Condonation of delay in penalty appeals required where illness and procedural ignorance prevented timely filing on merits.

Delay in filing penalty appeals should be condoned where it resulted from the director responsible for legal and financial matters suffering a heart stroke and other directors lacking knowledge of the applicable procedure. Rejecting condonation without granting an opportunity and dismissing the appeals without examining the penalty challenges would exclude a meritorious matter solely on limitation. The penalty appeals were therefore restored for adjudication on merits.

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Issues: Whether the delay in filing the appeals before the first appellate authority should have been condoned and the penalty appeals adjudicated on merits.

Analysis: The delay was attributed to the director responsible for legal and financial matters suffering a heart stroke, while the remaining directors lacked knowledge of the applicable legal procedure. The first appellate authority rejected the condonation application without affording an opportunity and dismissed the appeals without addressing the challenges to the penalties. A meritorious matter should not be excluded solely on limitation, particularly where the appeals concern penalties.

Conclusion: The delay was required to be condoned and the penalty appeals restored for adjudication on merits, in favour of the assessee.

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