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2015 (7) TMI 329 - ITAT AHMEDABAD

2015 (7) TMI 329 - ITAT AHMEDABAD - TMI - Penalty u/s 271(1)(c) - Condonation of delay rejected by CIT(A) and deciding the appeals on merits - Held that:- The quasi judicial authorities are being respected not on account of their power to legalise the injustice on technical ground but because, they are capable of removing injustice and is expected to do so. The contention of the assessee is that he being a lay man has handed over the papers to tax consultant who did not file appeals in time. Thi .....

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e assessee. Therefore, we condone the delay in filing the appeals before the CIT(A).

The assessment order and the penalty order are ex parte orders. The moment, the assessee will file any application for permission to adduce additional evidences then, as per sub-rule -3 of Rule 46A of IT Rules, 1962, the ld. first appellate authority will have to call for a remand report from the AO. The second proceeding would commence at the level of AO. Therefore, with a view to avoid multiple proc .....

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ation of the assessee. The ld. AO shall provide due opportunity of hearing.

As far as penalty appeal is concerned, since we have set aside the assessment order, there are no additions on which it can be alleged that assessee has evaded the taxes. After passing the assessment order, it is for the AO to assess whether penalty proceedings are to be initiated against the assessee or not. This factor would come out after completion of the assessment proceedings. Therefore, the penalty appe .....

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9. ITA No.615/Ahd/2014 has arisen out of an assessment order passed under section 144 r.w.s. 147 of the Income-tax Act, 1961 (herein after the Act), dated 28.12.2011 whereas ITA No.616/Ahd/2014 has arisen from a penalty order under section 271(1)(c) of the Act dated 13.6.2012. We heard both the appeals together and deem it appropriate to dispose of them by this common order. 2. The first common grievance of the assessee in both the appeals is that ld. CIT(A) has erred in not condoning the delay .....

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ld. AO had issued notice under section 148 on 19.10.2010 which was duly served upon the assessee. In response to the notice received under section 148 assessee had filed return on 28th July, 2011 declaring total income of ₹ 3,98,550/- under section 44AF of the Act. The assessee did not submit any other detail and claimed that as per section 44AF the deemed profit @ 5% is to be calculated on the gross receipt of ₹ 79,23,772/-. The ld. AO had issued notice under section 142(1) on 11.1. .....

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sessee filed an appeal before the ld. CIT(A) on 16.8.2012. The office of the CIT(A) confronted the assessee that his appeal is time barred by 199 days. The assessee filed an application for condonation of delay and filed his affidavit in support of his application. 5. The ld. A.O. has initiated penalty proceedings under section 271(1)©. He issued a show cause notice on 28.12.2011 which was served on the assessee but since he did not comply with the notices in the assessment proceedings, he .....

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ically for the reason that conduct of the assessee was very negligent before the AO. He did not bother to respond to any notice from Income-tax Department. In the opinion of the ld. CIT(A) the delay caused by the assessee was a deliberate delay and, therefore, assessee does not deserve any leniency. 7. With the assistance of the ld. representatives we have gone through the record carefully. The explanation of the assessee for condonation of delay is that when he received notices from the AO, he .....

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es properly on his behalf. He prayed for condonation of delay and adjudication of the controversy on merit. 8. The ld. DR on the other hand contended that one can appreciate the contention of an assessee availing services of tax expert being not conversant with the Income-tax Laws but when the assessee kept on receiving 12 notices in a row from the AO then at least he should verify why proceedings are not being attended before the AO. This conduct of the assessee reflect an arrogance not neglige .....

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icient cause has fallen for consideration before the Hon ble Supreme Court as well as of Hon ble High Courts. The Hon ble Courts are unanimous on the point that this expression to be construed liberally. The question before us is whether assessee was actually prohibited by sufficient reasons for not presenting the appeal or he has made a deliberate attempt of not properly handling the income-tax proceedings. At this stage, we would like to refer the assessment proceeding also. It is pertinent to .....

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l the terms of a notice issued under subsection (1) of section 142 3 or fails to comply with a direction issued under sub- section (2A) of that section], or (c) having made a return, fails to comply with all the terms of a notice issued under sub- section (2) of section 143, the 4 Assessing] Officer, after taking into account all relevant material which the 5 Assessing] Officer has gathered, 6 shall, after giving the assessee an opportunity of being heard, make the assessment] of the total incom .....

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section 142 has been issued prior to the making of an assessment under this section.] (2) 9 The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988 ), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988 , or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions a .....

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s to be a fair estimate of the proper figure of assessment and for this purpose he must be able to take into consideration, local knowledge, reputation of the assessee about his business, the previous history of the assessee or the similarly situated assessee. It is also pertinent to mention that judgment is a faculty to decide the matter with wisdom, truly and legally. Judgment does not depend upon the arbitrary, caprice of an adjudicator, but on settled and invariably principles of justice. Th .....

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alleged conduct of the assessee of not appearing before the AO. The quasi judicial authorities are being respected not on account of their power to legalise the injustice on technical ground but because, they are capable of removing injustice and is expected to do so. The contention of the assessee is that he being a lay man has handed over the papers to tax consultant who did not file appeals in time. This belief is to be tested on consequential result i.e. by making the appeal time barred wha .....

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n merit CIT(A) has not adjudicated the issues, procedurally, whenever we find any fault in a proceeding and the impugned order is set aside then the proceedings are required to be started from that stage, in other words, the Tribunal ought to have set aside the issues to the file of CIT(A) for adjudication on merits but this step would only result multiplication of the litigation. The assessment order and the penalty order are ex parte orders. The moment, the assessee will file any application f .....

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