Tribunal Orders CIT(A) to Allow Appeals on Penalties Due to Negligence; Directs Decision on Merits After Hearing Assessee.

Ms. Diamond Enterprises Versus ITO, Hingoli, Parbhani

Ms. Diamond Enterprises Versus ITO, Hingoli, Parbhani - TMI Issues:
1. Condonation of delay in filing appeal against penalty under section 271B of the Income Tax Act, 1961.
2. Condonation of delay in filing appeal against penalty under section 271AAC(1) of the Income Tax Act, 1961.

Issue 1: Condonation of delay in filing appeal against penalty under section 271B of the Income Tax Act, 1961:
The assessee, a trading firm, had its appeal against a penalty of Rs. 55,574 under section 271B dismissed by the CIT(A) due to a delay of 171 days in filing the appeal. The delay was attributed to negligence by the Tax Consultant. The Tribunal noted that in a previous quantum appeal by the same assessee, a delay of 727 days was condoned due to the Covid-19 pandemic period. Consequently, the Tribunal directed the CIT(A) to condone the delay in this case as well and decide the appeal on merit after providing an opportunity for the assessee to be heard. The grounds raised by the assessee were allowed for statistical purposes.

Issue 2: Condonation of delay in filing appeal against penalty under section 271AAC(1) of the Income Tax Act, 1961:
In this issue, the assessee challenged a penalty of Rs. 61,413 under section 271AAC(1) of the Act, which was confirmed by the CIT(A). The delay in filing the appeal was 232 days, and the CIT(A) did not condone the delay due to unsatisfactory reasons provided by the assessee. The Tribunal, after considering the similar issue in the first appeal, directed the CIT(A) to condone the delay in this case as well and decide the appeal on merit after giving the assessee an opportunity to be heard. The appeal was allowed for statistical purposes.

In conclusion, both appeals by the assessee were allowed for statistical purposes, and the Tribunal directed the CIT(A) to condone the delays in filing the appeals against the penalties under sections 271B and 271AAC(1) of the Income Tax Act, 1961, and decide the appeals on merit after providing an opportunity for the assessee to be heard.