Syedali Ebrahim Vs ACIT (ITAT Cochin)
In the case of Syedali Ebrahim vs ACIT, the Income Tax Appellate Tribunal (ITAT) Cochin addressed appeals filed by the assessee against orders from the National Faceless Appeal Centre (CIT(A)) concerning penalty levies under section 271B for Assessment Years 2010-11 to 2014-15. The assessee, an individual engaged in steel trading, had failed to submit the mandatory tax audit report under section 44AB. Consequently, the Assessing Officer levied a penalty of Rs. 1,00,000 for AY 2010-11 and presumably for the other years as well, following the assessee inability to provide an explanation to the show cause notice.
The core of the dispute before the ITAT stemmed from the CIT(A)’s decision to dismiss the assessee’s appeals solely on the grounds of a significant delay in filing – specifically, a delay of 1463 days for AY 2010-11. The assessee had explained that the delay occurred because the penalty orders and notices were served on a former Chartered Accountant who failed to inform him. The assessee stated he only became aware of the penalty orders during the Covid-19 pandemic, subsequently engaged another CA who passed away, and finally filed the appeals through a new CA. Despite this explanation citing reasonable cause, the CIT(A) deemed the assessee negligent and dismissed the appeals without evaluating the merits of the delay condonation request.
