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Facts
The assessee failed to file her return of income for AY 2013-14, leading to reopening under section 148 based on NMS data indicating significant financial transactions. Consequently, an assessment order was passed under section 144, treating the transactions as undisclosed income, and penalty proceedings under section 271(1)(c) were initiated.
Held
The Tribunal condoned the 288-day delay in filing the appeal before the CIT(A), taking a lenient view due to the assessee's age, moderate education, and unfamiliarity with e-proceedings, referencing a Supreme Court judgment on condonation of delay. The Tribunal set aside the CIT(A)'s order and restored the matter back to the CIT(A) for a fresh appellate order.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned, and whether the penalty levied under section 271(1)(c) is sustainable.
Sections Cited
148, 144, 271(1)(c)
AI-generated summary — verify with the full judgment below
Before: SHRI ANIKESH BANERJEE & SHRI PRABHASH SHANKAR
PER PRABHASH SHANKAR [A.Μ.] :- The present appeal arising from the appellate order dated 22.09.2025 is preferred by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)"] pertaining to penalty order passed u/s. 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 21.09.2022 for the Assessment Year [A.Y.] 2013-14. Page 2 Α.Υ. 2013-14 Damyanti Atul Shah, Mumbai
The grounds of appeal are as under: 1) The Ld CIT(A) erred in not condoning the delay on 288 days in filing
the appeal despite the fact that: • The assessee was not aware that such Penalty Order was passed on 21.09.2022. • The assessee does not regularly access her email id. • The assessee is a metric layperson and she had no knowledge of the technicalities of income tax proceedings. • The assessee's Chartered Accountant did not give proper advice to her. 2) The Ld CIT(A) erred in upholding the Penalty Order passed u/s 271(1)(c) of the Act and levying penalty of Rs 33,11,220/- despite the fact that: • Assessee did not file her return of income since she was not aware of the provisions of the Income Tax Act 1961. • There was no deliberate concealment of income.
In the instant case, the assessee had not filed her return of income for the year. Her case was re-opened by way of issue of notice u/s 148 of the Act on the basis of information available as NMS (Non- Filers of return) as per ITBA system. From the ‘NMS' data, it was seen that although the assessee had not filed her return of income, yet she had carried out certain financial transactions i.e. Rental income of Rs 27,83,236/-,Payment to Contractor of Rs 84,99,352/-.In absence of any compliance, the assessment order was passed u/s 144 of the Act determining the total income at Rs.1,12,82,588/- treating the above amounts as undisclosed income. Penalty u/s 271(1)(c) was also initiated for concealment of income. However, the assessee did not file any reply in response to the notices issued on various dates. Also, it was seen from the system data that assessee had not filed appeal before the CIT(A). Thus, in the absence of any compliance, it was concluded that the assessee had nothing to submit with respect to levy of penalty .Accordingly, minimum penalty of Rs.33,11,220/- u/s 271(1)(c) of the Act was levied.
The subsequent appeal before the ld.CIT(A) was filed with a delay of 288 days who did not condone the delay and dismissed the appeal observing that there was substantial delay in filing the appeal. He noted that the appellant was engaged in business activity and had significant business receipts as well as taxable income during the year. Any person carrying on business and earning substantial income was expected to be aware of their statutory obligation to file a return of income within the prescribed time, irrespective of the educational qualification. Ignorance of law could not be accepted as a valid excuse for non-compliance with statutory provisions.
Before us, the ld.AR has admitted that the appeal was filed late before the ld.CIT(A).In this regard, a condonation application has been filed claiming that the assessee is an old lady and was not aware of the fact that ex-parte penalty order was passed. She did not access her email id on regular basis. The assessee is matric passed and has no knowledge of Income Tax. Only in August 2023, she came to know that the assessment order was passed in her case by invoking the provisions of section 144 of the Act. However, the ld.CIT(A) did not give any relief and dismissed the appeal in limine. It is humbly requested to condone the delay in filing penalty appeal before the CIT(A). The delay was not intentional. The ld.DR however, objected to the condonation application stating that the assessee was careless in this regard as evident from non compliance before the AO both during assessment and penalty proceedings as also during appellate proceedings.
On careful consideration of the submissions of the assessee, we are of the considered opinion that the delay in filing of the appeal does not appear to be intentional. A lenient view needed to be taken considering the contention of the assessee being old lady, moderately educated and not conversant with e-proceedings. The ld.CIT(A) did not appreciate the explanation of the assessee in correct perspective. In this connection, reliance could be placed on the landmark decision of hon'ble Supreme Court which inter alia held in Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC) that “ordinarily, a litigant does not stand to benefit by lodging an appeal late........Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated....Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.... A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk.” We therefore, condone the delay.
1 The ld.AR has also submitted the assessee has challenged the quantum addition before the Hon'ble Income Tax Appellate Tribunal. The case was heard and the matter was set aside to the CIT(A) and the matter is pending before him.
In the light of above observations and in the substantial interest of justice, we set aside the appellate order and restore the entire matter back to the ld.CIT(A) for passing the appellate order de novo. In case of any failure on the part of the assessee, he would be at liberty to pass order after considering the materials on record. The assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld.CIT(A).
In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 12/01/2026. ANIKESH BANERJEE (न्यायिक सदस्य /JUDICIAL MEMBER) Place: मुंबई/Mumbai दिनांक / Date 12.01.2026 Lubhna Shaikh / Steno PRABHASH SHANKAR (लेखाकार सदस्य/ACCOUNTANT MEMBER) आदेश की प्रतिलिपि अग्रेषित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यापित प्रति //// आदेशानुसार / BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.