TaxTMI 
TaxTMI 
2026 (6) TMI 138
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....uch delay. Referring to the condonation petition Ld. Counsel for the assessee submitted that the order of the Ld. CIT(A) sustaining the penalty order passed by the AO was uploaded only in e-filing portal and never physically served on the assessee. Ld. Counsel for the assessee further referring to the order passed by the Tribunal in quantum proceedings submitted that the Tribunal had condoned delay of 1944 days and for the very same reason the assessee could not file the appeal before the Ld. CIT(A) against the penalty order passed by the AO. Therefore, in the interest of justice Ld. Counsel for the assessee submitted that the delay be condoned and appeal be admitted. 4. Ld. Counsel for the assessee further stated that the Tribunal as a matter fact deleted the quantum addition made in respect of disallowance of interest u/s. 36(1)(iii) of the Act and therefore, the penalty levied on this disallowance of interest will not survive. 5. It is further submitted that the AO treated subsidy recoverable as capital loss whereas the assessee treated the same as revenue loss. Ld. Counsel for the assessee submitted that whether a grant / subsidy is a capital or revenue in nature is a deb....
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....ount of the fact that the impugned order of the CIT(A) was uploaded only on the e-filing portal and was never physically served upon the Appellant. 1.4 Unfortunately, the Chartered Accountant handling the matter at that time failed to inform the management about the disposal of the appeal and the consequential penalty proceedings. It was only on 02/12/2023, when the Appellant received an intimation from the Income Tax Department regarding outstanding demand, that the management became aware of the penalty order. Immediately thereafter, fresh professional advice was sought, and the present appeal was filed without any further delay. 1.5 It may be noted that in the connected quantum proceedings, the Hon'ble ITAT [ITA No. 3791/DEL/2023] [Dt.21/08/2024] has already condoned a much longer delay of 1944 days in filing the appeal, after recording that the circumstances were bona fide and attributable to professional lapse rather than deliberate or negligent conduct on the part of the Appellant. The relevant portion of the ITAT judgment is extracted as under: 2. These two appeals are filed with the delay of 1944 and 1596 days respectively. Ld. Counsel for the....
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....ranting complete relief to the Appellant Company. Once the very foundation of the addition stands quashed, the corresponding penalty cannot survive. Accordingly, it is most humbly prayed that Your Honor may be pleased to delete the penalty levied on this account. The relevant findings of the Tribunal are reproduced below for ready reference: 8. Coming to merits of the case the Ld. Counsel for the assessee submits that in these two assessment years the AO disallowed interest of Rs. 37,46,010/- and Rs. 5,43,927/-u/s 36(1)(iii) of the Act on the loans and advances given by the assessee during these two assessment years. 18. Similar view has been taken by the Hon'ble Bombay High Court in the case of CIT Vs. Reliance Utilities (313 ITR 340), wherein the Hon'ble High Court held that where the assessee has his own funds as well as borrowed funds the presumption can be made that the advances for non business purposes have been made out of the own funds and that he borrowed funds have not been used for this purpose, accordingly. the disallowance of interest on the borrowed funds is not justified. 19. The ratios of the above decisions applies squarely to th....
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....nce of opinion itself rules out the element of concealment. Hence, in view of the debatable nature of the issue and the authoritative pronouncement of the Hon'ble Supreme Court, the levy of penalty on this ground deserves to be deleted. 3.4 In any case, penalty proceedings are quasi-judicial in nature and merely because some additions have been made, there can be no inference that same is in the nature of underreporting or misreporting of income. Further, in the case of Dilip N Sharoff 291 ITR 519(SC) the Hon'ble Supreme Court has held that mere disallowance or non-acceptance of claim in itself may not be sufficient for arriving at conclusion that assessee has concealed or furnished inaccurate particulars. Furthermore, there being no dispute with regard to genuineness of details submitted by the Assessee Company, the second limb of section 270A which is Misreporting of Income is also not relevant in the present case. 3.5 It is settled law that merely because a claim has been disallowed on technical ground, there cannot be any presumption about concealment or furnishing of inaccurate particulars. Reference may be made to following decisions: i. CIT....