ANANTH VASUDEV NAIK,HYDERABAD vs. INCOME TAX OFFICER, WARD-10(5), HYDERABAD

We notice at the outset that assessee’s instant appeal suffers from 514 days of delay in filing. Learned counsel submitted that assessee is old aged person and not at all conversed with e-proceedings and could not track the messages, which caused the impugned delay in filing of the instant appeal. The same are unrebutted from the Revenue’s side during the course of hearing. Case law Collector Land Acquisition Vs. Mst. Katiji & Ors 1987 AIR 1353 (SC) and University of Delhi Vs. Union of India, Civl Appeal No.9488 & 9489/2019 dt.17.12.2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way of the cause of substantial justice. We accordingly hold that assessee’s impugned delay of 514 days is neither intentional nor deliberate. The same stands condoned. Case is now taken up for adjudication on merits therefore.

Coming to the assessee’s sole substantive grievance challenging the correctness of both the learned lower authorities’ action imposing section 271(1)(c) penalty of Rs.8,96,330/-, we note with the able assistance of both the parties that the same has arisen on account of a long term capital gains addition to the tune of Rs.54,50,000/- made in assessment order dt.17.06.2014 invoking section 50C of the Act thereby determining the difference amount between actual sale price and SRO value as fair market value.

Learned departmental representative vehemently supported the impugned penalty. He failed to dispute that there is not even the slightest indication in the case file that the assessee infact had received anything over and above actual sale consideration. We thus conclude that once section 50C adopts SRO price as the deemed consideration, the impugned penalty based thereupon does not deserve to be sustained. We further wish to reiterate the hon’ble apex court’s landmark decision in CIT Vs. Reliance Petroproducts Pvt. Ltd. 322 ITR 58 (SC) that quantum and penalty are parallel proceedings wherein each and every disallowance / addition made in case of the former does not ipso 2 facto attracts the latter provision and conclude that the learned lower authorities’ have erred in law and on facts in imposing the penalty in issue in assessee’s case. The same is directed to be deleted.

This assessee’s appeal is allowed.