SPS Tube Industries, Ahmedabad V. ACIT, Circle-3(3), Ahmedabad

ITA 141/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8819 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 04-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Non compliance; Set aside
• Section: 144; 143(3); 142(1); 143(1); 274; 44AB

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.141/AHD/2019 / ASSTT. YEAR: 2015-16 SPS TUBE INDUSTRIES PLOT NO.518, PHASE-III KATHWADA, NR.GVMMSA VASAHAT ODHAV, AHMEDABAD. PAN : AAXFS 4891 A VS. ACIT, CIR.3(3) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : WRITTEN SUBMISSIONS REVENUE BY : SHRI RAJDEEP SINGH, SR.DR ! / DATE OF HEARING : 15/07/2021 '#$ ! / DATE OF PRONOUNCEMENT: 02 /08/2021 %& / O R D E R PER RAJPAL YADAV, VICE-PRESIDENT ASSESSEE IS IN APPEAL AGAINST ORDER OF THE LD.CIT(A )-3, AHMEDABAD DATED 31.12.2018 PASSED UNDER SECTION 271 (1)(B) OF THE INCOME TAX ACT, 1961. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING ORDER UNDER SECTION 271(1)(B) P ASSED BY THE AO, BY WHICH THE LD.AO IMPOSED PENALTY OF RS.10,000 /- FOR THE ASSTT.YEAR 2015-16 DUE TO ALLEGED DEFAULT OF NON-CO MPLIANCE OF THE STATUTORY NOTICE. ITA NO.141/AHD/2019 2 3 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS E NGAGED IN BUSINESS OF MANUFACTURING OF SS PIPES AND TUBES. I T HAS E-FILED RETURN OF INCOME ON 30.9.2015 DECLARING INCOME AT RS.1,24,99,840/-. THE RETURN WAS PROCESSED UNDER S ECTION 143(1) OF THE ACT AND THEREAFTER SELECTED FOR SCRUTINY ASS ESSMENT. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) BY AC CEPTING THE RETURNED INCOME. THEREAFTER, THE LD.AO INITIATED P ENALTY PROCEEDINGS UNDER SECTION 271(1)(B) FOR NON-COMPLIA NCE OF NOTICE ISSUED UNDER SECTION 142(1) DATED 18.9.2017. ACCOR DINGLY, A NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(B ) OF THE ACT WAS ISSUED TO THE ASSESSEE, HOWEVER, THE ASSESSEE H AS NOT FURNISHED ANY EXPLANATION FOR NON-COMPLIANCE OF NOT ICE. THE LD.AO ACCORDINGLY IMPOSED PENALTY OF RS.10,000/- UNDER SE CTION 271(1)(B) OF THE ACT. THE SAME WAS CHALLENGED BEF ORE THE FIRST APPELLATE AUTHORITY, BUT DID NOT SUCCEED, HENCE, TH E ASSESSEE BEFORE THE TRIBUNAL. 4. BEFORE US, THE ASSESSEE FILED A DETAILED SUBMISSI ON. IT IS INTER ALIA PLEADED THAT THE ASSESSEE HAS COOPERATED WITH THE DEPARTMENT FOR FINALIZATION OF ASSESSMENT, THAT IS EVIDENT FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) ITSELF . HOWEVER, THE TIME GIVEN IN THE NOTICE ISSUED UNDER SECTION 1 42(1) R.W.S. 129 OF THE ACT TO FURNISH VOLUMINOUS DETAILS WAS VE RY SHORT, AND BEYOND THE REACH OF THE ASSESSEE TO COMPLY. THE AS SESSEE HAS DEMONSTRATED IN THE FOLLOWING CHART HOW THE IMPUGNE D NOTICES WERE ISSUED AND HOW MUCH TIME WAS GIVEN TO THE ASSE SSEE FOR COMPLIANCE THEREOF. ITA NO.141/AHD/2019 3 PARTICULARS OF NOTICE ISSUED DATE OF NOTICE DATE OF SERVICE OF NOTICE DUE DATE TO COMPLY THE NOTICES DAYS ALLOWED BY THE AO TO ASSESSEE FOR COMPLIANCE NOTICE U/S 142(1) 18/09/2017 25/09/2017 28/09/2017 3 DAYS NOTICE U/S 274 13/10/2017 23/10/2017 27/10/2017 4 DAYS IT IS FURTHER PLEADED THAT ENTIRE ADMINISTRATIVE ST AFF OF THE ASSESSEE WERE BUSY IN COMPILATION OF VARIOUS DETAIL S REQUIRED FOR TAX AUDIT REPORT UNDER SECTION 44AB AS WELL AS IN TH E RETURN OF INCOME, AND THEREFORE, DELAY IF AT ALL IS BEYOND TH E CONTROL OF THE ASSESSEE AND FOR SUCH REASONS, THERE COULD NOT BE A NY PENALTY UNDER SECTION 271(1)(B) OF THE ACT. IT FURTHER PLE ADED THAT ASSESSMENT IN THE CASE OF THE ASSESSEE WAS FINALIZE D UNDER SECTION 143(3) AND NOT UNDER SECTION 144 OF THE ACT, AND TH ERE IS A CONSIDERABLE COMPLIANCE OF NOTICES AS IS EVIDENT FR OM THE OBSERVATION OF THE LD.AO IN THE ASSESSMENT ORDER IN PARA-3 THAT REPRESENTATIVES OF THE ASSESSEE HAVE ATTENDED AND F URNISHED THE REQUISITE DETAILS/EVIDENCE FROM TIME TO TIME, WHICH WERE PERUSED AND PLACED ON RECORD, AND THAT THE CASE WAS DISCUSS ED WITH THE AR PRESENT. THIS GOES TO SHOW THAT THE ASSESSEE HAS F ULLY COOPERATED IN THE ASSESSMENT PROCEEDINGS, AND THERE IS NO ROOM FOR VISITING THE ASSESSEE WITH PENALTY UNDER SECTION 271(1)(B) O F THE ACT. ON THE OTHER HAND, THE LD.DR SUPPORTED ORDERS OF TH E REVENUE AUTHORITIES. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND GONE TH ROUGH THE ORDERS OF THE REVENUE AUTHORITIES. THE ASSESSEE WA S IMPOSED WITH PENALTY UNDER SECTION 271(1)(B) OF THE ACT OF RS.10,000/- ON THE GROUND HE HAS NOT COMPLIED WITH STATUTORY NOTIC E ISSUED UNDER SECTION 142(1) R.W.S. 129 OF THE ACT. A PERUSAL O F THE ASSESSMENT ITA NO.141/AHD/2019 4 ORDER UNDER SECTION 143(3) OF THE ACT NOT SUGGESTS ANY WHISPER OF NON-COOPERATION BY THE ASSESSEE DURING THE ASSESSME NT PROCEEDINGS, ON THE OTHER HAND, THE LD.AO RECORDED THAT ASSESSEEES REPRESENTATIVES ATTENDED, FURNISHED REQ UISITE DETAILS/EVIDENCES FROM TIME TO TIME, WHICH WERE PER USED AND PLACED ON RECORD, AND THE CASE DETAILS WERE DISCUSS ED WITH THE REPRESENTATIVES. WHILE GOING THROUGH THE SUBMISSI ONS OF THE ASSESSEE, IT COULD BE UNDERSTOOD THAT THERE IS A RE ASONABLE CAUSE FOR THE ASSESSEE FOR NON-COMPLIANCE OF NOTICES AS T ABULATED ABOVE. THERE IS NO DELIBERATE ATTEMPT ON THE PART OF THE A SSESSEE, MORE SO WHEN THE TIME GIVEN BY THE LD.AO TO THE ASSESSEE FOR COMPLIANCE WAS VERY SHORT. FURTHER, ASSESSMENT UND ER SECTION 143(3) WAS FINALIZED BY ACCEPTING THE RETURNED INCO ME FILED BY THE ASSESSEE. THE ASSESSEE MIGHT HAVE MISSED TO MAKE CO MPLIANCE ON THOSE DATES BUT ULTIMATELY DUE COMPLIANCE WAS MADE AND REQUISITE DETAILS WERE FILED BY THE ASSESSEE AND HAD PARTICIP ATED IN THE PROCEEDINGS BEFORE THE AO AND THE ASSESSMENT HAS BE EN COMPLETED U/S 143(3), AND THEREFORE, PENALTY SHOULD NOT BE LEVIED U/S 271(1(B) OF THE ACT FOR NON COMPLIANCE OF PARTI CULAR NOTICE MERELY ON TECHNICAL GROUNDS. VARIOUS BENCHES OF THE TRIBUNAL IN A NUMBER OF DECISIONS HAVE HELD THAT WHERE THE ASSESS MENT ORDER WAS FINALLY PASSED U/S 143(3) AND NOT U/S 144 OF TH E ACT DUE TO SUBSEQUENT COMPLIANCE DURING THE ASSESSMENT PROCEED INGS, THAT WOULD BE CONSIDERED AS GOOD COMPLIANCE AND THE DEFA ULTS COMMITTED EARLIER SHOULD BE IGNORED AND BY TAKING A LENIENT VIEW THE PENALTY U/S 271(1)(B) OF THE I.T. ACT 1961 SHOU LD NOT BE LEVIED. THEREFORE, IN THE CASE ON HAND, WE ARE SAT ISFIED THAT THE ASSESSEE HAD REASONABLE CAUSES FOR NON-COMPLIANCE O F A PARTICULAR NOTICE, WHICH DOES NOT WARRANT IMPOSITION OF PENALT Y UNDER SECTION ITA NO.141/AHD/2019 5 271(1)(B) OF THE ACT. THUS, WE SET ASIDE ORDER OF THE LD.CIT(A) AND CANCEL THE IMPUGNED PENALTY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 2 ND JULY, 2021. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) VICE-PRESIDENT