2021 (2) TMI 1072 - AT - Income Tax

Condonation of delay in filing the present appeal by 515 days - whether sufficient cause on the part of the assessee company for not presenting the appeal within the prescribed time? - In the instant case, the ld. CIT(A) has passed ex-parte order. It has come to knowledge of the assessee when application under Vivaad to Vivad Scheme was rejected by the CIT, Ajmer and the reason was that no appeal is pending - HELD THAT - The assessee has not received any notice for hearing of the appeal as well as the order passed by the CIT(A). The assessee was not aware about the passing of CIT(A)'s order till the rejection of application under Vivad se Vishwas Scheme by the PCIT, Ajmer. However, as soon as assessee came to know of subsequent penalty order being passed against it, it consulted its Counsel and basis his advice, the present appeal has been filed though with a delay of 515 days. In case of Collector, Land Acquisition vs MST Katiji 1987 (2) TMI 61 - SUPREME COURT has held that the expression Sufficient Cause employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner to sub-serves the ends of justice that being the life-purpose of the existence of the institution of Courts. In the instant case, applying the same principles, we find that there is no culpable negligence or malafide on the part of the assessee in delayed filing of the present appeal and it does not stand to benefit by resorting to such delay more so considering the fact that it has applied for settlement of present dispute and payment of appropriate taxes. Therefore, in the factual matrix of the present case, we find that there exists sufficient and reasonable cause for condoning the delay in filing the present appeal and as held by the Hon ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. Though assessment and penalty proceedings are independent proceedings but at the same time, there is a close connection between the two proceedings and where the assessee has filed the present appeal apparently to safeguard its rights in relation to the penalty proceedings, the assessee cannot be denied and deprived of his legal defence and pleadings which he may take as so advised in the course of the penalty proceedings. Therefore, without going into the merits of levy of penalty which is not the subject matter of present dispute, where the assessee wishes to plead against levy of penalty, the Tribunal cannot be oblivious of its duty by denying such right to the assessee on mere technicality of delay in filing the present appeal. In exercise of powers under section 253(5) of the Act, we hereby condone the delay in filing the present appeal as we are satisfied that there was sufficient cause for not presenting the appeal within the prescribed time and the appeal is hereby admitted for adjudication on merits.

Summary

Issues Involved:
1. Ex parte order under Section 271B of the IT Act, 1961.
2. Confirmation of penalty by the CIT(A).
3. Condonation of delay in filing the appeal.

Detailed Analysis:

1. Ex parte order under Section 271B of the IT Act, 1961:
The assessee contested that the CIT(A) erred in passing an ex parte order under Section 271B without serving notice for a hearing. The assessee claimed that they were unaware of the appellate order until the rejection of their application under the Vivad Se Vishwas Scheme. The Tribunal noted that the CIT(A) passed the order ex parte and the assessee had not received any notice for the hearing or the order itself. Thus, the Tribunal considered the assessee's claim that they were not given an opportunity to be heard.

2. Confirmation of penalty by the CIT(A):
The CIT(A) confirmed a penalty of ?1,50,000/- imposed by the AO under Section 271B. The Tribunal did not delve into the merits of the penalty itself but focused on the procedural aspects and the assessee's right to appeal.

3. Condonation of delay in filing the appeal:
The primary issue was the delay of 515 days in filing the appeal, which the assessee attributed to not receiving the order and being unaware of it until much later. The Tribunal examined the reasons for the delay, including the impact of the COVID-19 pandemic. The Tribunal referred to several precedents, including the Supreme Court's decision in Collector, Land Acquisition vs. Mst. Katiji, emphasizing a liberal approach towards condonation of delay when substantial justice is at stake. The Tribunal found no malafide intent or deliberate delay by the assessee and noted that the delay did not benefit the assessee. Consequently, the Tribunal condoned the delay, allowing the appeal to be admitted for adjudication on merits.

Conclusion:
The Tribunal concluded that there was sufficient cause for the delay in filing the appeal and condoned the delay. The appeals for the subsequent years (A.Y. 2014-15 and 2015-16) with similar delays were also admitted following the same rationale. The Tribunal directed the Registry to list the matters for hearing in due course.