CENTRE FOR MANAGEMENT STUDIES HCM RIPA, Jaipur V. DCIT, Jaipur

ITA 113/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5212 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 08-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non compliance
• Section: 143(3); 142(1); 148; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF;D LN L; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA- @ ITA NOS. 113 TO 115/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2005-06 TO 2007-08 CENTRE FOR MANAGEMENT STUDIES HCM RIPA, JLN MARG, JAIPUR. CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAAJC 0474 A VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI S.C. KHICHA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 04/08/2016 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 08/08/2016 VKNS'K @ ORDER PER: LALIET KUMAR, J.M. ALL THESE APPEALS FILED BY THE SAME ASSESSEE AROSE AGAINST THE ORDER DATED 21/11/2015 PASSED BY THE LD CIT(A)-II, J AIPUR FOR THE A.Y. 2005-06 TO 2007-08. THE COMMON EFFECTIVE GROUNDS OF ALL THE APPEALS ARE AS UNDER:- 1 THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN LEVYING/CONFIRMING THE PENALTY U/S 271(1)(B) OF THE IT ACT, 1961 FOR RS. 10000.00 ITA 113 TO 115/JP/2016_ CENTRE FOR MANAGEMENT STUDIES VS DCIT 2 2. THAT THE PENALTY ORDER IS BAD IN LAW AND CONTRARY TO THE FACTS OF THE CASE AS IN THE PENALTY ORDER ON WHE RE IT WAS ESTABLISHED THAT ASSESSEE HAS WILLFULLY DEFAUL TED IN COMPLIANCES OF THE INCOME TAX PROCEEDINGS. AS NO MENS REA IS ESTABLISHED IN THIS CASE NO PENALTY IS LEVIABLE. 2. ALL THE APPEALS OF THE ASSESSEE ARE BEING HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIENCE, COMMON ORDE R IS BEING PASSED. 3. IN ALL THESE CASES, THE ASSESSEE HAS NOT FILLED ITS REGULAR RETURNS OF INCOME. NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) WAS ISSUED AGAINST THE ASSESSEE AND FOR COMPLIANCE O F THE SAME NOTICE, THE ASSESSEE HAS PRODUCED INCOME TAX DETAILS. THEREF ORE, NOTICES U/S 143(2)/142(1) OF THE ACT WERE ISSUED FROM TIME TO TI ME BUT NO COMPLIANCE HAS BEEN MADE BY THE ASSESSEE. THEREFORE , A NOTICE U/S 271(1)(B) OF THE ACT WAS ISSUED AGAINST THE ASSESSEE ON 04/02/2013 AND THE CASE WAS FIXED FOR 11/02/2013. ON 11/02/2013 , AN ADJOURNMENT APPLICATION WAS FILED BUT NO COMPLIANCES WERE MADE ON NOTICE ISSUED U/S 143(2)/142(1) OF THE ACT. THEREFORE, THE LD CIT(A ) HAS LEVIED PENALTY OF RS. 10000.00 U/S 271(1)(B) OF THE ACT FO R NOT COMPLYING THE NOTICE ISSUED U/S 143(2)/142(1) OF THE ACT. SIMILAR PENALTY HAS ALSO BEEN LEVIED BY THE LD CIT( A) IN OTHER CASES ALSO I.E. FOR THE A.Y. 2006-07 AND 2007-08 FO R THE SAME REASON ITA 113 TO 115/JP/2016_ CENTRE FOR MANAGEMENT STUDIES VS DCIT 3 MENTION ABOVE. 4. AGAINST THE ORDER OF THE LD CIT(A), THE ASSESSEE PREFERRED APPEALS BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE CENTRE FOR MANAGEMENT STUDIES IS A PROMOTED BY THE GOVERNMENT OF RAJASTHAN FOR THE PURPOSE OF IMPARTING TRAINING FOR THE GOVERNMEN T AND OTHER OFFICIALS IN THE STATE OF RAJASTHAN AND RUNNING WITH NO PROFIT MOTIVE. THE NOTICES OF ASSESSMENT WAS ISSUED BY THE ASSESSING OFFICER, C IRCLE -5 UNDER SECTION 143(2)/142(1) OF THE INCOME TAX ACT 1961 FO R THE ABOVE ASSESSMENT YEAR FOR ASSESSMENT UNDER SECTION 147. I NITIALLY CMS OFFICERS COULDN'T UNDERSTAND ABOUT THE COMPLIANCES OF THE NO TICES ON DATED 20.09.2012 AND 18.01.2013 BUT LATER ON WHEN THEY HAV E TAKEN THE MATTER TO THE NOTICES TO THE HIGHER OFFICERS THEY H AVE ENGAGED THE CA AND THE CA APPEARED ON 11.02.2013 ON BEHALF OF CMS AND THE CASE WAS FINALIZED UNDER SECTION 143(3) OF THE ACT, AFTER NE CESSARY HEARING AND SUBMISSION OF DETAILS AND DOCUMENTS AND NON COMPLIA NCE OF THE NOTICES WAS NOT DELIBERATE HENCE NO PENALTY IS LEVIABLE. 5. ON THE OTHER HAND, THE LD SR.DR HAS VEHEMENTLY S UPPORTED THE ORDER OF THE LD CIT(A) AND SUBMITTED THAT THE LD CIT( A) HAS RIGHTLY LEVIED THE PENALTY DUE TO NON-COMPLIANCE OF THE NOT ICES U/S 143(2)/142(1) OF THE ACT. ITA 113 TO 115/JP/2016_ CENTRE FOR MANAGEMENT STUDIES VS DCIT 4 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. DURIN G THE COURSE OF HEARING, THE LD AR OF THE ASSESSEE HAS SUBMITTED TH AT THE ASSESSEE I.E. CMS OFFICERS HAVE NOT UNDERSTAND ABOUT THE COMPLIAN CES OF THE NOTICES RECEIVED BY IT, BUT WHEN THEY HAVE TAKEN THE MATTER BEFORE THE HIGHER OFFICERS OF THE ASSESSEE MANAGEMENT, THEY HAVE ENGA GED THE LEGAL REPRESENTATIVE AND APPEARED BEFORE THE LD CIT(A) ON 11.02.2013 ON BEHALF OF THE ASSESSEE AND THEREAFTER THE ASSESSMEN T WAS COMPETED. NON COMPLIANCE OF NOTICES WAS NOT DELIBERATE. IN SIM ILAR TYPE OF CASE, THE COORDINATE BENCH OF DELHI ITAT IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHMSHAK SANGH BHAWAN TRUST VS. ASSISTANT DIRECTOR OF INCOME TAX [2008] 115 TTJ 419(DELHI) WHEREIN IT HAS BEE N HELD THAT THE ASSESSEE HAD NOT COMPLIED WITH NOTICE UNDER SECTION 142(1) BUT ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) AND NOT UNDER SECTION 144, THAT MEANT THAT SUBSEQUENT COMPL IANCE IN ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLI ANCE AND DEFAULTS COMMITTED EARLIER WERE IGNORED BY ASSESSING OFFICER AND, THEREFORE LEVY OF PENALTY UNDER SECTION 271(1)( B ) WAS NOT JUSTIFIED. THE FINDINGS OF THE COORDINATE BENCH IS REPRODUCED HERE UNDER. 2.3 WE HAVE CONSIDERED THE FACTS OF THE CASE AND RIVAL SUBMISSIONS. WE FIND THAT THE HON'BLE GUJARAT (SIC- ITA 113 TO 115/JP/2016_ CENTRE FOR MANAGEMENT STUDIES VS DCIT 5 RAJASTHAN) HIGH COURT HAS CLEARLY DISTINGUISHED BET WEEN CLS. ( A ) AND ( C ) OF SUB-S. (1) OF S. 275. UNDER CL. ( A ), THE LEVY OF PENALTY IS DEPENDENT UPON THE FINDINGS OF THE APPEL LATE AUTHORITIES, WHICH IS NOT THE CASE UNDER CL. ( C ). IN THIS CASE, THE DEFAULT OF NON-ATTENDANCE TO NOTICES WAS NOT THE SUBJECT-MATTER IN THE QUANTUM APPEAL AND IT IN NO WA Y DEPENDED UPON THE OUTCOME IN THE APPEAL. THE PENALTY DEPENDS UPON WHETHER THE DEFAULT WAS WILLFUL OR NOT. THEREFORE, WE ARE OF THE VIEW THAT THE RATIO OF THE CA SE OF HISSARIA BROS. ( SUPRA ) WILL BE APPLICABLE IN THIS CASE ALSO. CONSEQUENTLY, IT IS ALSO HELD THAT THE ORDER OUGHT TO HAVE BEEN PASSED ON OR BEFORE 31ST SEPT., 2001, FAILING WHICH THE LEVY WILL BECOME BARRED BY LIMITATION. 2.4 COMING TO THE ISSUE OF RECORDING OF SATISFACTION, IT MAY BE MENTIONED THAT MERE INITIATION OF PENALTY DOES NOT AMOUNT TO SATISFACTION AS HELD BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. RAM COMMERCIAL ENTERPRISES LTD. [2001] 167 CTR (DEL) 321 : [2000] 246 ITR 568 (DEL) . IN ABSENCE OF RECORDING OF THE SATISFACTION IN THE ASSESSMENT ORD ER, MERE INITIATION OF PENALTY WILL NOT CONFER JURISDICTION O N THE AO TO LEVY THE PENALTY. 2.5 WE ALSO FIND THAT FINALLY THE ORDER WAS PASSED UND ER S. 143(3) AND NOT UNDER S. 144 OF THE ACT. THIS MEANS T HAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMM ITTED EARLIER WERE IGNORED BY THE AO. THEREFORE, IN SUCH CIRCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO C OME TO THE CONCLUSION THAT THE DEFAULT WAS WILLFUL. 2.6 IN VIEW OF THE AFORESAID DISCUSSION, IT IS HELD TH AT THE LEARNED CIT(A) WAS NOT RIGHT IN UPHOLDING THE LEVY O F PENALTY. THUS, THE APPEAL IS ALLOWED. BY RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINAT E BENCH OF DELHI ITA 113 TO 115/JP/2016_ CENTRE FOR MANAGEMENT STUDIES VS DCIT 6 ITAT, THE PENALTY LEVIED BY THE LD CIT(A) IS DELETED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. SIMILAR IDENTICAL FINDINGS HAS ALSO BEEN GIVEN IN OTHER CASES I.E. CASES FOR A.Y. 2006-07 AND 2007-08. 7. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/08/2016. SD/- SD/- HKKXPAN YFYR DQEKJ (BHAGCHAND) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 08 TH AUGUST, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- CENTRE FOR MANAGEMENT STUDIES HCM RIPA, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE D.C.I.T., CIRCLE-5, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 113 TO 115/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR