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Facts
The assessee filed an appeal against the order of the CIT(A) related to penalty imposed under section 271(1)(c). The appeal was filed with a delay of 78 days due to misplacement of documents by the assessee's counsel. The original assessment order was set aside.
Held
The Tribunal condoned the delay in filing the appeal, noting that the quantum appeal had already been set aside. Since the assessment order was set aside, the penalty imposed under section 271(1)(c) could not be sustained.
Key Issues
Whether the penalty under section 271(1)(c) can be sustained when the original assessment order has been set aside? Whether the delay in filing the appeal should be condoned?
Sections Cited
271(1)(c), 147, 144, 144B, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
PER KUL BHARAT, VICE PRESIDENT.: This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 05.11.2024, pertaining to the assessment year 2014-15. The assessee has raised the following grounds of appeal: -
1. 1. That the Assessing Officer and the Ld. Commissioner of Income Tax (Appeals), (here-in-after referred to as the Ld. CIT(A)} have erred on facts in initiation and imposing penalty u/s 271(1)(c) of the Income Tax Act, 1961 amounting to Rs. 12,61,425/- against the merits, circumstances and legal aspect of the case on account of concealment of particulars of income/furnished inaccurate particulars of income.
1. 2. That the Ld. CIT (A), has erred on facts in law in upholding the penalty, as the original Re-assessment order passed u/s 147 r.w.s. 144 read with section 144B of the ITA dtd 31.03.2022 has been set aside for fresh Page 2 of 4 reassessment vide appeal order u/s 250 of the ITA, 1961 dated 05.11.2024. Thus, the penalty-imposed u/s 271(1)(c) when the initial order has been set aside for fresh consideration, is unjustified and deserves to be set aside.
3. That the penalty order of the Ld. CIT (A), dated 21.08.2024, having been passed without affording proper and justified opportunity and appreciation of facts and legal background deserves to be set aside.
4. The appellant craves leave to modify any of the grounds of appeal
mentioned above and / or to add any fresh grounds as and when it is required to do so.”
2. During the course of hearing, it was noted that the appeal is barred by limitation for 78 days. The assessee has filed an application seeking condonation of delay in filing of this appeal. Ld. Counsel for the assessee reiterated the submissions as made in the application seeking condonation of delay. It is stated that Mrs. Upma Agarwal, W/o Late Naveen Agarwal, Advocate, had misplaced the documents related to the assessment under consideration. Therefore, the appeal could not be filed within the prescribed time. It is submitted that the assessee has not obtained any undue advantage for the delay in filing the present appeal. He submitted that in order to secure the interest of justice, the delay may be condoned and appeal be admitted for adjudication.
3. On the other hand, the Ld. Departmental Representative for Revenue opposed the submissions of the assessee and contended that the assessee cannot take advantage of his negligence. Therefore, he submitted that the appeal may be dismissed on the ground of limitation alone.
We have heard the rival contention and perused the material available on record. It is stated by the Ld. Authorized Representative for the assessee that the delay in filing the Page 3 of 4 present appeal occurred due to the misplacement of documents relating to the assessment proceedings, and an affidavit has been filed to this effect. Considering the facts and circumstances of the present case and the statement made on affidavit by the assessee, we are of the view that the Ld. Counsel, who was handling the assessee’s case, has explained the reasons for the delay satisfactorily. It is also noted that, in the quantum appeal, the matter has already been set aside to the Assessing Officer. We, therefore, respectfully following the judgment of the Hon'ble Supreme Court in the case of Collector of Land Acquisition Vs. MST. Katiji & Ors 167 ITR 471 (SC) hereby condone the delay and admit the appeal for hearing on merits.
Apropos to the grounds of appeal, the Ld. Counsel for the assessee submitted that the impugned penalty is unsustainable, as the very addition on which it was levied no longer survives in view of the assessment order having been set aside. Therefore, he prayed that the matter may be remanded back to the Assessing Officer to decide the issue of levy of penalty afresh.
The Ld. Departmental Representative (DR) supported the orders of the lower authorities.
Heard, the Ld. Representatives of the parties and perused the material available on records. It is not disputed by the Ld. Departmental Representative that the Tribunal, in the quantum proceedings, has set aside the assessment order and restored the matter back to the file of the Assessing Officer. Since the assessment itself has been remanded to the AO, the penalty proceedings initiated and subsequently imposed u/s 271(1)(c) of the Act cannot be sustained. We, therefore, set aside the Page 4 of 4 impugned order and restore the issue to the Assessing Authority to be decided afresh in accordance with law after framing the assessment. Grounds raised
in this appeal are partly allowed for statistical purpose.
8. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 11/12/2025.