LAKHAMSHI J. GALA, MUMBAI V. DCIT CEN CIR 12, MUMBAI

ITA 115/MUM/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0928 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 03-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHUMIKA VORA
• Keywords: Opportunity of being heard; Principle of natural justice; Reasonable cause
• Section: 142(1); 153A; 132; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO.109/MUM/2014 TO 115/MUM/2014 / ASSESSMENT YEAR 2004-05 TO 2010-11. MR.LAKHAMSHI J. GALA, ROOM NO.1, 1 ST FLOOR, CENTRAL BUILDING, 23, CHOWPATTY SEA FACE, GIRGAUM, MUMBAI 400006 / VS. THE DCIT, CEN. CIR. 12, MUMBAI. ./ ./ PAN/GIR NO. : AACPG4775A ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY MS. BHUMIKA VORA RESPONDENT BY SHRI JEEVANLAL LAVIDIYA ' # $ / DATE OF HEARING : 09/06/2015 ' # $ / DATE OF PRONOUNCEMENT : 09/06/2015 / O R D E R PER BENCH: THESE APPEALS ARE FILED BY THE ASSESSEE AND THEY ARE DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-37, MUMBAI DATED 01/11/2 013 FOR ASSESSMENT YEARS 2004-05 TO 2010-11. GROUNDS OF APPEAL IN ALL THE APPEALS ARE IDENTICAL AND READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLAN TS CASE AND IN LAW LEARNED CIT(A) ERRED IN CONFIRMING THE LEVIED BY THE AO BY PROVISION OF SECTION 271(1)(B) OF THE INCOME TAX ACT, 1961. 2. IN ANY CASE THE LD. CIT(A) FAILED TO APPRECIATE THAT THE IMPUGNED ORDER WAS PASSED BY THE LD. AO WITHOUT COMPLYING WITH THE PR OVISION OF SEC. 274 OF THE INCOME TAX ACT 1961. ITA NO.109/MUM/2014 TO 115/MUM/2014 / ASSESSMENT YEAR 2004-05 TO 2010-11. 2 3. THE APPELLANT CRAVES LEAVES TO ADD, TO AMEND, AL TER MODIFY AND/ OR WITHDRAW ANY OR ALL THE ABOVE GROUNDS OF APPEAL, EACH OF WHI CH ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2. IN ALL THESE CASES PENALTY OF RS.10,000/- IS IMP OSED UNDER SECTION 271(1)(B) OF THE INCOME TAX ACT, 1961(THE ACT). IN ALL THESE CASES FACTS ARE IDENTICAL AND THESE APPEALS WERE DISPOSED OF BY LD . CIT(A) BY A CONSOLIDATED ORDER. 3. THE PENALTY ORDER IN EACH OF THE CASE IS SAME AN D FOR THE SAKE OF CLARITY THE ORDER IS REPRODUCED BELOW: PENALTY ORDER U/S. 271(1)(B) R.W.S. 274 OF THE I.T .ACT, 1961. IN THE CASE NOTICE U/S. 142(1) OF THE I.T. ACT, 1 961 WAS ISSUED TO YOU ON 05/02/2013 AND WAS DULY SERVED, REQUIRING YOU TO AT TEND PERSONALLY AND GIVE EVIDENCE ON 12/02/2013 AT 11.30 AM. BUT THERE WAS NEITHER COMPLIANCE, NOR ANYBODY FILED COMPLETE DETAILS NOR SOUGHT ANY ADJOU RNMENT TO THE SAID NOTICE. IN VIEW OF ABOVE, THE PENALTY U/S. 271(1)(B) R.W.S . 274 OF IT ACT 1961 IS HEREBY INITIATED. PENALTY U/S.271(1)(B) LEVIED OF RS.10,000/- ISSUE DEMAND NOTICE ACCORDINGLY. 3.1 THUS IT CAN BE SEEN FROM THE ABOVE ORDER THAT FIRS TLY, ON THE BASIS OF NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT IMPUGNED PENALT Y HAS BEEN IMPOSED AND SECONDLY, THE FAILURE OF THE ASSESSEE WAS TO ATTEND TH E DATE GIVEN IN THE NOTICE UNDER SECTION 142(1) ON 12/2/2013. 3.2 THE ASSESSEE OBJECTED THE LEVY OF PENALTY IN THE APPEAL FILED BEFORE LD. CIT(A) ON THE GROUND THAT I) NO NOTICE UNDER SECTION 142(1) WA S RECEIVED AND II) ON THE GROUND THAT NO SHOW CAUSE NOTICE WAS ISSUED BEFORE LEVY OF PE NALTY UNDER SECTION 271(1)(B) OF THE ACT. THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE LD. CIT(A) WERE FORWARDED TO THE CONCERNED AO. IN REPLY THE AO SUBMITTED THAT NOTICE UNDER SECTION 142(1) DATED 5/2/2013 WAS SERVED ON THE ASSESSEE AND COPY OF ACKN OWLEDGE OBTAINED BY THE POSTAL AUTHORITIES WAS ALSO SUBMITTED. IT WAS FURTHER SUBMITTE D THAT IN THE NOTICE ISSUED UNDER SECTION 142(1) DATED 5/2/2013, IT WAS CLEARLY MENTIONED THAT NON-COMPLIANCE ITA NO.109/MUM/2014 TO 115/MUM/2014 / ASSESSMENT YEAR 2004-05 TO 2010-11. 3 WILL BE PENALIZED BY LEVY OF PENALTY UNDER SECTION 271(1)(B) OF THE ACT. THUS, IT WAS CLAIMED BY THE AO THAT NOTICE U/S. 142(1) WAS DULY SE RVED AND ASSESSEE WAS PUT TO NOTICE THAT PENALTY WILL BE LEVIED FOR NON-COMPLIANC E. ON THESE FACTS, LD. CIT(A) HAS CONCLUDED THAT ASSESSEE DID NOT COMPLY WITH SEVERAL NOT ICES ISSUED BY THE AO AND ONLY AT THE VERY END THE AO LEVIED PENALTY UNDER SEC TION 271(1)(B) AND ASSESSMENT WAS FINALLY COMPLETED UNDER SECTION 144 OF THE ACT. LD. CIT(A) FURTHER OBSERVED THAT ASSESSEE DID NOT GIVE EVIDENCE OF COMPLIANCE WITH SE VERAL NOTICES ISSUED UNDER SECTION 142(1) OF THE ACT AND DID NOT EXPLAIN NON-COMPLIANCE. THEREFORE, LD. CIT(A) HAS CONFIRMED THE LEVY OF PENALTY, WHICH IS AGITATED IN THE PRESENT APPEALS. 4. AFTER NARRATING THE FACTS, IT WAS SUBMITTED BY LD. A R THAT LD. CIT(A) HAS WRONGLY TAKEN COGNIZANCE OF OTHER DATES ON WHICH ASSE SSEE FAILED TO ATTEND THE PROCEEDINGS, WHEREAS THE IMPUGNED PENALTY HAS BEEN I MPOSED BY THE AO ONLY FOR THE DEFAULT OF THE ASSESSEE FOR NON-APPEARANCE ON 12/2/20 13. IT WAS SUBMITTED THAT ADMITTEDLY FOR LEVY OF PENALTY UNDER SECTION 271(1) (B) NO SEPARATE NOTICE WAS ISSUED BUT ONLY ON THE BASIS OF OBSERVATION OF THE AO IN THE NOTICE ISSUED UNDER SECTION 142(1) THE IMPUGNED PENALTY HAS BEEN IMPOSED AND CO NFIRMED. IT WAS SUBMITTED THAT ON SIMILAR FACTS IN GROUP CASE I.E. IN THE CASE OF M /S. SPECIALITY PAPER LTD., LD. CIT(A) HAS DELETED THE PENALTY AND REFERENCE IN THIS REGARD WAS MADE TO ORDER PASSED BY LD. CIT(A) DATED 27/6/2014 FOR ASSESSMENT YEAR 2004-05 TO 2009-10, COPY WAS ALSO PLACED ON OUR RECORD AND WAS ALSO GIVEN TO LD. DR. IN THE SAID CASE SIMILAR REPORT WAS OBTAINED AND AFTER FINDING THAT NO SHOW CAUSE NOTICE WA S ISSUED FOR LEVY OF PENALTY, IT WAS HELD THAT BY LD. CIT(A) THAT IT WAS IN VIOLATION OF CARDINAL PRINCIPLE OF NATURAL JUSTICE. IT WAS FURTHER HELD BY LD. CIT(A) THAT THOSE OBSERVATIONS REGARDING SECTION 271(1)(B) WERE IN THE NOTICE ISSUED UNDER SECTION 142 (1) OF THE ACT DATED 28/1/2013 AND NOT FOR THE NON-COMPLIANCE OF NOTICE DATED 5/2/201 3. THUS, IT WAS SUBMITTED BY LD. AR THAT LD. CIT(A) HAS COMMITTED AN ERROR IN SUSTA INING THE PENALTY AND IN ABSENCE OF SHOW CAUSE NOTICE FOR LEVY OF PENALTY, T HE PENALTY SHOULD HAVE BEEN DELETED. 5. ON THE OTHER HAND, RELYING UPON THE ORDER PASSED B Y LD. CIT(A) IT WAS SUBMITTED BY LD. DR THAT ASSESSEE WAS CLEARLY INFORME D THAT NON-COMPLIANCE OF NOTICE UNDER SECTION 142(1) OF THE ACT WOULD RESULT INTO THE LE VY OF PENALTY UNDER SECTION ITA NO.109/MUM/2014 TO 115/MUM/2014 / ASSESSMENT YEAR 2004-05 TO 2010-11. 4 271(1)(B) OF THE ACT AND THIS WAS SUFFICIENT COMPLIAN CE WITH THE PROVISIONS OF SECTION 274(1) OF THE ACT AND, THEREFORE, LD. CIT(A) WAS RIGHT IN SUSTAINING THE PENALTY AND HIS ORDER SHOULD BE UPHELD. 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENTIO NS HAVE CAREFULLY BEEN CONSIDERED. IT MAY BE MENTIONED HERE THAT WE HAVE CAR EFULLY GONE THROUGH THE ASSESSMENT ORDERS FOR ALL THE YEARS TO ASCERTAIN THE D EFAULT OF THE ASSESSEE FOR WHICH THE IMPUGNED PENALTY HAS BEEN IMPOSED. THE DEFAULT OF THE ASSESSEE AS MENTIONED IN THE IMPUGNED PENALTY ORDER IS REGARDING NOTICE ISSUED UNDER SECTION 142(1) ON 5/2/2013, WHICH REQUIRE THE ASSESSEE TO ATTEND THE ASS ESSMENT PROCEEDINGS PERSONALLY AND GIVE EVIDENCE ON 12/2/2013 AT 11.30 A M. IT IS FOR NON-COMPLIANCE OF SUCH NOTICE IMPUGNED PENALTY HAS BEEN IMPOSED. THE PENALTY ORDER HAS ALREADY BEEN REPRODUCED IN THE ABOVE PART OF THIS ORDER. THE AS SESSMENT ORDERS IN RESPECT OF A.Y 2004-05 TO 2009-10 ARE IDENTICALLY WORDED SO AS IT RE LATES TO MENTIONING THE REASON FOR PROCEEDING TO MAKE BEST JUDGMENT ASSESSMENT UNDER SECTION 144 R.W.S. 153A OF THE ACT. FOR THE SAKE OF CONVENIENCE THE OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER FOR A.Y 2004-05 TO THAT EXTENT ARE REPRODUCED B ELOW: THE SEARCH & SEIZURE ACTION U/S 132 OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT IN THE CASE OF RELIABLE PAPER (INDIA) P RIVATE LIMITED AND ITS GROUP CONCERNS, MUMBAI BETWEEN 23.02.2010 AND 20.04.2010, WHEREIN INCRIMINATING DOCUMENTS. RELATING TO THE ASSESSEE WAS FOUND AND S IMULTANEOUSLY ACTION U/S. 132 OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT ON THE PREMISES OF THE ASSESSEE AT ROOM NO.1, 1ST FLOOR; 23 CENTRAL BUILDING, CHOWP ATTY SEA FACE, MUMBAI- 400007. 2. SUBSEQUENTLY NOTICE U/S. 153A OF I.T. ACT, 1961 DATED 07.03.2011 WAS ISSUED AND DULY SERVED ON THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2004-05 ON 23.0 3.2011 DECLARING A TOTAL INCOME OF RS. 27,82,940/-. 3. THEREAFTER, NOTICE U/S 143(2) WAS ISSUED ON 11. 04.2011 AND DULY SERVED ON THE ASSESSEE. THE DATE FOR HEARING WAS FIXED ON 25. 04.2011, BUT ON THE DESIGNATED DATE NO ONE FROM THE ASSESSEE. ON 26.04 .2011 ASSESSEE SUBMITTED LETTER OF ADJOURNMENT AND THE CASE IS ADJOURNED TILL FURTHER DATE. 4. FURTHER, NOTICE U/S. 142(1) DATED 25.04.2011 ALO NG WITH QUESTIONNAIRE WAS ISSUED AND DULY SERVED ON THE ASSESSEE CALLING FOR VARIOUS DETAILS. THE DATE FOR MAKING SUBMISSIONS AND FOR HEARING THE CASE WAS FIXED ON 12.05.2011. HOWEVER, ON THE DESIGNATED DATE NO ONE ATTENDED. O N 19.05.2011 ASSESSEE HAS SUBMITTED LETTER ADJOURNMENT AND THE CASE IS ADJOU RNED TO 30.05.2011. ITA NO.109/MUM/2014 TO 115/MUM/2014 / ASSESSMENT YEAR 2004-05 TO 2010-11. 5 5. SUBSEQUENTLY, THE ASSESSEE MADE HIS FIRST PARTIA L SUBMISSION ON 15.06.2011 AND SECOND PARTIAL SUBMISSION WAS MADE O N 21.10.2011. 6. FURTHER NOTICE U/S. 142(1) DATED 15.10.2012 WAS ISSUED ASKING THE ASSESSEE TO SUBMIT COMPLETE DETAILS AS REQUESTED IN THE QUESTIONNAIRE ISSUED EARLIER. THE DATE FOR COMPLIANCE OF THIS NOTICE WA S FIXED ON 29.10.2012, BUT ON THE DESIGNATED DATE NO ONE ATTENDED, NOR HAD ANY AD JOURNMENT LETTER BEEN FILED. 7. IN VIEW OF CONSISTENT NON-COMPLIANCE ON THE PART OF THE ASSESSEE MORE REMINDER NOTICE U/S. 142(1) DATED 29.10.2012 WAS IS SUED AND DULY SERVED ON THE ASSESSEE. IN THIS NOTICE THE ASSESSEE WAS ASKED TO SHOW CAUSE THAT IF THE ASSESSEE FAILS TO ATTEND THE HEARING WITH ALL DETAI LS THEN WHY THE ASSESSMENT SHOULD NOT BE COMPLETED U/S.144 OF THE INCOME TAX A CT, 1961. FURTHER IT WAS MENTIONED THAT, IF IS THE LAST OPPORTUNITY OF BEING HEARD, AND FURTHER THE ASSESSMENT WILL BE COMPLETED EX-PARTE WITHOUT FURTH ER NOTICE. THE DATE FOR HEARING WAS FIXED ON 06.11.2012, BUT ON THE DESIGNA TED DATE NO ONE ATTENDED. 8. IN VIEW OF CONSISTENT NON-COMPLIANCE ON THE PART OF THE ASSESSEE ONE MORE REMINDER NOTICE U/S.142(1) DATED 7/12/2012 WAS ISSU ED AND DULY SERVED ON THE ASSESSEE. IN THIS NOTICE THE ASSESSEE WAS ASKED TO SHOW CAUSE THAT IF THE ASSESSEE FAILS TO ATTEND THE HEARING WITH ALL DETAI LS THEN WHY THE ASSESSMENT SHOULD NOT BE COMPLETED U/S.144 OF THE INCOME TAX A CT, 1961. FURTHER IT WAS MENTIONED THAT, IT IS THE LAST OPPORTUNITY OF BEING HEARD, AND FURTHER THE ASSESSMENT WILL BE COMPLETED EX-PARTE WITHOUT FURTH ER NOTICE. THE DATE FOR HEARING WAS FIXED ON 14.12.2012, BUT ON THE DESIGNA TED DATE NO ONE ATTENDED. 9. FURTHERMORE, NOTICE U/S 142(1) DATED 31.12.012 W AS ISSUED WHEREIN A FINAL OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE ASSESS EE. THE DATE FOR HEARING WAS FIXED ON 07.01.2013, BUT ON THE DESIRED DATE NO ONE ATTENDED, IN RESPONSE TO THE ABOVE MENTIONED NOTICES, THE ASSESSEE HAS SUBMITTED SOME DETAILS ON 08.01.2013. 10. PENALTY U/S 271(1)(B) R.W.S. 274 OF LT. ACT, !L .961 HAS BEEN INITIATED VIDE PENALTY ORDER DATED 14.2.2013. 11. SINCE THE DETAILS SUBMITTED BY THE ASSESSEE WER E NOT COMPLETE, NOTICE U/S 142(1) DATED 21.01.2013 ALONG WITH QUESTIONNAIRE WA S ISSUED AND DULY SERVED ON THE ASSESSEE CALLING FOR VARIOUS DETAILS. THE DA TE FOR COMPLIANCE OF THIS NOTICE WAS FIXED ON 28.01.2013. BUT NO ONE ATTENDED ON THE DESIRED DATE. 12. IT IS VERY EVIDENT FROM THE FACTS AS MENTIONED IN THE AFORESAID FT PARAGRAPHS THAT THERE IS CONTINUOUS NON-COMPLIANCE OF VARIOUS NOTICES ON THE PART OF THE ASSESSEE AND HENCE THE ASSESSMENT IS BEING COMPLETE D ON THE BASIS OF THE MATERIALS, DOCUMENTS AND INFORMATION AS AVAILABLE O N RECORD WITH THIS OFFICE EX- PARTE U/S. 144 OF THE I.T. ACT, 1961 AFTER PROVIDIN G THE SUFFICIENT OPPORTUNITY OF BEING HEARD AND BY FOLLOWING ALL PRINCIPLES OF NATU RAL JUSTICE. ITA NO.109/MUM/2014 TO 115/MUM/2014 / ASSESSMENT YEAR 2004-05 TO 2010-11. 6 6.1 IT CAN BE SEEN FROM THE ABOVE OBSERVATIONS OF AO THAT IT DOES NOT REFER EVEN TO THE NOTICED ISSUED UNDER SECTION 142(1) DATED 5/2/2013 , WHICH REQUIRED THE ASSESSEE TO ATTEND THE ASSESSMENT PROCEEDINGS AND TO SUBMIT THE EV IDENCE ON 12/2/2013. THUS, THE FAILURE OF THE ASSESSEE TO ATTEND THE PROCEE DINGS ON 12/2/2013 HAS NOT BEEN EVEN MADE GROUND FOR FRAMING EX-PARTE ASSESSMENT UN DER SECTION 144 OF THE ACT. IN RESPECT OF ASSESSMENT YEAR 2010-11 ALSO NO REFERENC E HAS BEEN MADE TO THE IMPUGNED NOTICE DATED 5/2/2013 WHICH REQUIRED THE ASSESSEE TO ATT END THE PROCEEDINGS ON 12/2/2013. FOR THE SAKE OF BREVITY THE RELEVANT POR TION OF THE ASSESSMENT ORDER FOR A.Y. 2010-11 IS NOT REPRODUCED. 6.2 THUS, IT CAN BE SEEN THAT THE IMPUGNED FAILURE OF THE ASSESSEE DOSE NOT RESULT INTO BEST JUDGMENT ASSESSMENT AND THE SAID NOTICE HAS NOT BEEN EVEN REFERRED IN THE ASSESSMENT ORDERS PASSED BY AO IN RESPECT OF ALL TH E ASSESSMENT YEARS. 6.3 IN THE LIGHT OF ABOVE MENTIONED FACTS, WE HAVE TO C ONSIDER THAT WHETHER LEVY OF IMPUGNED PENALTY IS JUSTIFIED OR NOT. ADMITTEDLY, P ENALTY HAS BEEN IMPOSED ONLY ON THE BASIS OF SOME OBSERVATIONS OF AO IN THE NOTICE ISS UED UNDER SECTION 142(1) ON THE BASIS OF WHICH IT IS CLAIMED THAT ASSESSEE WAS PUT TO TH E NOTICE THAT IN CASE OF FAILURE OF THE ASSESSEE, PENALTY UNDER SECTION 271(1)(B) WOU LD BE LEVIED. WHETHER SUCH OBSERVATIONS OF AO IN THE NOTICE ISSUED UNDER SECTION 142(1) WOULD BE SUFFICIENT COMPLIANCE WITH THE PROVISIONS OF SECTION 274(1), WH ICH DESCRIBE THE PROCEDURE FOR IMPOSING THE PENALTY UNDER CHAPTER XXI. IT IS DESCRI BED IN SECTION 274(1) THAT NO ORDER IMPOSING PENALTY UNDER THIS CHAPTER SHALL BE M ADE UNLESS THE ASSESSEE HAS BEEN HEARD, OR HAS BEEN GIVEN REASONABLE OPPORTUNITY OF BEING HEARD. THE NOTICE ISSUED UNDER SECTION 142(1) REQUIRED THE ASSESSEE TO SUBMIT EVIDENCE TO SUPPORT HIS CASE BUT THAT DOES NOT MEAN THAT ASSESSEE HAS BEEN PUT TO NOTICE FOR LEVY OF PENALTY U/S.271(1)(B). FOR LEVY OF PENALTY A SEPARATE NOTI CE IS REQUIRED TO BE GIVEN DESCRIBING FAILURE OF THE ASSESSEE FOR A PARTICULAR DATE TO COMPL Y WITH THE NOTICE. NOTICE UNDER SECTION 142(1) WAS FOR 12/2/2013 AND UPON NON-COMPL IANCE OF THAT NOTICE, THE AO WAS REQUIRED TO ISSUE FURTHER NOTICE TO THE ASSESSEE, IF HE WANTED TO LEVY PENALTY UNDER SECTION 271(1)(B) TO FULFILL THE COMPLIANCE OF SECTION 274(1). THE REQUIREMENT OF ITA NO.109/MUM/2014 TO 115/MUM/2014 / ASSESSMENT YEAR 2004-05 TO 2010-11. 7 SECTION 274 IS THAT ORDER IMPOSING PENALTY CANNOT BE PASSED UNLESS THE ASSESSEE HAS BEEN HEARD OR HAS BEEN GIVEN A REASONABLE OPPORTUN ITY OF BEING HEARD. FOR IMPOSITION OF PENALTY NO OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE. THE ASSESSEE MUST BE PUT TO NOTICE TO SHOW CAUSE AS TO WHY HE/SHE WAS UNABLE TO FULFILL THE REQUIREMENTS OF THE NOTICE. SUCH OPPORTUNITY IS MIS SING IN THE PRESENT CASE. THEREFORE, EVEN NOT GOING INTO THE QUESTION THAT WHETHER THERE IS A REFERENCE IN THE ASSESSMENT ORDER OF THE FAILURE OF THE ASSESSEE TO ATTE ND THE PROCEEDINGS ON 12/2/2013, IT IS A CLEAR CASE WHERE IT CAN BE HELD TH AT LEVY OF IMPUGNED PENALTY IS CONTRARY TO THE STATUTORY PROVISIONS OF SECTION 274(1). SECTION 274(1) HAS BEEN INTERPRETED BY THE COURTS THAT IT PROVIDES PRINCIPLES OF NATURAL JUSTICE THAT EVEN WHERE A PROVISION FOR PENALTY IS NOT ATTENDED WITH A SPECIFI C PROVISION FOR GIVING A HEARING, THE ASSESSEE SHOULD BE GIVEN SUCH OPPORTUNITY TO SHOW , IF HE CAN, THAT DEFAULT OR DELAY IN COMPLYING WITH THE SUBSTANTIVE PROVISIONS OF LAW WAS NOT WITHOUT REASONABLE CAUSE AND REFERENCE IN THIS REGARD CAN BE MADE TO THE FOLLOWING DECISIONS: CAG IIT V. SMT. P.PARUKUTTI AMMA, 105 ITR 79 (KER); TARULATA SHYAM VS. AGIT, 99 ITR 532 (GAUHATI); CIT VS. NARANG & CO., 98 ITR 462 (DE L). 6.4 HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. D.RATNAM (1995) TAX LR 504, 506 HAS HELD THAT UNDER SECTION 274(1) IT IS MANDATORY FOR THE AUTHORITIES CONCERNED TO SERVE A SHOW CAUSE NOTICE ON THE ASSESSEE REQUIRIN G HIM TO OFFER HIS EXPLANATION, CONSIDER THE EXPLANATION, IF ANY, SUBMITTED BY THE AS SESSEE AND THEREAFTER HOLD HIM GUILTY OF CONCEALMENT ETC. 6.5 IN THE PRESENT CASE ASSESSEE HAS NEVER BEEN PUT TO THE NOTICE TO EXPLAIN AS TO WHY PENALTY SHOULD NOT BE IMPOSED UNDER SECTION 271( 1)(B) AS THERE WAS ONLY AN INDICATION IN THE NOTICE ISSUED UNDER SECTION 142(1) THAT THE FAILURE OF THE ASSESSEE TO ATTEND THE PROCEEDINGS ON 12/2/2013 WOULD ENTAIL THE ASS ESSEE FOR LEVY OF PENALTY UNDER SECTION 271(1)(B) OF THE ACT. BUT THAT CANNOT BE S AID TO BE FULFILLMENT OF THE REQUIREMENT OF SECTION 274(1) AS THE SAME REQUIRE TH AT ASSESSEE SHOULD BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD AND FULFILLME NT OF SUCH REQUIREMENT IS ABSENT IN THE PRESENT CASE. ITA NO.109/MUM/2014 TO 115/MUM/2014 / ASSESSMENT YEAR 2004-05 TO 2010-11. 8 6.5 IN VIEW OF ABOVE DISCUSSION, WE HOLD THAT LD. CI T(A) HAS COMMITTED AN ERROR IN UPHOLDING THE IMPUGNED PENALTY IN RESPECT OF ALL THES E YEARS. WE DELETE THE IMPUGNED PENALTY IN ALL THE YEARS AND APPEALS FILED BY THE A SSESSEE ARE ALLOWED. 7. IN THE RESULT, ALL THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/06/2015 ' )* + , 09/06/2015 ' SD/- SD/ - ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ) MUMBAI; + DATED 09/06/2015 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. /# ( ) / THE CIT(A)- 4. /# / CIT 5. 01 #23 , $ 23 , ) / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, 0# # //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ) / ITAT, MUMBAI . . ./ VM , SR. PS