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Income Tax Appellate Tribunal, MUMBAI BENCHES “H”, MUMBAI
Before: SHRI JASON P. BOAZ (AM) & SHRI. AMIT SHUKLA (JM)
These three appeals are directed against the orders of the CIT (Appeals)-33, Mumbai for Assessment Year 2007-2008. Since these appeals were heard together and are inter-connected, they are disposed off by way of this combined order.
The facts of the case, brief by, are as under:- 2.1 The assessee filed the return of income for Assessment year 2007-08 on 08/11/2007 declaring total income of Rs. 2,50,090/-. The case was selected for scrutiny and inspite of many notices issued by the Assessing Officer (in short ‘AO’), they were returned back unserved the AO. The AO then issued a notice to the assessee on 07/12/2009 calling upon him to show cause why the assessment should not be completed ex-parte. This notice was served by affixture at the known addresses of the assessee, to which also they was no compliance by the assessee. On issue of another notice the assessee presented himself before the AO where he was confronted with information gathered u/s 133(6) of the Act from one Shri. Sunil Gulati. The assessee is reported to have not filed any reply thereto. In that view of the matter, the AO proceeded to complete the assessment vide order dt. 29/12/2009, on the basis of details on record including CASS information in respect of cash deposits of Rs. 19,66,500/- and Rs.16,02,000/- in the assesse’s saving bank accounts with Cosmos Co-op Bank and Corporation Bank Ltd, respectively and computed the assessee’s income at Rs. 42,17,890/- The AO simultaneously also initiated penalty proceedings u/s 271(1)(c) and 271 (1)(b) of the Act by issue of notices on 29/12/2009.
2.2 Subsequently, the AO also took up the penalty proceedings u/s 271(1)(b) and 271(1)(c) of the Act for Assessment year 2007-08 and issued notice to the assessee on 08/06/2010, fixing the hearing in these matters on 16/06/2010. Since there was no suppose from the assessee thereto, the AO after this simple notice proceeded to levy penalty of Rs. 13, 38,200/- u/s 271(1)(c) of the act as no appeal had been filed by the assessee against the order of assessment and Penalty of Rs.10,000/- u/s 271(1)(b) of the Act since, there was no response to the issue to the single notice fixing the hearing for 16/06/2010. Both these orders are dated 21/06/2010.
2.3 From the details on record, it appears that the assessee preferred appeals against the orders of assessment for Assessment year 2007-08 dt. 29/12/2009 and the order dt. 21/06/2010 levying penalty u/s 271(1) (c) and 271 (1) (b) of the Act before the CIT(Appeals)-33, Mumbai, on 24/01/2012.
3.1 On appeal as per the impugned order of Ld. CIT(A) the order of the assessment for Asst. year 2007-08 dt. 29/12/2009 was served on the assessee on 02/01/2010 and therefore the appeal was to have been filed before him on or before 01/02/2010. The appeal was filed on 24/01/2012, resulting thereby in a delay of 1 year 11months and 23 days. The Ld.CIT(A) observes that the assessee had not filed a petition for condonation of delay in filing the appeal but merely submitted at ground no. 10 of his submission dt. 21/12/2012 that the delay be condoned as it was by reasonable cause due to change in his office and residential premises, death of his sister-in-law, illness of his mother and self with which he was pre-occupied and therefore could not give instructions to his CA/ITP to file the appeal in time. The Ld. CIT (A) was of the opinion that the delay of 1 year, 11months and 23 days was inordinate and did not condone the delay and as stated in para 2.10 proceeded to dismiss the appeal. The Ld. CIT (A), however, then went on to adjudicate the appeal on merits also, as is evident from the impugned appellate order, and dismissed the appeal on merits.
3.2 In the matter of the penalty of Rs. 42,17,890/- levied u/s 271(1)(c) of the Act, on appeal, the Ld.CIT(A) dismissed the assessee’s appeal for non prosecution, after issuing notices on three occasions, which admittedly were not served on the assessee . Though, this appeal also was filed late along with the other two appeals, this issue was neither observed nor addressed by the Ld CIT(A).
3.3 In the matter of penalty of Rs. 10,000/- levied u/s 271(1)(b) of the Act, the Ld. CIT (A) observed that since the order dt. 21/06/2010 was received by the assessed on 25/06/2010, he ought to have filed the appeal on or before 25/07/2010. Since, the appeal was filed on 24/01/2012. This was a delay of 1 year 6 months. The Ld.CIT (A) was of the view that the delay in filling the appeal cannot be condoned as it was inordinate and therefore, proceeded to dismiss the appeal.
4.1 We have heard both parties and perused and carefully considered the material on record. Admittedly, there was a delay of 1 year 11 months and 23 days in filing the appeal before the Ld.CIT (A) in respect of the order of assessment dt. 29/12/2009 for Asst. Year 2007-08. Similarly, there was a delay of 1 year 6 months in filing the appeal against the order dt. 21/06/2010 levying penalty of Rs. 10,000/- u/s 271(1) (b) of the Act. It appears that though there was a similar delay in filling the appeal against the order dt. 21/06/2010 levying penalty of Rs. 42,17,890/-, u/s 271(1)(c) of the Act the Ld.CIT (A) dismissed this appeal on grounds of non prosecution.
4.2 The Hon’ble Apex Court in the case of Collector, Land Acquisition (167 ITR 471((SC), while laying down the principles for considering the matters of condonation of delay in filing appeals has stated that substantial justice should prevail over technical considerations. The Hon’ble court also explained that everyday’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a natural, common sense and pragmatic manner. Considering the aforesaid principles, we find from the details on record that the assessee had in fact, filed a petition dt. 22/07/2013 for condonation of delay of 1 year 11 months and 23 days in filing the appeal in the quantum appeal, which as per acknowledgment of the office of Ld. CIT (A) was filed on 23/07/2013. (Placed at page 34 of the assessee’s Paper book containing 1-226 pages). This was filed well before the Ld. CIT (A) disposed the appeals in the case on land. In this petition, which apparently has not been considered by the Ld. CIT (A), it is submitted that the order of assessment was virtually completed ex-parte. The assessee submits that the delay in filing the appeal was due to preoccupation with the sickness of his sister-in-law who died on 03/07/2009 (Copy of Death Certificate placed at Page 165 of the Paper book) and subsequently both him and his mother took ill and he was busy with medical tests, hospital visits and doctors consultations. In these circumstances it is submitted that his business suffered losses, which resulted in him having to sell his office and residential properties to meet the medical bills. The assessee prayed that it was for these reasons that the assessee filed the appeals belatedly by and prayed for condonation of delay in the larger interest of justice. These explanations by the assessee, in our view, would hold good for all three appeals.
4.3 Obviously, as is evident from the record, the Ld.CIT (A) did not consider this petition dt. 22/07/2013 filed before him, as there is not a whisper about this is the impugned order. On a perusal of the order of assessment for assessment year 2007-08 dt. 29/12/2009 and the orders levying penalty u/s 271(1)(c) of the Act and 271(1)(b) of the Act for the same year, it is evident that these orders have been passed by the AO in haste within a period of 3 months, from taking up the matters without proper service of the notices on the assessee and in an ex-parte manner. The Ld CIT(A), we find has refused to condone the delay summararily even without considering the letter dt. 22/07/2013 filed before him on 23/07/2013 seeking condonation of delay.
4.4 Taking into account the facts and circumstances of the case, we are of the opinion that, if the said delay in filing the appeals before the Ld. CIT(A) is condoned, there shall be no loss to revenue as legitimate taxes payable by the assessee’s to revenue, in accordance with law, above will be collected. Moreover, it is hard to believe that an assessee, in whose cases taxes of Rs. 18, 43,607/- and penalties of Rs. 13, 38,200/- and Rs. 10,000/- have been levied u/s 271(1) (c) and 271 (1)(b) of the act respectively, would wantonly file the appeals belatedly, thereby, jeopardizing his own case. In this view of the matter, we are of the opinion that this is a fit case for condoning the delay in filing these appeals before the Ld.CIT (A) and accordingly condone the same in the interest of equity and justice.
4.5 In respect of the Ld CIT (A)’s order dt. 03/02/2014, passed in respect of the order of assessment for assessment year 2007-08 dt. 29/12/2009, we also find that the Ld CIT(A) after refusing condonation of delay is filing the appeal and dismissing the assessees appeal, at para 2.10 of his order, has proceeded to adjudicate the issues in appeal on merits. We are of the view that once the Ld CIT(A) has refused the to condone the delay in filing the appeal, the said appeal is not admitted for hearing and adjudication and therefore he was precluded from adjudicating the appeal on merits, as nothing is pending before him. In this regard, the assessee has placed reliance on the decision of the ITAT, Kolkata Bench in the case of DR Murari Mohan Kokey in and1406/Kol/2014 dt. 05/11/2014 wherein following the decision of the Hon’ble Bombay High Court in CIT vs. Mysore Iron & Steel Works (1949) 17 ITR 478(Bom), it was held at para 8 thereof that once the Ld. CIT(A) has not admitted the appeal as being barred by limitation, he should not have adjudicated on merits. In this view of the matter and respectfully following the decisions of the Hon’ble Bombay High Court (supra) and the ITAT Kolkata Bench in the case of Murari Mohan Kokey (supra), we set aside the orders of the Ld CIT (A) in respect of the order of assessment for Assessment year 2007-08 dt. 29/12/2009, and the order levying penalty u/s 271(1) (b) of the Act dt. 21/10/2010 and restore them to the file of the AO for denovo assessment with the observation that the findings rendered by the Ld CIT(A) on merits shall have no bearing on the fresh assessment to be carried out by the AO. Needless to add the assessee shall be given adequate opportunity of being heard and to file details etc. which shall be considered along with those filed before the CIT(A) and before us in the Paper book (Page 1 to 226).
4.6 Since we have set aside the assessment and appellate orders of authorities below on quantum issues for Assessment year 2007-08 to the file of the AO for fresh assessment, the penalty levied u/s 271(1)(c) of the Act would not now survive for consideration and the same is consequently cancelled.
In the result, the assesses appeals for Assessment year 2007-08 are treated as allowed for statistical Purposes.