Tribunal Condones Delay Due to Covid-19, Remands Tax Penalty Case for Fresh Hearing, Imposes Rs.10,000 Cost.

The Tribunal condoned a 386-day delay in the assessee's appeal due to reasons like the Covid-19 lockdown and property attachment. Regarding the penalty under section 271(1)(c) of the Income Tax Act, the Tribunal noted the assessee's lack of cooperation, which led to an ex-parte order by the CIT(A). However, the Tribunal set aside the order, remanding the case for fresh adjudication, and imposed a cost of Rs.10,000 payable to the Tamil Nadu State Legal Services Authority. The appeal was allowed for statistical purposes, granting the assessee another opportunity to present its case.

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Issues:
1. Condonation of delay in filing the appeal.
2. Validity of penalty under section 271(1)(c) of the Income Tax Act.

Condonation of Delay:
The appeal by the assessee was found to be time-barred by 386 days, with the assessee filing a condonation petition citing reasons for the delay. The delay was attributed to various factors, including the Covid-19 lockdown, termination of dealership, and attachment of properties by the Tax Recovery Officer. The Tribunal, after considering the reasons presented, condoned the delay of 386 days and admitted the appeal.

Validity of Penalty under Section 271(1)(c) of the Income Tax Act:
The main issue in the appeal was the confirmation of the penalty under section 271(1)(c) of the Act amounting to Rs.7,48,707. The Tribunal noted that the assessee had not cooperated adequately with the authorities, leading to an ex-parte order by the CIT(A). Despite multiple opportunities provided by the CIT(A) for a hearing, the assessee failed to appear, except on two occasions. The Tribunal observed that the assessee's lack of cooperation necessitated the ex-parte order. However, in the interest of justice, the Tribunal decided to grant the assessee another opportunity to represent its case before the CIT(A) by setting aside the earlier order and remanding the matter for fresh adjudication. The Tribunal imposed a cost of Rs.10,000 to be paid to the Tamil Nadu State Legal Services Authority at the Honorable High Court of Madras, which the assessee was directed to pay and produce the challan before the CIT(A).

In conclusion, the Tribunal allowed the appeal filed by the assessee for statistical purposes, providing a chance for the assessee to present its case before the CIT(A) afresh.

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