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2022 (4) TMI 1534 - AT - Income TaxCondonation of delay in filing appeals beyond the limitation period - sufficient cause of delay - whether delay was excessive or inordinate? - Levy of penalty u/s 271(1)(c) Delay of 591 days and levy of penalty u/s.271F Delay of 775 days - HELD THAT - Under the scheme of Constitution the Government cannot retain even a single pie of the individual citizen as tax when it is not authorised by an authority of law. Therefore if we refuse to condone the delay that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore in our opinion by preferring the substantial justice the delay has to be condoned. Question of condonation of delay is a factual matter and the result would depend upon the facts of the case and the cause shown by the assessee for the delay. Generally delays in preferring appeals are required to be condoned in the interest of justice where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of the delay. As assessees have shown sufficient cause for the delay in filing the appeals before the Tribunal - Assessee s appeals are treated as partly allowed for statistical purposes.
Issues Involved:
1. Levy of penalty under Section 271(1)(c) of the Income Tax Act. 2. Levy of penalty under Section 271F of the Income Tax Act. 3. Condonation of delay in filing appeals before the CIT(A). Issue-wise Detailed Analysis: 1. Levy of Penalty under Section 271(1)(c) of the Income Tax Act: The assessee was penalized under Section 271(1)(c) for ?13,19,400/- due to the ex-parte assessment order dated 18-12-2018. The penalty order was also passed ex-parte on the same date. The assessee filed an appeal before the CIT(A) with a delay of 591 days, attributing the delay to the non-resident status of the assessee and the failure of the GPA-holder and tax consultant to represent the case properly. The CIT(A) rejected the condonation petition, stating no reasonable cause for the delay. The Tribunal, however, emphasized the principles laid down by the Apex Court in Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471), which advocate for a pragmatic approach towards condonation of delay to ensure substantial justice over technicalities. 2. Levy of Penalty under Section 271F of the Income Tax Act: The assessee was also penalized under Section 271F for ?5,000/- due to the same ex-parte assessment order. The appeal against this penalty was filed with a delay of 775 days. Similar to the Section 271(1)(c) penalty, the delay was attributed to the non-resident status of the assessee and the failure of the authorized representative. The CIT(A) rejected the condonation petition for this delay as well, citing no reasonable cause. The Tribunal reiterated the importance of substantial justice and the need for a liberal construction of "sufficient cause" as per various judicial precedents, including the Madras High Court's judgment in CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596). 3. Condonation of Delay in Filing Appeals Before the CIT(A): The Tribunal analyzed the principles of condonation of delay, emphasizing that substantial justice should be preferred over technical considerations. It noted that refusing to condone the delay could result in a meritorious matter being dismissed at the threshold, thus defeating the cause of justice. The Tribunal referenced several judgments, including those of the Apex Court and various High Courts, which advocate for a liberal approach towards condonation of delay when sufficient cause is shown. The Tribunal highlighted that the non-filing of a counter-affidavit by the Revenue opposing the condonation of delay itself indicates sufficient cause for condonation. Consequently, the Tribunal condoned the delay in filing the appeals and remitted the issues back to the CIT(A) for a decision on merits in accordance with the law. Conclusion: The Tribunal condoned the delays of 591 days and 775 days in filing the appeals against the penalties under Sections 271(1)(c) and 271F, respectively. It emphasized the principles of substantial justice and the need for a liberal approach towards condonation of delay. The appeals were remitted back to the CIT(A) for a decision on merits, ensuring that justice is served without being hindered by technicalities. The appeals were treated as partly allowed for statistical purposes.
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