PANHERA GRAMIN BIGARSHETI SAHAKARI PAT SANSTHA MARYADIT,BULDHANA vs. ITO WARD-2, KHAMGAON, KHAMGAON
Facts
The assessee failed to comply with three statutory notices under section 142(1) of the Income Tax Act, leading to penalties of ₹10,000 each, totaling ₹30,000. The assessee's appeal to the CIT(A) was delayed by 396 days, and the CIT(A) dismissed it without considering the merits. A second appeal was filed with the Tribunal with a 29-day delay, which was condoned.
Held
The Tribunal condoned the 29-day delay in filing the appeal, citing insufficient staff and lack of knowledge of IT proceedings as reasons. The Tribunal found the assessee's submissions regarding the penalty acceptable and quashed the penalty order of ₹30,000. For the second appeal concerning a penalty of ₹7,78,502 under section 270A, the Tribunal noted a revised audit report showing the claimed deduction was in accordance with the report and therefore quashed this penalty as well.
Key Issues
Whether the penalties levied by the Assessing Officer and confirmed by the CIT(A) are justified, considering the delay in proceedings and the correctness of the claimed deductions and the audit report.
Sections Cited
142(1), 270A, 80P, 80P(2)(a)(i)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR
BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER
ITA no.495 and 496/Nag./2024 (Assessment Year : 2020–21) Panhera Gramin Bigarsheti Sahakari Pat Sanstha Maryadit Grampanchayat Building ……………. Appellant Panherakhedi, Buldhana 443 001 PAN – AAAAP7879F v/s Income Tax Officer ……………. Respondent Ward–2, Khamgaon Assessee by : Smt. Veena Agrawal Revenue by : Shri Abhay Y. Marathe
Date of Hearing – 04/02/2025 Date of Order – 25/02/2025
O R D E R PER V. DURGA RAO, J.M.
The present appeals by the assessee are emanating from the impugned orders of even date 14/06/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2020–21.
ITA no.495/Nag./2024 Assessee’s Appeal – A.Y. 2020-21
The assessee has raised following grounds:-
“1. Whether in the facts and circumstances of the case, the learned CIT(A) is justified in affirming the levying penalty of Rs. 30,000/-.
2 Panhera Gramin Bigarsheti Sahakari Pat Sanstha Maryadit ITA no.495–496/Nag./2024
Whether in the facts and circumstances of the case, the learned CIT(A) is justified in affirming the penalty levied even where the appellant later participated in the proceeding. 3. Whether in the facts and circumstances of the case, the learned CIT(A) is justified in not condoning the delay in filing appeal. 4. Whether in the facts and circumstances of the case, the learned CIT(A) is justified in confirming the order passed by the learned AO in breach of principle of natural justice. 5. Assessee craves leave to add or alter any other ground during or at the time of appeal proceedings.”
The matrix of the case is that, the assessee, during the assessment proceedings, failed to comply with three statutory notices issued by the Assessing Officer under section 142(1) of the Income Tax Act, 1961 (“the Act”). As a result of such non-compliant attitude of the assessee, the Assessing Officer levied penalty of ` 10,000 for each failure to comply with three statutory notices dated 06/12/2021, 16/12/2021 and 02/08/2022, which aggregated to ` 30,000 only. The assessee being aggrieved challenged the imposition of penalty of ` 30,000, before the first appellate authority.
Before the learned CIT(A), the assessee filed its appeal belatedly which was delayed by 396 days. Though the assessee filed application for condonation of delay, however, the reasons stated by the assessee were found to be neither sufficient nor convincing to be acceptable to the learned CIT(A) and hence the learned CIT(A), rejecting the application for condona- tion of delay, dismissed the assessee’s appeal without going onto the merits
3 Panhera Gramin Bigarsheti Sahakari Pat Sanstha Maryadit ITA no.495–496/Nag./2024 of the case. Once again, the assessee being aggrieved by the impugned order passed by the learned CIT(A), filed appeal before the Tribunal.
Before us also, once again the assessee filed second appeal that too with a delay of 29 days which proves that the assessee is a habitual defaulter. When the Bench posed a question to the learned Counsel, Smt. Veena Agrawal, appearing for the assessee, to give reason for such delay in filing this appeal before the Tribunal, she submitted that, within the office of the assessee, due to insufficient staff and in particular nobody is aware or posses any knowledge of Income Tax proceedings and as a result of which the assessee failed to reply in time. She thus prayed that condoning the delay, the penalty of ` 30,000, be deleted. Keeping in view the overall facts and circumstances of the case and considering the request of the learned Counsel for the assessee as well as in the interest of natural justice, the delay of 29 days is hereby condoned. Insofar as levy of penalty of ` 30,000 is concerned, we find the submissions of the learned Counsel for the assessee in this regard are acceptable. Thus, we are of the opinion that the assessee is entitled to get relief by quashing the penalty order issued by the Assessing Officer levying penalty of ` 30,000. We order accordingly and hereby quash the penalty levied by the Assessing Officer.
In the result, assessee’s appeal being ITA no.495/Nag./2024, is allowed.
ITA no.496/Nag./2024 Assessee’s Appeal – A.Y. 2020-21
4 Panhera Gramin Bigarsheti Sahakari Pat Sanstha Maryadit ITA no.495–496/Nag./2024 7. The assessee has raised following grounds:–
“1. Whether in the facts and circumstances of the case, the learned CIT(A) is justified in affirming the levy of penalty of Rs 7,88,502/-. 2. Whether in the facts and circumstances of the case, the learned CIT(A) is justified in affirming the penalty where there is no under-reporting and misreporting of income. 3. Whether in the facts and circumstances of the case, the learned CIT(A) is justified in not condoning the delay in filing appeal. 4. Whether in the facts and circumstances of the case, the learned CIT(A) is justified in confirming the order passed by the learned AO in breach of principle of natural justice. 5. Assessee craves leave to add or alter any other ground during or at the time of appeal proceedings.
Delay of 29 days in filing this appeal has already been condoned vide Para-6 above.
This is a case of levy of penalty of ` 7,78,502, under section 270A of the Act.
It is the case of the Department that the Auditor in the 3CD report for the relevant assessment year had categorically stated that admissible amount of deduction under section 80P of the Act is only ` 11,72,904. Hence the excess claim of deduction under section 80P(2)(a)(i) of the Act amounting to ` 49,90,406 [i.e., ` 61,63,310 (-) ` 11,72,904] was disallowed. The learned Counsel for the assessee submitted that the assessee has claimed excess deduction of ` 49,90,406.
The learned Counsel for the assessee submitted before us that there was a mistake in the original audit report. Before us, the revised audit report
5 Panhera Gramin Bigarsheti Sahakari Pat Sanstha Maryadit ITA no.495–496/Nag./2024 is placed on record. We find that the assessee has claimed deduction of ` 61,63,310, under section 80P(2)(a)(i) of the Act which is in accordance with Audit Report and consequently, we hold that the levy of penalty is liable to be quashed. Accordingly, we set aside the impugned order passed by the learned CIT(A) confirming levy of penalty of ` 7,78,502, under section 270A of the Act imposed by the Assessing Officer and hereby direct the Assessing Officer to delete the penalty as stated above. Thus, all the grounds raised by the assessee are allowed.
In the result, assessee’s appeal being ITA no.496/Nag./2024, stands allowed.
To sum up, both the appeals by the assessee are allowed. Order pronounced in the open Court on 25/02/2025
Sd/- Sd/- K.M. ROY V. DURGA RAO ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 25/02/2025 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur
