Shri Jagteswar Singh, Kolkata V. ITO, WD-33(2), KOLKATA, Kolkata

ITA 1272/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1190 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTAHARJEE
• Assessee Lawyers: MRS SASWATI MITRA DUTTA
• Keywords: Source of fund; Reasonable cause
• Section: 273B; 143(3); 142(1)

Judgement Text

1 ITA NO.1272/KOL/2016 JAGTESWAR SINGH, AY- 2011-12 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1272/KOL/2016 ASSESSMENT YEAR: 2011-12 SHRI JAGTESWAR SINGH (PAN: AJVPS1925N) VS. INCOME-TAX OFFICER, WD-33(2), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 18.01.2018 DATE OF PRONOUNCEMENT 28.03.2018 FOR THE APPELLANT MRS. SASWATI MITRA (DUTTA), ADVOC ATE FOR THE RESPONDENT SHRI ARINDAM BHATTAHARJEE, ADDL. CIT, DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF LD. CIT(A)-9, KOLKATA DATED 30.03.2016 FOR AY 2011-12 IN RESPECT OF UPHOLDING T HE PENALTY OF RS.10,000/- IMPOSED BY THE AO U/S. 271(1)(B) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT). 2. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) IN CONFIRMING THE PENALTY U/S. 271(1)(B) OF THE ACT. THE FACTS AND CI RCUMSTANCES UNDER WHICH PENALTY U/S 271(1)(B) OF THE ACT WAS IMPOSED ON THE ASSESSEE BY THE AO ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 30.09.2011 DECLARING A NIL IN COME. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS FOR THE REASON THAT THERE WAS A CASH DEPOSIT OF RS.31,70,000/- IN A S.B. A/C. MAINTAINED BY THE ASSESSEE IN ANDHRA BAN K, BALLYGUNGE PARK BRANCH. WHEN ASKED BY THE AO TO EXPLAIN THE SOURCE OF THE DEPOSI T, THE ASSESSEE REPLIED THAT THE SOURCE OF SUCH CASH DEPOSIT WAS FROM AGRICULTURAL ACTIVITY. THE ASSESSEE WAS ASKED TO PRODUCE DOCUMENTS LIKE HARD COPY OF RETURN, COMPUTATION OF INCOME, COPY OF BANK STATEMENTS, AUDITED ACCOUNTS, LAND DEED ALONG WITH DETAILS OF L AND, LOCATION, AREA QUANTITY, TAX RECEIPTS ETC. ON VARIOUS DATES, ( WHICH FACTS HAVE BEEN SHOWN BY WAY OF A CHART BY TH E AO IN THE 2 ITA NO.1272/KOL/2016 JAGTESWAR SINGH, AY- 2011-12 ORDER PASSED U/S. 271(1)(B) OF THE ACT ), BUT ACCORDING TO AO, NO COMPLIANCE OR PARTIAL COMPLIANCE WAS ONLY MADE BY ASSESSEE PURSUANT TO NO TICE U/S. 142(1) OF THE ACT ISSUED ON VARIOUS DATES BY THE AO AND, THEREFORE, THE AO OBSE RVED THAT IT IS QUITE EVIDENT FROM THAT CHART HE HAS TABULATED IN HIS PENALTY ORDER THAT TH E ASSESSEE WAS ATTEMPTING TO DELAY THE PROCEEDING TO ENSURE THAT PROPER INVESTIGATION IS N OT POSSIBLE IN THE INSTANT CASE. ACCORDINGLY, THE AO CONCLUDED THAT THE ASSESSEE DID NOT COMPLY WITH NOTICE U/S. 142(1) OF THE ACT DESPITE BEING GIVEN SEVERAL OPPORTUNITIES T O DO SO WITH AN INTENTION TO OBSTRUCT THE PROCESS OF INVESTIGATION CARRIED OUT BY HIM. THERE FORE, HE THOUGHT THAT IT A FIT CASE FOR IMPOSITION OF PENALTY U/S. 271(1)(B) OF THE ACT AND IMPOSED A PENALTY OF RS.10,000/-. ON APPEAL, THE LD. CIT(A) CONFIRMED THE SAME BY AN EX PARTE ORDER WITHOUT HEARING THE ASSESSEE. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE S UBMITTED BEFORE US THAT THE ASSESSEE IS A SENIOR CITIZEN AND WAS QUITE UNWELL WHEN THE DOCUME NTS WERE REQUISITIONED BY THE AO AND SINCE THE DOCUMENTS CALLED FOR RELATED TO AGRICULTU RAL LAND SITUATED AT HIS ANCESTRAL HOMETOWN IN STATE OF UTTAR-PRADESH IT CAUSED DELAY IN GETTING THE DOCUMENTS, SO THAT WAS THE REASON FOR THE DELAY IN FILING THE REQUISITE DO CUMENTS SOUGHT FOR BY THE AO. SHE ALSO DREW OUR ATTENTION TO THE FACT THAT THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 11.03.2014, WHEREIN IT WAS ACKNOWLEDGED BY THE AO I N HIS OWN WORDS IN COMPLIANCE TO THE NOTICES SHRI A. BANERJEE AND SMT. SASWATI MITRA DUTTA, A/RS OF THE ASSESSEE APPEARED FROM TIME TO TIME TO EXPLAIN THE RETURN. ACCORDING TO LD. AR, THE ASSESSEES SOURCES OF INCOME WERE PROFIT FROM A FIRM NAMED M/S. UNIVERSAL CONSTRUCTION AND BANK INTEREST. THE ASSESSEE PRODUCED THE ORIGINAL DOCUMENTS AS CALLED FOR, FOR VERIFICATION. THE CASE IS HEARD AND DISCUSSED WITH HIM . THEREFORE, ACCORDING TO HER, THE ASSESSMENT WAS FINALLY COMPLETED BY THE AO UNDER SECTION 143(3) OF THE AC T WAS SUFFICIENT TO SHOW THAT THERE WAS SUBSTANTIAL COMPLIANCE MADE BY THE ASSESSEE. SHE A LSO SUBMITTED THAT THE DEFAULT COMMITTED BY THE ASSESSEE THUS COULD NOT BE SAID TO BE WILLFUL AND THE PENALTY IMPOSED U/S. 271(1)(B) OF THE ACT IS LIABLE TO BE CANCELLED. 4. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF THE LOWER AUTHORITIES AND URGED BEFORE THE BENCH TO CONFIRM THE SAME. 3 ITA NO.1272/KOL/2016 JAGTESWAR SINGH, AY- 2011-12 5. WE HAVE HEARD RIVAL SUBMISSION AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE IS A SENIOR CITIZE N AND NOT KEEPING WELL AND THE DOCUMENTS SOUGHT FOR BY THE AO RELATED TO AGRICULTURAL INCOME OF THE ASSESSEE AND THE LAND IS SITUATED AT HIS HOMETOWN IN THE STATE OF UTTAR-PRADESH. HEN CE, WHEN AO ASKED THE ASSESSEE TO PRODUCE THE DOCUMENTS PERTAINING TO HIS ANCESTRAL L AND SITUATED AT HIS VILLAGE IN THE STATE OF UP, DELAY HAPPENED WHICH WAS NOT DELIBRATE. BEING A SENIOR CITIZEN AND SUFFERING FROM OLD-AGE ILLNESS, THE PROMPT SUBMISSION OF DOCUMENTS COULD NOT HAPPEN AND THE DELAY CAUSED TO PRODUCE THE SAME WAS BEYOND HIS CONTROL AND THUS THE DELAY IS NOT AT ALL WILLFUL. AND SINCE THE ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT AFTER THE ASSESSEE HAD PRODUCED ALL DOCUMENTS THE PENALTY WAS NOT WARRANTED. WE ALSO F IND THAT THE LANGUAGE USED IN SECTION 271(1)(B) OF THE ACT IS THAT . HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY MEANING THEREBY THAT THE AUTHORITIES A RE GIVEN DISCRETION TO IMPOSE PENALTY OR NOT. FURTHER, SEC. 273B OF THE ACT PROVIDES THA T NO PENALTY SHALL BE IMPOSABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFERRED TO IN THE PROVISIONS OF SECTION 271(1)(B) OF THE ACT IF HE PROVES THAT THER E WAS REASONABLE CAUSE FOR THE SAID FAILURE. IN THIS REGARD IT WOULD BE PRUDENT TO REF ER TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL VS. STATE OF O RISSA 83 ITR 26, WHEREIN IT WAS HELD THAT EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHOR ITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN TH ERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT. WE ALSO NOTE THAT THE ASSES SMENT PROCEEDING HAS BEEN FRAMED U/S. 143(3) OF THE ACT AND THE AO HIMSELF IN THE ASSESS MENT ORDER HAS ACKNOWLEDGED THAT LD. AR OF THE ASSESSEE PARTICIPATED AND PRODUCED DOCUME NTS BEFORE THE AO WHICH MEANS COMPLIANCE WAS MADE BY THE ASSESSEE AND, THEREFORE, THE DELAY IN NOT FURNISHING DOCUMENTS RELATED TO HIS AGRICULTURAL LAND SITUATE IN THE STA TE OF UP, CANNOT BE VIEWED AS DELIBERATE ATTEMPT ON THE PART OF ASSESSEE TO DELAY THE ASSESS MENT. WE NOTE THAT ASSESSEE HAD PRODUCED THE DOCUMENTS RELATED TO AGRICULTURAL LAND AND THE AO THEREAFTER ISSUED COMMISSION TO VERIFY THE FACTS AND THEREAFTER FRAME D THE ASSESSMENT ORDER U/S. 143(3) OF THE ACT. THEREFORE, THE DEFAULT ON THE PART OF THE ASS ESSEE IN NOT COMPLYING THE NOTICES ISSUED BY THE AO U/S. 142(1) OF THE ACT WAS MERELY A TECHN ICAL OR VENIAL NATURE FOR WHICH THE IMPOSITION OF PENALTY U/S. 271(1)(B) OF THE ACT WAS NOT JUSTIFIED. THEREFORE, CONSIDERING ALL THE FACTS OF THE CASE, WE HOLD THAT THE PENALTY IMP OSED BY THE AO U/S. 271(1)(B) OF THE ACT 4 ITA NO.1272/KOL/2016 JAGTESWAR SINGH, AY- 2011-12 AND CONFIRMED BY THE LD. CIT(A) UNDER CONSIDERATION IS NOT SUSTAINABLE FOR THAT WE RELY ON A COORDINATE BENCH DECISION IN THE CASE OF ANIL CHA RAN PAUL VS. DCIT IN ITA NOS. 887- 893/KOL/2016, AYS. 2006-07 TO 2012-13 DATED 13.12.2 017, AND WE CANCEL THE SAME. THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 28TH MARCH , 2018 SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28TH MARCH, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI JAGTESWAR SINGH, GREENWOOD PARK, H IG-3, FLAT-1, DB-1, NEW TOWN, RAJARHAT, KOLKATA-700 156 2 RESPONDENT ITO, WARD-33(2), KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .