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Judgment
PER VIMAL KUMAR, JM:
The application for condonation of delay of 349 days in filing Appeal and appeal filed by the Appellant/assessee are against order dated 17.02.2025 of Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [hereinafter referred to as “the CIT(A)”] under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) arising out of penalty order dated 16.03.2022 of Ld. Assessing Officer/Assessment Unit (hereinafter referred to as ‘the AO’) u/s 271 (1)(c) of the Act for A.Y. 2012-13.
In application for condonation of delay, it is mentioned that the Assessee is a small farmer engaged in agriculture activities has limited knowledge of income tax law and is dependent on professional assistance. The Assessee was not served with notice. The explanation for condonation of delay of 349 days in filing appeal does not smack of mala-fides as appellant has not gained anything by not filing appeal within period of limitation, therefore, delay of 349 days in filing appeal before the Tribunal is condoned.
Brief facts of the case are that, the Assessee failed to file return of income under Section 139(1) of the Act for A.Y 2012-13. As per AIR/CIB Information the Assessee had deposited cash of Rs. 61,52,000/- in his bank account in Financial Year 2011-12 relevant to A.Y 2012-13. The Assessee vide letter dated 13.03.2019 was required to explain the source of cash deposited with remained uncomplied with. Proceedings under Section 147 of the Act were initiated. Notice under Section 148 of the Act dated 29.03.2019 was issued. The Assessee failed to file copy of return. Notices under Section 142(1) along with questionnaire dated 01.08.2019, 20.09.2019 and show cause notice dated 28.10.2019 were issued but of no use. On completion of proceedings Ld. AO vide ex-parte order made addition of Rs. 61,52,000/- and initiated penalty proceedings under Section 271(1)(c) of the Act. The penalty proceedings were completed vide order dated 16.03.2022. Penalty of Rs. 52,45,584/- was imposed.
Against penalty order dated 16.03.2022 of Ld. AO appellant/assessee filed appeal before Ld. CIT(A) which was dismissed vide order dated 17.02.2025.
Being aggrieved appellant/assessee preferred present appeal on following grounds:
“1.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the impugned penalty order passed u/s 271(1)(c) by the Ld. AO is bad in law and liable to be quashed.
2.(i) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the penalty order dated 16/03/2022 under section 271(1)(c) of the Act which is clearly barred by limitation as per section 275(1)(c) of the Act.
(ii)That the penalty proceedings were initiated with the assessment order dated 25/11/2019 for AY 2012-13 and six months from the end of relevant FY ended on 30/09/2020 thereby the penalty order dated 16/03/2022 is beyond the statutory time limit under section 275(1)(c), the penalty order is time-barred and void ab initio.
3.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in dismissing the appeal of the appellant without adjudicating the grounds raised by the appellant on merits, which is contrary to the mandate of section 250 of the Income-tax Act, 1961 (“Act”).
4.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in disposing of the appeal without granting a proper and effective opportunity of hearing and without passing a speaking order on each ground of appeal raised by the appellant, thereby violating the principles of natural justice.
5.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in dismissing the appeal without condoning the delay and without ensuring proper and valid physical service of notice of hearing upon the appellant thereby rendering the impugned order unsustainable in law.
6.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that the Ld. AO has erred in issuing the penalty notice dated 25/11/2019 under section 271(1)(c) without specifying the limb, whether there is concealment of income or furnishing inaccurate particulars, under which the penalty was invoked for, making the notice defective and the penalty order dated 16/03/2022 invalid as per settled law.
7.On the facts and circumstances of the case and in law, the Ld. CIT(A) has not appreciated the fact that the Ld.AO has failed to record in writing the satisfaction regarding concealment or furnishing inaccurate particulars of income in the assessment order or penalty notice dated 25/11/2019 or further notices, rendering the penalty proceedings invalid and the penalty order dated 16/03/2022 without jurisdiction and bad in law.
8.On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in confirming the imposition of penalty without ensuring valid service of statutory notices both in assessment and penalty proceedings, as notices u/s 142(1) and 274 were never served on the appellant either at the correct address thereby denying the appellant an effective opportunity of being heard in violation of the principles of natural justice.
9.(i) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the penalty of Rs. 17,48,528/- on the alleged addition of Rs. 61,52,000/- treating the cash deposits of Rs. 61,52,000/-in the bank account of the assessee as undisclosed income.
(ii)That the said addition has been made without appreciating that cash deposits of Rs. 61,52,000/- were sourced from genuine sources available with the appellant.
10.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the penalty order dated 16/03/2022, which is erroneous as the onus to prove concealment or inaccurate particulars lies strictly on the Revenue, and a mere claim not accepted by the A.O. does not automatically attract penalty.
11.The appellant craves leave to add, amend, alter, or withdraw any of the above grounds of appeal at the time of hearing.”
The Ld. Representative for appellant/assessee submitted that Ld. CIT(A) erred in confirming penalty order which was time bared as per Section 275(1)(c) of the Act. Ld. CIT(A) decided appeal vide ex-parte order in violation of principles of natural justice. The matter may be restored to the file of Ld. AO.
The Ld. Departmental Representative submitted that appellant failed to appear before Departmental Authorities.
From examination of record, in light of aforesaid rival contention, it is crystal clear that Ld. CIT(A) vide ex-parte order dated 17.02.2205 dismissed the appeal on ground of delay of 624 days in filing appeal before Ld. CIT(A) and on merits. Appellant/assessee was proceeded against ex-parte during the assessment proceedings. Appellant/assessee, a small farmer engaged in agriculture activities has prayed for restoration of matter to file of Ld. AO.
In view of above material facts in the interest of justice impugned orders dated 17.02.2025 of Ld. CIT(A) and penalty order dated 16.03.2022 of Ld. AO are set aside and the matter is restored to the file of Ld. AO for fresh decision in accordance with law after affording a fair opportunity of hearing to the appellant/assessee.
In the result, application for condonation of delay of 349 days is allowed and the Appeal filed by the Assessee is allowed for statistical purposes.