TMI Blog2023 (5) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... filing of the present appeal, in the interest of justice. Penalty u/s 271(1)(c) - Additional income on account of excess stock u/s 69B - HELD THAT:- As we are of the view that this is not a case of concealment of income and the excess stock found the case of M/s. Pankaj Textile was more or less neutralized on account of excess stock in the case of M/s. Sonal Fabrics and M/s. Mahek Impex. Further, at the time such excess stock was found by the Department, it is observed that since books of accounts were not written up to date of search, proper books stock could not be arrived at and as the physical stocks of various firms operating from the same premises were mixed, there arose a difference in the physical stocks as compared to the books stock. Accordingly, looking into the facts of the instant case we are of the considered view that at this is not a fit case for levy of penalty under Section 271(1)(c) of the Act. Accordingly, we are hereby directing that the levy of penalty under Section 271(1)(c) of the Act be set-aside. Appeal of the assessee is allowed. - Smt.Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assessee under Section 279(1) of the Income Tax Act, on 19.02.2018. The fact of Department having launched prosecution against the assessee came to the notice of the assessee only on the month of May / June 2021 on receipt of order of Hon ble Additional Chief Metropolitan Magistrate, Ahmedabad. The assessee was advised by his consultant to file compounding application, which was filed before Principal CCIT on 03.12.2021. However, the Principal CCIT rejected the compounding application vide order dated 12.01.2022. It was owing to the aforesaid circumstances that there was a delay of 1976 days in filing of the present appeal before ITAT. The Ld. Counsel for the assessee submitted that in view of the facts mentioned above, it is a fit case for condonation of delay in filing of the present appeal, since there was no mala fide intention on part of the assessee in delay in filing of the present appeal. In response, the Ld. Departmental Representative vehemently opposed the assessee s application for condonation of delay in filing of the present appeal. 3.1 The Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji 1987 taxmann.com 1072, analyzed the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urred since he was waiting outcome of penalty order. The Commissioner (Appeals) however refused to condone the delay. The ITAT as later (as also confirmed by the High Court) held that that the reason stated by the assessee in these cases is that he was waiting for the outcome of the penalty proceedings. Therefore, one has to consider, whether reasonable prudent person would do so. The inference of such delay has to be drawn on the basis of circumstances available on record and conduct of the assessee. After considering the surrounding circumstances and applying the test of human probabilities, one has to reasonably conclude that the plea of the assessee is genuine. The explanation offered by the assessee for the delay cannot be rejected as false or devoid of merits. Therefore, this short delay of 175 days is condoned. 3.4 In the case of Kiran Laxmikant Joshi v. ITO [2004] 3 SOT 822 (AHD.), the facts were that the assessee moved an application under section 154, which was disposed of by the Assessing Officer. The appeal against the said order was filed before the Commissioner (Appeals) with a delay of more than 6 months. The assessee explained that the delay was on account of ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sar - Trib.), ITAT held that where assessee claimed condonation of delay of 124 days in filing appeal due to reason that appeal papers were prepared and handed over to Assistant of assessee's counsel for filling who failed to do so and ultimately appeal was filed belatedly through another local counsel and such contention was also supported by affidavit of previous counsel, since assessee had demonstrated bona fide reason and sufficient cause for such delay, same was to be condoned. 3.7 In our considered view, looking into the facts of the present case, this is a fit case forcondonation of delay. Accordingly, we are hereby condoning the delay of 1976 days in filing of the present appeal, in the interest of justice. 4. On merits, the facts of the case are that during the course of assessment, the Assessing Officer observed that on verification of stock statement taken at the time of survey proceedings, there was difference of Rs. 4,44,012/- in the case of M/s. Pankaj Textiles. The assessee during the course of assessment, accepted the difference and agreed to pay taxes on the additional income on account of excess stock under Section 69B of the Act. However, the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) has erred in facts and in law in not condoning the minor delay of 5 days in filing of appeal before him. Further, even while dismissing of the assessee against the penalty order passed under Section 271(1)(c) of the Act, the Ld. CIT(Appeals) did not discuss the merits of the case at all. On going to the merits of the case, we are of the view that this is not a case of concealment of income and the excess stock found the case of M/s. Pankaj Textile was more or less neutralized on account of excess stock in the case of M/s. Sonal Fabrics and M/s. Mahek Impex. Further, at the time such excess stock was found by the Department, it is observed that since books of accounts were not written up to date of search, proper books stock could not be arrived at and as the physical stocks of various firms operating from the same premises were mixed, there arose a difference in the physical stocks as compared to the books stock. Accordingly, looking into the facts of the instant case we are of the considered view that at this is not a fit case for levy of penalty under Section 271(1)(c) of the Act. Accordingly, we are hereby directing that the levy of penalty under Section 271(1)(c) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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