Loading judgment…
Facts
The assessee filed an appeal against an order, which was delayed by 33 days. The assessee claimed a delay due to his manager's abrupt departure and failure to receive notices. The AO added Rs. 12,69,500 to the assessee's income from the sale of a property and levied a penalty.
Held
The Tribunal condoned the delay in filing the appeal, noting it was miniscule. While the assessee's explanation for non-compliance was unconvincing, the Tribunal, for substantial justice, decided to remand the case to the Ld. Commissioner.
Key Issues
Condonation of delay in filing the appeal and the merits of the penalty levied under section 270A of the Income Tax Act.
Sections Cited
250, 270A, 274, 143(3), 56(2)(vii)(b)(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI GIRISH AGRAWAL
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the assessee against the order dated 03.11.2023, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2018-19.
At the outset, we observe that in the instant case there is a delay of 33 days in filing the instant appeal on which the Assessee by filing his affidavit has claimed that his manager had given his personal email ID while filing first appeal before the Ld. Commissioner, somehow the manager left the job abruptly and therefore the assessee did not receive any e-mails as well as any notice in physical mode. However, on 12th January 2024 the assessee’s CA got an email qua outstanding demand in his email ID which was given as alternate email ID. He accordingly checked the IT portal and saw that the appeal filed before the Ld. Commissioner has been dismissed. The assessee has not received any notice for the date of hearing and became aware of the non-attendance only upon visiting the income tax portal qua notice of recovery of demand; therefore the assessee had reasonable cause for the delay in filing the appeal with a delay.
On the contrary the Ld. D.R. refuted the claim of the assessee.
We have considered the rival claims of the parties and perused the material available on record specifically Form 35 and Form 36 wherein the assessee has mentioned the email address for sending the notices as “alpeshchitalia@gmail.com”. The assessee has also mentioned only one mobile number i.e. 9930369636 in the assessee’s personal information in column No.1 of form No.35 as well as form No.36 which goes to show that the contention to the effect that his manager had given his personal email ID while filing first appeal as mentioned in the affidavit filed by the Assessee, appears to be incorrect, un-warranted and un-justifiable. Hence, we are inclined not to entertain the ground/reason mentioned by the assessee for condonation of delay in filing of the instant appeal. However, considering the peculiar facts and circumstances, we find that the impugned order dated 03.11.2023 was received by the assessee on the very same date and the assessee filed its appeal on 05.02.2024 whereas he was supposed to file his file on or before 02-01-2024 and therefore there is a delay of 33 days only. Though the reason mentioned by the Assessee is un-satisfactory and insufficient, however, as the delay is miniscule and therefore for the just decision of the case and for the ends of substantial justice, we are inclined to condone the delay. Hence the delay is condoned accordingly.
Coming to the merits of the case, we observe that in the instant case the assessment order dated 16.04.2021 was passed under section 143(3) of the Act, whereby the income of the assessee was determined at Rs.25,11,980/- and penalty proceedings under section 270A read with section 274 of the Act were initiated on the reason to believe that the violation/omission on the basis of which additions were made tantamount to under reporting of income in consequence of misreporting whereof within the meaning of section 270A read with section 274 of the Act. Infact, in this case on perusal of the details it was found by the AO that the assessee has sold a property for Rs.56,50,000/- on 13.03.2018 whereas the assessee and his wife have made an agreement for purchase of a property for Rs.70,81,000/- on 21.07.2017 with the builder. The registration value on the date of agreement as per stamp duty valuation authority was Rs.83,50,000/-. Therefore, the case of the assessee was examined, however, due to non compliance of the notices the difference amount of Rs.12,69,500/- (difference between Rs.83,50,000/- – Rs.70,81,000/-) was added to the total income of the assessee from “e-sources” under section 56(2)(vii)(b)(ii) of the Act. Subsequently, the penalty proceedings were also initiated by issuance of notice under section 270A of the Act on 16.04.2011, however, the assessee failed to reply to the said notice, therefore, in order to provide sufficient opportunity and while following the principle of natural justice, another show cause notice dated 11.06.2021 was also issued for necessary compliance by 18.06.2021. Though in response to the same the assessee filed his reply on 03.09.2021 with remarks “I am submitting the reply of the show cause notice under section 270” but not made any attachment. As the assessee failed to justify the reason for under-reporting of income, therefore it was observed by the AO that there is no valid reason or explanation for under reporting of income to the tune of Rs.12,69,500/-, as the Assessee failed to furnish valid reason for under-reporting thereof and therefore failed to disclose his true income. The AO ultimately quantified the penalty to the tune of Rs.7,88,098/- being 200% of the tax sought to be evaded on under-reported income of Rs.12,69,500/- and consequently levied the same.
The Assessee being aggrieved challenged the said levy of penalty before the Ld. Commissioner, however, in spite of affording various opportunities, neither appeared nor complied with the notices sent and preferred not to file any details, documents or submissions, therefore the Ld. Commissioner construed that the AO has passed a reasoned and speaking order considering all the facts and circumstances of the case and therefore no interference with the penalty order of the AO is called for.
We have given thoughtful considerations to the peculiar facts and circumstances of the case. The Assessee before us also failed to demonstrate the reason for non-compliance before the Ld. Commissioner except reiterating the reason mentioned for delay in filing the instant appeal to the effect that the Manager of the Assessee had entered his email ID in the income tax profile, who left the job without informing the Assessee, which resulted into not receiving any notice from NFAC. The reason given by the Assessee is at all unconvincing. The conduct of the Assessee since assessment proceedings as well as penalty proceedings under section 270A of the Act before the AO as well as in the appellate proceedings before the Ld. Commissioner seems to be non-compliant and/or non-vigilant and therefore the Assessee do not deserve any leniency. However, considering the conduct of the Assessee and peculiar facts that the Ld. Commissioner in the absence of relevant reply/documents was unable to decide the appeal filed by the assessee in its right perspective and in proper manner and therefore for the just decision of the case and for the ends of substantial justice, we are inclined to remand the instant case to the file of the Ld. Commissioner, however, subject to deposit of Rs. 10,000/- in the account of Revenue Department. Thus the case is remanded accordingly.
In the result, appeal filed by the Assessee stands allowed for statistical purposes.
Order pronounced in the open court on 10.07.2024.