2026 (3) TMI 1337

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....inst the order u/s. 271B of the Income Tax Act, 1961 (hereinafter the 'Act') passed by the AO dated 18.02.2022. 2. Brief facts of the case are that the assessee is an individual, engaged in the wholesale business of poly trading and has filed his return of income on 25.12.2017 for A.Y.2017-18, by admitting a total income of Rs. 30,29,350/-. Subsequently, the case was selected for scrutiny under CASS to examine the issue of cash deposits during the demonetization period. During the assessment proceedings the AO accepted the return of income and concluded the assessment u/s. 143(3) of the Act dated 18.12.2019. Later, the AO noticed that the assessee had not filed tax audit report, though the assessee's turnover limit was Rs. 16,29,81,133/-....

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....f the return, report, notices and orders passed during the hearing. The original notice for penalty proceedings was issued on 24.01.2022 and again on 28.09.2022 and the assessee had promptly filed its submissions before the AO. However, on verification with the AO about the status of notice issued on 24.01.2022, the AO informed the assessee that the penalty order has already been passed on 18.02.2022 by levying the penalty of Rs. 1,50,000/-. Therefore, the assessee became aware of the order only when another SCN dated 28.09.2022 was received. Therefore, the ld.AR prayed for condoning the delay in filing the appeal before the ld.CIT(A) and delete the penalty as the assessee had already filed the audit report before even issuing notice u/s. 1....

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....d by the assessee indicates that the delay was not deliberate but occurred due to lack of proper communication/knowledge of the penalty order. It is a settled principle of law that substantial justice should prevail over technical considerations, and when reasonable cause is shown, delay deserves to be condoned. In this regard, we note that the ld. CIT(A) has not examined the explanation of the assessee in proper perspective, nor recorded any finding as to why the explanation was not acceptable. Accordingly, considering the facts and circumstances of the case, we are of the considered view that the assessee has demonstrated sufficient and reasonable cause for delay. Therefore, the delay in filing the appeal deserves to be condoned. 9. On....