2016 (1) TMI 39 - AT - Income Tax

Condonation of delay - Penalty under section 271(1)(c) and under section 271D - delay in filing appeal - whether it cannot be said that non-filing of the appeal is only due to misplacement of the record but it may also be due to additions agreed to by the assessee? - Held that - The assessee s explanations in the assessment proceedings would therefore be the basis for levy of penalty under section 271D. The assessee would, therefore required assessment records to submit its explanation during penalty proceedings under section 271D and therefore the assessee s contention that the assessment records were not required to represent in 271D proceedings is not sustainable. When the assessee had the assessment records for representing in the proceedings under section 271D, it cannot be said that it was prevented by sufficient cause to file appeal against the order under section 143(3) read with section 147 of the Act or in appeal against the penalty proceedings under section 271(1)(c) due to misplacement of file is not maintainable at least till the proceedings under section 271D got concluded. The assessee did not represent before the A.O. during the penalty proceedings under section 271(1)(c) and has filed the appeal against the same also with delay. The assessee, has therefore, not been vigilant in challenging the re-assessment proceedings as well as the penalty proceedings. The assessee s explanation is common for all the appeals proceedings. Therefore, the CIT(A) s order for refusing to condone the delay of 217 days in filing the appeal against order under section 143(3) read with section 147 and 29 days and 81 days in filing of the appeals against the penalty proceedings mentioned above is upheld. - Decided against assessee

Summary

Issues: Delay in filing appeals before the Ld. CIT(A) against various orders, refusal to condone the delay, penalty proceedings under section 271(1)(c) and section 271D of the I.T. Act, 1961.

Analysis:
1. The appeals were filed by the assessee against the order of the Ld. CIT(A)-VII, Hyderabad for the A.Y. 2011-2012. The Ld. CIT(A) dismissed the appeals against the orders of the A.O. under section 143(3) read with section 147, penalty order under section 271(1)(c), and order under section 271D by refusing to condone the delay in filing the appeals.

2. The assessee, a trader in IMFL, filed the return of income for A.Y. 2011-2012, which was initially processed resulting in a refund. Subsequently, after receiving information regarding investments, a notice under section 148 was issued. During re-assessment proceedings, discrepancies in net profit percentage were noted, and the assessee explained challenges in maintaining proper sale bills due to the nature of the retail business. The A.O. proposed estimating gross profit based on fixed MRP, which the assessee accepted. Further, discrepancies in explaining the sources of investment led to additions in the income.

3. The A.O. initiated penalty proceedings under section 271(1)(c) and section 271D. The assessee, after delays, filed appeals against these orders with an application for condonation of delay citing misplacement of assessment records. The Ld. CIT(A) refused to condone the delay, leading to the appeals being dismissed.

4. The ITAT noted that the assessee agreed to additions made by the A.O. during assessment but did not appear during penalty proceedings under section 271(1)(c). However, detailed submissions were made during proceedings under section 271D. The delay in filing appeals was attributed to the misplacement of files. The ITAT referred to a Supreme Court judgment on condonation of delay and upheld the CIT(A)'s decision to refuse condonation of delay.

5. The ITAT concluded that the assessee's explanations for the delay were not sufficient, especially considering the nature of the penalty under section 271D. As the assessee did not actively challenge the re-assessment and penalty proceedings, the delay in filing appeals was not condoned. One appeal was dismissed, while others were treated as allowed for statistical purposes.

Judgment: The appeal of the assessee in ITA.No.844/Hyd/2015 is dismissed, while ITA.Nos.845 & 846/Hyd/2015 are treated as allowed for statistical purposes.