M/s M B Patel, RAJKOT-GUJARAT V. The Income Tax Officer, Ward 2 (4), RAJKOT-GUJARAT

ITA 1094/RJT/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3016 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 11-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CJ MANIAR
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO.1094/RJT/2011 (ASSESSMENT YEAR 2007-08) M/S MB PATEL VS THE ITO, WD.2(4) THAKKAR CHAMBER RAJKOT NEW GHEE KANTA ROAD, RAJKOT PAN : AAKFM0107A (APPELLANT) (RESPONDENT) DATE OF HEARING : 22-11-2011 DATE OF PRONOUNCEMENT : 30-11-2011 APPELLANT BY : WRITTEN SUBMISSION RESPONDENT BY : SHRI CJ MANIAR O R D E R PER AL GEHLOT (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-III, RAJKOT DATED 28-06-2010 FOR THE ASSESSMENT YEAR 200 7-08. 2. THE GROUND RAISED IN THE APPEAL IS IN RESPECT OF LEVY OF PENALTY U/S 271(1)(B) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN CIVIL CONSTRUCTION WORK. A NOTICE U/S 143(2) WAS SERVED UPON THE ASSESSEE ON 05-08- 2008. ON CENTRALIZATION OF ASSESSEES CASE, A FRES H NOTICE OF HEARING WAS ALSO ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER NOTE D THAT THE ASSESSEE DID NOT COMPLY WITH THE NOTICES ISSUED U/S 143(2) DATED 05- 08-2008 AND 142(1) DATED ITA NO.1094/RJT/2010 2 18-05-2009 AND 09-09-2009 AND HEARING NOTICES / LET TERS ISSUED ON 22-09-2009 AND 01-10-2009. A FINAL OPPORTUNITY WAS GIVEN BY NOTICE DATED 01-10-2009 OF WHICH HEARING WAS FIXED ON 05-10-2009. HOWEVER, TH E ASSESSEE FILED WRITTEN SUBMISSION ON 06-11-2009 ON THE BASIS OF WHICH THE ASSESSING OFFICER MADE THE ASSESSMENT U/S 143(3) OF THE ACT. THE ASSESSING OF FICER INITIATED PENALTY FOR NON- COMPLIANCE OF NOTICES, FIVE IN TOTAL, AS STATED ABO VE. THE ASSESSEE DID NOT GIVE REPLY TO THE SHOW CAUSE NOTICE OF THE PENALTY U/S 2 71(1)(B) OF THE ACT. THE ASSESSING OFFICER LEVIED PENALTY OF RS.50,000 U/S 2 71(1)(B) OF THE ACT. THE CIT(A), AFTER CONSIDERING THE FACTS NOTICED THAT PE NALTY FOR NON-COMPLIANCE OF NOTICES U/S 143(2) DATED 05-08-2008 AND NOTICES U/S 142(1) DATED 18-05-2009 AND 09-09-2009 IS LEVIABLE. HOWEVER, THE PENALTY F OR NOTICE DATED 22-09-2009 AND 01-10-2009 CANNOT BE LEVIED. THE CIT(A) ACCORD INGLY REDUCED THE PENALTY TO RS.30,000. 4. THE ASSESSEE, INSTEAD OF PUTTING PERSONAL PRESEN CE HAS FILED WRITTEN SUBMISSIONS. IN THE WRITTEN SUBMISSION, THE ASSESS EE, RELYING UPON THE ITAT ORDER, JODHPUR BENCH IN THE CASE OF BABULAL VS DCIT 91 TTJ (JODH) 368 WHEREIN IT HAS BEEN HELD THAT THE ASSESSING OFFICER IS BOUN D TO ISSUE SHOW CAUSE NOTICE AND LEVY PENALTY SEPARATELY FOR EACH AND EVERY DEFA ULT. IN CASE OF FAILURE TO FOLLOW PROCEDURE, PENALTY COULD NOT BE LEVIED. IT IS ALSO THE SUBMISSION OF THE ASSESSEE THAT THE PENALTY LEVIED IS TIME BARRED REL YING UPON THE ITAT, DELHI BENCH IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSH AK SANGH BHAWAN TRUST VS ADIT 115 TTJ 419 (DEL) AND THE JUDGMENT OF RAJASTHA N HIGH COURT IN THE CASE OF ITA NO.1094/RJT/2010 3 CIT VS HISSARIA BROS 291 ITR 244 (RAJ. IT IS FURTH ER SUBMITTED THAT WHEN ASSESSMENT IS COMPLETED U/S 143(3) AND NOT U/S 144 WHICH MEANS THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMMITTED EARLIER WERE IGNORED BY THE ASSESSING OFFICER. IN SUPPORT OF THIS CONTENTION THE ASSESSE E RELIED UPON THE ORDER OF ITAT DELHI BENCH IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS ADIT 115 TTJ 419 (DEL). WITHOUT PREJUDICE TO THE ABOVE SUBMISSION, IT IS ALSO SUBMITTED THAT THE FIRST NOTICE IS A FORMAL NOTICE AND SUBSEQUENT NOTICES ARE NOTICES OF ROUTINE NATURE. 5. AFTER HEARING THE LD.DR, WHO HAS RELIED UPON THE ORDER OF CIT(A) AND ON CONSIDERATION OF FACTS WE FIND THAT PENALTY U/S 271 (1)(B) IS LEVIABLE, IF THE ASSESSEE HAS FAILED TO COMPLY WITH NOTICES UNDER SU B SECTION (1) OF SECTION 142 OR SUB SECTION (2) OF SECTION 143(3). IN THE CASE UNDER CONSIDERATION, ADMITTEDLY, THE ASSESSEE DID NOT APPEAR BEFORE THE AO. THE ASS ESSING OFFICER GAVE FINAL OPPORTUNITY VIDE NOTICE DATED 01-10-2009 OF WHICH H EARING WAS FIXED FOR 05-10- 2009. WHEN THE ASSESSEE DID NOT APPEAR ON THAT DAT E ALSO, THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE WHICH WAS COMPLIED BY THE ASSESSEE BY FILING WRITTEN SUBMISSION DATED 06-11-2009 AND ACCORDINGLY THE ASS ESSING OFFICER PASSED THE ORDER U/S 143(3) ON 11-11-2009 ON THE BASIS OF THE WRITTEN SUBMISSION. ON CONSIDERATION OF FACTS WE FIND THAT THE ASSESSEE HA S, IN SUBSTANCE, COMPLIED WITH THE ASSESSMENT PROCEEDINGS AS HE SUBMITTED WRITTEN SUBMISSION ON 06-11-2009 ITA NO.1094/RJT/2010 4 AND BASED ON THAT WRITTEN SUBMISSION ONLY THE ASSES SMENT COULD BE FRAMED BY THE ASSESSING OFFICER. 6. ISSUANCE OF NOTICES IN CONNECTION WITH THE ASSES SMENT PROCEEDINGS IS PART AND PARCEL OF THE ASSESSMENT PROCEEDINGS ITSELF AND THE ASSESSMENTS ARE ALWAYS FRAMED ON THE BASIS OF THE COMPLIANCE MADE BY THE A SSESSEE. IN THE CASE UNDER CONSIDERATION ALSO THE SAME THING HAS HAPPENED. SO ME NOTICES COULD NOT BE COMPLIED WITH AND SOME WERE DULY COMPLIED WITH. IN SUCH A CIRCUMSTANCE, THERE CANNOT BE ANY GOOD AND SUFFICIENT REASON FOR SEGREG ATING THE NOTICES THAT WERE NOT COMPLIED WITH BY THE ASSESSEE AND LEVYING PENAL TY FOR THE SAME. UNDER THE CIRCUMSTANCES, WE DO NOT FIND THE LEVY OF PENALTY U /S 271(1)(B) IN THE CASE UNDER CONSIDERATION IS JUSTIFIED. THEREFORE, WE DELETE T HE PENALTY OF RS.30,000 ALSO THAT HAS BEEN SUSTAINED BY THE CIT(A), 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-11-2011. SD/- SD/- (T.K. SHARMA) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DT : 30 NOVEMBER, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-III, RAJKOT 4. THE CIT-II, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT