SMT. SHANTI DEVI, ALWAR V. INCOME TAX OFFICER, WARD-2-1, ALWAR

ITA 1036/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9755 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 14-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Non compliance
• Section: 273B; 142(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 1036/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SMT. SHANTI DEVI, W/O- SH. RAMDHAN MEENA, READER, JAI SHIV SADAN, NEAR IDGAH, MAIN ROAD, KALA KAUN, ALWAR. CUKE VS. THE ITO, WARD-2(1), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AWVPD 8069 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE JKTLO DH VKSJ LS @ REVENUE BY : MISS CHANCHAL MEENA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 26/06/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 29/06/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A), ALWAR DATED 24.06.2019 FOR THE ASSESSME NT YEAR 2010-11 WHEREIN HE HAS PARTLY SUSTAINED THE LEVY OF PENALTY U/S 271(1)(B) AT RS.10,000/- AS AGAINST RS. 20,000/- IMPOSED BY THE ASSESSING OFFICER. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE HOWE VER, AN APPLICATION RECEIVED BY THE REGISTRY ON 27.01.2020 SIGNED BY ADVOCATE SHREE CHAND GUPTA WHEREIN IT WAS SUBMITTED THAT WR ITTEN SUBMISSION ITA NO. 1036/JP/2019 SMT. SHANTI DEVI VS. ITO 2 MAY BE CONSIDERED FOR DECIDING THE PRESENT MATTER. ACCORDINGLY, IT WAS DECIDED TO HEAR THIS MATTER AFTER CONSIDERING THE W RITTEN SUBMISSION OF THE ASSESSEE AND HEARING THE LD. DR AND MATERIAL AV AILABLE ON RECORD. 3. IN HER WRITTEN SUBMISSIONS, THE ASSESSEE HAS SUB MITTED THAT THE LD. CIT(A) WHILE REDUCING THE PENALTY HAS NOT PROPE RLY CONSIDERED AND APPRECIATED THE ASSESSEES WRITTEN SUBMISSIONS. IT WAS SUBMITTED THAT THE ASSESSING OFFICER WHILE PASSING THE PENALTY ORD ER HAS WRONGLY STATED THAT THE ASSESSEE WILLFULLY NOT COMPLIED WIT H THE NOTICES ISSUED BY HIM. IT WAS SUBMITTED THAT SHE IS AN ILLITERATE LADY WHO EVEN DOES NOT KNOW HOW TO SIGN AND ACCORDINGLY SHE APPOINTED A CH ARTERED ACCOUNTANT TO REPRESENT HER CASE BEFORE THE ASSESSI NG OFFICER. WHERE THE CHARTERED ACCOUNTANT HAS NOT APPEARED BEFORE TH E ASSESSING OFFICER AND PROPERLY REPRESENTED THE CASE, THE ASSE SSEE MAY NOT BE PANELIZED FOR DEFAULT ON THE PART OF THE CHARTERED ACCOUNTANT. IN SUPPORT, RELIANCE WAS PLACED ON DECISION OF THE COO RDINATE BENCH IN CASE OF ITO VS HARI SINGH (2004) 32 T.W. 32. IT WA S FURTHER SUBMITTED THAT SINCE THE ASSESSMENT ORDER PASSED BY THE ASSES SING OFFICER HAS BEEN HELD AS VOID AB-INITIO BY THE LD. CIT(A), THE CONSEQUENT PENALTY U/S 271(1)(B) LEVIED BY THE ASSESSING OFFICER DOES NOT STAND AND THE SAME MAY BE KINDLY DELETED. 4. PER CONTRA, THE LD. DR SUBMITTED THAT THERE IS C LEARLY NON- COMPLIANCE TO TWO NOTICES U/S 142(1) DATED 09.10.20 17 AND 31.10.2017 ISSUED BY THE ASSESSING OFFICER AND THEREAFTER THE PENALTY PROCEEDINGS WAS INITIATED DURING THE COURSE OF ASSESSING PROCEE DINGS, AND THEREAFTER VIDE ORDER DATED 26.06.2018, PENALTY OF RS. 20,000/ - WAS LEVIED FOR THE ITA NO. 1036/JP/2019 SMT. SHANTI DEVI VS. ITO 3 NON COMPLIANCE TO THE SAID NOTICES ISSUED BY THE AS SESSING OFFICER. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) HAS ALREA DY RESTRICTED THE PENALTY TO RS. 10,000/-, THEREFORE, GIVEN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, NO FURTHER RELIEF SHOULD BE GRANT ED IN THE INSTANT CASE AND THE ORDER OF THE LD CIT(A) MAY BE AFFIRMED AND THE APPEAL OF THE ASSESSEE BE DISMISSED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT THE PENALTY PROCEEDINGS U/S 271(1)(B) WERE INITIATED DURING THE ASSESSMENT PROC EEDINGS FOR NON-COMPLIANCE TO TWO NOTICES NAMELY, NOTICE U/S 14 2(1) DATED 9.10.2017 AND SUBSEQUENT NOTICE U/S 142(1) DATED 31 .10.2017 AND THEREAFTER, PENALTY WAS LEVIED U/S 271(1)(B) FOR RS 20,000/- VIDE ORDER DATED 26.06.2018. ON APPEAL, THE LD CIT(A) HAS RED UCED THE PENALTY TO RS 10,000 APPARENTLY FOR THE REASON THAT SUBSEQUENT DEFAULT IS CONTINUATION OF THE INITIAL DEFAULT AND PENALTY CAN NOT BE LEVIED FOR EACH AND EVERY DEFAULT. 6. THE ISSUE THEREFORE IS LIMITED TO NON-COMPLIANCE TO FIRST NOTICE ISSUED U/S 142(1) DATED 9.10.2017 AND LEVY OF PENAL TY U/S 271(1)(B) AND WHETHER THERE IS REASONABLE CAUSE FOR NON-COMPL IANCE IN TERMS OF SECTION 273B OF THE ACT OR NOT. FIRSTLY, COMING TO THE CONTENTIONS ADVANCED BY THE ASSESSEE WHEREIN IT HAS BEEN CONTEN DED THAT SHE, BEING AN ILLITERATE LADY, HAS APPOINTED A CHARTERED ACCOUNTANT TO REPRESENT HER CASE BEFORE THE ASSESSING OFFICER AND WHERE THERE IS NON- APPEARANCE OR NON-COMPLIANCE ON PART OF THE CHARTER ED ACCOUNTANT, SHE CANNOT BE PENALIZED. IN THIS REGARD, WE REFER TO THE PROCEEDINGS ITA NO. 1036/JP/2019 SMT. SHANTI DEVI VS. ITO 4 BEFORE THE ASSESSING OFFICER AND FIND THAT NOTICE U /S 142(1) WAS ISSUED ON 9.10.2017 AND MATTER WAS SCHEDULED FOR HEARING O N 16.10.2017. ON THE SCHEDULED DATE OF HEARING, SHRI V.K. DATTA, CA APPEARED AS AUTHORIZED REPRESENTATIVE AND SOUGHT ADJOURNMENT FO R 07 DAYS AND MATTER WAS ACCORDINGLY ADJOURNED FOR 24.10.2017 ON WHICH DATE, HOWEVER, THERE WAS NO ATTENDANCE ON PART OF THE AUT HORIZED REPRESENTATIVE AND THEREAFTER, ANOTHER NOTICE U/S 1 42(1) WAS ISSUED ON 31.10.2017. THE INFORMATION/DOCUMENTS SO SOUGHT BY THE ASSESSING OFFICER NECESSARILY HAVE TO BE PROVIDED BY THE ASSE SSEE TO THE AUTHORIZED REPRESENTATIVE. HOWEVER, THERE IS NOTHI NG ON RECORD WHICH DEMONSTRATE THAT SUCH DOCUMENTS WERE EITHER IN THE POSSESSION OF THE AUTHORIZED REPRESENTATIVE AT THE TIME OF INITIAL HE ARING AND HE WANTED TIME TO GO THESE DOCUMENTS BEFORE SUBMITTING TO THE ASSESSING OFFICER OR THE ASSESSEE HAS SUBSEQUENTLY SUBMITTED THESE DO CUMENTS TO THE AUTHORIZED REPRESENTATIVE TO BE SUBMITTED TO THE AS SESSING OFFICER WHICH THE AUTHORIZED REPRESENTATIVE FAILED TO SUBMIT BEFO RE THE ASSESSING OFFICER. THEREFORE, WE FIND THAT THOUGH THERE IS N ON-APPEARANCE ON PART OF THE AUTHORIZED REPRESENTATIVE AT THE SECOND SCHE DULED DATE OF HEARING, AT THE SAME TIME, THE POSSIBILITY OF NON-A VAILABILITY OF THE REQUISITE DOCUMENTS AS SO REQUIRED BY THE ASSESSING OFFICER CANNOT BE RULED OUT. THEREFORE, IN ABSENCE OF THESE FACTS AND WITHOUT CONFRONTING THE AUTHORIZED REPRESENTATIVE, WE ARE UNABLE TO ACC EDE TO THE CONTENTION OF THE ASSESSEE THAT MERELY BECAUSE SHE HAS AUTHORIZED A CHARTERED ACCOUNTANT, THE ENTIRE FAULT LIES WITH TH E CHARTERED ACCOUNTANT AND ASSESSEE CANNOT BE FAULTED AS THE NO N-COMPLIANCE IS BY WAY OF NON-FILING OF THE INFORMATION/DOCUMENTS SO S OUGHT BY THE ITA NO. 1036/JP/2019 SMT. SHANTI DEVI VS. ITO 5 ASSESSING OFFICER AND NOT LIMITED TO ATTENDING TO T HE PROCEEDINGS BEFORE HIM. 7. THE SECOND CONTENTION RAISED BY THE ASSESSEE IS THAT SINCE THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER HA S BEEN HELD AS VOID AB-INITIO BY THE LD. CIT(A), THE CONSEQUENT PENALTY U/S 271( 1)(B) LEVIED BY THE ASSESSING OFFICER DOES NOT STAND AND THE SAM E MAY BE KINDLY DELETED. IN THIS REGARD, FIRSTLY, WE FIND THAT THER E IS NO FINDING RECORDED BY THE ASSESSING OFFICER OR BY LD CIT(A) AND THERE IS NOTHING ON RECORD THAT THE ASSESSMENT ORDER HAS BEEN DECLARED VOID AB -INITIO BY THE LD CIT(A). HAVING SAID THAT, WE REFER TO THE PROVISIO NS OF SECTION 271(1)(B) WHICH PROVIDES THAT WHERE THE ASSESSING O FFICER IN THE COURSE OF ANY PROCEEDINGS IS SATISFIED THAT ANY PERSON HAS FAILED TO COMPLY WITH A NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT, HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY PAYABLE BY HIM, A SUM OF TEN THOUSAND RUPEES FOR EACH SUCH FAI LURE. THEREFORE, WE FIND THAT THE LEVY OF PENALTY U/S 271(1)(B) IS INDE PENDENT OF LEVY OF TAX AND EVEN WHERE THERE IS NO TAX PAYABLE, THE PENALTY CAN STILL BE LEVIED U/S 271(1)(B) AND THE CONTENTION SO ADVANCED CANT BE ACCEPTED. 8. HAVING SAID THAT, WE FIND THAT DURING THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSEE WAS ISSUED A SHOW-CAUSE D ATED 29.05.2018 AND IN RESPONSE, THE ASSESSEE SUBMITTED THAT THE AP PEAL HAS BEEN FILED AGAINST THE ASSESSMENT ORDER BEFORE THE LD CIT(A) A ND THE MATTER MAY BE ADJOURNED TILL DISPOSAL OF APPEAL BY THE LD CIT( A). HOWEVER, THE ASSESSING OFFICER DIDNT ACCEPT THE ASSESSEES CONT ENTIONS AND ITA NO. 1036/JP/2019 SMT. SHANTI DEVI VS. ITO 6 PROCEEDED WITH LEVY OF PENALTY U/S 271(1)(B) OF THE ACT AND THE FINDINGS OF THE ASSESSING OFFICER READS AS UNDER:- THE REPLY FILLED THE A.R. OF THE ASSESSEE IS NOT G ENUINE & NOT ACCEPTABLE, AS THE ASSESSEE HAS NOT MADE THE COMPLI ANCES OF THE NOTICE U/S 142(1) OF THE I.T. ACT, 1961 DATED 0 9.10.2017 & 31.10.2017 DURING THE ASSESSMENT PROCEEDINGS. HENCE , THE AO HAS RIGHTLY INITIATED PENALTY PROCEEDINGS U/S 271(1 )(B) OF THE I.T. ACT, 1961, WHICH IS NOT EXCUSABLE. THUS, CONSIDERING THE FACTS OF THE CASE AS DISCUSSE D ABOVE IN CONNECTION WITH NON COMPLIANCE OF THE NOTICES MENTI ONED ABOVE AS WELL AS DISCUSSED IN ASSESSMENT ORDER, IT IS CLE AR THAT THE ASSESSEE HAS WILLFULLY NOT COOPERATED TO THE DEPART MENT IN FINALIZING THE ASSESSMENT PROCEEDINGS. THEREFORE, T HE CASE IS FIT FOR LEVY OF PENALTY U/S 271(1)(B) OF THE I.T. ACT, 1961. THE TOTAL PENALTY OF RS. 20,000/- U/S 271(1)(B) OF THE I.T. A CT, 1961 IS HEREBY IMPOSED TOWARDS FAILURE IN COMPLIANCE ON THE DATES OR SHOW CAUSE NOTICES, AS PER DETAILS GIVEN BELOW:- SR.N O. NOTICES DATE OF ISSUANCE DATE OF HEARING REMARKS AMOUNT OF PENALTY (RS.) 1. NOTICE U/S 142(1) 09.10.2017 16.10.201 7 NON COMPLIED RS. 10,000/- 2. NOTICE U/S 142(1) 31.10.2017 06.11.201 7 NON COMPLIED RS. 10,000/- ITA NO. 1036/JP/2019 SMT. SHANTI DEVI VS. ITO 7 3. TOTAL PENALTY RS. 20,000/- 9. WE THUS FIND THAT WHERE THE ASSESSEES CONTENTIO NS TO KEEP THE PENALTY PROCEEDINGS WERE NOT FOUND ACCEPTABLE TO TH E ASSESSING OFFICER, THE ASSESSEE SHOULD HAVE BEEN ALLOWED ANOTHER OPPOR TUNITY TO PUT WORTH HER CONTENTIONS ON MERITS OF LEVY OF PENALTY. HOWEVER, THE ASSESSING OFFICER WITHOUT PROVIDING ANY SUCH OPPORT UNITY TO THE ASSESSEE, PASSED THE PENALTY ORDER. THEREFORE, ON THIS GROUND ITSELF, WHERE THERE IS LACK OF OPPORTUNITY BEFORE LEVY OF P ENALTY, THE PENALTY SO LEVIED DESERVED TO BE SET-ASIDE. FURTHER, WE FIND THAT THERE IS NO INDEPENDENT FINDING RECORDING BY THE ASSESSING OFFI CER WHILE LEVYING THE PENALTY AND MERELY REFERRING TO THE FINDINGS IN THE ASSESSMENT ORDER, HE HAS ARRIVED AT A CONCLUSION THAT THE ASSESSEE HAS W ILLFULLY NOT COMPLIED WITH THE NOTICES AND NOT CO-OPERATED IN FINALIZING THE ASSESSMENT PROCEEDINGS. IT IS A SETTLED POSITION THAT ASSESSME NT AND PENALTY PROCEEDINGS ARE TWO SEPARATE AND DISTINCT PROCEEDIN GS AND THOUGH REFERENCE CAN BE DRAWN TO THE FINDINGS IN THE ASSES SMENT ORDER, THE ASSESSING OFFICER HAS TO RECORD INDEPENDENT FINDING S AS TO WHY PENALTY MAY BE LEVIED IN THE GIVEN CASE WHICH WE FIND LACKI NG IN THE INSTANT CASE AND PENALTY SO LEVIED THEREFORE CANNOT BE SUST AINED. 10. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF T HE CASE, THE PENALTY SO LEVIED AND SUSTAINED BY THE LD CIT(A) IS SET-ASI DE AND THE MATTER IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE. ITA NO. 1036/JP/2019 SMT. SHANTI DEVI VS. ITO 8 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/06/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29/06/2020. * SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. SHANTI DEVI, ALWAR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-2(1), ALWAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 1036/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR.