TaxTMI 
TaxTMI 
2015 (1) TMI 958
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....ick Industrial Companies Act, for declaring the assessee as a sick company. On 18.3.1997 BIFR declared the assessee as a sick company. Thereafter on 30.11.1997 the assessee filed a return for losses. On 23rd Feb.2000 the Board of Industrial and Financial Reconstruction (BIFR) ordered for winding up. Just before passing the order of winding up the AO passed order u/s 143(3) on 10th Feb.2000 determining the assessed income at 'nil'. Thereafter penalty was levied u/s 271(1)(c) on deemed income of Rs. 3,90,43,136/- being loss claimed and disallowed. 2.2. On 14th Feb.,2001 the Hon'ble Delhi High Court appointed an official liquidator. On 31.10.2002, the Ld.CIT(A) dismissed the appeal of the assessee filed against the order of the AO passed u/s 143(3), ex parte. On 25.3.2003 the official liquidator vide letter dt. 25.3.2003 informed the AO that the Hon'ble Delhi High Court vide order dt. 16.4.2001, directed the official liquidator not to take any further steps, pursuant to the Court Order dt. 14.2.2001 and hence no reply is filed by the official liquidator before the AO. The Advocate of the assessee company had also informed the AO that the company is in liquidation. 2.3. The AO pa....
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.... days which has to be explained. 4.1. He further submitted that, the only working and active Director of the company was Shri RK Srivastav who died on 1.1.2005 after prolonged illness from 1999 to 2004, and has left behind, his wife Smt.Rekha Srivastava, who was a house wife and who is a stranger to income tax. He submitted that Smt.Rekha Srivastav took time to understand the issue that led to demand notice and thereafter she had to collect all the relevant papers, as the books of accounts etc. were impounded by the AO during the assessment proceedings on 27.1.2000 and as the balance of records/books were taken by the official liquidator of the High Court vide order dt. 14.1.2001. He submitted that the assessee company closed its operations in 1997-98 and it had no staff, no office or activity or liquidity, which state of affairs continues till date. He pleaded that the widow of the Director, after taking huge efforts, could file this appeal before the First Appellate Authority and under those circumstances there was a reasonable cause for delay and the first appellate authority should have condoned the delay. He relied on a number of case laws in support of his proposition. We ....
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....& H) ii) CIT vs. Krishi Tyre Retreading & Rubber Industries 263 CTR (Raj.) 484 iii) Ajaib Singh & Co. 253 ITR 630 (P&H) iv) CIT vs. P. Govindasmay 263 ITR 509 (Mad.) v) CIT vs. G.R. Rajendran 259 ITR 109 (Mad.) vi) CIT vs. Pushpendra Suran 264 CTR (Raj) 204 vii) CIT vs. Baroda Tin Works 221 ITR 661 (Guj.) viii) New Sorathia Engg. Co. vs. CIT 282 ITR 642 (Guj.) 5. Ld. D.R. Smt.Parminder Kaur, on the other hand opposed the contentions of the assessee. She submitted that perusal of the assessment order demonstrates that, the assessee admitted and filed a revised return of income, recomptuing the loss at Rs. 34,72,540/-. She argued that the variation between the loss declared in the original return of income at Rs. 3,90,43,136/- and the revised return of income is huge and points out to the fact that the assessee had concealed its income. She submitted that the assessee had not heeded to the advice of its auditors and has claimed certain expenses which were rightly disallowed by the AO though the assesssee had filed the revised return of income. She specifically took this Bench through para 6 of the Ld.CIT(A)'s order at page 11. 5.1. On the issue of condonati....
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....lty order on the assessee company, which in turn informed the official liquidator and requested the official liquidator to take necessary action. This act of the company shows its bonafide. Under the circumstances, the fact that Shri RK Srivastav was alive during the passing of the penalty order, is not a relevant circumstance as he could not have filed an appeal against the penalty order. The company had in our view acted in a diligent and bonafide manner and communicated the fact of passing of a penalty order to the official liquidator with the request for further action. When the official liquidator, who is the competent authority in this case, does not take any action the asseseee cannot be blamed. The undisputed fact is that the main Director of the company Shri RK Srivastav fell sick in 1998 and developed severe diabetes and heart problems and ultimately passed away on 1.1.2005. He was survived by his wife, who is a housewife and who was not knowing the affairs of the company. 8.3. The Ld.CIT(A) further observes that after the death of Mr. Srivastava 5y-6m has elapsed, before filing of the appeal and the assessee has not given any cogent reasons to explain the delay. This ....
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....ent cause from preferring the appeal in time before the Tribunal. Since the existence of the assessee was in liquidation before the Hon'ble Gujarat High Court, therefore, the assessee could not have moved the appeal for the purpose of filing appeal before the Tribunal. Considering the facts and circumstances and the documents placed on record, we have to take pragmatic and liberal approach while condoning the delay in the matter." 8.7. In view of the above discussion, we are of the view that the Ld.CIT(A) should have condoned the delay in filing of the appeal before him. In the result we allow ground nos. 2 and 3 of the assessee and condone the said delay in filing of the appeal before the Ld. CIT(A). 8.8. Ground nos.4 and 5 are on merits. 8.9. A perusal of the assessment order demonstrates that it has been passed in a cursory and summary manner, de hors of any detail, except for mentioning that certain figures had not tallied, no analysis whatsoever or reasons leading to the disallowance, are given by the AO. AO simply says that the assessee has filed reply explaining the discrepancies but does not give any reason as to why the explanation cannot be accepted. Nowhere in t....
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.... 2010 judgment dated 13th December, 2012 concluded 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) Wilful 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) Even 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 l1(A) and (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 proceedings under Section 271(1)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained in Section 1 (B). ....