Negligent and Casual Approach during Income Tax Assessment Proceedings: ITAT imposes Cost of Rs. 5000 on Assessee [Read Order]

The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has imposed a cost of Rs. 5000 on the assessee considering the negligent and causal approach during the assessment proceedings under the Income Tax Act, 1961.

The assessee, Shri Rajkumar Tiwari, is an individual who filed his return of income for the year under consideration on 28.02.2018 declaring a total income of Rs.3,95,320/-. The said return was selected for limited scrutiny in order to verify the cash payments made by the assessee against credit card purchases and a notice under Section 143(2) of the Income-tax Act, 1961. There was a delay of 5 months in filing the first appeal and therefore, the first appellate authority dismissed the same invoking limitation grounds.

Before the authorities, the assessee contended that the delay was due to Covid-19 situation.

Allowing the plea of the assessee, the division bench comprising Shri P.M. Jagtap, Vice-President and Shri Siddhartha Nautiyal, Judicial Member observed that “in our opinion, the explanation offered by the assessee for the delay of about 5 months in filing the appeal before the learned CIT(A) constituted a sufficient cause in the facts and circumstances of the case including especially the fact that there was complete lockdown declared by the Govt. of India to prevent the spread of Covid-19 virus during the relevant period. We, therefore, condone the said delay.”

It was contended on behalf of the department that sufficient opportunity was given by the Assessing Officer to the assessee during the course of assessment proceedings of being heard on the issue and if at all the Tribunal is inclined to restore the matter to the file of the Assessing Officer, a cost may be imposed on the assessee for his negligent and casual attitude shown during the course of assessment proceedings.

Allowing this argument, the bench held that “We are inclined to accept this contention of the learned DR. We accordingly impose a cost of Rs.5000/- [Rs. Five Thousand Only] on the assessee and subject to the payment of the said cost to the Prime Minister’s Relief Fund, we restore the matter to the file of the Assessing Officer for deciding the same afresh on merit in accordance with law after giving proper and sufficient opportunity of being heard to the assessee.”

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