ANAND SHESHRAO BHAROSE,,PUNE vs. INCOME-TAX OFFICER, WARD - 1(4),, AURANGABAD

ORDER

PER RAVISH SOOD, JM

1. On the facts and circumstances prevailing in the case and as per provisions of the Act, it be held that the penalty initiated and levied u/s 271(1)(c) of the Act are not according to the provisions of sec. 271(1)(c) of the Act and the same may please be deleted. Just and proper relief may be granted to the appellant.

2 Shri Anandrao Sheshrao Bharose A.Y. 2010-11 2. The appellant prays to be allowed to add, amend, delete, modify, rectify, raise any ground of appeal at the time of hearing.

3. The appellant prays that the delay in filing appeal may be condoned. “

2. Briefly stated, the assessee had filed its return of income for A.Y. 2010-11 on 31-5-2-2-, declaring an income of Rs. 2,43,110/- a/w agricultural income at Rs. 1,78,110/-. Assessment was thereafter framed by the A.O vide his order passed u/s 143(3) of the Act, dated 18-03-2013 after making two additions, viz. (i) addition of the sundry creditors: Rs. 5,22,020/-; and (ii) addition of the assessee‟s agricultural income by treating the same as his „Income from other sources‟: Rs. 1,78,110/-; and the income of the assessee was determined at Rs. 9,43,240/-.

3. On appeal, the CIT(A)-1, Aurangabad vide his order dated 1-12- 2015 though scaled down the addition of the assessee‟s agricultural income to an amount of Rs. 70,010/-, however, he upheld the addition of the sundry creditors that was made by the A.O u/s 69-A of the ct.

4. After receipt of the order of the CIT(A), the A.O vide his order passed u/s 271(1)(c) of the Act, dated 24-3-2017 saddled the assessee with a penalty of Rs. 1,67,632/-.

5. On appeal, the CIT(A) upheld the penalty imposed by the A.O u/s 271(1)(c) of the Act and dismissed the appeal of the assessee.

6. Aggrieved, the assessee has assailed the order of the CIT(A) before us. On a perusal of the record, we find that the appeal filed by the assessee before us involves a delay of 12 days. As per the „Affidavit‟ filed by the assessee the aforesaid delay in filing of this appeal had ITA No. 1563//PUN/2018 3 Shri Anandrao Sheshrao Bharose A.Y. 2010-11 occasioned, for the reason, that the assessee was awaiting the order of the Tribunal qua the quantum appeal in its case for the year under consideration, as well as that for the preceding years, viz. A.Ys. 2005-06 to 2008-09, wherein a common issue was involved. It is stated by the assessee, that he remaining under a bonafide belief that the penalty matter was totally dependent upon the outcome of the quantum appeals of the assessee, wherein the hearing of the same before the Tribunal was finally concluded, viz. (i) A.Ys 2005-06 to A.YU. 2008-09, to 254/Pun/2016: 26.07.2018; and A.Y. 2010-11 : ITA No. 255/Pun/2016 : 12-09-2018, therefore, for the said bonafide reasons he was awaiting for the order of the tribunal, which had resulted to the delay of 12 days in filing of the present appeal before us. It is stated by the assessee that remaining under the aforesaid bonafide belief that the penalty matter was totally dependent upon the outcome of the quantum appeal of the assessee before the Tribunal, he had sincerely intended to avoid unnecessary litigation which had resulted to the delay of 12 days in filing of the present appeal. Although, we would not hesitate to observe that the delay in filing of the appeal against a penalty order, for the reason, that the order of the Appellate Authority in the quantum appeal was awaited by the assessee cannot form a justifiable reason for seeking condonation of the delay in filing of the appeal, but considering the bonafides of the assessee a/w the factum of short period of delay of 12 days in filing of the present appeal, and the fact that the ld. D.R had no objection to the condonation of the delay therein involved, we are of the 4 Shri Anandrao Sheshrao Bharose A.Y. 2010-11 considered view that in all fairness the aforesaid delay merits to be condoned.

7. We shall now advert to the issue involved in the present appeal before us. At the very outset of the hearing of the appeal, it was submitted by the ld. Authorised Representative (for short AR) for the assessee that the addition of the sundry creditors of Rs. 5,22,020 (supra) that was made by the A.O u/s 69A of the Act, had thereafter been vacated by the Tribunal while disposing off the assessee‟s quantum appeal, vide its order passed in dated 30-11-2018. Qua part sustaining by the CIT(A) of an addition of agricultural income of Rs. 70,110/-, it was submitted by the ld. A.R that the same too had been vacated by the Tribunal vide its aforesaid order. In sum and substance, it was submitted by the ld. A.R that now when the additions as regards which penalty had been imposed by the A.O u/s 271(1)(c) of the Act had finally been vacated by the Tribunal and does not hold the ground any more, therefore, the penalty in question cannot exist on a standalone basis and is liable to be deleted.

ITA No. 1563//PUN/2018 5 Shri Anandrao Sheshrao Bharose A.Y. 2010-11 the assessment u/s 143(3) of the Act, dated 18-03-2013, to the extent the same were thereafter sustained by the CIT(A), viz. (i). addition of sundry creditors u/s 69-A : Rs. 5,22,020; and (ii). Addition of the assessee‟s agricultural income by treating the same as his income from other sources : Rs. 70,110/, which had formed the very basis for saddling the assessee with penalty u/s 271(1)(c) of the Act, had been vacated by the Tribunal while disposing off the assessee‟s quantum appeal vide its order passed in dated 30-11-2018. In the backdrop of the aforesaid fact, now when the abovementioned additions which formed the very basis for levy of penalty u/s 271(1)(c) of the Act had been vacated, therefore, the penalty imposed by the A.O u/s 271(1)(c) cannot survive on a standalone basis and has to meet the same fate. We, thus, in the backdrop of our aforesaid observations quash the penalty of Rs. 1,67,632/- imposed by the A.O u/s 271(1)(c) of the Act.

Order pronounced in the open court on 07/01/2022.