Yashvi Distribution Servies Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-8(4), Ahmedabad

ITA 1091/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6050 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 09-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 143(3); 142(1); 143(2); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D. C. AGRAWAL , AM) ITA NO.1091/AHD/2010 A. Y.: 2006-07 YASVI DISTRIBUTION SERVICES PVT. LTD., A/302 SUMADHUR APARTMENT, NEXT TO AMBAWADI TELEPHONE EXCHANGE, BIMANNAGAR, AMBAWADI, AHMEDABAD PA NO. AAACY 2181P VS THE INCOME TAX OFFICER, WARD- 8 (4), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI HIMANSHU SHAH, AR RESPONDENT BY SMT. NEETA SHAH, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- XIV, AHMEDABAD DAT ED 01-02-2010 FOR ASSESSMENT YEAR 2006-07, CHALLENGING LEVY OF PENALT Y U/S 271 (1) ( B ) OF THE IT ACT. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL ON RECORD. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSME NT WAS COMPLETED EX-PARTE U/S 143(3) READ WITH SECTION 144 OF THE IT ACT ON 01-12-2008 DETERMINING THE TOTAL INCOME AT RS.7,12,640/- AGAIN ST RETURNED LOSS OF RS.29,230/-. THE AO ISSUED MANY STATUTORY NOTICES U /S 143(2)/142(1) OF THE IT ACT ON VARIOUS DATES MENTIONED IN THE PENALT Y ORDER ON 09-10-2007, 30-05-2008, 08-07-2008, 25-09-2008, 31- 10-2008 AND 14-11-2008. HOWEVER, THE ASSESSEE DID NOT COMPLY WI TH ANY OF THE ABOVE NOTICES. THEREFORE, PROCEEDINGS FOR PENALTY U/S 271 (1) (B) OF THE IT ACT ITANO.1091/AHD/2010 YASVI DISTRIBUTION SERVICES VS IT), W-8(4), AHMEDAB AD 2 WAS INITIATED. HOWEVER, NONE APPEARED FROM THE SIDE OF THE ASSESSEE AND NO REPLY WAS FILED IN RESPONSE TO THE PENALTY NOTIC ES. SHOW CAUSE NOTICE WAS ALSO ISSUED AGAINST THE ASSESSEE AS TO WHY PENA LTY U/S 271 (1) (B) OF THE IT ACT SHOULD NOT BE LEVIED. DESPITE SERVICE OF THE ABOVE NOTICE ALSO, NONE APPEARED BEFORE THE AO IN RESPONSE TO THE SHOW CAUSE NOTICE. THE AO, THEREFORE, CONCLUDED THAT THE ASSESSEE HAS NOTH ING TO SAY IN THE MATER. THE AO CONSIDERING THE NON-COMPLIANCE BY THE ASSESSEE AGAINST THE STATUTORY NOTICES AND THAT NO EXPLANATION IS FI LED FOR NON-COMPLIANCE OF THE NOTICES HELD THAT THE ASSESSEE HAS COMMITTED DEFAULT U/S 271(1) (B) OF THE IT ACT WITHOUT ANY REASONABLE CAUSE, THE REFORE, PENALTY OF RS.50,000/- WAS LEVIED (FOR DEFAULT RS.10,000/- ON EACH OCCASION). PENALTY WAS CHALLENGED BEFORE THE LEARNED CIT(A). T HE LEARNED CIT(A) NOTED IN THE IMPUGNED ORDER THAT THE ASSESSEE WAS G IVEN SEVERAL OPPORTUNITY OF BEING HEARD BUT THE ASSESSEE DID NOT COMPLY. ON SOME DATE SHRI HIMANSHU SHAH & CO., CHARTERED ACCOUNTANT REQUESTED FOR ADJOURNMENT AND ULTIMATELY ON THE DATE OF HEARING N OBODY APPEARED FROM THE SIDE OF THE ASSESSEE AND EVEN ON THE LAST DATE OF HEARING NO REQUEST FOR ADJOURNMENT HAS BEEN RECEIVED. THE LEAR NED CIT(A), THEREFORE, NOTED THAT DESPITE GIVING SEVERAL OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE, THE ASSESSEE HAS NOT COMPLIED WITH DESPIT E THE APPEAL PENDING FOR LONG TIME. THE APPEAL OF THE ASSESSEE WAS ACCOR DINGLY DECIDED ON MERIT IN THE ABSENCE OF THE ASSESSEE. THE LEARNED C IT(A) CONSIDERING THE MATERIAL ON RECORD NOTED THAT THE ASSESSEE FAILED T O COMPLY WITH SEVERAL STATUTORY NOTICES ISSUED BY THE AO AND EVEN THE AS SESSEE HAS NOT CARED TO FILE ANY REPLY AT THE PENALTY STAGE, THEREFORE, PENALTY WAS RIGHTLY LEVIED IN THE MATTER. ORDER OF THE AO WAS CONFIRMED AND PE NALTY APPEAL WAS ACCORDINGLY DISMISSED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO FILE REPLIES A ND EXPLANATION BEFORE THE AO FOR FAILURE TO COMPLY WITH THE NOTICES. THE LEARNED COUNSEL FOR THE ITANO.1091/AHD/2010 YASVI DISTRIBUTION SERVICES VS IT), W-8(4), AHMEDAB AD 3 ASSESSEE ON SOME DATES OF HEARING APPEARED BEFORE T HE AO AND WANTED TO FILE AFFIDAVIT OF THE COUNSEL BUT NO TIME WAS GIVEN BY THE AO. HE HAS EXPLAINED THAT EVEN FOR 31-10-2008 THE AO HAS MENTI ONED IN THE PENALTY NOTICE THAT IT WAS UNCLAIMED. IT WOULD SHOW THAT SA ID NOTICE WAS NOT SERVED UPON THE ASSESSEE. THE LEARNED COUNSEL FOR T HE ASSESSEE SUBMITTED THAT EVEN ONE OF THE NOTICES WAS U/S 143( 2) OF THE IT ACT AND GENERALLY ON THE FIRST DATE OF HEARING NO PROCEEDIN G WOULD BE CONDUCTED BY THE AO. HE HAS THEREFORE, SUBMITTED THAT THE ASS ESSEE MAY BE GIVEN ONE MORE CHANCE TO EXPLAIN THE REASONABLE CAUSE FOR FAILURE TO COMPLY WITH THE NOTICES AT THE ASSESSMENT STAGE. 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEES CON DUCT SHOWS THAT ASSESSEE NEVER COMPLIED WITH ANY OF THE STATUTORY N OTICES. EVEN NO REPLY WAS FILED AT THE PENALTY STAGE AS WELL AS BEFORE TH E LEARNED CIT(A). THEREFORE, PENALTY IS RIGHTLY IMPOSED IN THE MATTER . 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. SECTION 271 (1) (B) OF THE IT ACT PROVIDES THAT IF THE AO IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UN DER THIS ACT THAT THE ASSESSEE HAS FAILED TO COMPLY WITH THE NOTICES U/S 142(1) OR 143(2) OF THE IT ACT MAY IMPOSE PENALTY. THE FACTS NOTED ABOVE AN D THE DETAILS CONTAINED IN THE ORDERS OF THE AUTHORITIES BELOW CL EARLY PROVE THAT THE ASSESSEE AT THE ASSESSMENT STAGE DID NOT COMPLY WIT H ANY OF THE STATUTORY NOTICES, THEREFORE, THE AO WAS COMPELLED TO PASS EX-PARTE ASSESSMENT ORDER U/S 143(3) READ WITH SECTION 144 O F THE IT ACT. WHEN THE PENALTY NOTICE WAS ISSUED TO THE ASSESSEE AND T HE EXPLANATION OF THE ASSESSEE WAS CALLED FOR NEITHER THE ASSESSEE APPEAR ED BEFORE THE AO AT THE PENALTY STAGE NOR FILED ANY REPLY EXPLAINING TH E DEFAULT IN COMPLYING WITH THE STATUTORY NOTICES. THE AO ALSO ISSUED SHOW CAUSE NOTICE AS TO WHY PENALTY SHOULD NOT BE IMPOSED AGAINST THE ASSES SEE FOR FAILURE TO ITANO.1091/AHD/2010 YASVI DISTRIBUTION SERVICES VS IT), W-8(4), AHMEDAB AD 4 COMPLY WITH THE STATUTORY NOTICES. SUCH SHOW CAUSE NOTICE WAS ALSO NOT COMPLIED WITH BY THE ASSESSEE. THE ASSESSEES COUNS EL SOMETIMES APPEARED BEFORE THE LEARNED CIT(A) AT PENALTY STAGE BUT NO REPLY WAS FILED AND NO EXPLANATION WAS GIVEN AS TO WHY THERE WAS FA ILURE TO COMPLY WITH THE STATUTORY NOTICES AS NOTED IN THE ORDERS OF THE AUTHORITIES BELOW. THE ABOVE FACTS SHOW THAT THE ASSESSEE DELIBERATELY DID NOT COMPLY WITH THE STATUTORY NOTICES AS WELL AS DID NOT AVAILED OF THE OPPORTUNITIES OF BEING HEARD GRANTED BY THE AO AND THE LEARNED CIT(A) AT T HE PENALTY STAGE. THE HONBLE M. P. HIGH COURT IN THE CASES OF VIMAL GINNING AND PRESSING FACTORY V. CIT [2005] 279 ITR 100 AND RUKMINI BAI V . COMMISSIONER OF INCOME-TAX [2005] 276 ITR 650 CONFIRMED THE PENALTY WHEN NO EXPLANATION WAS FILED AT THE PENALTY STAGE. THE LEA RNED COUNSEL FOR THE ASSESSEE TRIED O EXPLAIN THAT ON THE FIRST DATE OF HEARING WHEN NOTICE U/S 143(2) OF THE IT ACT HAS BEEN SERVED, GENERALLY THE AO WOULD NOT CONDUCT ANY PROCEEDINGS. SUCH A SUBMISSION IS NOT WARRANTED IN LAW. THE NOTICE U/S 143(2) OF THE IT ACT IS A STATUTORY NOTICE THRO UGH WHICH THE ASSESSEE IS INTIMATED TO SUPPORT THE RETURN OF INCOME AND TH E DETAILS CONTAINED THEREON. THE ASSESSEE IS BOUND TO COMPLY WITH THE S AID NOTICE BEFORE THE AO AND HAVE TO SATISFY THE REQUIREMENTS OF THE AO A T THAT STAGE. THE ASSESSEE SHALL HAVE TO PRODUCE THE EVIDENCE IN SUPP ORT OF THE CLAIM MADE IN THE RETURN OF INCOME. THEREFORE, THERE WAS NO RE ASON FOR NON- COMPLIANCE OF THE FIRST NOTICE ISSUED U/S 143(2) OF THE IT ACT. SIMILARLY, ALL THE SUBSEQUENT NOTICES ISSUED U/S 142(1) OF THE IT ACT SHALL HAVE TO BE COMPLIED WITH AS PER REQUIREMENTS OF THE AO. THE ASSESSEE HAS HOWEVER, FAILED TO COMPLY WITH ANY OF THE NOTICES I SSUED BY THE AO IN THIS REGARD. WHATEVER EXPLANATION IS NOW MADE DURING THE COURSE OF HEARING HAS NOT BEEN MADE BEFORE THE AUTHORITIES BELOW IN A NY MANNER. THEREFORE, THE SUBMISSIONS OF THE LEARNED COUNSEL F OR THE ASSESSEE ARE DEVOID OF MERIT AND REJECTED. RESULTANTLY, THERE EX ISTS NO REASONABLE CAUSE IN FAVOUR OF THE ASSESSEE FOR FAILURE TO COMP LY WITH ANY OF THE STATUTORY NOTICES MENTIONED BY THE AO IN THE PENALT Y ORDER. WE, ITANO.1091/AHD/2010 YASVI DISTRIBUTION SERVICES VS IT), W-8(4), AHMEDAB AD 5 THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW IN IMPOSING PENALTY AGAINST THE ASSESSEE U/S 271 (1 ) (B) OF THE IT ACT. WE CONFIRM THE FINDINGS OF THE AUTHORITIES BELOW AND D ISMISS THE APPEAL OF THE ASSESSEE. 7. AS A RESULT, THE APPEAL OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED ON 11-06-2010 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 11-06-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD