2005 (2) TMI 435 - AT - Income Tax

Summary

Issues:
1. Delay in filing appeal and condonation of delay.
2. Sustaining the penalty imposed under section 271(1)(c) of the IT Act.

Analysis:

Issue 1: Delay in filing appeal and condonation of delay
The appeal was filed against the order of CIT(A), Bhatinda, for the assessment year 1986-87. The primary contention of the assessee was the delay in filing the appeal, seeking condonation of the delay. The delay was nearly for 7 years, and the assessee claimed it was due to a bona fide impression that an appeal had been filed by their counsel. The counsel had not filed the appeal against the penalty imposed under section 271(1)(c) as mentioned in the reply drafted by him. The assessee immediately filed an appeal upon realizing the lapse. The CIT(A) rejected the request for condonation of delay, suggesting that the assessee might have asked the counsel not to file an appeal. However, the ITAT, Amritsar, observed that the delay was due to the advocate's lapse and that the assessee's bona fide belief was justified. Relying on relevant legal precedents, the ITAT set aside the CIT(A)'s order and directed the appeal to be treated as filed on time.

Issue 2: Sustaining the penalty imposed under section 271(1)(c) of the IT Act
The ITAT noted that the CIT(A) had summarily dismissed the appeal regarding the penalty without addressing the submissions of the assessee, possibly due to the delay in filing the appeal not being condoned. Since the delay in filing the appeal was now condoned, the ITAT set aside the CIT(A)'s order and remanded the matter for reconsideration. The ITAT instructed the CIT(A) to provide proper opportunity to both parties and to pass a speaking and reasoned order while re-deciding the penalty issue. The appeal was treated as allowed for statistical purposes, indicating a favorable outcome for the assessee.

In conclusion, the ITAT, Amritsar, in this judgment, addressed the issues of delay in filing the appeal and condonation of delay, as well as the penalty imposed under section 271(1)(c) of the IT Act. The ITAT found in favor of the assessee, emphasizing the bona fide belief regarding the appeal filing and directing a reconsideration of the penalty issue by the CIT(A) with proper opportunity for both parties.