PRAMILA B.JAIN, MUMBAI V. ADDL CIT RG 19(1), MUMBAI

ITA 1385/MUM/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3415 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 18-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUM EET KUMAR
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1385/MUM/2010 (ASSESSMENT YEAR: 2006-07) SMT. PRAMILA B. JAIN ADDL. CIT, RANGE 19(1) 12, DEEPMALA BUILDINGS, 3RD ROAD PIRAMAL CHAMBERS, LALBAUG KHAR (W), MUMBAI 400052 VS. MUMBAI 400012 PAN - ADIPJ 7317 C APPELLANT RESPONDENT APPELLANT BY: SHRI SUBHASH CHHAJED RESPONDENT BY: SHRI SUMEET KUMAR O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE APPELLANT IS AGAINST THE ORDER O F THE CIT(A)- XXX, MUMBAI DATED 25.11.2009 CONFIRMING THE PENALTY UNDE R SECTION 272A(1)(C) OF THE I.T. ACT OF ` 10,000. 2. THE BRIEF FACTS ARE THAT THE A.O., WHILE ASSESSING THE CASE OF SMT. REKHA R. JAIN ISSUED SUMMONS TO THE LENDERS TO ATTE ND PERSONALLY BEFORE THE A.O. AND TO PRODUCE ORIGINAL PASS BOOK AND COPY OF RETURN OF INCOME IN ORDER TO VERIFY THE GENUINENESS OF LOANS GIVEN BY T HEM TO THE ASSESSEE REKHA R. JAIN FOR A.Y. 2006-07. HOWEVER THE A.O. FOUND TH AT THE WITNESS, I.E. THE APPELLANT DID NOT ATTEND BEFORE HIM ON THE DATE OF HEARING, I.E. 18.12.2008 AND CONSEQUENTLY HE INTIMATED THIS FACT TO THE ADDL . CIT VIDE HIS LETTER DATED 19.01.2009. THE A.O. ALSO RECOMMENDED THAT PENALTY PROCEEDINGS UNDER SECTION 272A(1)(C) MAY BE INITIATED AGAINST SMT. PR AMILA B. JAIN. THE ADDL. COMMISSIONER INITIATED PENALTY PROCEEDINGS AGAINST THE APPELLANT VIDE LETTER DATED 23.02.2009 STATING THAT THE APPELLANT HAD CON TRAVENED THE PROVISIONS OF SECTION 131 OF THE I.T. ACT. SHE WAS ASKED TO SH OW CAUSE ALONG WITH RELEVANT EVIDENCE AS TO WHY PENALTY SHOULD NOT BE L EVIED UNDER SECTION 272(A)(1)(C) OF THE I.T. ACT. AFTER CONSIDERING THE REPLY OF THE APPELLANT, THE ADDL. CIT IMPOSED PENALTY OF ` 10,000/- UNDER SECTION 272A(1)(C) OF THE ACT BY HOLDING AS UNDER: - ITA NO. 1385/MUM/2010 SMT. PRAMILA B. JAIN 2 IT IS CLEAR THAT THE WITNESS SMT. PRAMILA B. JAIN FAILED TO COMPLY WITH THE SUMMONS BY NOT ATTENDING BEFORE ITO 19(1)(2) ON THE PRESCRIBED DATE. THE AFFIDAVIT FILED BY HER IN RESPECT OF NON COMPLI ANCE OF SUMMON SIS A SELF SERVING DOCUMENT WHICH IS INCONSISTENT WITH TH E FACTS OF THE CASE AND ALSO EVIDENCE ON RECORD. IT IS NOT CLEAR WHY TH E SAME HAS BEEN EXECUTED ON 19.12.2008 WHEN THERE WAS NO REQUIREMEN T TO FILE AN AFFIDAVIT FROM ANY OF THE AUTHORITY. BESIDES, HAVIN G PREPARED THIS AFFIDAVIT, IT IS NOT CLEAR WHY THE SAME HAS NOT BEE N SUBMITTED TO ANY AUTHORITY SUPERIOR TO ITO 19(1)(2) WHO COULD HAVE T AKEN REMEDIAL ACTION IN THE MATTER. BESIDES NO OTHER INSTANCE OF ANY TYP E WHEREIN ITO 19(1)(2) HAD NOT ATTENDED THE ASSESSEE OR C.A. AFTER CALLING HIM HAS COME TO ANY NOTICE IN LAST TWO YEARS. THE PENALTY WAS CONFIRMED BY THE CIT(A) STATING THA T THE CONTENTIONS OF THE APPELLANT ARE NOT CORRECT. 3. AT THE OUTSET THE LEARNED COUNSEL SUBMITTED THAT ON SIMILAR FACTS IN THE CASE OF SMT. RANJANA JAIN, WHO IS ALSO SUMMONED BY THE A.O., THE ITAT HAS DELETED THE PENALTY AND SINCE THE FACTS ARE SIM ILAR THE PENALTY IS TO BE DELETED. 4. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE ORDE RS THE A.O. HAD ISSUED WITNESS SUMMONS NOT ONLY TO THE APPELLANT BU T ALSO TO THE OTHER PERSON AND THE PENALTY LEVIED FOR NON APPEARANCE ON SAME FACTS BY SOME OFFICER IN THE CASE OF SMT. RANJANA JAIN WAS CANCEL LED BY THE ITAT IN ITA NO. 1228/MUM/2010 DATED 30 TH SEPTEMBER 2010 BY HOLDING AS UNDER: - 4. A PLAIN PERUSAL OF THE ORDERS OF THE AUTHORITIE S BELOW SHOWS THAT THE ONLY REASON AS TO WHY THE ASSESSEES EXPLANATION FO R NOT APPEARING BEFORE THE INCOME TAX OFFICER IS REJECTED IS THAT W HEN THE INCOME TAX OFFICER DID NOT RECORD HER ATTENDANCE, THE ASSESSEE WAS EXPECTED TO APPROACH THE INCOME TAX OFFICERS SUPERIOR AUTHORIT Y AND RECORD THE PRESENCE OR, IN THE ALTERNATE, THE ASSESSEE WAS EXP ECTED TO AGAIN APPEAR BEFORE THE INCOME TAX OFFICER ON THE VERY NEXT DATE . THIS REJECTION OF THE ASSESSEES EXPLANATION, IN OUR CONSIDERED VIEWS, IS WHOLLY AND UNSUSTAINABLE IN LAW INASMUCH AS THE PENALTY CAN ON LY BE IMPOSED FOR NOT APPEARING BEFORE THE INCOME TAX OFFICER ON THE SCHEDULE DATE OF APPOINTMENT. THAT IS NOT THE CASE HERE. THE ASSESSE E WAS PRESENT ON THE APPOINTED DAY. THE ASSESSEE IS EXPECTED TO PRESENT BEFORE THE OFFICER REQUIRING HIS PRESENCE. IN ANY EVENT, IT IS WHOLLY UNREALISTIC TO ASSUME IN CASE THE ASSESSEE IS CALLED UPON TO APPEAR BEFORE T HE ITO AND DESPITE HER WAITING OUTSIDE THE ROOM OF THE ITO AND DESPITE HER HAVING DULY INTIMATED THE ITO ABOUT HER PRESENCE THERE, THE ASS ESSEE DOES NOT GET CALLED IN THE CHAMBER OF THE INCOME TAX OFFICER, TH E ASSESSEE SHOULD IMMEDIATELY APPROACH THE HIGHER AUTHORITIES TO INFO RM THE ABOVE ATTITUDE OF THE ITO. THE ASSESSEE IS NOT DUTY BOUND TO DO SO . AS FAR THE SUGGESTION THAT THE ASSESSEE SHOULD HAVE APPEARED O N THE NEXT WORKING ITA NO. 1385/MUM/2010 SMT. PRAMILA B. JAIN 3 DAY, THE ASSESSEE IS NOT UNDER OBLIGATION TO DO SO. UNDISPUTEDLY, UNDER THE ABOVE CIRCUMSTANCES, PERHAPS THE ASSESSEE COULD HAVE APPEARED ON THE SUBSEQUENT DATE TO ASCERTAIN THE REASONS OF HER NOT BEING ALLOWED TO PRODUCE HERSELF ON THE SCHEDULED DATE. HOWEVER, JUS T BECAUSE THE ASSESSEE DID NOT SO, THE PENALTY FOR NON-COMPLIANCE CANNOT BE IMPOSED. THE PENALTY CAN BE IMPOSED, IF THE ASSESSEE IS UNDE R OBLIGATION TO DO SOMETHING AND HE FAILS TO DISCHARGE THAT OBLIGATION . THAT IS NOT EVEN THE CASE OF THE AUTHORITIES BELOW. THE PENALTY CANNOT B E IMPOSED FOR ASSESSEE NOT DOING SOMETHING WHICH THE ASSESSEE OUG HT TO HAVE DONE IN IDEAL CIRCUMSTANCES. HAVING SAID THAT, WE ALSO FEEL THAT THE ASSESSEE HAS ALREADY UNDERGONE SUFFICIENT AGONY IN PURSING T HIS LITIGATION AND THE ASSESSEE WILL HOPEFULLY ENSURE, IN FUTURE, SCRUPULO US COMPLIANCE WITH LEGITIMATE REQUISITIONS FROM THE TAX AUTHORITIES. W E LEAVE IT AT THAT. FOR THE REASONS SET OUT ABOVE, WE DEEM IT PROPER TO DELETE THE IMPUGNED PENALTY. THE ASSESSEE GETS RELIEF ACCORDINGLY. 5. SINCE THE FACTS ARE SAME, FOLLOWING THE RATIONALE A DOPTED BY THE COORDINATE BENCH, WE ARE ALSO OF THE OPINION THAT T HE FACTS DID NOT WARRANT ANY PENALTY. ACCORDINGLY, PENALTY IS CANCELLED. 6. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER 2010. SD/- SD/- (R.S. PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH DECEMBER 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXX, MUMBAI 4. THE CIT XIX, MUMBAI CITY 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.