PATANAKAR SHIVENDRA NAGOJIRAO HUF,KOLHAPUR vs. INCOME TAX OFFICER, WARD 1(1), KOLHAPUR

This appeal filed by the assessee is directed against the order dated 08.03.2024 passed by the National Faceless Appeal Centre, Delhi [in short ‘NFAC’) confirming the levy of penalty u/s.271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) in relation to the assessment year 2014-15.

The brief facts anent to this appeal are that the assessee is a HUF stated to be deriving income from Agriculture activities and income from other sources. The assessee filed the return of income on 31.07.2014 declaring total income of Rs.4,97,000/- which was subsequently revised couple of times u/s.139(5) on 19.11.2014 and 11.12.2015 respectively declaring total income of Rs.3,56,620/- and Agricultural income of Rs.78,000/-. The case was selected for scrutiny under CASS to verify the large cash deposits in savings bank account maintained with Vijaya Bank Ltd., Rajaram Road, Shivaji Udyam Nagar, Kolhapur. The AO completed the assessment u/s.143(3) on 28.12.2016 by making addition of Rs.1,50,20,500/- u/s.68 as unexplained cash deposits. He also made addition of Rs.2,07,176/- being interest earned by the assessee.

Aggrieved assessee challenged the assessment before the ld.CIT(A). The ld.CIT(A) gave part relief to the assessee after calling for a remand report from the AO and the objections received from the assessee. The matter travelled before the Tribunal and the parties filed cross appeals against their respective grievance. The Tribunal vide and CO No.53/PUN/2018 remitted the matter back to the file of AO for verification of facts denovo and pass a speaking order.

Pursuant to the directions given by the Tribunal, the AO made enquiries relating to the cash deposits by issuance of notices as per the provisions of the Act calling upon the assessee to furnish the name and address of the persons/parties to whom the assessee has given his agricultural land on rent and received agricultural income. The assessee filed the relevant details. The AO was not convinced with the details furnished by the assessee. Eventually, the AO made addition of Rs.34,84,800/- u/s.69 of the Act treating the same as unexplained investment of the assessee. The AO vide order dated 11.01.2022 levied penalty of Rs.10,76,803/- u/s.271(1)(c) of the Act.

The assessee filed an appeal before the ld.CIT(A)/NFAC challenging the levy of penalty but with a delay of 111 days. The ld.CIT(A)/NFAC dismissed the appeal of the assessee without condoning the delay.

Now the assessee is in appeal before the Tribunal challenging the impugned order passed by ld.CIT(A).

At the outset, the ld. AR submitted that the assessee has not received any notices of hearing. The notices were sent by the Department on arpatil.tax@gmail.com which was email id of the former Chartered Accountant. Therefore, the assessee was unaware of the proceedings which led to delay of 111 days in filing the appeal before the ld.CIT(A)/NFAC. It is therefore prayed to condone the delay by setting aside the impugned order.

The ld. Departmental Representative on the other hand supported the orders of the authorities below.

We have heard the parties and perused the record placed before us. On perusal of the impugned order, it would reveal that the ld.CIT(A)/NFAC did not condone the delay. It is submitted before us that the assessee in Form 35 filed before the CIT(A)/NFAC has given his email address for communication as caamol_madiwal@rediffmail.com. However, the notices were sent to a different email id – arpatil.tax@gmail.com which happens to be an email id of the former Chartered Accountant. There is nothing on record to disbelieve the averments made by the assessee. Having given our thoughtful consideration to the pleadings advanced by the ld. AR and the facts of the case prevailing in the instant case, we are of the considered view that the ld.CIT(A)/NFAC ought to have condoned the delay in the aforementioned circumstances. Here, we would like to quote the decision of Hon’ble Jurisdictional High Court in the case of Vijay Vishin Meghani vs. DCIT, 389 ITR 250 (Bom.) wherein it was held that in the matter of condonation of delay an overall view in the larger interest of justice has to be taken. None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate Authority finds that the litigant has deliberately and intentionally delayed filing of the appeal, that he is careless, negligent and his conduct is lacking in bonafides. We therefore condone the delay of 111 days. In view thereof, without dwelling into merits of the issue, we set-aside the impugned order under challenge and remit back to the file of Ld. CIT(A)/NFAC to the stage of its institution with a direction to adjudicate the subject matter denovo in accordance with law after providing reasonable opportunities and pass a speaking order. Appellant is also directed to remain vigilant and make satisfactory compliance to the notice(s) of hearing issued by ld.CIT(A)/NFAC and should refrain from taking adjournments unless otherwise required for reasonable cause. Effective grounds of appeal raised by the appellant are allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.