MR BIMAL H. KIRI, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX. CIRCLE 19(1), MUMBAI

ITA 1336/MUM/2023

AI Insights

The case involves Mr. Bimal H. Kiri, who appealed against the penalties levied by the Income Tax Officer and confirmed by the Commissioner of Income-tax (Appeals) for the assessment year 2011-12. The penalties were imposed due to the assessee's repeated non-compliance with notices issued during the scrutiny of his income tax return, which led to significant additions to his income. The Tribunal found no reasonable cause for the assessee's non-compliance and upheld the penalties.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125149 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 19-04-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reasonable cause; Condonation of delay
• Section: 271(1)(c); 144; 273B; 143(3); 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI NARENDER KUMAR CHOUDHRY, JM ITA Nos. 1336 & 1337/Mum/2023 (Assessment Year: 2011-12) Mr . Bim a l H. K ir i 29-A, Sa r a s wa t i B u i l d in g , Ke n n e d y Br id g e R o a d , O p e r a Ho u s e , Mu m b a i-4 0 0 0 0 4 Vs. The ACIT Circle 19(1) 203, 2 nd Floor, Matru Mandir, Mumbai-400 007 (Appellant) (Respondent) PAN No. AEBPK2298D Assessee by : None Revenue by : Shri Ashok Kumar Ambastha, DR Date of hearing: 11.07.2023 Date of pronouncement : 12.07.2023 O R D E R PRASHANT MAHARISHI, AM: 01. ITA No.1336/Mum/2023 is filed by the assessee against the order of the National Faceless Appeal Centre, Delhi [the learned Commissioner of Income-tax (Appeals)] dated 27 th February, 2023, for A.Y. 2011-12, wherein the appeal filed by the assessee against the penalty order passed by the learned Income Tax Officer- 16(3)(4), Mumbai (the learned Assessing Officer) for A.Y. 2011-12 under Section 271(1)(b) of the Act dated 26 th September, 2014, levying the penalty of ₹60,000/- was confirmed. 02. The fact of the case shows that the assessee is an individual. He filed his return of income on 29 th September 2011, declaring total income Page | 2 ITA Nos.1336 & 1337/Mum/2023 Mr. Bimal H. Kiri; AYs 2011-12 of ₹5,16,550/-. This return was selected for scrutiny. Necessary notices were issued. The learned Assessing Officer issued notice and requested for the details on 7 occasions, out of which on 6 occasions no one appeared or complied with the notices. Only on one occasion, Chartered Accountant by way of letter requested for adjournment. 03. It was found that as per AIR information, assessee has deposited cash amounting to ₹30,14,740/- in three different bank accounts. As none explained the source of such cash, the same was added to the total income of the assessee. Certain other additions were also made. Accordingly, the assessment order under Section 143(3) of the Income-tax Act, 1961 (the Act) was passed on 27 th March, 2014, determining the total income of the assessee at ₹41,96,121/-. The learned Assessing Officer further initiated the penalty proceedings under Section 271(1)(b) of the Act for non appearance on six different occasions. The show cause notice under Section 274 of the Act was also not responded. Therefore, the learned Assessing Officer recorded that the assessee has no explanation to offer for non- compliance of notices. Accordingly, for six occasions of non- compliance, he levied of penalty of ₹60,000/-, being ₹10,000/- for each non-compliance by order under Section 271(1) (b) of the Act on 26 th September, 2014. 04. Assessee preferred the appeal before the learned CIT (A). The appeal was delayed before the learned CIT (A) for merely 5 years and 4 months. The learned CIT (A) categorically noted that the assessee did not either given any explanation before the learned Assessing Officer for non-appearance or before the learned CIT (A), therefore, the learned CIT (A) held that assessee does not have any reasonable cause for non-appearance and confirmed the penalty of ₹60,000/-. 05. Aggrieved by that order, the assessee has filed appeal before us. 06. As per the address given in the memorandum of appeal, the notice was sent to the assessee by registered post on 15 th July, 2023, which was returned to the sender on 24 th June, 2023 as unclaimed. The Page | 3 ITA Nos.1336 & 1337/Mum/2023 Mr. Bimal H. Kiri; AYs 2011-12 address on the envelope is as per memorandum of appeal. The Postal department tried twice to send the notice however, it could not serve. Cause list of the appeal for hearing is also displayed on the website of the ITAT and therefore, we find that there are no other records available to us to serve the notice to the assessee and therefore, the issue is decided on the merit of the case. 07. The learned Departmental Representative submitted that there is total non-compliance by the assessee. Neither before the learned Assessing Officer nor before the learned CIT (A) assessee complied with the notice and therefore, the show cause notice was issued for levy of penalty under Section 271(1) (b) of the Act, even assessee did not care to respond to the penalty notice. Even before the learned CIT (A) despite filing of the appeal late, there is no compliance. Therefore, in this case, the assessee deserves penalty, which is rightly been confirmed by the learned CIT (A). 08. We have carefully considered the contentions of the learned Departmental Representative and perused the orders of the lower authorities. In this case during the course of assessment proceedings out of seven notices, on 6 occasions none appeared before him. Even the show cause notice issued subsequently under Section 144 of the Act was not fully complied with. Therefore, it resulted into addition of almost ₹35 lacs in the hands of the assessee. The assessee filed appeal against the assessment order and also against the penalty order under Section 271(1) (c) of the Act and also under Section 271(1) (b) of the Act. All these appeals are having huge delay; the appellant did not submit even the grounds of appeal before the learned CIT (A). The learned CIT (A) was kind enough to consider the statements of facts filed before him and in absence of ground of appeal, he examined whether there is a reasonable cause or not for non-appearance. After perusing the assessment order and the penalty order, he came to the conclusion that there is no reasonable cause shown by the assessee for deletion of the penalty. Even before us, the assessee remains non-compliant. Thus, in absence of any Page | 4 ITA Nos.1336 & 1337/Mum/2023 Mr. Bimal H. Kiri; AYs 2011-12 reasonable cause shown by the assessee under Section 273B of the Act, we do not have any other alternative but to confirm the orders of the lower authorities, confirming the levy of penalty of ₹60,000/- under Section 271(1) (b) of the Act. Accordingly, we dismiss the appeal of the assessee. 09. ITA No. 1337/Mum/2023 is filed by the assessee against the order of the learned CIT (A), confirming the levy of penalty levied under Section 271(1)(c) of the Act by order dated 26 th September, 2014, passed by the learned Assessing Officer for A.Y. 2011-12, is confirmed. 010. Brief facts of the case shows that the assessment was made in case of the assessee under Section 143(3) of the Act determining the total income at ₹41,96,120/-. The addition of ₹30,14,714/- was made on account of cash deposited in various bank accounts of the assessee for which assessee failed to any explanation. On other disallowances and additions were on account of not providing any information to the learned Assessing Officer. Therefore, the learned Assessing Officer issued notice under Section 274 read with section 271(1) (c) of the Act. Notice was issued on 27 th March, 2014, the assessee did not comply with the notice for levy of penalty. Therefore, vide Para no.7, the learned Assessing Officer reached at the conclusion that the assessee has concealed income and furnished inaccurate particulars of his income within the meaning of explanation 1 to Section 271(1)(c) of the Act. Thereafter, the learned Assessing Officer levied the penalty of ₹11,26,000/-, being 100% of the tax sought to be evaded. The penalty order was passed on 26 th September, 2014. 011. The assessee aggrieved with the same preferred the appeal before the learned CIT (A). The learned CIT (A) passed an order on 27 th February, 2023, such appeals were filed before the learned CIT (A) after huge delay of 5 years and 4 months. The learned CIT (A) issued notice to the assessee as well as email was also sent. Assessee neither sought any adjournment before him nor submitted any Page | 5 ITA Nos.1336 & 1337/Mum/2023 Mr. Bimal H. Kiri; AYs 2011-12 explanation. Therefore, the learned CIT (A) noted in detail that the delay has not been explained by the assessee for 5 Years and 4 months. He treated the appeal as invalid and non-est, accordingly, the appeal of the assessee is dismissed. 012. Before us, despite notice, none appeared. Therefore, we proceed to decide the issue as per information available on record. 013. The learned Departmental Representative vehemently submitted that the appeal filed before the learned CIT (A) was delayed by 5 years and 4 months. There was no application for condonation of delay filed by assessee. The learned CIT (A) has made all the efforts to serve the notice to the assessee, even by email also, however, assessee remain non-compliant. Thus, in absence of application for condonation of delay, the appeal of the assessee could not have been admitted by the learned CIT (A). Therefore, no infirmity can be pointed out in the order of the learned CIT (A). 014. We have carefully considered the contention raised by the learned Departmental Representative as well as the orders of the lower authorities. The learned CIT (A) found that appeal filed by the assessee before him is delayed by 5 years and 4 months. For such a huge delay assessee has not filed any application for condonation. Further, the learned CIT (A) has issued notice for hearing to the assessee and also intimated the date of hearing by email. No response was received from the assessee. Therefore, in absence of any condonation application for such huge delay. There is no other alternative left with the learned CIT (A) except dismissing the appeal of the assessee in limine. This is the order of the learned CIT (A) not admitting the appeal of the assessee. Before us, the appeal filed by the assessee is on the merits. As the order of the learned CIT (A) clearly shows that the appeal of the assessee is not admitted having huge delay, deciding the issue in this appeal on the merits will result into a premium to the non-compliance of the assessee. Even before us, the assessee has not given any explanation either along with the Page | 6 ITA Nos.1336 & 1337/Mum/2023 Mr. Bimal H. Kiri; AYs 2011-12 appeal or at the time of hearing regarding delay in filing of appeal before the learned CIT (A). Therefore, we do not find any infirmity in the order of the learned CIT (A) in not condoning the delay of 5 years and 4 months in absence of any explanation or prayer for such condonation. Accordingly, appeal of the assessee is dismissed. 015. In the result, both the appeals of the assessee are dismissed. Order pronounced in the open court on 12.07. 2023. Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated:12.07. 2023 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai