S. Jagroop Singh, Ludhiana V. ITO, Khanna

ITA 1051/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8913 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: AMANDEEP VATS
• Keywords: Reasonable cause
• Section: 142(1); 147; 148; 144; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 1051/CHD/2016 ASSESSMENT YEAR: 2009-10 SHRI JAGROOP SINGH, VS THE ITO, C/O SHRI RANJIT SINGH,COLLEGE ROAD, WARD-II, NEAR AARJOO HOSPITAL, KHANNA. VPO-KARAMSAR (RARA SAHIB), TEHSIL PAYAL (LUDHIANA). PAN NO. : GEQPS8721L ITA NO. 1052/CHD/2016 ASSESSMENT YEAR: 2009-10 SMT. JASBIR KAUR, VS THE ITO, W/O SHRI RANJIT SINGH,COLLEGE ROAD, WARD-II, NEAR AARJOO HOSPITAL, KHANNA. VPO-KARAMSAR (RARA SAHIB), TEHSIL PAYAL (LUDHIANA). PAN NO. : DYPPK0772G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMANDEEP VATS RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 14.12.2016 DATE OF PRONOUNCEMENT : 16.12.2016 O R D E R BOTH THE APPEALS BY DIFFERENT ASSESSEES ARE DIRECTE D AGAINST THE DIFFERENT ORDERS OF LD. CIT(APPEALS)-2 LUDHIANA DATED 16.08.2016 FOR ASSESSMENT YEAR 2009-10, CHALL ENGING THE LEVY OF PENALTY UNDER SECTION 271(1)(B) OF THE INCOME TAX ACT. 2. THIS ORDER SHALL DISPOSE OFF BOTH THE ABOVE APPE ALS FILED BY DIFFERENT ASSESSEES ON COMMON ISSUES. 3. THE FACTS ARE TAKEN FROM THE CASE OF SHRI JAGROO P SINGH, ASSESSEE. IT IS NOTED THAT ASSESSMENT WAS COMPLETE D 2 UNDER SECTION 144 READ WITH SECTION 147 OF INCOME T AX ACT ON 19.03.2015 AT AN INCOME OF RS. 26,25,000/-. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 26.03.2014 REQUIRING T HE ASSESSEE TO FILE RETURN OF INCOME FOR THE ASSESSMEN T YEAR UNDER APPEAL AND SENT THROUGH REGISTERED POST. THE RE WAS NO COMPLIANCE TO THE NOTICE AND EVEN NO RETURN HAVE BEEN FILED. THEREFORE, NOTICE UNDER SECTION 142(1) OF T HE ACT WAS ISSUED ON 02.05.2014 REQUIRING THE ASSESSEE TO PRODUCE/FILE RETURN OF INCOME. NONE ATTENDED ON TH E SAID DATE. AGAIN NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED ON 24.11.2014, 03.12.2014, 21.01.2015 ASKING THE ASSESSEE TO FILE/PRODUCE RETURN OF INCOME AND BOOKS OF ACCOUNT ON THE GIVEN DATE. ON THESE DATES, NEITHER ASSESSEE ATTENDED ASSESSMENT PROCEEDINGS NOR ANY APPLICATION HAVE BEEN SENT. ONCE AGAIN, NOTICE UNDE R SECTION 142(1) OF THE ACT WAS ISSUED ON 27.02.2015 AND WAS SERVED THROUGH AFFIXTURE. THE PENALTY PROCEEDI NGS UNDER SECTION 271(1)(B) OF THE ACT WERE INITIATED A ND NOTICE WAS ISSUED FOR HEARING ON 19.03.2015, ON THE DATE F IXED, NONE ATTENDED THE PENALTY PROCEEDINGS. AGAIN ANOTH ER OPPORTUNITY WAS PROVIDED BY THE ASSESSING OFFICER O N 10.06.2015, 12.08.2015 AND 04.09.2015. NOTICES ALS O REMAINED UN-COMPLIED WITH. ON 15.09.2015, ASSESSEE FILED THE REPLY, BUT ASSESSING OFFICER HELD THAT THERE WA S NO REASONABLE CAUSE FOR NON-APPEARANCE AND IMPOSED PEN ALTY OF RS. 10,000/-. 3 4. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) T HAT PENALTY HAS BEEN IMPOSED FOR NON-COMPLIANCE OF THE NOTICES. IN-FACT, NO NOTICE ISSUED UNDER SECTION 1 47/148 OF THE ACT HAS BEEN SERVED UPON ASSESSEE. ALL THE NOT ICES ISSUED BY THE ASSESSING OFFICER WERE SENT AT THE AD DRESS, WARD-3, MODEL TOWN, DORAHA, LUDHIANA WHEREAS ASSE SSEE WAS RESIDING AT COLLEGE ROAD, NEAR AARJOO HOSPITAL , VPO KARAMSAR (RARA SAHIB) TEHSIL PAYAL, LUDHIANA. N OTICES WERE ISSUED ON THE BASIS OF AIR INFORMATION. THE C OPY OF THE ASSESSMENT ORDER DATED 19.03.2015 WAS SERVED UP ON ASSESSEE AT THE CORRECT ADDRESS OF THE ASSESSEE MEN TIONED ABOVE. THE ASSESSEE HAS FILED A REPLY TO THE NOTIC E DATED 04.09.2015 WHICH FACT IS ADMITTED BY THE ASSESSING OFFICER IN THE PENALTY ORDER. IT WAS, THEREFORE, SUBMITTED THAT SINCE NO NOTICE WAS SERVED UPON ASSESSEE, THEREFORE , PENALTY NEED NOT TO BE IMPOSED. THE LD. CIT(APPEAL S), HOWEVER, DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMI TTED THAT NO NOTICE HAVE BEEN SERVED UPON ASSESSEE AT TH E CORRECT ADDRESS OF THE ASSESSEE. HE HAS REFERRED T O PB-13 WHICH IS SHOW CAUSE NOTICE ISSUED BY ASSESSING OFFI CER FOR LEVY OF PENALTY UNDER SECTION 271(1)(B) OF THE ACT DATED 04.09.2015 IN WHICH THE ADDRESS OF THE ASSESSEE MENTIONED IN THE ASSESSMENT ORDER AS WELL AS CORREC T ADDRESS HAVE BEEN MENTIONED. HE HAS SUBMITTED THAT THIS NOTICE WAS SERVED UPON ASSESSEE AT THE CORRECT ADDR ESS ON WHICH ASSESSEE FILED A REPLY, COPY OF WHICH IS FILE D AT PAGE 4 15 OF THE PAPER BOOK IN WHICH ASSESSEE EXPLAINED TH AT NO NOTICE WAS SERVED UPON ASSESSEE. THEREFORE, PENALTY IS NOT LEVIABLE. ON THE OTHER HAND, LD. DR RELIED UPON OR DERS OF THE AUTHORITIES BELOW. 6. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW PENALTY IS NOT LEVIABLE IN THE MATTER. THE PENALTY UNDER SECTION 271(1)(B) OF THE ACT COULD BE LEVIED WHEN A SSESSEE FAILED TO COMPLY WITH THE NOTICES ISSUED AGAINST HI M. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AS WELL A S IN THE PENALTY ORDER HAS MENTIONED THE ADDRESS OF THE ASSE SSEE AS WARD NO. 3, MODEL TOWN, DORAHA. MANY NOTICES WER E ISSUED AT THE ASSESSMENT STAGE AS WELL AS AT THE ST AGE OF PENALTY PROCEEDINGS BUT NONE HAVE BEEN SERVED UPON ASSESSEE. THE ASSESSING OFFICER IN THE PENALTY ORD ER HAS MENTIONED THAT LASTLY NOTICE WAS ISSUED FOR 04.09.2 015 AND ASSESSEE'S REPLY HAVE BEEN RECEIVED ON 15.09.2015. COPY OF THE NOTICE DATED 04.09.2015 IS FILED IN THE PAPE R BOOK IN WHICH THE ASSESSING OFFICER HAS MENTIONED ADDRESS O F THE ASSESSEE AS WARD NO. 3, MODEL TOWN, DORAHA AS WEL L AS CURRENT ADDRESS IS MENTIONED AS NOW COLLEGE ROAD , VPO KARAMSAR (RARA SAHIB) NEAR AARJOO HOSPITAL TEHSIL PAYAL, LUDHIANA. THIS NOTICE IS SERVED UPON ASSESSEE AND ASSESSEE FILED A REPLY BEFORE ASSESSING OFFICER, CO PY OF WHICH IS FILED AT PAGE 15 OF THE PAPER BOOK IN WHIC H ASSESSEE HAS SPECIFICALLY EXPLAINED THAT NO NOTICE FOR ASSESSMENT PROCEEDINGS WAS EVER SERVED UPON ASSESSE E. IN THESE CIRCUMSTANCES, IT IS THE DUTY OF THE ASSESSIN G OFFICER TO RECORD FACTUAL FINDING IN THE PENALTY ORDER AS T O WHETHER 5 EARLIER NOTICES SENT TO THE ASSESSEE AT DIFFERENT A DDRESS WERE SERVED UPON ASSESSEE OR NOT. IN THE ABSENCE O F ANY FACTUAL FINDING IN THE IMPUGNED ORDER, ASSESSEE IS ABLE TO EXPLAIN THAT NO NOTICES WERE SERVED UPON ASSESSEE A T THE ADDRESS MENTIONED IN ASSESSMENT ORDER AS WELL AS PE NALTY ORDER AT WARD NO. 3, MODEL TOWN, DORAHA. THE LD. C OUNSEL FOR THE ASSESSEE, THEREFORE, RIGHTLY CONTENDED THAT ASSESSEE IS NOT RESIDING AT THAT ADDRESS AND WHEN DEPARTMENT HAS LOCATED CORRECT ADDRESS OF THE ASSESSEE AT COLLEGE ROAD, VPO KARAMSAR (RARA SAHIB) NEAR AARJOO HOSPITAL TEH SIL PAYAL, LUDHIANA THIS NOTICE WAS SERVED UPON ASSESS EE AND WAS DULY REPLIED BY ASSESSEE. THEREFORE, IT STANDS ESTABLISHED ON RECORD THAT ASSESSEE WAS NOT RESIDIN G AT THE ADDRESS WHERE EARLIER NOTICES WERE ISSUED TO THE AS SESSEE FOR COMPLETION OF THE ASSESSMENT PROCEEDINGS AS WEL L AS FOR LEVY OF THE PENALTY. THEREFORE, THERE WAS NO REASO N FOR THE ASSESSEE TO COMPLY WITH THE SAID NOTICES. ACCORDIN G TO SECTION 272B OF THE ACT, NO PENALTY UNDER SECTION 271(1)(B) SHALL BE IMPOSABLE ON THE ASSESSEE FOR TH E FAILURE REFERRED TO IN THE SAID PROVISION, IF ASSESSEE PROV ES THAT THERE WAS A REASONABLE CAUSE OF THE SAID FAILURE. 7. CONSIDERING THE ABOVE DISCUSSION, IT IS CLEAR TH AT ASSESSEE HAS BEEN ABLE TO PROVE THAT WAS A REASONAB LE CAUSE FOR FAILURE TO COMPLY WITH THE NOTICES BECAUS E NO NOTICE WAS SERVED UPON ASSESSEE FOR COMPLETION OF T HE ASSESSMENT PROCEEDINGS AND FOR LEVY OF THE PENALTY. I, THEREFORE, DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ORDERS OF THE AUTHORITIES BELOW. IN THIS VIEW OF T HE MATTER, 6 I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND CAN CEL THE PENALTY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . 9. THE FACTS ARE SAME IN THE CASE OF OTHER ASSESSEE SMT. JASBIR KAUR. FOLLOWING THE REASONS FOR DECISION IN THE CASE OF SHRI JAGROOP SINGH, I SET ASIDE THE ORDERS OF AU THORITIES BELOW AND CANCEL THE PENALTY. 10. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS A LSO ALLOWED. 11. IT IS CLARIFIED THAT FINDING IN THIS ORDER WOUL D BE RELEVANT QUA THE PENALTY MATTER ONLY AND SHALL NOT AFFECT THE QUANTUM PROCEEDINGS. 12. IN THE RESULT, BOTH APPEALS OF THE ASSESSEES A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 16 TH DECEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH