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Facts
The assessee filed an appeal against the order of CIT(A) which dismissed their appeal against a penalty levied under section 271(1)(c) due to a delay of 2890 days. The assessee's directors were in hiding due to DRT proceedings, and the managing director was imprisoned. The CIT(A) had deleted the additions on merits.
Held
The Tribunal held that when technicality is pitted against substantial justice, substantial justice should prevail. Since the additions on merits were deleted by the CIT(A), the penalty levied under section 271(1)(c) had no basis to survive.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned and the penalty deleted when the additions on merits have been deleted.
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
(�नधा�रण वष� / Assessment Year : 2011-2012) Hotel Pranaminn Private Limited, Vs ACIT, Circle-2(1), Bhubaneswar Plot No.P-1, Jayadev Vihar, Near Kalinga Hospital, Bhubanesar-751023 PAN No. :AABCH 3189 F (अपीलाथ� /Appellant) (��यथ� / Respondent) .. �नधा�रती क� ओर से /Assessee by : Shri P.K.Mishra, AR राज�व क� ओर से /Revenue by : Shri Vijay Singh, Sr. DR सुनवाई क� तार�ख / Date of Hearing : 02/12/2025 घोषणा क� तार�ख/Date of Pronouncement : 02/12/2025 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order passed by the ld. CIT(A), Bhubaneswar-2, dated 17.02.2025 for the assessment year 2011-2012.
Ld. AR submitted that the ld. CIT(A) has dismissed the appeal of the assessee against the penalty levied u/s.271(1)(c) of the Act on account of delay in filing the appeal of 2890 days. It was the submission that the directors of the assessee company were hiding on account of DRT proceedings and the managing director was also behind the bar. It was also the submission that on merits the addition made in the hands of the assessee has been deleted by the ld. CIT(A) and the revenue has not filed any further appeal before the Tribunal. It was the submission that the quantum addition itself having been deleted, the penalty u/s.271(1)(c) of the Act is not liable to be levied. It was the submission that when technicality is pitted against substantial justice, the substantial justice would prevail.
In reply, ld. CIT-DR vehemently supported the orders of the AO and ld. CIT(A). It was the submission that the assessee should have been diligent.
We have considered the rival submissions. As it is noticed that the additions in the quantum assessment, which has led to the levy of panty has been deleted by the ld. CIT(A) in the quantum proceedings, obviously legs for the levy of penalty no more survives. This being so, we are of the view that the delay before the ld. CIT(A) should have been condoned and the appeal should have been disposed off. As pointed out by the ld. AR when technicality is pitted against substantial justice, the substantial justice would prevail, this being so, as the quantum addition itself has been deleted, the penalty has no more legs to survive. Thus, the delay in filing the appeal before the ld. CIT(A) is condoned and the penalty as levied by the AO u/s.271(1)(c) of the Act and as confirmed by the ld. CIT(A) is deleted.