TaxTMI 
TaxTMI 
2022 (10) TMI 403
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....or deciding the above appeals en masse. 3. The Grounds of appeals raised by the assessee in the lead case (in ITA No.690/SRT/2018) are as follows: "1) The Commissioner of Income Tax (Appeals) erred in law and on facts in levying penalty equivalent to 100% of tax on returned income by invoking Explanation 3 to Section 271(1) without appreciating the law on the issue properly. "2) The order of Commissioner of Income Tax (Appeals) levying the penalty by invoking Explanation 3 to section 271(1) is bad in law as no show cause notice was issued to the assessee for invoking the said Explanation, specifically, on the fact that Assessing Officer has not invoked the above Explanation in his penalty order. 3) The appellant craves leave to add, amend, alter, delete, substitute or modify any or all of the Grounds of Grounds of Appeal." 4. At the outset, Learned Counsel for the assessee informs the Bench that all these three appeals filed by the assessee are barred by limitation by one thousand two hundred sixty six days (1266 days). The assessee moved a petition for condonation of delay and filed affidavit also. The contents of the affidavit filed by assessee are reproduced below: "I,....
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....)(c) of the Act, the penalty proceeding was initiated against the assessee by the ld. CIT(A). After getting the advice from the advocate, the assessee filed this appeal before this ITAT. The Ld. Counsel for the assessee contended that during the appellate proceedings, notice of penalty has not been issued to the assessee, that is, the penalty notice under section 271(1)(c) has not been issued to the assessee, therefore, assessee was not aware about the initiation of penalty by the CIT(A) and that is why the delay has occurred. The Ld. Counsel therefore argued that it is the mistake of the ld CIT(A)/ the Revenue authorities, not to issue any notice on the assessee, therefore assessee was not informed about the initiation of penalty hence this negligence of the revenue authorities has resulted into such huge delay in filing the appeal. Such negligence of Revenue Authorities should not be put on the assessee to explain the reason for delay in filing the appeal. The ld Counsel further pointed out that had the Revenue Authorities wanted to initiate the penalty proceedings against the assessee, the Revenue Authorities would have issued the notice to the assessee on time. Thus, ld Counsel....
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....s binding between the parties. In other words, when the period of limitation prescribed has expired the decree holder has obtained a benefit under the law of limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree-holder by lapse of time should not be light heartedly disturbed. The other consideration which cannot be ignored is that if sufficient cause for excusing delay is shown discretion is given to the court to condone delay and admit the appeal. This discretion has been deliberately conferred on the court in order that judicial power and discretion in that behalf should be exercised to advance substantial justice. As has been observed by the Madras High Court in Krishna v. Chathappan, ILR 3 Mad 269: "Section 5 gives the court a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words 'sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bonafide is imputable to the appellant." Again in The State of West Bengal v. The A....
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....pplication filed under Section 5 of the Limitation Act accompanied by his own affidavit. Even though the appellant appears not to be as vigilant as he ought to have been, yet his conduct does not, on the whole, warrant to castigate him as an irresponsible litigant. He should have been more vigilant but on his failure to adopt such extra vigilance should not have been made a ground for ousting him from the litigation with respect to the property, concededly to be valuable. While deciding the application for setting aside the exparte decree, the court should have kept in mind the judgment impugned, the extent of the property involved and the stake of the parties. We are of the opinion that the inconvenience caused to the respondent for the delay on account of the appellant being absent from the court in this case can be compensated by awarding appropriate and exemplary costs. In the interests of justice and under the peculiar circumstances of the case we set aside the order impugned and condone the delay in filing the application for setting aside ex-parte decree. To avoid further delay, we have examined the merits of the main application and feel that sufficient grounds exist for se....
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....ce under section 271(1)(c) of the Act, and hence the penalty initiated by ld CIT(A) should be quashed. 13. On merits, Learned Counsel pleads that no penalty is leviable under section 271(1)(c) of the Act, in respect of addition made by AO on account of land premium payable, cost of acquisition, cost of improvement and cost of transfer, as there has been no suppression of material facts, in respect of these issues. To support his stand, ld Counsel relied on the Judgment of Hon`ble Supreme Court in the case of Reliance Petro Products Ltd. (reported in 322 ITR 158), wherein it was held that mere making of a claim in the return of income, does not amount to concealment. Therefore, the penalty levied in all above three assessment years may be cancelled. 14. Learned Counsel further contended that Tribunal has deleted the quantum addition, vide order dated 31.05.2022 in ITA No.150 to 154, in case of assessee (Jivrajbhai Harkhabhai Balar), therefore penalty should not survive, hence such penalty should be quashed. 15. On the other hand, Ld. DR for the Revenue submitted that since the penalty proceeding was initiated by the ld. CIT(A), as the assessee has not filed the return of income u....
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.... That is, penalty under section 271(1)(c) was imposed by ld CIT(A) during the appellate proceedings, vide para no. 35.1 of the order of ld CIT(A), without issuing notice to the assessee under section 271(1)(c) of the Act. It is mandatory to issue the notice under section 271(1)(c) of the Act to the assessee and to inform the assessee by way of penalty notice that penalty has been initiated against him. Had the penalty notice been issued to the assessee, the assessee would have replied to the Revenue authority and would have filed submissions in his favour. Since no penalty notice has been issued to the assessee, therefore there is no occasion to defend the case by the assessee, hence it is against the principle of natural justice. The principle of natural justice requires that assessee should be intimated about the charges initiated against him, by way of penalty notice under section 271(1)(c) of the Act. Since, the assessee has not been informed and no notice under section 271(1)(c) of the Act, has been issued, therefore, it is violation of principle of natural justice and hence on this point alone, the penalty initiated by the ld. CIT(A) is bad in law. 19. We note that it is set....