SHREE CAPITAL SERVICES LTD.,KOLKATA vs. ACIT, CIR. 5(1), KOLKATA

The assessee has taken four grounds of appeal. In brief, its grievance is that ld. CIT(Appeals) has erred in confirming the penalty amounting to Rs.58,28,617/-, which was imposed by the ld. Assessing Officer under section 270A of the Income Tax Act. Such penalty has been confirmed by the ld. CIT(Appeals) by dismissing the appeal of assessee being time barred by 86 days.

With the assistance of ld. Representatives, we have gone through the record carefully. It emerges out from the record that assessment order was framed under section 143(3) read with section 143(3A) and 143(3B) of the Income Tax Act, 1961 on 06.04.2021. The ld. Assessing Officer thereafter imposed a penalty under section 270A on account of under-reporting his income and accordingly imposed a penalty of Rs.58,28,617/- vide order dated 26.03.2022.

Dissatisfied with this order, appeal was filed before the ld. CIT(Appeals) on 19.09.2022. The ld. CIT(Appeals) was of the view that appeal is time barred by 86 days. The assessee has requested for condonation of delay on account of COVID period as well as technical glitches in the system. The ld. CIT(Appeals) did not condone the delay by observing that benefit of Hon’ble Supreme Court’s direction issued on Miscellaneous Application No. 665 of 2021 in suo motu Writ Petition No. 3 of 2020 is available upto 29th

On due consideration of the above facts and circumstances, we are of the view that a slight delay made by the assessee in filing the appeal before the ld. 1st Appellate Authority ought to have been condoned. Even if there is a marginal negligence at the end of the assessee, then ld. 1st Appellate Authority ought to have appreciated that punishment in the shape of penalty amounting to Rs.58,28,617/- is too harsh than a minor negligence for making the appeal time barred at the end of the assessee. The ld. 1st Appellate Authority ought to have condoned the delay and should have decided the appeal on merit. No strong reasons have been recorded by the ld. CIT(Appeals) for not condoning the delay by 86 days in filing the appeal before the ld. 1st Appellate Authority. Therefore, we allow the appeal of the assessee and condone the delay in filing the appeal before the ld. 1st Appellate Authority. We set aside the issue to the ld. CIT(Appeals) for deciding it afresh on merit.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 4/04/2024.