RAMESH P. MEHTA HUF,SURAT V. INCOME TAX OFFICER, WARD 3(2)(3), SURAT, SURAT

ITA 165/SRT/2024

AI Insights

The case involves three appeals by the assessee, Ramesh P Mehta (HUF), against the orders of the National Faceless Appeal Centre, Delhi / Commissioner of Income Tax (Appeals), which confirmed the penalties levied under section 271B of the Income Tax Act for the assessment years 2011-12 to 2013-14. The main contention was the imposition of a penalty of Rs. 150,000, which the assessee argued was based on an incorrect turnover figure and was imposed without a proper opportunity to be heard, violating the principles of natural justice. The Tribunal found merit in the assessee's arguments and decided to restore the matter to the Assessing Officer for a fresh decision post the quantum assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 106915 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: RAKESH SHAH
• Keywords: Condonation of delay; Opportunity of being heard; Principle of natural justice
• Section: 271B

Judgement Text

"आयकर अपीलीय अिधकरण, सूरत Ɋायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.163 to 165/SRT/2024 (AYs 2011-12 to 2013-14) (Physical court hearing) Ramesh P Mehta, HUF, 104, Raj Anand Apartment, Kahan Faliyu, Katargam, Surat-393 004 [PAN : AAKHR 6564 G] बनाम Vs Income Tax Officer, Ward- 3(2)(3), Surat, Aayakar Bhavan, Majura Gate, Surat- 395 001 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Rakesh Shah, CA राजˢ की ओर से /Revenue by Shri Mukesh Jain– Sr-DR अपील पंजीकरण/Appeal instituted on 15.02.2024 सुनवाई की तारीख/Date of hearing 31.12.2024 उद ्घोषणा की तारीख/Date of pronouncement 31.12.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This group of three appeals by individual assessee are directed against the separate orders of National Faceless Appeal Centre, Delhi /Commissioner of Income Tax (Appeals) [for short to as “Ld.CIT(A)”] all dated 27.10.2023 for assessment years (AYs) 2011-12 to 2013-2014. The ld CIT(A) confirmed penalty levied by Assessing Officer (AO) under section 271B in assessment years 2011-12 to 2013-14. In all appeals, the assessee has raised identical grounds of appeals, facts in all appeals are common. Therefore, with the consent of both the parties, all the appeals were clubbed, heard together and are decided by common order to avoid conflicting decision. For appreciation of ITA Nos.163-165/SRT/2024 (A.Ys.11-12 to 13-14) Ramesh P Mehta (HUF) 2 fact, appeal for A.Y. 11-12, in ITA No.163/SRT/2024 is treated as “lead” case. The assessee has raised the following grounds of appeal:- “1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing ex parte order without giving reasonable and sufficient opportunity of being heard. 2. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer by imposing a penalty of Rs.150000/-. 3.It is therefore prayed that above addition made by the Assessing Officer and confirmed by CIT(A) may please be deleted. 4. The appellant craves leave to add or alter or delete any of the ground or grounds of appeal at the time of the hearing before Your Honour.” 2. At the outset of hearing, Ld. Authorized Representative (Ld.AR) of the assessee submits that there is delay of 51 days in all the appeals before the tribunal. The Ld. AR of the assessee submits that delay in filing appeals are neither intentional nor deliberate. The Ld. AR of the assessee submits that assessee is a common person and not conversant with Income Tax Laws, and he was of the view that if appeal filed against the tax demand order than no need to file separate appeal for penalty orders. The Ld. AR submits that as per direction of tax consultant assessee filed appeal before Tribunal, for which delay occurred. The ld AR of the assessee submits that there is no inordinate delay in filing appeal. The assessee is not going to be benefitted in filing appeal belatedly. The assessee has a good case on merit and is likely to succeed if the appeals are heard on merit. 3. On the other hand, Ld. Senior Departmental Representative (Ld. Sr-DR)for the Revenue submits that in the application for condonation of delay, assessee has not disclosed reasonable and plausible cause for condoning the delay. The ITA Nos.163-165/SRT/2024 (A.Ys.11-12 to 13-14) Ramesh P Mehta (HUF) 3 assessee has given a very vague explanation. The assessee has made a self- serving statement that the delay is not intentional. The Ld. Sr-DR for the Revenue submits that the delay should not be condoned as the assessee has not disclosed reasonable and plausible cause. 4. We have considered the preliminary submissions of both the parties and perused the record carefully. On the plea of delay, we find that the Ld.AR of the assessee has vehemently submitted that there was no intentional or deliberate delay rather the delay is for the reasons that the assessee is a common person and not conversant with Income Tax Laws. The Ld AR of the assessee also submitted that the assessee has good case on merit. On considering the submission of assessee and facts of the case, we are of the view that the delay in filing all the appeal before Tribunal is not deliberate or intentional or gross negligence on part of assessee, therefore, considering the principle that when technical consideration and cause of substantial justice are pitted against each other, the cause of substantial justice may be preferred, therefore we find that the explanation given by assessee for condonation of delay is reasonable one. Hence, the delay in filing all appeals are condoned. Now adverting to the merit of the case. 5. Rival submission of both the parties have been heard and record perused. The Ld.AR for the assessee submits that addition made in the quantum assessment has already been restored back to the file of Assessing Officer by this tribunal in ITA Nos. 479, 480 and 481/SRT/2023 vide order dated 26.10.2023, therefore the penalties may also be restored back to the file of Assessing Officer passing fresh order. The Ld. AR of the assessee further submits that ITA Nos.163-165/SRT/2024 (A.Ys.11-12 to 13-14) Ramesh P Mehta (HUF) 4 Assessing Officer has wrongly arrived at a figure of turnover for imposing penalty under section 271B. The Assessing Officer considered all transactions in bank accounts which can never be considered as total turnover for imposing penalties. The penalty was imposed without giving opportunity of being heard to assessee. The penalty was levied in violation of principle of natural justice. The Ld. AR of the assessee submits that this appeal may also be restored to the file of Assessing Officer to decide it afresh after passing assessment order in terms of order of this Tribunal. He has also filed copy of decision of this Tribunal in quantum assessment, which is kept in record. 6. On the other hand, ld. Sr-DR for the Revenue supported the order of lower authorities. The ld SR DR for the revenue prayed for dismissal of all the appeals. 7. We have considered the rival submissions of both the parties and have gone through order of lower authorities carefully. We find that the addition in the quantum assessment has already been restored back to the file of Assessing Officer in order dated 26.10.2023 in ITA Nos.479 to 481/SRT/2023. We also find merit in the submission of Ld. AR of the assessee that entire bank transactions cannot be considered as a turnover of the assessee for the purpose of levying penalty under section 271B of the Act. Thus, considering the fact that addition made in quantum assessment has already been restored back to the file of Assessing Office by the order of this Tribunal (supra). Therefore, we deem it appropriate to restore all the appeal back to the file of Assessing Officer to decide the matter afresh after passing assessment order. ITA Nos.163-165/SRT/2024 (A.Ys.11-12 to 13-14) Ramesh P Mehta (HUF) 5 8. In the result, assessee’s appeal ITA No.163/SRT/2024 is allowed for statistical purposes. 9. Now we take ITA No.164-165/Srt/2024 for assessment years 2012-13 and 2013-14. Since we have already restored the matter back to the file of Assessing Officer in ITA No.163/Srt/2024, therefore, these appeals are also restored back to the file of Assessing Officer for deciding the issue afresh. 10. In the result, both the appeals of assessee are allowed for statistical purposes. 11. In combined result, all the three appeals of assessee are allowed for statistical purposes in above terms. Registry is directed to place one copy of this order in all appeals folder / case file(s). Order pronounced in the open court on 31/12/2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद˟/Accountant Member Ɋाियक सद˟/Judicial Member सूरत / Surat Dated: 31/12/2024 Dkp Outsourcing Sr. P.S* आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to :  अपीलाथȸ/ The Appellant  Ĥ×यथȸ/ The Respondent  आयकर आयुÈत/ CIT  ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, सूरत/ DR, ITAT, SURAT  गाड[ फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलȣय अͬधकरण, सूरत "