Taxpayer asked to deposit Rs 10000 in PM Relief Fund as cost for condonation of huge delay of 1276 days

The Income Tax Appellate Tribunal (ITAT) in the matter of Anil Gaherilal Duggad Vs. DCIT has imposed a cost of Rs. 10,000/- for each appeal to be deposited in the Prime Minister National Relief Fund (PMNRF) within a period of 4 weeks from the receipt of the order copy to condone the huge delay of 1276 days in filing the appeal before the Ld. CIT(A).

The assessees are the husband and wife engaged in the business of trade in brass and Proprietors of two different firms wherein common disallowances were been made on account of bogus purchases by the respective firms.

The original assessment under Section 143(3) was passed on 26.12.2011 treating the purchase of brass as bogus purchase and an addition of Rs. 38,00,000/- was being made and determined the taxable income as Rs. 19,61,059/-. Following this assessment order, penalty proceeding was initiated against the husband and levied a penalty of Rs. 13,00,000/- under Section 271(1)(c) of the Act. In the case of the wife Smt. Rekha Anil Duggad, by order dated 20.03.2015 levied a penalty of Rs.23,00,000/- under Section 271(1)(c) of the Act.

As against these penalty orders both the assessees filed appeals before the Ld. CIT(A) with a request to condone the delay of 1276 days in filing such appeals. The Ld. CIT(A) has dismissed the appeals by holding that the assessee has not submitted any evidence either alongwith the appeal or with the appellate proceeding to establish the genuine hardship and there is no reasonable cause to condone the huge delay of 1276 days and thereby dismissed the appeal filed by the assessee vide order dated 24.01.2020.

Contention of Taxpayer

Petitioner Representative, Mr. Suresh Gandhi submitted that original penalty order passed under section 271(1)(c) of the Act on 24.3.2015 might had served on one Shri Vikas Prajapati who has left job as an accountant in the assessee-firm, so it has not come to the knowledge of the assessee. Only during the recovery proceedings in the month of September, 2018 the assessee came to the knowledge of the so called penalty order. It is thereafter, assessee obtained copy of the impugned order, and then filed statutory appeal before the ld.CIT(A) thereby a delay of 1276 days in filing appeal caused.

In the meanwhile, the assessee challenged quantum appeal, which travelled upto this Tribunal by way of appeals in ITA No.882/Ahd/2014 and 883/Ahd/2014 and vide common order dated 26.4.2017, the Tribunal directed the AO to restrict the impugned disallowance of bogus purchase of brass at 15% only, and not on the entire amount as claimed by the assessee.

Thus, the assessee has got substantial relief in the quantum appeal. Consequently, the present penalty matter is required to be reconsidered especially quantification. The ld. AR further pleaded that this court can take into consideration further development in the case and condone the delay of 1276 days in filing appeal, and also set aside the matter back to the file of the AO even by passing any conditional order and also direct the AO to pass appropriate further orders in the penalty proceedings.

ITAT Order

The Appellate Tribunal Ruled out that, “We have given our thoughtful considerations and further developments taken place in the quantum appeal and the orders passed by the Coordinate Bench of the Tribunal in assessee’s own case. We think it deemed fit to impose a cost of Rs. 10,000/- for each appeal to be deposited in the Prime Minister National Relief Fund within a period of 4 weeks from the receipt of the order copy to condone the huge delay of 1276 days in filing the appeal before the Ld. CIT(A).

On paying the cost within 4 weeks from the date of receipt of this order copy, and on such production of the proof of the payment, the Ld. AO shall pass a fresh order under Section 271(1)(c) of the Act in accordance with law. In terms of the above conditions the appeals are allowed for statistical purposes.

In the result, the appeals filed by the assessees are allowed for statistical purposes.”

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