Shakuntala Hiralal Malu, Pune V. DCIT Cen. Cir. 1(2), Pune

ITA 1116/PUN/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49752 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2000-2001
• Appeal Filed On: 18-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANT LEUVA
• Keywords: Charitable institution; Reasonable cause; Set aside
• Section: 273B; 143(3); 142(1); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER S.NO. ITA NO ASSTT.YEAR 1. 1116/PN/09 2000-01 2. 1117/PN/09 2001-02 3. 1118/PN/09 2002-03 4. 1119/PN/09 2003-04 5. 1120/PN/09 2004-05 6. 1121/PN/09 2005-06 7. 1122/PN/09 2006-07 MRS SHAKUNTALA HIRALAL MALU .. APPELL ANT 60 NANA PETH, PUNE PAN - AEGPM1222G VS. DY. COMMISSIONER OF INCOME-TAX, .. RESPONDENT CEN. CIR. 1(2) PUNE APPLICANT BY: SHRI KISHOR PHAD KE RESPONDENT BY: SHRI HEMANT LEUVA ORDER PER BENCH: IN ALL THESE APPEALS PREFERRED BY SMT SHAKUNTALADE VI H MALU FOR DIFFERENT ASSESSMENT YEARS, THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER UPHOLDING THE PENALTY UNDER SECTION 271(1)(B) OF THE INCOME-T AX ACT, 1961 (IN SHORT THE ACT). 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW AND DECISIO NS RELIED UPON. 3. THE RELEVANT FACTS ARE THAT THE AO LEVIED PENALT Y U/S 271(1)(B) OF THE ACT, ON THE BASIS THAT THE FOLLOWING NOTICES ISSUED TO A ND SERVED UPON THE ASSESSEE REMAINED UNCOMPLIED BY THE ASSESSEE: (I) NOTICE ISSUED U/S 142(1)/143(2) ON 23.10.2007 F IXING THE DATE OF HEARING ON 2.11.2007; (II) NOTICE U/S 142(1) ISSUED ON 6.11.2007 FIXING T HE DATE OF HEARING ON 13.11.2007 AND WHICH NOTICE WAS SERVED ON THE ASSES SEE ON 13.11.2007 ITSELF. ITA NOS 1116 TO1122/PN/09 SHAKUNTALA H MALU, PUNE 2 4. BEING SATISFIED WITH THE DECISIONS SHOWN BY THE ASSESSEE FOR NON- COMPLIANCE OF NOTICE DATED 6.11.2007 FOR THE DATE O F HEARING ON 13.11.2007, THE LD. CIT(A) HAS DELETED THE PENALTY LEVIED U/S 271(1 )(B) OF THE ACT IN THIS REGARD, BUT HE HAS FOUND NO SUBSTANCE IN THE EXPLANATION OF THE ASSESSEE FOR NON- COMPLIANCE OF NOTICE DATED 23.10.2007 FOR THE DATE OF HEARING ON 2.11.2007. THE LD CIT(A) HAS ACCORDINGLY UPHELD THE LEVY OF PENALT Y FOR NON-COMPLIANCE OF NOTICE DATED 23.10.2007. THE ASSESSEE HAS QUESTIONED THIS ACTION OF THE LD CIT(A) BEFORE US. 5. IN SUPPORT OF THE GROUNDS QUESTIONING THE VALIDI TY OF THE ACTION OF THE LD CIT(A), THE LD. AR SUBMITTED THAT THERE WAS HUGE DE LAY ON THE PART OF THE AO IN ISSUING THE NOTICES U/S 153A CALLING FOR THE RETURN S AFTER THE SEARCH. THE ASSESSEE TOOK EXTRA PRECAUTION IN COMPLYING WITH TH ESE NOTICES AND FILED THE RETURN WITHIN 10 DAYS ONLY. THIS WAS TIME IN OCTOBE R, 2007 WHEN THE ASSESSEES C.A WAS EXTREMELY BUSY IN FILING THE OTHER RETURNS OF HIS CLIENTS AS WELL AS IN FINALIZING THE AUDIT REPORTS. THE LD. AR SUBMITTED THAT THE C.A OF THE ASSESSEE COMPLIED WITH ALL THE REQUIREMENTS OF THE A.O AS PE R VARIOUS NOTICES ISSUED IN MALU & AGARWAL GROUP OF CASES WITH THE RESULT THAT ALL THESE ASSESSMENTS WERE COMPLETED BY THE AO DULY IN THE LAST WEEK OF DECEMB ER, 2007 WHEN THEY WERE GETTING TIME BARRED. BEFORE THE LD. CIT(A), THE ASS ESSEE FURNISHED A CHRONOLOGICAL CHART GIVING THE VARIOUS DAYS ON WHICH SHRI MUNDADA , THE CA OF THE ASSESSEE ATTENDED BEFORE THE AO IN CONNECTION WITH MALU-AGAR WAL GROUP OF CASES WHICH SHOWS THAT IT IS NOT A CASE THAT HE HAD TO GO HARDL Y ONCE OR TWICE TO THE AO, BUT THE CHART WOULD SHOW THAT HE WAS CALLED BY THE AO N UMBER OF TIMES IN CONNECTION WITH VARIOUS CASES. COPY OF THE SAID CHA RT OF APPEARANCE HAS BEEN MADE AVAILABLE BEFORE THE TRIBUNAL AT PAGES 37 & 38 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. IF THIS WAS SO, THERE WAS N O REASON AS TO WHY THE ASSESSEE WOULD NOT HAVE COMPLIED WITH THESE TWO NOT ICES ISSUED BY THE AO. THE ASSESSEE COMPLIED WITH THE VARIOUS REQUIREMENTS AS PER THE NOTICES IN SUCH A SHORT SPELL OF TIME AND DID NOT GIVE ANY OPPORTUNIT Y TO THE AO TO MAKE ANY EX PARTE ASSESSMENTS. THIS FACT ITSELF INDICATES THAT THE ASSESSEE HAS CO-OPERATED ITA NOS 1116 TO1122/PN/09 SHAKUNTALA H MALU, PUNE 3 WITH THE DEPARTMENT FULLY. THUS, IT IS NOT CORRECT TO ALLEGE BY THE AO THAT THE ASSESSEE DID NOT COMPLY WITH THE NOTICES U/S 142(1) /143(2) EITHER OUT OF NEGLECT OR WILLFUL DEFAULT. THE VERY REASON WHY THE ASSESSE E DID NOT COMPLY WITH THE NOTICE DATED 23.10.2007 WAS THAT ALTHOUGH, HE SENT THE NOTICE TO HIS CA, BUT HE WAS EXTREMELY BUSY IN FILING THE RETURNS AND, THERE FORE, DUE COMPLIANCE MAY NOT HAVE BEEN MADE. THE LD. AR PLACED RELIANCE ON THE F OLLOWING DECISIONS: (I) SWARNABEN M KHANNA & ORS V DCIT (2010) 37 SOT 2 5 (AHD); (II) AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST V. ASSTT. DIRECTOR OF IT (2008) 115 TTJ (DEL) 419; (III) MANISH HIRALAL MAL & OTHERS, V. DCIT - ITA NO 1388 TO 1394/PN/09 & ORS. ORDER DATED 31.12.2009; (IV) BANSILAL RAMNATH AGARWAL CHARITABLE TRUST, PUN E V DCIT ITA NOS 198 TO 203/PN/2011 ORDER DATED 23.3.2011; (V) M/S BANSILAL SAREES & OTHERS V DCIT - ITA NO S 39 TO 45/PN/10 & ORS. ORDER DATED 30.6.2010 6. THE LD DR, ON THE OTHER HAND, TRIED TO JUSTIFY T HE PENALTY LEVIED BY THE AO ON THE BASIS THAT THE ASSESSEE FAILED TO FURNISH SA TISFACTORY EXPLANATION FOR NON- COMPLIANCE OF THE NOTICES. 7. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT UNDISPUTEDLY ASSESSMENT HAS BEEN FRAMED U/S 143(3) READ WITH SEC. 153A/153C AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE. THERE IS NO EX PARTE A SSESSMENT. WE THUS DO NOT FIND REASON TO DISBELIEVE THE ABOVE-STATED EXPLANAT ION OF THE ASSESSEE FOR NON- COMPLIANCE OF NOTICE ISSUED U/S 142(1)/143(2) ON 23 .10.2007 FIXING THE DATE OF HEARING ON 2.11.2007. THE EXPLANATION OF THE ASSESS EE IN THIS REGARD REMAINED THAT HE HAD SENT THE NOTICE TO HIS CA, BUT HE WAS E XTREMELY BUSY IN FILING HE RETURNS AND, THEREFORE, DUE COMPLIANCE MAY NOT HAVE BEEN MADE. THE CHART OF APPEARANCE MADE AVAILABLE AT PAGES 37 & 38 OF THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE BEFORE THE TRIBUNAL SHOWS THAT SHRI MUNDADA, THE LD. CA OF THE ASSESSEE USED TO ATTEND THE OFFICE OF THE AO IN CON NECTION WITH THE CASES OF MALU-AGARWAL GROUP. THUS, NO MALA FIDE INTENTION CA N BE INFERRED AGAINST THE ASSESSEE FOR DELIBERATE NON-COMPLIANCE OF NOTICE IS SUED ON 23.10.2007 FOR 2.11.2007. THE DELHI BENCH OF THE TRIBUNAL IN THE C ASE OF AKHIL BHARTIYA PRATHAMIK SHIKSHAN SANGH BHAVAN TRUST (SUPRA) HAS H ELD THAT IF THE ASSESSMENT ITA NOS 1116 TO1122/PN/09 SHAKUNTALA H MALU, PUNE 4 ORDER IS PASSED U/S 143(3) AND NOT U/S 144, THEN NO N-COMPLIANCE IS DEEMED TO HAVE BEEN WAIVED. SIMILAR VIEW HAS BEEN TAKEN BY TH E AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF SWARNABEN M KHANNA & OTHERS (SUPRA). THE PROVISIONS LAID DOWN U/S 273B OF THE ACT MAKE IT CLEAR THAT NO PENALTY U/S 271(1)(B) SHALL BE IMPOSED ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFERRED TO IN THE SAID PROVISIONS, IF HE PROVES TH AT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. INVOKING THESE PROVISIONS U/S 273B OF THE ACT, WE FIND THAT THE ASSESSEE IN THE PRESENT CASE HAS BEEN SUCCESSFUL IN EXPLAINING THAT THERE WAS REASONABLE CAUSE FOR NON-COMPLIANCE OF THE NOTICE I N QUESTION ON THE PART OF THE ASSESSEE, AS DISCUSSED ABOVE. WE THUS SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW IN THIS REGARD AND DIRECT THE AO TO DELETE TH E PENALTY LEVIED U/S 271(1)(B) FOR NON-COMPLIANCE OF NOTICE ISSUED ON 23.10.2007 F OR 2.11.2007. THE GROUND IS ACCORDINGLY ALLOWED. CONSEQUENTLY, THE APPEALS ARE ALLOWED. 8. IN THE RESULT, THE APPEALS ARE ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF APRIL, 2011. SD/- SD/- (G.S. PANNU) (I.C. S UDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBE R PUNE: DATED: 29 TH APRIL, 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. SHAKUNTALA H. MALU, PUNE 2. DCIT CC 1(2), PUNE 3. THE CIT(A)-I, PUNE 4. THE CIT (CEN), PUNE 5. THE D.R, B BENCH, PUNE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE