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TMI Blog2019 (7) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... e required to be heard on merits to render the justice. Therefore, we hold that there is reasonable cause for filing the appeal belatedly and delay of filing the appeal required to be condoned. Accordingly, we condone the delay and remit the matter back to the file of the CIT(A) to decide the appeal on merits after giving opportunity to the assessee. - I.T.A.No.118-122/VIZ/2018, I.T.A.No.123/VIZ/2018, Stay Application No.02/Viz/2019 (Arising out of I.T.A. No.123/Viz/2018 - - - Dated:- 17-7-2019 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Singh, Accountant Member For the Appellant : Shri V.Naga Prasad, AR For the Respondent : Shri D.K.Sonowal, CIT DR ORDER PER BENCH : SA No.02/Viz/2019, A.Y.2014-15 1. Stay Application filed by the assessee for the Assessment Year (A.Y.) 2014-15 is dismissed since the appeal is taken up simultaneously. I.T.A. No.118-122/Viz/2018 A.Y.: 2009-10, 2011-12 to 2014-15 2. These appeals are filed by the assessee and against the orders of the Commissioner of Income Tax (Appeals) [CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re incurred by the assessee for the financial years 2008-09 and 2010-11 to 2013-14 as under: Sl.No. Fin.Year Asst.Year Receipts Rs. Expenditure Rs. Net Receipts Rs. 1. 2008-09 2009-10 1,92,00,000 -- 1,92,00,000 2. 2010-11 2011-12 8,27,95,000 2,42,67,700 5,85,27,300 3. 2011-12 2012-13 2,96,03,000 6,04,63,675 -3,08,60,675 4. 2012-13 2013-14 7,32,79,500 73 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s commitment with regard to non-levying of penalty u/s 271(1)(c) of the Act. However, the department did not honour it's commitment and levied the penalty, therefore, the assessee is forced to come on appeal before the CIT(A), hence requested to condone the delay and admit the appeal. The assessee further argued before the Ld.CIT(A) that the assessee is in double jeopardy for honouring it s commitment i.e. payment of taxes and the penalty though the assessee's income is exempt u/s 11 and there is no case for taxing the receipts u/s 115 BBC of the Act. In view of the peculiar circumstances the assessee requested the Ld.CIT(A) to condone the delay in filing the appeal and decide the appeal on merits. Not being convinced with the explanation of the assessee, the Ld.CIT(A) held that the assessee's case is not a fit case for condoning the delay since there was no reasonable cause and accordingly dismissed the appeal of the assessee inlimine. The Ld.CIT(A) relied on the decisions of Encon Furnaces (P.) Ltd. Vs. Asst.Commissioner (1996) 56 ITD 14 (Delhi- Trib), Prashant Projects Ltd. Vs. Dy.CIT (2013) 37 Taxmann.com 137 and the decision of Hon'ble ITAT Hyderabad in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee did not file appeals till the penalty proceedings were finalised and the appeals are filed only after passing the penalty orders which shows the bonafide intention of the assessee to honour the understanding between the department and the assessee. By levying the penalty, the assessee was made to suffer the tax and penalty which is heavy burden on the assessee and the proceedings did not close as expected hence forced to come on appeal. Though the assessee was not liable for additional income it was admitted only with an intention to purchase peace. The Ld.AR argued that in the instant case, the appeal was dismissed inlimine without going into the merits of appeals and the assessee was given an opportunity of being heard before the CIT(A) to present the case on merits. Therefore requested to condone the delay in filing the appeal and remit the matter back to the file of the Ld.CIT(A) for deciding the appeal afresh on merits. 3. On the other hand, the Ld.DR supported the order of the Ld.CIT(A) and argued that there is no case for the assessee to condone the delay. The CIT(A) rightly found that there is no reasonable cause for filing the appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed during the year exceeded the statutory limit of 85 % of the receipts. As such, there was no tax liability and no requirement of preparing computation of total income: The stand taken by the Society was strictly in accordance with the provisions of Sec 11 to 13 of the Income Tax Act read with a plethora of case laws pronounced by various judicial authorities, The returns were filed accordingly. 7. It is submitted that the above revised returns are being filed only with the sole objective of purchasing peace with the department and to avoid possible litigation. The above returns are filed with a clear understanding that no penal and prosecution proceedings would be initiated against the assessee Society. in case the Department is of a different view at any stage we may be permitted to revert to our original stand as mentioned in para 5 above as the revised returns are being filed ONLY with a view to buy peace with the Department. 4.1. As per the letter filed before the ACIT, the assessee submitted that the total expenditure incurred during the year exceeded the statutory limit of receipts of 85% of the total receipts. As such there was no tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment accepting the revised return, it is understood that the revised returns were filed subject to non-levying of penalty. From the above chronology of events, it is evident that the assessee's admission of additional income through revised return is conditional surrender and the assessment was made on the basis of admission made by the assessee as per letter dated 10.03.2016. Since the AO has levied the penalty on admission of additional income which was surrendered conditionally, the department has gone against the implied mutual understanding between the department and the assessee and same is sufficient reason for condoning the delay in filing the appeal. When the assessee has admitted the additional income trusting the department that the penalty would not be imposed and if the department proceeds to continue the litigation and levy the penalty, the very purpose of admitting the additional income is defeated and the assessee should be permitted to seek the justice through the appellate authorities. In this case very fact that the assessee kept silent till the penalty proceedings are finalized, clearly shows that the assessee was under bonafide impression that the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween Inordinate delay and a delay of short duration or few days, forth the former doctrine of prejudice is attracted whereas to the tatter it may not be attracted, That apart, the first one warrants strict approach whereas the second calls for a liberal delineation ix) The conduct, behaviour and attitude of a party relating to its Inaction or negligence are relevant factors to be taken into consideration It is so as the fundamental principle is that the courts are required to weigh the bale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach. x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation. xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception. xiii) The State or a public body of an entity representing a collective cause should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has pointed out that there is delay in filing the appeal by 315 days. The assessee moved an application for condonation of delay by stating therein that the delay occurred in the present ease is bona tide. It was further stated that assessee had made surrender of ₹ 50,00,000/-subject to no penal action but while framing the assessment, the A0 initiated the penalty proceedings u/s 271(1)(c) of the Act and the CIT(A) vide order dated 30-12 2011 upheld the proceeding initiated by the A0 u/s 147 of the Act and confirmed the addition of ₹ 50,00,000/-accepting the surrender made by the assessee. However, the Id. CIT(A) deleted the addition of ₹ 7,13,535/- made by the A0 on other grounds. It was submitted that since the conditional surrender had been accepted by the A0 and the CIT(A), the assessee did not file appeal against the order passed by the CIT(A) and it was only when the A0 imposed the penalty of ₹ 17,00,000/- vide order dated 30.07.201Z the assessee after receiving the said order sought an opinion from the legal experts who opined that the surrender was conditional, it was made by the assessee to buy peace and to avoid litigation as lie being the illitera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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