SHAKUNTLA THUKRAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The appellant-revenue has filed the instant appeal under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 12.04.2016, Annexure A.3, passed by the Income Tax Appellate Tribunal, Chandigarh (in short, "the Tribunal") in I.T.A. No.429/Chd/2013, for the assessment year 2005-06, claiming following substantial questions of law:-

(2.) A few facts relevant for the decision of the controversy involved, as narrated in the appeal, may be noticed. The appellantassessee is a resident of Ludhiana. She is engaged in the business of manufacture, purchase and sale of cloth and fabrication. She is a regular assessee under the Act. She filed her return of income for the assessment year in question declaring total income at Rs. 2,80,161/- on 31.10.2005. The Assessing Officer passed order dated 27.12.2007 under Section 143(3) of the Act assessing income at Rs. 58,67,550/-. The addition was made on the ground of suppression of closing stock amounting to Rs. 28,73,640/- and on account of unaccounted job work done. The Assessing Officer initiated penalty proceedings under Section 271(1)(c) of the Act. The assessee appeared and explained that the imposition of penalty was not maintainable under the law. According to the assessee, on the issue of suppression of closing stock, total stock of Rs. 27,45,000/- was lying with her. Besides, she was having stock of other parties worth Rs. 28,73,640/-. The assessee had taken insurance on entire stock since the stock was in her custody, and the responsibility for safety laid with her. To take credit limits and loans from the Bank, the assessee declared the entire stock as her own. The Assessing Officer summoned record from the Bank and after perusing the same, made addition to the income of the assessee. On the second issue, regarding addition of Rs. 5,20,889/-, on account of unaccounted work done, it was explained to the Assessing Officer that the various items could not be accounted for in the books of account due to clerical error. The Assessing Officer imposed penalty of Rs. 11,13,430/- under Section 271(1)(c) of the Act, vide order dated 27.09.2010, Annexure A.1 as the quantum was confirmed. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 06.06.2011, Annexure A.2, the appeal was dismissed confirming the penalty. The appeal before the Tribunal was to be filed within 60 days. It was only in April 2013 when the counsel for the assessee received the order passed by the Tribunal in quantum appeal, it transpired that there was mistake about non filing of the penalty appeal under Section 271(1)(c) of the Act. Vide order dated 12.04.2016, Annexure A.3, the Tribunal dismissed the appeal on the ground that the appeal was highly belated. It was recorded that there had been no diligence on the part of the assessee and that the party guilty of negligence could not ask for condonation of delay of 613 days in filing the appeal. Hence, the instant appeal by the appellant-revenue before this Court.

(3.) We have heard learned counsel for the parties.