THE SHAHPUR PRIMARY CO OPERATIVE CONSUMER STORES LIMITED,WAR NO vs. INCOME TAX OFFICER , INCOME TAX OFFICE WARD- DHARMSHALA

The brief facts leading to the present appeal are that the assessment order under Sections 147 r.w.s. 144 of the & 430/CHD/2024 A.Y. 2015-16 2 Income-tax Act, 1961 ("the Act") was passed by the Assessing Officer on 02.03.2023. The assessee filed an appeal before the CIT(A) with a delay of 189 days, accompanied by a condonation petition stating genuine and bona fide reasons for the delay, inter alia, that due to deposit of the tax demand and inadvertent lapse, the appeal was not filed within time. However, the CIT(A) refused to condone the delay and dismissed the appeal without adjudicating the case on merits.

The ld. AR had submitted that given a chance, the assessee would be able to demonstrate before the CIT(A) that the assessee is entitled to get the relief if the delay in filing the appeal is condoned.

Per contra, the ld. DR has relied upon the order passed by the lower authorities.

We have heard the rival submissions and perused the record. Considering the explanation offered by the assessee and in the interest of substantial justice, we believe that the assessee has demonstrated sufficient cause for the delay in filing the appeal before the CIT(A). Dismissal of the appeal on technical grounds would cause irreparable loss to the assessee without & 430/CHD/2024 A.Y. 2015-16 3 adjudication of merits.In view of the foregoing, we condone the delay in filing the appeal before the CIT(A). However, we make it abundantly clear that the assessee shall comply with the condition of pre-depositing of the tax demand before filing the appeal in accordance with law. Accordingly, we set aside the impugned order passed by the CIT(A) and restore the matter back to his file for adjudication of the appeal on merits, in accordance with law, after affording due opportunity of hearing to the assessee.

We further observe that penalty proceedings under Section 271(1)(c) of the Act were initiated and a penalty of ₹15,97,203/- was levied for alleged concealment of income based on the addition made in the quantum assessment. The assessee challenged the said penalty before the CIT(A); however, the penalty appeal was dismissed on the ground of non-compliance with the mandatory requirement under Section 249(4)(b) of the Act, without adjudicating the merits of the penalty. Since the quantum addition, which forms the basis of the penalty, has been restored to the file of the CIT(A) for fresh adjudication, we deem ITA Nos.248 & 430/CHD/2024 A.Y. 2015-16 4 it appropriate that the penalty appeal should also be restored to the CIT(A) file. Accordingly, we set aside the order of the CIT(A) in the penalty proceedings and direct him to decide the penalty appeal afresh in accordance with law, after giving due opportunity to the assessee, and keeping in view the outcome of the quantum appeal..

In the light of the above, both the appeals are allowed for statistical purposes.