Vijaybhai Mansukhbhai Patel, Surat V. Income Tax Officer, Ward-1, Surat

ITA 454/SRT/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5802 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-07-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 16-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Keywords: Reasonable cause; Condonation of delay; Set aside
• Section: 271(1)(c); 144

Judgement Text

आयकर अपीलीय अिधकरण, सुरत Ɋायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आ.अ.सं./ITA No.454/SRT/2024 (AY 2016-17) (Hybrid hearing) Vijaybhai Mansukhbhai Patel Kumbharwada, Kanpura, At PO Vyara, Dist. Tapi-394650 [PAN No: AHTPP 6606 R] Vs I.T.O., Ward-1, Surat. अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Ms. Chaitali Shah, CA राजˢ की ओर से /Revenue by Shri Ravikant Gupta, CIT-DR with Shri Vinod Kumar, Sr.DR अपील पंजीकरण/Appeal instituted on 18.04.2024 सुनवाई की तारीख/Date of hearing 15.07.2024 उद्घोषणा की तारीख/Date of pronouncement 15.07.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld. CIT(A)”] dated 21.02.2024 for assessment year 2016-17, wherein the ld. CIT(A) confirmed the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 23/09/2022. 2. Rival submissions of both the parties have been heard and record perused. The Ld. Authorized Representative (Ld.AR) for the assessee submits that Assessing Officer as well as Ld.CIT(A) have passed ex parte order in confirming the penalty of Rs.4,50,090/-. The Ld.AR of the assessee submits that there was delay in filing appeal before Ld.CIT(A), however, Ld.CIT(A) instead of passing separate order on the plea of condonation of delay dismissed the appeal of assessee in limine. The Ld.AR of the assessee ITA No.454/SRT/2024 (A.Y 16-17) Vijaybhai M Patel Vs ITO 2 submits that penalty was levied on 23/09/2022 and the appeal was filed on 06/06/2023. The ld AR of the assessee in her all fairness submits that before ld CIT(A) the appeal was filed on 06.06.2023, thus, there was delay of about nine months. The assessee filed application for condoning such delay by explaining the facts that the assessee was in judicial custody from 30.09.2021 to 18.05.2023 assessee could not contest reopening assessment proceedings before Assessing Officer nor filed appeal before Ld.CIT(A) in time. The assessee was released on 18.05.2023 and immediately filed appeal on 06.06.2023. The Ld.CIT(A) also confirmed the action of the Assessing Officer without discussing the plea of condonation of delay as well as on merit of case. The Ld. AR of the assessee submits that there was reasonable cause for not filing appeal in time before CIT(A). On merit, the ld AR for the assessee submits that she has same explanation for non-appearance before Assessing Officer as well as before ld CIT(A). The ld. AR of the assessee submits that in appeal against the quantum assessment, the matter has already been restored back to the file of Assessing Officer to pass the order afresh in ITA No. 447/Srt/2024 dated 11/07/2024. The ld. AR of the assessee submits that once the assessment order on the basis of which penalty was levied, is restored back to the file of Assessing Officer, the penalty under Section 271(1)(c) of the Act will not survive. 3. On the other hand, Ld. Senior Departmental-Representative (Sr DR) for the Revenue supported the orders of lower authorities. On merit, the Ld.SR-DR for the Revenue submits that assessee was given sufficient opportunities by Assessing Officer as well as NFAC/Ld.CIT(A) and assessee has no case on ITA No.454/SRT/2024 (A.Y 16-17) Vijaybhai M Patel Vs ITO 3 merit. The Ld. Sr-DR for the Revenue submits that in absence of any explanation, Assessing Officer has no option except to levy the penalty on the addition made in the assessment order. On the plea of condonation of delay, the Ld. Sr-DR for the Revenue submits that delay in filing before Ld.CIT(A) may not be condoned. In case the Bench is of the view that the assessee deserve any leniency that matter may be set aside to Assessing officer but with imposing of the cost. 4. We have considered the submissions of both the parties and have gone through the orders of lower authorities carefully. We find that assessment was completed under section 144 r.w.s. 144B r.w.s. 147 of the Act on 23.03.2022 and Assessing Office made addition on account of expenses paid for purchasing car of Rs.14,56,600/-. The Assessing Officer while passing the assessment order initiated penalty under Section 271(1)(c) of the Act. The Assessing Officer levied penalty vide his order dated 23/09/2022 of Rs. 4,50,090/- by taking view that assessee was given opportunities by issuing notice dated 21/03/2022 and the assessee failed to response such show cause notice. We find that the appeal was filed before Ld.CIT(A) on 06.06.2023, thus, there was delay of more than nine months. However, the Ld.CIT(A) has not given any finding on the plea of condoning the delay. Considering the fact that assessee in the application for condonation of delay has stated that assessee was in judicial custody from 30.09.2021 to 18.05.2023 assessee could not contest the issue before Assessing Officer nor filed appeal before Ld.CIT(A) in time. The assessee was released on 18.05.2023 and immediately filed appeal on 06.06.2023. Thus, considering ITA No.454/SRT/2024 (A.Y 16-17) Vijaybhai M Patel Vs ITO 4 the peculiar facts and circumstances of the case, we find that there was reasonable cause for not filing appeal in time before Ld.CIT(A). Hence, the delay in filing appeal before CIT(A) is condoned. Further considering the fact that against the addition in the quantum assessment, the SMC Bench of this Tribunal in ITA No. 447/Srt/2024 has already restored the matter back to the file of Assessing Officer to pass the assessment order afresh. Thus, the penalty levied under Section 271(1)(c) of the Act will not survive. However, the Assessing Officer will be at liberty to initiate the penalty proceedings as per law, after completing the assessment proceedings. 5. In the result, the appeal of the assessee is allowed. Order pronounced in open court on 15 th July, 2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER सूरत /Surat, Dated: 15/07/2024 *Ranjan Copy to: 1. Appellant- 2. Respondent- 3. CIT 4. DR 5. Guard File True copy/ By order Senior Private Secretary/Assistant Registrar, ITAT, Surat