M/S. ARORA JEWELLERS PVT. LTD.,DELHI vs. ACIT, NEW DELHI

Common issue pertaining to confirmation of penalty u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act) is involved in all these appeals which were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity.

The Registry has pointed out that each of the appeal of the assessee is barred by limitation by 230 days. The Director of the assessee filed to 6005/Del/2014 2 Arora Jewellers Pvt. Ltd. applications for condonation of delay. The contents of the each application are as under:

“Sir, The aforesaid assessee company was looked after by Late Sh. Satish Arora. After his sudden demise on 23-03-2010, the business was looked after by Late Smt. Sushma Arora the another shareholder, who was dependent on professionals. After his death Sh. V. K. Gupta an employee was appointed as director and thereafter in 2012 Sh. Kapil Sachdeva was appointed as Director. The shareholder were only Mr. & Mrs. Arora. Mrs. Sushma Arora was also expired on 25-05-2014. It is submitted that director Shri Kapil Sachdeva was appointed to look after the matter who was assisted by professionals. The company did not continue business activities after their death and so professionals also did not care. Recently Smt. Monika Sethi is appointed as director who is Samdhin of Mrs. Sushma Arora about few days before. It is submitted that the undersigned is appointed as director and very new while company was not doing any business after the death of both main shareholders, nobody followed up the matter with the counsel after sending the order passed by the CIT(A). The professionals who were looking after the matter also did not take interest as a result of which the appeal could not be prepared by them and recently they have returned the order of CIT(A) dismissing assessee's appeal on penalty. The appeals on quantum is already pending before the Hon'ble ITAT. It is humbly submitted that this appeal is now prepared by the new counsel who informed that it is barred by limitation and so it is necessary to condone the delay. It is humbly prayed that keeping in view the Principles of Natural Justice & the circumstances in which both the main shareholders and the directors of the company expired, an opportunity of being heard be given and the delay may kindly be condoned.” Sd/- (Monika Sethi) Director to 6005/Del/2014 3 Arora Jewellers Pvt. Ltd.

During the course of hearing the ld. Counsel for the assessee reiterated the contents of the aforesaid application and requested to condone the delay which was beyond the control of the assessee. In the present case, it appears that the assessee company was having only two shareholders namely, Late Sh. Satish Arora and Late Smt. Sushma Arora who were also the Directors. However, after their death, the professionals appointed as Director did not take care. Thereafter, Smt. Monika Sethi relative of the earlier Directors Late Sh. Satish Arora and Late Smt. Sushma Arora was appointed the Director. It is also noticed that the ld. CIT(A) passed the impugned orders ex-parte qua the assessee. After considering the aforesaid narrated peculiar facts of this case, the delay in filing the appeal appears to be beyond the control of the assessee, therefore, the same is condoned and the appeals are admitted.

During the course of hearing the ld. Counsel for the assessee at the very outset sated that the appeals on quantum in to 3104/Del/2011 had already been heard by the ITAT ‘A’ Bench, New Delhi on 26.07.2016. Therefore, these cases may be set aside to the AO to be decided after considering the outcome of the quantum appeals already heard by the ‘A’ Bench of the ITAT New Delhi. The ld. Senior DR although submitted that these cases are allotted to the ld. CIT(A), who is not available. to 6005/Del/2014 4 Arora Jewellers Pvt. Ltd.

After considering the submissions of the ld. Counsel for the assessee and the material on record, it is noticed that the ld. CIT(A) passed the impugned order ex-parte and dismissed the appeals of the assessee in limine. It is also noticed that the appeals in quantum additions have already been heard by the ITAT Bench ‘A’, New Delhi on 26.07.2016 and have the direct bearing on these appeals pertaining to the penalty u/s 271(1)(c) of the Act. Therefore, these appeals are set aside to the file of the AO to be decided in accordance with law after considering the outcome of the aforesaid referred to appeals of the assessee on quantum addition.

In the result, the appeals of the assessee are allowed for statistical purposes. (Order Pronounced in the Court on 28/07/2016)