M/s Shaheed Kartar Singh Sarabha Charitable Trust (Regd.), Ludhiana V. CIT(A)-4, Ludhiana

ITA 1254/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0760 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 16-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA
• Keywords: Charitable institution; Principle of natural justice; Bonafide belief; Condonation of delay; Ignorance of law; Set aside
• Section: 271(1)(c); 2; 11; 274

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A, CHANDIGARH (VIRTUAL COURT) . . , !' #$ %.&.'(%, )!' BEFORE: JUSTICE SHRI P.P. BHATT, PRESIDENT & SHRI. N.K.SAINI, VICE PRESIDENT ITA NO. 1254/CHD/2019 ASSESSMENT YEAR : 2015-16 M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST (REGD.) VPO SARABHA, DISTT. LUDHIANA THE CIT(A) - 4 LUDHIANA PAN NO: AAATS4168H APPELLANT RESPONDENT !' ASSESSEE BY : SHRI ASHWANI KUMAR, C.A SHRI ADITYA KUMAR, C.A SHRI BHAWESH JINDAL, C.A MISS UDITI JAIN, C.A #!' REVENUE BY : SHRI SANDEEP DAHIYA, CIT $ %! & DATE OF HEARING : 02/12/2020 '()*! & DATE OF PRONOUNCEMENT : 02/12/2020 *&+/ ORDER PER BENCH: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 27/03/2019 OF LD. CIT(A)-4 LUDHIANA. 2. THE REGISTRY HAS POINTED OUT THAT THE APPEAL FIL ED BY THE ASSESSEE IS BARRED BY LIMITATION BY 63 DAYS. THE ASSESSEE MOVED AN APPLICATION DT. 21/09/2019 FOR CONDONATION OF THE DELAY BY STATING THEREIN AS UNDER: SUB: REQUEST FOR CONDONATION OF DELAY IN FILING THE APPEAL BEARING NO. 1254/ CHANDI/2019 IN THE CASE OF M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST (REGD.) FOR A/Y 2015-16 SIR, RESPECTFULLY THE FOLLOWING IS SUBMITTED FOR SYMPATH ETIC CONSIDERATION OF THE HON'BLE BENCH. 2 ORDER U/S 271(1)(C) R.W.S. 250(6) OF THE INCOME TAX ACT, 1961 WAS PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIAN A ON 27.03.2019 WHICH WAS RECEIVED BY THE APPELLANT ON 16.05.2019. THE APPELL ANT IS CHARITABLE TRUST AND CONSIDERING THE FACT THAT AN APPEAL BEFORE THE HON' BLE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH, CHANDIGARH WAS ALREADY FILED ON 13.02.2019 (BEARING NO. 174/CHANDI/2019) WITH RESPECT TO THE Q UANTUM WITH RESPECT TO THE SAID NOTICE AND WAS UNDER THE BONAFIDE BELIEF THAT NO APPEAL IS REQUIRED TO BE FILED AGAINST THIS ORDER AS AN APPEAL IS ALREADY PE NDING BEFORE THE HON'BLE BENCH (QUANTUM APPEAL). SUBSEQUENTLY, AS A PART OF FILING THE DOCUMENTS, TH E APPELLANT SHARED THE SAID ORDER WITH ITS COUNSEL WHEREBY IT CAME TO THE ATTEN TION THAT THIS IS A PENALTY ORDER TO BE DEALT WITH SEPARATELY. AS SOON AS THIS FACT C AME TO THEIR NOTICE, THE COUNSEL OF THE APPELLANT GOT THE APPEAL PREPARED AND FILED. IT WAS DUE TO THESE UNAVOIDABLE CIRCUMSTANCES THAT THE DELAY IN FILING THE APPEAL HAS OCCURRED WHICH IS HIGHLY REGRETTED. IT IS PRAYED THAT THE DELAY IN FILING THE APPEAL KI NDLY BE CONDONED AND THE APPEAL BE ADJUDICATED ON MERITS. 3. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESEE REITERATED THE CONTENTS OF THE AFORESAID APPLICATION AND SUBMI TTED THAT DUE TO LACK OF KNOWLEDGE THE ASSESSEE COULD NOT FILE THE APPEAL IN TIME, SINCE THE APPEAL ON QUANTUM OF THE ASSESSEE WAS PENDING BEFORE THE ITAT AND THE ASSESSEE WAS UNDER THIS IMPRESSION THAT THE ORDER PASSED BY THE LD. CIT(A) WAS ON QUANTUM. HOWEVER, WHEN IT CAME TO THE KNOWLEDGE OF THE ASSES SEE THAT THE ORDER PASSED BY THE LD. CIT(A) WAS PENALTY ORDER, THEREAFTER, IM MEDIATELY THE COUNSEL OF THE ASSESSEE GOT THE APPEAL PREPARED AND FILED IT. HE R EQUESTED TO CONDONE THE DELAY. 4. IN HIS RIVAL SUBMISSIONS THE LD. CIT DR OPPOSED THE CONDONATION OF DELAY AND SUBMITTED THAT IGNORANCE OF LAW CANNOT BE AN EX CUSE FOR CONDONING THE DELAY AND THAT THE ASSESSEE WAS A WILLFUL OFFENDER SINCE IT REMAINED ABSENT BEFORE THE LD. CIT(A). 5. IN HIS REJOINDER THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE THEN COUNSEL FOR THE ASSESSEE SOUGHT ADJOURNMENT BEFORE THE LD. CIT(A), HOWEVER INSTEAD OF GRANTING THE ADJOURNMENT, THE LD. CIT(A) DECIDED THE APPEAL. HE AGAIN REQUESTED TO CONDONE THE DELAY IN FILING THE APPEAL. 3 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN OUR OPINION TH E ASSESSEE HAS A PLAUSIBLE EXPLANATION FOR DELAY IN FILING THE APPEAL WHICH OC CURRED UNDER THE BONAFIDE BELIEF THAT NO APPEAL WAS REQUIRED TO BE FILED AGAI NST THE ORDER AGAINST WHICH APPEAL WAS ALREADY PENDING BEFORE THE ITAT AND WHEN THIS MISTAKE CAME TO THE KNOWLEDGE OF THE ASSESSEE, A STEP WAS TAKEN IMM EDIATELY TO FILE THE APPEAL BEFORE THE ITAT. WE THEREFORE BY CONSIDERING THE PE CULIAR FACTS OF THIS CASE AND KEEPING IN VIEW THE PRINCIPLES OF NATURAL JUSTICE C ONDONE THE DELAY AND APPEAL IS ADMITTED. 7. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THAT ORDER PASSED U/S 271(1)(C) READ WITH SECTION 2 50(6) BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS SHE WAS NOT JUSTIFIED TO DIR ECT THE LEVY OF PENALTY U/S 271(1)(C) AT RS. 11,98,68,227/-. 2. THAT ORDER LEVYING PENALTY IS UNJUSTIFIED AS NO PRO PER AND REASONABLE OPPORTUNITY WAS PROVIDED TO THE APPELLANT FOR OFFER ING THEIR EXPLANATION AND AS SUCH, THE LEVY OF PENALTY IS IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 7.1 FROM THE AFORESAID GROUNDS IT IS GATHERED THAT ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE DIRECTION OF THE LD. CIT(A) TO LEVY THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 8. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE FILED THE RETURN OF INCOME ON 25/09/2015 DECLARING NIL INCOME. LATER ON THE CASE WAS SELECTD FOR SCRUTINY AND THE A.O. FRAMED THE ASSESSMENT VIDE AS SESSMENT ORDER DT. 03/11/2017 AND MADE THE ADDITION OF RS. 1,13,41,361 /- BY INVOKING THE PROVISIONS OF SECTION 11(1), 13(1)(C) R.W.S 13(3) OF THE ACT. AGAINST THE SAID ORDER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO DISMISSED THE SAME VIDE ORDER DT. 19/12/2018 AND WHILE DECIDING THE AP PEAL OF THE ASSESSEE THE LD. CIT(A) FURTHER ENHANCED THE INCOME BY AN AMOUNT OF RS. 11,98,68,227/- AND ASSESSED THE ASSESSEE AS AOP, THE BENEFIT OF CLAIM UNDER SECTION 11 OF THE ACT WAS ALSO DENIED. THE LD. CIT(A) INITIATED THE PENAL TY PROCEEDINGS VIDE NOTICE DT. 4 19/12/2018 UNDER SECTION 274 R.W.S 271 OF THE ACT. THE LD. CIT(A) MENTIONED IN THE IMPUGNED ORDER THAT INSPITE OF THE SERVICE OF N OTICE, NEITHER ANYONE ATTENDED THE PENALTY PROCEEDINGS NOR FILED ANY REPL Y. 8.1 LD. CIT(A) DIRECTED THE A.O. TO ISSUE DEMAND NO TICE FOR DETERMINING THE QUANTUM OF PENALTY @ 100% OF THE TAX SOUGHT TO BE E VADED ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME TO T HE EXTENT OF RS. 11,98,68,227/-. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON' BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATION PRIVATE LIMITED REPORTED IN 327 ITR 510. 9. NOW THE ASSESSEE IS IN APPEAL. 10. LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT ENHANCED INCOME ON THE BASIS OF WHICH THE PENALTY UNDER SECT ION 271(1)(C) OF THE ACT WAS DIRECTED TO BE LEVIED HAS BEEN DELETED BY THIS BENC H OF ITAT IN ITA NO. 174/CHD/2019 FOR THE A.Y. 2015-16 VIDE ORDER DT. 1 0/11/2020. IT WAS FURTHER SUBMITTED THAT SINCE THE ADDITION ON THE BASIS OF W HICH THE PENALTY UNDER SECTION 271(1) (C) OF THE ACT WAS LEVIED, IS NOT IN EXISTENCE, THEREFORE NO PENALTY IS LEVIABLE UNDER SECTION 271 (1)(C) OF THE ACT IN THE ASSESSEES CASE. THE RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE SUPREME C OURT IN THE CASE OF K. C. BUILDERS & OTHERS VS. ASST. CIT REPORTED IN 265 ITR 562. 11. IN HIS RIVAL SUBMISSIONS THE LD. CIT DR REITERA TED THE OBSERVATIONS MADE BY THE LD. CIT(A) IN THE IMPUGNED ORDER AND STRONGLY S UPPORTED THE SAME. 12. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE IT IS AN ADMITTED FACT THAT THE ADDITION MADE BY THE A.O. AS WELL AS THE INCOME ENHANCED BY THE LD. CIT(A) WERE DELETED BY THIS BENCH OF THE ITAT VIDE ORDER DT. 10/11/2020 IN ITA NO. 174/CHD/2019 FOR THE A.Y. 2015-16 IN ASSESSEES OWN CASE. THEREFORE, THE ADDITION WHICH WAS THE BASIS FOR LEVYING THE PENALT Y UNDER SECTION 271(1)(C) OF THE ACT IS NOT IN EXISTENCE NOW. 5 12.1 ON A SIMILAR ISSUE THE HON'BLE APEX COURT IN T HE CASE OF K. C. BUILDERS & OTHERS (SUPRA)HELD AS UNDER: WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER O N THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED, ARE DELETED, THERE REMAI NS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCEALMENT AND, THEREFORE, IN SUCH A C ASE NO PENALTY CAN SURVIVE AND THE PENALTY IS LIABLE TO BE CANCELLED. ORDINARI LY, PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. IN VIEW OF THE ABOVE, BY RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE APEX COURT IN THE AFORESAID REFERRED TO CAS E THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT DIRECTED TO BE LEVIED BY THE L D. CIT(A) IS DELETED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. (ORDER PRONOUNCED IN THE COURT ON 02/12/2020) SD/- SD/- . . %.&.'(%, (P.P. BHATT ) ( N.K. SAINI ) !' / PRESIDENT )!' / VICE PRESIDENT AG DATE: 02/12/2020 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE