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TMI Blog2021 (6) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... filed challenging the assessment framed. Thereafter, vide penalty order dated 23rd September, 2014 passed by the AO u/s 271(1)(c) of the Act, the AO has levied a penalty of Rs. 16,52,935/-. On appeal, the Ld. CIT (A) has upheld the imposition of penalty and now the assessee is in appeal before us challenging the confirmation of penalty. 2.1 Assessee has raised the following grounds of appeal: "1. That on facts and in law the CIT(A) has erred in upholding levy of penalty u/s 271(1)(c) of the Act on following additions/disallowances made by AO in order dated 28th March, 2014 passed u/s 143(3) of the Act : (a) Income from Commission and Brokerage of Rs. 1,89,000/- (b) Advances from customers of Rs. 51,65,300/- 2. That on facts and in law, the AO/CIT(A) have erred in holding / upholding that appellant has furnished inaccurate particulars of his income and / or concealed particulars of his income. 2.1 That on facts and in law the CIT(A) has erred in invoking provisions of Explanation 1 to Section 271 of the Income Tax Act, 1961." 3.0 From the records it is seen that pursuant to the defects pointed out by the Registry, the assessee has filed fresh appeal memo stating that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer of attorney was issued to Mr. Romal Jain on 25th March 2019 (copy enclosed at page 16). Appeal was then redrafted by Mr. Romal Jain, CA in March 2019 (copy of invoice raised by Mr. Jain for his professional services is enclosed page 15). (g) The appeal was finally filed with office of Hon'ble ITAT in Delhi on 1st April, 2019." 3.2 The Ld. AR prayed that in view of the circumstances as elaborated afore said, the delay be condoned. 4.0 On the other hand, the Ld. Departmental Representative (DR) vehemently opposed the request made for condonation of delay. 5.0 Having heard both the parties on the issue of condonation of delay, it is seen that it is settled law that the courts and the quasi-judicial bodies are empowered to condone the delay if the litigant satisfies the Court that there were sufficient reasons for availing the remedy after the expiry of the limitation. Such reasoning should be to the satisfaction of the Court. The expression "sufficient cause or reason" as provided in sub-section (5) of section 253, subsection (3) section 249 of the Income Tax Act, 1961 is used in identical terms in the Limitation Act and the Civil Procedure Code. Such expression has also been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a very long range can be condoned as the explanation thereof is satisfactory. Once the Court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior Court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and in its own finding even untrammeled by the conclusion of the lower court. 10.......... The primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the Court in different situation is not because on the expiry of such time a bad cause would transform into a good cause." 5.1.1 The Hon'ble Supreme Court further observed that rules of limitation are not meant to destroy the rights of the parties. They are meant to see that the parties do not resort to dilatory tactics but seek the remedy promptly. The Hon'ble Apex court further observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on/negligence has to be weighed in light of facts and circumstances of each case. If the negligence or omission is a by-product of a deliberate attempt with mala fide intention for delaying the process of litigation which could give some benefit to the litigant, then probably the delay would not deserve to be condoned. However, if no mala fide can be attributed to the delay, the delay will be condonable. Therefore, on the facts of the present case, we are of the considered opinion that the assessee has been able to demonstrate sufficient reasons, in the shape of approaching wrong remedy, for filing an appeal before the Tribunal. Therefore, we deem it fit to condone the delay and admit the appeal. 6.0 Now coming to the merits of the appeal, the Ld. AR has drawn our attention to the notice dated 28th March 2014 issued u/s 274 of the Act and it was submitted by him that in this notice, penalty has been proposed to be imposed for having concealed the particulars of income or for furnishing inaccurate particulars of income. It was submitted that, thus, the assessee was not made aware of the charge for which the penalty was being proposed to be imposed. It was submitted that it was set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in case of CIT vs. Manjunatha Cotton and Ginning Factory & Ors 359 ITR 565(Kar) has dealt with the identical issue threadbare and come to the following conclusion:- "63. In the light of what is stated above, what emerges is as under: a) Penalty under Section 271(1)(c) is a civil liability. b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section 271. e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. f) Ever if there is no specific finding regarding the existence of the conditions mentioned in Section 271(1)(c), at least the facts set out in Explanation 1(A) & (B) it should be discernible from the said order which would by a legal fiction constitute concealment because of deeming provision. g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. u) The findings recorded in the assessment proceedings in so far as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessment or reassessment cannot be declared as invalid in the penalty proceedings." 8.2 Therefore, respectfully following the law as laid down by the Hon'ble High Court of Karnataka, as stated above, we are of the considered view that when the assessee has not been specifically made aware of the charges leveled against him as to whether there is a concealment of income or furnishing of inaccurate particulars of income on his pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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