Delay in filing Tax Appeal as Signed appeal documents misplaced by tax consultant: ITAT refuses to condone delay

During the course of assessment proceedings under section 143(3) of the Act, the AO observed that the assessee had claimed a bogus short term capital loss of Rs. 35,33,650, and when the same was brought to the notice of the assessee, he admitted his mistake and submitted a revised statement of income stating that the above loss may be treated as a “speculative loss”. The AO added the bogus short-term capital loss of Rs. 35,33,650 to the income of the assessee and also imposed penalty u/s 271(1)(c) of the Act amounting to Rs. 10,60,095 being 100% of the tax sought to be evaded. An appeal was filed by the assessee against the penalty order, Ld. CIT(A) dismissed the appeal.

The appeal was time-barred by 825 days. The tribunal observed that in the case of T. Kishan [2012] held that in condoning the delay in filing an appeal, it must be proved beyond a shadow of a doubt that the assessee was diligent and was not guilty of negligence whatsoever.

In the instant case, the assessee had filed a condonation application, wherein he had stated that the signed appeal documents were handed over to the tax consultant but the appeal documents were misplaced by the tax consultant and not handed over to the tax consultant. The assessee had acted negligently and had not brought on record any cogent reason for the delay in filing the appeal. The assessee had not brought forth any persuasive reason for the delay in filing the appeal. No affidavit by the tax consultant had been filed by the assessee before the tribunal and no convincing reason was given for the delay. Hence, the assessee’s application for condonation of delay was dismissed.

Also, the assessee had made the bogus claim of short-term capital loss in the return of income although after investigation the assessee filed revised computation and requested that the short-term capital loss may be treated as a “speculative loss”. No reason for this revised stand/position was given by the assessee and the assessee offered to pay tax when the bogus claim was detected by the Ld. Assessing Officer. The tribunal held that there was no infirmity in the order passed by the Ld. CIT(Appeals) in confirming the penalty u/s 271(1)(c) of the Act in the instant facts. Hence, the appeal of the assessee was hereby dismissed.