Shri Haresh B.Patel, Ahmedabad V. The Income tax Officer,Ward-9(4), Ahmedabad

ITA 1241/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80315 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SHAH
• Assessee Lawyers: A C SHAH
• Section: 273B; 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO.1241/AHD/2011 A.Y.2008-09 SHRI HARESH B. PATEL 8, SHITAL ROW HOUSE, B/H LIC OFFICE, OPP. RUPAL PARK, ANKUR CROSS ROAD, AHMEDABAD. PAN: AGCPP 7260R VS INCOME TAX OFFICER, WARD-9(4), AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI V.K. SHAH, SR.D.R., ASSESSEE(S) BY : SHRI A.C. SHAH, AR / // / DATE OF HEARING : 02/09/2014 / DATE OF PRONOUNCEMENT: 5/09/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF THE LD. CIT(APPEALS)XV-AHMEDABAD, DATED 15 TH MARCH, 2011 AND THE GROUND RAISED ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN LAW AND ON FACTS IN RETAINING THE PENALTY TO THE EXTENT OF RS. 50,000/- OUT OF RS.70,000/- LEVIED BY THE ASSESSING OFFICER U/S. 271(L)(B) OF T HE INCOME TAX ACT, 1961 ALTHOUGH SHE WAS SATISFIED WITH THE REASONABLE CAUS E ADDUCED BEFORE HER BECAUSE ON THAT BASIS ALONE SHE HAS DELETED THE PEN ALTY TO THE EXTENT OF RS.20,000/-. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THE FACT THAT THE ID. A.O. HAD NOT COMPL ETED THE ASSESSMENT U/S 144 BUT IT WAS COMPLETED U/S 143(3) OF THE INCOME TAX A CT, 1961 WHICH WOULD INDICATE THAT THE ID. A.O. HAD CONDONED THE EARLIER DEFAULTS. 2. FACTS IN BRIEF WERE THAT AN ASSESSMENT U/S. 143( 3) WAS COMPLETED VIDE ORDER DATED 14.12.2010 ON THE ASSESSED INCOME OF RS.61,13,480/- ITA NO.1241/AHD/2011 SHRI HARESH B. PATEL VS. ITO, WARD 9(4), AHMEDABAD. FOR A.Y. 2008-09 - 2 - AGAINST THE DECLARED INCOME OF RS.1,08,540/-. IN TH E ASSESSMENT ORDER, IT WAS MENTIONED THAT FEW NOTICES U/S.142(1) WERE ISSU ED IN THE YEAR 2010 BUT IN RESPECT OF FOUR NOTICES, NO ONE FROM THE SID E OF THE ASSESSEE HAD ATTENDED THE PROCEEDINGS BEFORE THE AO. THEREAFTER AGAIN A NOTICE U/S.143(2) WAS ISSUED ON 2.12.2010 WHICH WAS SERVED UPON THE ASSESSEE AND IN COMPLIANCE ADVOCATE OF THE ASSESSEE HAD APPE ARED. WHILE LEVYING THE PENALTY U/S.271(1)(B) ORDER DATED 12.10.2010, T HE AO HAS MENTIONED THESE NOTICES WHICH WERE ISSUED TO ATTEND THE PROCE EDINGS AND THEREAFTER CAME TO THE CONCLUSION THAT THERE WERE SEVEN SUCH D EFAULTS ON WHICH A PENALTY OF RS.10,000/- FOR EACH DEFAULT TOTALING RS .70,000/- WAS IMPOSED ON THE ASSESSEE. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY IN RESPECT OF TWO NOTICES THE PENALTY WAS DELETED B UT IN RESPECT OF REST OF THE FIVE DEFAULTS PENALTY WAS CONFIRMED AS UNDER: 3. IT IS SEEN THAT FIRST NOTICE WAS ISSUED WAY BAC K IN SEPTEMBER 2009 AND FROM SEPTEMBER 2009 FOR ONE YEAR THE NOTICES KEPT B EING ISSUED TILL THE LAST NOTICE U/S.271(1)(B) DATED 17.9.2010. THE NON-COMPL IANCE WAS ATTRIBUTABLE TO THE TAX REPRESENTATIVE OR THE APPELLANT THE FACT IS THAT IT DEBARRED THE AO FROM COLLECTING INFORMATION AND MAKING RELEVANT INQUIRIE S IN TIME. THE APPELLANT CANNOT ESCAPE HIS RESPONSIBILITY SPECIALLY WHEN THE NOTICES WERE RECEIVED BY HIM. I THINK IT WOULD BE FAIR ENOUGH TO DELETE THE PENALTY ON 2 DEFAULTS (FOR NOTICES DATED 4.6.2010 AND 30.7.2010) OUT OF 7 BUT RESTRICT THE PENALTY TO 5 DEFAULTS. THE PENALTY LEVIED FOR REMAINING 5 DEFAUL TS IS UPHELD. 4. FROM THE SIDE OF THE APPELLANT, LEARNED AR, MR. A.C. SHAH APPEARED AND INFORMED THAT WHILE DECIDING THE QUANT UM APPEAL HONBLE ITAT A BENCH IN ITA NO.57/AHD/2013 FOR A.Y. 2008- 09 VIDE ORDER DATED 17 TH APRIL, 2014 HAS MENTIONED THE SUBMISSION OF THE AS SESSEE THAT HE WAS PREVENTED BY SUFFICIENT CAUSE FOR NOT PRODUC ING THOSE DETAILS BEFORE THE AO. THE TRIBUNAL HAS REPRODUCED THE PORT ION OF THE ORDER OF LEARNED CIT(A) THROUGH WHICH THE IMPUGNED ADDITION U/S.68 OF ITA NO.1241/AHD/2011 SHRI HARESH B. PATEL VS. ITO, WARD 9(4), AHMEDABAD. FOR A.Y. 2008-09 - 3 - RS.60,04,945/- WAS DELETED. FINALLY, THE ORDER OF L EARNED CIT(A) DELETING THE QUANTUM ADDITION WAS CONFIRMED BY THE RESPECTED ITAT BENCH. LEARNED AR HAS ALSO INFORMED THAT THERE WAS FAILURE ON THE PART OF HIS ADVOCATE, NAMELY, SRI BHAVESH H. VYAS WHO WAS ENGAG ED TO APPEAR ON BEHALF OF THE ASSESSEE, BUT HE FAILED TO APPEAR IN COMPLIANCE OF THE NOTICES. LATER ON, WHEN THE ASSESSEE CAME TO KNOW A BOUT LEVY OF PENALTY OF RS.70,000/- DUE TO NON APPEARANCE OF THE SAID AD VOCATE, HE HAS CHANGED THE ADVOCATE AND APPOINTED ANOTHER ADVOCATE , NAMELY, SRI NILESH PRAJAPATI. IN SUPPORT OF THESE FACTS, AN AFFIDAVIT IS FILED IN THE COMPILATION. 5. FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., M R. V.K. SHAH HAS PLEADED THAT THIS ASSESSEE DOES NOT DESERVE ANY REL IEF BECAUSE HE WAS NOT WATCHFUL ABOUT THE TAX PROCEEDINGS AND DELIBERATELY AVOIDED THE INVESTIGATION. THE PART RELIEF GIVEN BY LEARNED CIT (A) WAS ADEQUATE, HENCE, REST OF THE PENALTY FOR NON APPEARANCE SHOUL D BE CONFIRMED. 6. HEARD BOTH THE SIDES. ORDER OF THE AUTHORITIES B ELOW IS CAREFULLY PERUSED. WE HAVE NOTED THAT AS PER THE PROVISIONS O F SECTION 273B OF IT ACT IN RESPECT OF A DEFAULT U/S.271(1)(B) IT IS PRO VIDED THAT NO PENALTY SHALL BE IMPOSABLE ON THE PERSON FOR ANY FAILURE RE FERRED TO IN THE SAID SECTION, IF HE PROVES THAT THERE WAS A REASONABLE C AUSE FOR THE SAID FAILURE. IN THIS CASE, THE ASSESSEE HAS PLEADED HIS BONA FID E BY APPOINTING AN ADVOCATE WHO WAS ASSIGNED TO REPRESENT HIS CASE BEF ORE THE AO. WHEN THE ASSESSEE CAME TO KNOW ABOUT THE NON APPEARANCE OF THAT ADVOCATE, THE SAID ADVOCATE WAS CHANGED AND ANOTHER ADVOCATE WAS APPOINTED. SINCE, IT WAS A FAILURE OR A LAPSE ON THE PART OF THE ADVOCAT E, THEREFORE, IN THE LIGHT OF FEW ORDERS, NAMELY, CONCORD OF INDIA INSURANCE C O. LTD. VS. SMT. ITA NO.1241/AHD/2011 SHRI HARESH B. PATEL VS. ITO, WARD 9(4), AHMEDABAD. FOR A.Y. 2008-09 - 4 - NIRMALA DEVI, 118 ITR 507 (SC), MANOJ AHUJA VS. IAC , 190 ITR 696 (P&H), GUJARAT TUBEWELL CO. VS. ITO 43 TTJ 331 AND BHARAT VIKAS UDYOG VS. ITO, 35 TTJ 204, THE ASSESSEE MUST NOT BE TREATED IN DEFAULT. 6.1 CONSIDERING THE TOTALITY OF THE FACTS AND CIRCU MSTANCES OF THE CASE AS ALSO THE CASE LAW CITED, WE HEREBY HOLD THAT APP LYING THE PROVISIONS OF SECTION 273B, THE ASSESSEE SHOULD NOT BE TREATED IN DEFAULT FOR WHICH THE IMPUGNED PENALTY U/S.271(1)(B) WAS IMPOSED. WE HERE BY DIRECT TO DELETE THE PENALTY. RESULTANTLY, THE GROUNDS ARE HEREBY AL LOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 5/09/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD