2022 (8) TMI 1472 - AT - Income Tax

Penalty u/s.271(1)(c) - CIT(A) decided the appeal ex-parte dismissing the appeal - assessee could not file details before AO except filing written submissions - HELD THAT - Assessee could not file details before AO except filing written submissions dated 25.09.2014. We have noticed that the assessee is actually non-cooperating with the authorities in providing details or he is totally non-cooperative. Hence the CIT(A) has no alternative except to pass ex-parte order. When these facts were confronted to assessee he only pleaded mercy. On the other hand DR requested that the order of CIT(A) be confirmed. After hearing rival contentions and going through the facts we are of the view that in the interest of justice one more opportunity be provided to assessee to represent its case before CIT(A) subject to a cost of Rs.10, 000/- to be paid to Tamil Nadu State Legal Services Authority at Hon ble High Court of Madras. Assessee will pay this cost and produce the challan before CIT(A) - We set aside the order of CIT(A) and remand the matter back to the file of the CIT(A) for fresh adjudication. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Validity of penalty under section 271(1)(c) of the Income Tax Act.

Condonation of Delay:
The appeal by the assessee was found to be time-barred by 386 days, with the assessee filing a condonation petition citing reasons for the delay. The delay was attributed to various factors, including the Covid-19 lockdown, termination of dealership, and attachment of properties by the Tax Recovery Officer. The Tribunal, after considering the reasons presented, condoned the delay of 386 days and admitted the appeal.

Validity of Penalty under Section 271(1)(c) of the Income Tax Act:
The main issue in the appeal was the confirmation of the penalty under section 271(1)(c) of the Act amounting to Rs.7,48,707. The Tribunal noted that the assessee had not cooperated adequately with the authorities, leading to an ex-parte order by the CIT(A). Despite multiple opportunities provided by the CIT(A) for a hearing, the assessee failed to appear, except on two occasions. The Tribunal observed that the assessee's lack of cooperation necessitated the ex-parte order. However, in the interest of justice, the Tribunal decided to grant the assessee another opportunity to represent its case before the CIT(A) by setting aside the earlier order and remanding the matter for fresh adjudication. The Tribunal imposed a cost of Rs.10,000 to be paid to the Tamil Nadu State Legal Services Authority at the Honorable High Court of Madras, which the assessee was directed to pay and produce the challan before the CIT(A).

In conclusion, the Tribunal allowed the appeal filed by the assessee for statistical purposes, providing a chance for the assessee to present its case before the CIT(A) afresh.