BSM SHELTER ESTATE INDIA,INDORE vs. INCOME TAX OFFICER 1(3), INDORE , INDORE

आदेश / O R D E R

Per B.M. Biyani, AM:

The captioned two appeals are filed by assessee. The details of appeals are as under:

(i) I.T.A. No. 290/Ind/2024 is a quantum-appeal directed against appeal-order dated 09.02.2023 passed by Commissioner of Income- tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 30.12.2017 passed by ITO-1(3), Indore [“AO”] u/s 143(3) of the Income-tax Act, 1961 [“Act”].

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BSM Shelter Estate India Private Limited ITA Nos. 290& 291/Ind/2024 – A.Y. 2015-16

(ii) I.T.A. No. 291/Ind/2024 is a penalty-appeal directed against appeal-

order dated 24.01.2024 passed by CIT(A) which in turn arises out of

penalty-order dated 26.06.2018 passed by AO u/s 271(1)(c) of the

Act.

are being disposed of by this common order for the sake of convenience,

brevity and clarity.

assessee-company filed return of income for AY 2015-16 declaring a total

income of Rs. Nil. The case of assessee was selected for scrutiny and the

AO passed assessment-order dated 30.12.2017 u/s 143(3) determining a

total income of Rs. 1,05,00,000/- after making certain additions. The AO

also imposed penalty of Rs. 31,75,000/- qua those additions u/s 271(1)(c)

vide penalty-order dated 26.06.2018. Aggrieved by both orders, the

assessee filed two separate appeals to CIT(A). The CIT(A) disposed

assessee’s quantum-appeal vide order dated 09.02.2023 and penalty-

appeal vide order dated 24.01.2024 wherein the assessee’s appeals were

dismissed. Now, the assessee has come in these appeals assailing the

orders of CIT(A).

I.T.A. No. 290/Ind/2024 – Quantum appeal:

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BSM Shelter Estate India Private Limited ITA Nos. 290& 291/Ind/2024 – A.Y. 2015-16

against impugned order dated 09.02.2023 after a delay of 361 days beyond

statutory period and therefore time-barred. Ld. AR for assessee submitted

that the assessee has filed a condonation-application supported by an

affidavit. Referring to Para 4 to 13 of condonation application, Ld. AR

submitted that the delay has occurred due to the fact that the assessee’s

previous counsel failed to keep the track of the assessee’s first-appeal before

CIT(A) and did not attend hearings fixed by CIT(A) and even the counsel was

not aware of the impugned order which was passed ex-parte by CIT(A). That

the CIT(A) sent communication of impugned ex-parte order to the email id

vinayverma543@gmail.com which belonged to Mr. Vinay Verma, director of

assessee-company despite the fact that the assessee clearly denied email

service by mentioning “No” against “Whether notices/ communication may

be sent on email?” in Form No. 35 filed to CIT(A) and that no physical

communication of impugned order was made to assessee. It is further

submitted that the email id of director remains overloaded with thousands

of emails relating to business of assessee due to which the communication

of impugned order left unread. Subsequently, when the order dated

24.01.2024 passed by CIT(A) dismissing penalty-appeal of assessee was

received, the assessee contacted earlier counsel and came to know that its

quantum-appeal had already been dismissed ex-parte vide impugned order

dated 09.02.2023. Thereafter, the assessee was in trust that the earlier

counsel would take suitable legal action but, however, in the month of

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BSM Shelter Estate India Private Limited ITA Nos. 290& 291/Ind/2024 – A.Y. 2015-16

March, 2024 when the recovery proceeding were initiated by department

against assessee, the assessee contacted another counsel for handling the

matter who arranged to file appeal before ITAT. Therefore, the delay in filing

appeal is attributed to the lapse and negligence on the part of earlier

counsel. To explain the negligence of earlier counsel, Ld. AR pointed out that

there were two separate appeals before CIT(A) one by way of quantum-

appeal and other by way of penalty-appeal. Vide notice dated 23.10.2023,

the CIT(A) fixed hearing of penalty-appeal on 31.10.2023 but the earlier

counsel carelessly filed reply relating to the issues of quantum-appeal, this

carelessness is clearly recorded by CIT(A) in order dated 24.01.2024 relating

to penalty-appeal as under:

“6.2 The reply filed by the appellant has been perused and it is seen that the submission of the appellant is in relation to the grounds of appeal raised by it in the appeal filed by the appellant against the order dated 30.12.2017 passed u/s 143(3). The said appeal has since been dismissed by the CIT(A) vide his order ITBA/NFAC/S/250/2022- 23/1049588231(1) dated 9.2.2023. The appellant has not filed any submission in relation to the grounds of appeal raised by it in the present appeal. The Hon'ble J&K High Court in its decision in the case of CIT vs. Hotel High Park (2000) 164 CTR 610 (J&K) has held that:

"The validity of an assessment order which has attained finality cannot be challenged in an appeal against penalty. The appellate authority cannot entertain any challenge to the validity of the assessment order in an appeal against the order of penalty and appellate authority cannot declare a settled order as illegal and invalid in an appeal against penalty."

In the absence of any submission from the appellant in regard to the grounds of appeal raised in the present appeal, I have gone through the penalty order passed by the AO and I am in complete agreement with the action of the AO in imposing a penalty u/s 271(1)(c) of the Income Tax Act. In view of the same the penalty imposed by the AO is upheld.

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BSM Shelter Estate India Private Limited ITA Nos. 290& 291/Ind/2024 – A.Y. 2015-16

the earlier counsel did not take care even to keep track that the quantum-

appeal had already been dismissed by CIT(A) vide order dated 09.02.2023.

passing of ex-parte order by CIT(A) and fully dependent on earlier counsel

handling the matter. Ld. AR pointed out that at Page 22 of Paper-Book, the

assessee has also filed a copy of authorisation dated 22.03.2019 given by

assessee to earlier counsel for representing its cases before CIT(A). Ld. AR

submitted that these facts undoubtedly show that not only the non-

representation before CIT(A) but also the delay in filing present appeal before

ITAT is due to counsel’s lapse only. Ld. AR submitted that there is no

deliberate lethargy, negligence, mala fide intention or ulterior motive of

assessee in making delay and the assessee does not stand to derive any

benefit because of delay. Accordingly, he prayed that in the interest of equity

and justice and having regard to the view taken by Hon’ble Supreme Court

in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353,

1987 2 SCC 387, the delay ought to be condoned in present case.

submitted that the assessee itself is accepting that the email communication

of impugned order was made by CIT(A) to director’s email id provided in

Form No. 35, therefore there is no deficiency in the service of order by

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CIT(A). He submitted that in present times, the email communication is one

of the modes adopted by department. He submitted that the assessee has to

give importance to statutory communications and the overloading of email

account with thousands of emails cannot be an excuse or reason to neglect

departmental communication. He submitted that the delay should not be

condoned in present case.

mentioned “No” for email communication in Form No. 35 which is evident

from copy of Form No. 35 available in case-record. He pointed out that the

assessee had to provide email id in Form No. 35 due to mandate of Form No.

35 but clearly denied email service in the option provided in Form No. 35 for

the very reason that its email a/c remains overloaded with business emails

and statutory communication should not remain missed or unattended.

documents to which our attention has been drawn. We firstly find that the

impugned order dated 09.02.2023 in quantum-appeal of assessee was

passed by CIT(A) ex-parte to assessee for non-prosecution of the notices of

hearing. Secondly, we find that the penalty-appeal of assessee has also been

dismissed by CIT(A) by assigning the reason that the reply filed by

assessee’s AR was in relation to the grounds raised in quantum-appeal

despite the fact that the quantum-appeal had already been dismissed vide

order dated 09.02.2023. The revenue cannot dispute both of these facts

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clearly transpired by the orders of CIT(A). Thus, from these two facts, it is

clearly discernible that the assessee’s authorised counsel, who was dealing

matters before CIT(A), failed to keep the track of first appeals before CIT(A)

and failed to take note of the impugned order dated 09.02.2023 having been

passed ex-parte by CIT(A) against assessee. So far as the contention of Ld.

DR that there was a direct email service of impugned order by CIT(A) to the

email id supplied by assessee in Form No. 35 is concerned, we suffice it to

note that the assessee has made a clear-cut denial to email service by

mentioning “No” in the option prescribed in Form No. 35. The assessee

further claims that when the penalty-appeal was dismissed by CIT(A) vide a

subsequent order dated 24.01.2024, the assessee approached earlier

counsel and trusted that the counsel shall take an appropriate measure in

the matters but the earlier counsel still did not take suitable action which

came to assessee’s notice subsequently when recovery proceedings were

started by department in March, 2024. This resulted in a persisting delay of

some days which was again due to lapse of earlier counsel. This claim of

assessee for persisting delay of some days deserves credence having regard

to the careless approach of counsel in handling appeals of assessee before

CIT(A). Therefore, the facts of present case shows that there was a delay in

filing present appeal due to negligence of earlier counsel and not

attributable to assessee. The AR of assessee has cited certain judicial

decisions in Case Law Paper-Book wherein the lapse of counsel has been

considered as a ‘sufficient cause’ for condoning delay. We find that section

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253(5) of the Act empowers the ITAT to admit an appeal after expiry of

prescribed time, if there is a ‘sufficient cause’ for not presenting appeal

within prescribed time. It is also a settled position by Hon’ble Supreme

Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR

1353, 1987 2 SCC 387 that whenever substantial justice and technical

considerations are opposed to each other, the cause of substantial justice

must be preferred by adopting a justice-oriented approach. Thus, taking into

account the provision of section 253(5) and the decision of Hon’ble Supreme

Court, we take a judicious view, condone delay, admit appeal and proceed

with hearing.

assessee for the reason that the assessee did not make any submission

before him despite opportunities given. It is further observed that the CIT(A)

has simply confirmed the order passed by AO and thereby upheld the

additions but the grounds/issues raised by assessee in first-appeal requires

an apt adjudication by CIT(A) on merit in accordance with provisions of

250(6) of the Act which provides “The order of the Commissioner (Appeals)

disposing of the appeal shall be in writing and shall state the points for

determination, the decision thereon and the reason for the decision.”. Ld. AR

for assessee submits that the assessee is ready and willing to make

representation before CIT(A) if an opportunity is given and hence prays that

the present matter should be remanded to CIT(A) for an apt adjudication.

Ld. DR for revenue agrees that if the bench condones the delay in filing

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appeal, it may remand matter to CIT(A) but makes a request to direct the

assessee to represent case before CIT(A) and do not seek unnecessary

adjournments. Since we have condoned delay, we accept the prayer for

remanding this appeal to CIT(A) for adjudication afresh after giving

opportunity to assessee. The assessee is directed to make representations

before CIT(A) failing which the CIT(A) shall be at liberty to pass appropriate

order in accordance with law. This appeal is accordingly allowed in these

terms.

additional grounds claiming the same to be of legal nature and allowed to be

admitted as per decision of Hon’ble Supreme Court in NTPC Vs. CIT (1998)

ITR 383 SC. Since we have remanded matter to CIT(A), the assessee may

raise similar grounds before CIT(A) and the CIT(A) shall consider in terms of

decision of Hon’ble Supreme Court.

I.T.A. No. 291/Ind/2024 – Penalty-appeal:

05.04.2024 against impugned order dated 24.01.2024 after a delay of 12

days beyond statutory period and therefore time-barred. Ld. AR for assessee

submitted that the assessee has filed a condonation-application supported

by an affidavit according to which the reason of 12 days’ delay is the same

as narrated for ‘persisting delay’ in ITA No. 290/Ind/2024 i.e. after receipt of

penalty-order, the assessee approached earlier counsel and trusted that the

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counsel shall take an appropriate measure in the matter but the earlier

counsel still did not take suitable action which came to assessee’s notice

when recovery proceedings were started by department in March, 2024. This

very explanation of assessee has already been given credence by us in

foregoing para while condoning delay in said appeal. Adopting the very same

adjudication, we condone the delay of 12 days in this appeal.

271(1)(c). The said penalty is based on quantum addition made in

assessment-order. Since we have already remanded quantum-appeal to

CIT(A), we also remand penalty-appeal in very same terms to CIT(A) for

adjudication afresh.

Order pronounced in open court on 27.09.2024

Sd/- Sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक / Dated : 27.09.2024 Dev/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore

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