Cause of Delay should be Considered rather than Length of Delay for Condonation: ITAT Remands 44AB Penalty Issue for Reconsideration [Read Order]
The tribunal observed that the CIT(A) had not evaluated the merits of the assessee’s explanation and dismissed the appeal by considering the duration of the delay.
![Cause of Delay should be Considered rather than Length of Delay for Condonation: ITAT Remands 44AB Penalty Issue for Reconsideration [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/Condones-Delay-ITAT-TAXSCAN.jpg "Cause of Delay should be Considered rather than Length of Delay for Condonation: ITAT Remands 44AB Penalty Issue for Reconsideration [Read Order]")
The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) remanded section 44AB Penalty issue for reconsideration holding that cause of delay should be considered rather than length of delay for condonation. Syedali Ebrahim (assessee) an individual trader engaged in the business of steel rods under the name M/s. Giant Steels filed his return of income for AY 2010-2011 on...
The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) remanded section 44AB Penalty issue for reconsideration holding that cause of delay should be considered rather than length of delay for condonation.
Syedali Ebrahim (assessee) an individual trader engaged in the business of steel rods under the name M/s. Giant Steels filed his return of income for AY 2010-2011 on 08.10.2010 declaring an income of Rs. 3,66,520.
The Assessing Officer (AO) initiated penalty proceedings under Section 271B read with Section 274 upon observing that the assessee failed to furnish the mandatory audit report as per Section 44AB of the Income Tax Act.
Read More: ICAI Invites Candidate Feedback on May 2025 CA Final, Intermediate, Foundation & INTT-AT Exam Papers
Know the complete aspects of tax implications of succession, Click here
The AO levied a penalty of Rs. 1,00,000 for AY 2010-2011 by order dated 26.11.2019, observing that the assessee did not provide any explanation in response to the show cause notice.
Aggrieved by the penalty, the assessee filed an appeal before the CIT(A) with a delay of 1463 days. The assessee submitted that the penalty order and show cause notice had been served upon his earlier Chartered Accountant, who failed to communicate the same to him.
The assessee also contended that during the COVID-19 pandemic, he discovered the penalty order and attempted to initiate corrective measures, but his newly engaged Chartered Accountant also passed away on 22.09.2022. The appeal was eventually filed on 28.12.2023.
The CIT(A) dismissed the appeal concluding that the delay was due to negligence on the part of the assessee. Aggrieved by the order of CIT(A), the assessee appealed to the ITAT.
The Single Member Bench comprising Inturi Rama Rao (Accountant Member), observed that the CIT(A) had not evaluated the merits of the assessee’s explanation and dismissed the appeal by considering the duration of the delay.
Read More: Income Tax Return Filing: Complete ITR Form 4 Checklist for AY 2025-26 for Small Business Owners
Complete Ready to Use PDFs of 200+ Agreements Click here
The Tribunal remanded the matter to the CIT(A) for fresh consideration, directing that due opportunity be granted to the assessee to present his case in view of the facts and the interest of justice.
The appeal filed by the assessee was allowed for statistical purposes. The above findings were applied to the connected appeals for AYs 2011–12 to 2014–15 as well. All five appeals were accordingly allowed for statistical purposes.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
