.
Sections Cited
250, 271(1)(c), 274, 5
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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
(Assessment Year: 2009-10) Kolet Resort Club Pvt. Ltd., Vs. Income Tax Officer, C/o. P. Murali & Co. Chartered Ward-4(2), Accountants, 6-3-655/2/3, Ahmedabad Somajiguda, Telangana-500082 [PAN No.AAACK8607J] (Appellant) .. (Respondent) Appellant by : Shri Laxmikant Rathi, A.R. Respondent by: Shri Yogesh Mishra, Sr. DR 07.01.2025 Date of Hearing Date of Pronouncement 19.02.2025 O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC), Delhi vide order dated 05.01.2024 passed for A.Y. 2009-10.
The assessee has taken the following grounds of appeal:-
“1. The order of appeal passed by the Ld. CIT(A) u/s 250 of the Act dt. 05.01.2024 is erroneous both on facts and in law to the extent the order is prejudicial to the interest of the appellant.
2. The Ld. CIT(A) ought to have admitted and heard the appeal on the basis of merits instead of dismissing the appeal without condoning the delay and without appreciating the fact that the appellant has a reasonable cause for such delay which is beyond the control of the appellant.
The Ld. CIT(A) has erred in rejecting the appeal on the technical reason of delay in filing which amounts to denial of justice to the appellant on the technical and curable delay in seeking justice.
4. The Ld. CIT(A) ought not to have denied the justice to the appellant by rejecting the appeal on the reason of delayed submission and ought to have decided the issue on merits by condoning the delay.
5. The Ld. CIT(A) ought to have admitted the appeal and observed that the appellant company has neither concealed any income nor furnished any inaccurate particulars to entail itself liable for imposition of penalty u/s 271(1)(c) of the Act.
6. The Ld. CIT(A) erred in not admitting the appeal and appreciating the fact that the appellant company has not made any wilful attempt to conceal the income and therefore, the penalty levied by the AO is against the provisions of law. 7. The Ld. CIT(A) erred in not appreciating the fact that the penalty u/s 271(1)(c) of the Act cannot levied when reasonable justification has been given/ submitted for the same. 8. The Ld. CIT(A) erred by not appreciating the fact that the penalty order has been passed exparte without giving a reasonable opportunity of being heard. Hence, penalty may please be deleted/ in the interest of justice. 9. The Ld. CIT(A) erred in dismissing the appeal relating to penalty u/s 271(l)(c) when the quantum appeal has been set aside by the Hon'ble ITAT to the Ld. CIT(A) on the similar issue of delayed filing of appeal which is still pending before the CIT(A). 10. The Ld. CIT(A) erred in not admitting the appeal and not appreciating the fact that the notice dated 15.12.2011, issued by the AO u/s 274 r.w.s. 271(1)(c) of the Act is bad-in-law as it does not specify under which limb of section 271(l)(c) of the Act, the penalty proceedings has been initiated, i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. 11. The Assessing Officer ought to have appreciated that there is breach of Principles of Natural Justice and, that the penalty order passed u/s 271(l)(c) of the Act is invalid 'ab initio' since there is no clear indication about the concealment of the particulars of the income, nor there is clear indication for furnishing of inaccurate particulars of income 12. The Ld. CIT(A) erred by not fairly and judiciously appreciating the fact that the penalty proceedings and assessment proceedings are two independent proceedings and that the penalty order cannot be solely based on the reasons given in assessment order. 13. Appellant may, add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal
at any time before or at the time of hearing of the appeal.”
3. The brief facts of the case are that this is an appeal emanating out of order of Ld. CIT(A) confirming the order of levy of penalty under Section 271(1)(c)
Kolet Resort Club Pvt. Ltd. vs. ITO Asst.Year –2009-10 - 3– of the Act passed by the Assessing Officer. Before us, the Counsel for the assessee submitted that since quantum proceedings for the instant assessment year have been restored by ITAT Ahmedabad to the file of Ld. CIT(A), in assessee’s own case for A.Y. 2009-10 in vide order dated 16.01.2020, accordingly, the penalty order is also liable to be set-aside to the file of Ld. CIT(A). The Counsel for the assessee placed the order of ITAT Ahmedabad dated 16.01.2020 for our records. It would be useful to reproduce the relevant extracts of the order for ready reference:
“4. Thereafter assessee preferred first statutory appeal before the ld. CIT(A) who dismissed the appeal of the assessee on account of delayed filing of appeal by 789 days. And ld. CIT(A) dismissed the appeal without condoning the delay and nothing has been discussed about the merit of the case.
5. Now Assessee has come before us and stated that the delay in filing of appeal was because of the reason that, earlier appeal was filed with the ld. CIT(A)- VIII, Ahmedabad but on not finding any issue of notice for hearing from year and thereafter cross verifying the facts from the department, assessee came to know about the fact that the appeal was not filed with the jurisdictional CIT(A).
In support of its contention, assessee cited an order of ITAT Chennai in the case of JCIT vs. Tractors & Farm Equipments Ltd. wherein it is held: "The delay cannot be condoned simply because the appellant's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The Hon'ble Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 36! has held that the casue for the delay in filing, the appeal which by due care and attention could have been avoid cannot be a sufficient cause within the meaning of fhe limitation provision. Where no negligence, nor inaction, or want of bona fides can be imputed to the appellant a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clear hands."
And ld. A.R. also cited an order of Hon’ble Apex Court in the matter of Vedabai Alias Vaijayanatabhai Baburao Patil vs. Shantaram Baburao Patil, 253 ITR 798 wherein it is held:
In exercising discretion under section 5 of the Limitation Act, the Court should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such case deserves a liberal approach.
Since assessee inadvertently could not file appeal with the Jurisdictional CIT, therefore appeal of the assessee could not be heard. In our considered opinion, it appears to be genuine and cogent reason. Therefore, in the interest of justice, we set aside this matter back to the file of the ld. CIT(A) after condoning the delay that ld. CIT(A) will decide matter on merit of the case after giving an opportunity of hearing heard to the assessee. Assessee is also directed not to seek unnecessarily adjournment and will cooperate with the ld. CIT(A) for speedy disposal of appeal.
In the result, appeal filed by the Assessee is allowed for statistical purpose.”
We observe that since the quantum proceedings in connection with which the present penalty under Section 271(1)(c) of the Act was levied has itself been restored to the file of Ld. CIT(A) for de-novo consideration, accordingly, the present penalty proceedings are also directed to be restored to the file of Ld. CIT(A).
In the result, the appeal of the assessee is allowed for statistical purposes. This Order is pronounced in the Open Court on 19/02/2025