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TMI Blog2014 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... of a non-deliberate delay - there is sufficient cause for condoning delay - CIT(A) was not justified in dismissing the appeals on the ground without pointing out the defect and allowing opportunity to the assessee to rectify it – thus, the order of the CIT(A) is set aside with a direction to decide the appeal on merit after condoning delay – Decided in favour of Assessee. Imposition of penalty u/s 271(1)(c) of the Act – Held that:- At this stage it will be premature to impose penalty u/s 271(1)(c) of the Act, when assessee’s appeals against assessment orders are still pending - It may be recalled that CIT(A) dismissed in limine appeals preferred by the assessee against the assessment orders - Though, technically penalty proceeding u/s 271(1)(c) of the Act can be invoked during pendency of quantum appeal, but to avoid multiplicity of proceeding and unnecessary harassment to the assessee it is always advisable to wait for the decision of the appellate authorities on quantum additions – the order of the CIT(A) is set aside and the matter is remitted back to the AO – Decided in favour of Assessee. - ITA No. 173/H/14, 174/H/14, 175/H/14, 1426/H/13, 1427/H/13, 1428/H/13 - - - Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee challenged the order passed by the CIT(A) before the ITAT. The ITAT in ITA No. 169-171/Hyd/13, dated 23/05/2013 restored the appeals to the CIT(A) with a direction to consider assessee s application for condonation of delay and decide. In consequence to the direction of the ITAT, the Ld. CIT(A) revived the proceedings again. In course of the proceeding before CIT(A) the assessee in support of its claim that appeal could not be filed due to illness of the MD submitted medical reports etc. The Ld. CIT(A) after considering assessee s submissions in the light of evidence brought on record felt that the condition of the MD was not that severe to render him incapable of signing the appeal papers. The Ld. CIT(A) on going through the medical reports/prescriptions was of the view that they do not reveal that the MD was not in such a condition which can prevent him from carrying out his day to day duties. The Ld. CIT(A) was of the opinion that the so called medical condition of the MD is not even classified as a disease in medical literature. The Ld. CIT(A) opined that the irritable bowel syndrome, that the MD was stated to be suffering from is a most common condition requiring antacid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent that he was not able to sign the appeal papers. In our view, the CIT(A) is neither competent nor technically qualified to assess the degree of illness of the MD. It is a fact on record that the assessee has not only explained the cause of delay but has also submitted evidence to substantiate such claim. As can be seen, learned CIT(A) has not disputed the fact that the MD was ill but he was of the view that the illness is not that severe to disable the MD from attending to his day to day work. However, we are unable to agree with the view of learned CIT(A). The evidence on record show that the MD was keeping ill intermittently. It is not necessary that only when a person is immobile or bedridden he would not be able to attend to his day to day activities. Even when a person is afflicted with illness quite intermittently, it not only takes a toll on him physically but also mentally. It so much preoccupies his mind that, it is quite possible that many other acts or duties, which he could otherwise have attended to if not ill, escapes his attention. Though section 249 of the Act prescribes the time limit of 30 days for preferring appeal, it also empowers the 1st appellate autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issues raised in appeals. Though the learned AR urged before us to decide grounds on merits, we refrain from doing so as learned CIT(A) has dismissed the appeals in limine without considering the merits and for which reason we have restored the appeals back to his file. 9. In the result, assessee s appeals are considered to be allowed for statistical purposes. ITA Nos. 1426, 1427 1428/Hyd/2014 10. All these appeals have been filed by the assessee on the common issue of penalty imposed u/s 271(1)(c) of the Act being sustained by the CIT(A). 11. Briefly, the facts are, as stated in the earlier part of this order the assessee was in business of manufacture of machine tools and execution of job work. In course of reassessment proceeding the Assessing Officer noticed that the assessee has not shown any turnover from business. He, therefore, concluded that when the assessee has stopped its business activities there is no user of the plant and machineries, hence, depreciation is not allowable. Accordingly, he disallowed the depreciation claimed. That besides the Assessing Officer also made additions on account of unexplained credits and unexplained deposits. Against the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be recalled that CIT(A) dismissed in limine appeals preferred by the assessee against the assessment orders. While dealing with assessee s appeals in ITA Nos. 173 to 175/Hyd/2014 against aforesaid order of the CIT(A) in earlier part of our order, we have set aside the order of the learned CIT(A) and restored the appeals back to him for deciding on merit. A decision by the CIT(A) on merits might have an impact on the leviability of penalty u/s 271(1)(c). Though, technically penalty proceeding u/s 271(1)(c) of the Act can be invoked during pendency of quantum appeal, but to avoid multiplicity of proceeding and unnecessary harassment to the assessee it is always advisable to wait for the decision of the appellate authorities on quantum additions. Therefore, considering the fact that we have restored the quantum appeals to the CIT(A) for deciding on merits, in our view, it will be proper to consider imposition of penalty u/s 271(1)(c) depending upon the view taken by the appellate authorities on the additions made in assessment. Accordingly, we set aside the impugned order of the CIT(A) and restore the matter back to the file of the Assessing Officer. The Assessing Officer may take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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