Sub-Registrar Assurances, Hyderabad V. Addl.CIT (CIB), Hyderabad

ITA 1426/HYD/2014

• Counselvise Citation: 142622514 RSA 2014
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 16-07-2015
• Assessment Year: misc
• Appeal Filed On: 28-08-2014
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1426/HYD/2014 SUB - REGISTRAR ASSURANCES, WYRA, KHAMMAM DIST., [PAN: BJHPS5601N] VS THE A DDL . COMMISSIONER OF INCOME TAX (CIB), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI MO HD. AFZAL , A R FOR REVENUE : S HRI RAMA KRISHNA BANDI , D R DATE OF HEARING : 1 6 - 0 7 - 201 5 DATE OF PRONOUNCEMENT : 22 - 0 7 - 2015 O R D E R THIS IS AN APPEAL BY ASSESSEE, SUB-REGISTRAR, ASSU RANCES, WYRA, KHAMMAM DISTRICT AGAINST THE PART CONFIRMATION OF P ENALTY LEVIED U/S. 272A(2)(C) OF THE INCOME TAX ACT [ACT]. THIS PENAL TY WAS LEVIED BY ADDL. CIT ON 28-12-2010 WHICH LD. CIT(APPEALS) PARTLY CON FIRMED TO THE EXTENT OF RS. 10,500/-. 2. THE FACTS OF THE CASE ARE LITTLE PECULIAR IN THE SENSE THAT ITO(CIB), VIJAYAWADA VIDE HIS LETTER DT. 04-05-2010 ASKED SUB -REGISTRAR, WYRA, KHAMMAM DISTRICT TO INTIMATE THE DATA IN RESPECT OF IMMOVEABLE PROPERTIES VALUED AT RS. 5 LAKHS OR MORE BUT LESS T HAN RS. 30 LAKHS W.E.F. 01-04-2010 IN THE FORMAT GIVEN ON PAGE NO.2 OF THE NOTICE. AS CAN BE SEEN FROM THE NOTICE, THE NOTICE WAS ISSUED IN T HE MONTH OF MAY, 2010 ASKING FOR THAT YEAR'S DATA W.E.F. 01-04-2010 AND VIDE PARA 5, IT WAS MADE CLEAR THAT INFORMATION FOR THE MONTH OF AP RIL SHOULD BE RECEIVED WITHIN 20 DAYS FROM THE RECEIPT OF NOTICE AND INFORMATION FROM I.T.A. NO. 1426/HYD/2014 SUB-REGISTRAR ASSURANCES, WYRA, KHAMMAM DIST., :- 2 -: THE MONTH OF MAY 2010 SHOULD BE FURNISHED IN THE SU CCEEDING MONTH BY 15 TH OF NEXT MONTH AND SO ON. THE NOTICE ISSUED IS A C ONTINUING NOTICE FOR OBTAINING INFORMATION EVERY MONTH FROM 01-04-20 10. THESE NOTICES WERE ISSUED TO ALL SUB-REGISTRARS IN KHAMMAM DISTRI CT AND COPY OF WHICH WAS MARKED TO DISTRICT REGISTRAR, KHAMMAM. A SSESSEE, EVEN THOUGH AS STATED AS SUB-REGISTRAR ASSURANCES, SUBMI TS THAT IT IS ONLY SUB-REGISTRAR, WYRA AND THERE IS NO SUB-REGISTRAR A SSURANCES. BE THAT AS IT MAY, REMINDER WAS ISSUED TO SUB-REGISTRAR, WY RA DT. 08-09-2010 BY THE ITO(CIB), VIJAYAWADA INFORMING THAT THERE IS NO COMPLIANCE AND AGAIN INFORMING THAT THERE WILL BE A PENALTY U/S. 2 72A(2)(C) OF THE ACT OF RS. 100/- PER EVERY DAY DURING WHICH THE FAILURE CO NTINUES. VIDE THE LETTER DT. 04-10-2010 THE SUB-REGISTRAR, WYRA HAS F URNISHED INFORMATION FROM 01-04-2010 TO 15-09-2010. EVEN THOUGH THE INF ORMATION WAS ACCEPTED BY THE ITO AS RECEIVED BY HIM ON 19-10-201 0, ON 08-10-2010, ITO ISSUED ANOTHER REMINDER DT. 8-10-2010. ASSESSE E VIDE LETTER DT. 18- 10-2010 REPLIED THAT THE REQUIRED INFORMATION WAS F URNISHED ON 04-10- 2010. 3. IN THE MEAN TIME, LD. ADDL. CIT, HYDERABAD VIDE HIS LETTER DT. 24- 01-2011 ADDRESSED TO SUB-REGISTRAR, WYRA, KHAMMAM D ISTRICT SHOW CAUSED WHY PENALTY U/S. 272A(2)(C) SHOULD NOT BE LE VIED, AS THERE IS NO COMPLIANCE TO THE NOTICE DT. 04-05-2010 AND SUBSEQU ENT REMINDER OF 08- 10-2010. ASSESSEE VIDE LETTER DT. 31-01-2011 REQUE STED THE ADDL. CIT TO DROP THE PROCEEDINGS AS THEY HAVE COMPLIED WITH THE NOTICES ISSUED. LD. ADDL. CIT SURPRISINGLY HAS PASSED TWO PENALTY ORDER S, ONE ON SUB- REGISTRAR, WYRA LEVYING PENALTY OF RS. 23,300/- FOR TWO DEFAULTS I.E., FOR COMPLYING BELATEDLY OF 134 DAYS FOR THE FIRST NOTIC E DUE ON 15-06-2010 AND NON-COMPLIANCE FROM 16-10-2010 OF 99 DAYS. THE TOTAL OF 233 DAYS WERE CONSIDERED FOR LEVY OF PENALTY OF RS. 23,300/- . THIS ORDER PASSED ON 28-02-2011 WAS SUBJECT MATTER OF APPEAL BEFORE C IT(A)-VII, I.T.A. NO. 1426/HYD/2014 SUB-REGISTRAR ASSURANCES, WYRA, KHAMMAM DIST., :- 3 -: HYDERABAD AND VIDE HIS APPEAL IN ITA NO. 2030/2010- 11/ CIT(A)- VII/HYD DT. 29-05-2010 ACCEPTED ASSESSEE'S CONTENTI ONS AND DELETED THE PENALTY. THERE IS NO APPEAL ON THIS BY THE REVENUE . 4. THE SAME ADDL.CIT REITERATING THE SAME FACTS, IN ANOTHER ORDER STATED TO BE ON SUB-REGISTRAR OF ASSURANCES, LEVIED PENALTY OF RS. 23,100/- AGAIN CALCULATING 126 DAYS FOR THE DELAY I N COMPLIANCE FROM 15-06-2010 TO 19-10-2010. AS CAN BE SEEN FROM BOTH THE ORDERS, THE PERIOD FROM 15-06-2010 TO 28-09-2010 WAS CONSIDERED AS 134 DAYS WHEREAS IN THE SECOND PENALTY ORDER, THE PERIOD FRO M 15-06-2010 TO 19- 10-2010 WAS CONSIDERED AS 126 DAYS (SIC). IN ADDIT ION TO THE ABOVE, THE ADDL. CIT ALSO CONSIDERED A NON-COMPLIANCE PERIOD F ROM 15-11-2010 OF A PERIOD OF 105 DAYS. THIS ORDER ALSO WAS SUBJECT MA TTER OF APPEAL BEFORE CIT(A) BY SUB-REGISTRAR, WYRA IN THE NAME OF SUB-RE GISTRAR OF ASSURANCES WHICH IN ITA NO. 2029/10-11/CIT(A)-VII, HYDERABAD (IMPUGNED ORDER) CANCELLED THE PENALTY ON THE FIRST DEFAULT I.E., OF 126 DAYS ACCEPTING ASSESSEE'S CONTENTIONS ON REASONABLE CAUSE. HOWEVER, HE CONFIRMED THE PENALTY OF THE BALANCE 105 DAYS, AS H E CONSIDERED THAT THERE IS NO COMPLIANCE. ASSESSEE IS AGGRIEVED ON T HE CONFIRMATION OF THE SECOND PART OF THE PENALTY ORDER. 5. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERU SING THE PAPER BOOK, I AM OF THE OPINION THAT THE PENALTY CANNOT B E SUSTAINED ON THE FACTS OF THE CASE. FIRST OF ALL AS SEEN FROM BOTH THE ORDERS PLACED ON RECORD, LD. ADDL. CIT(A) ON THE SAME GIVEN SET OF F ACTS HAS LEVIED TWO PENALTY ORDERS, ONE AGAINST SUB-REGISTRAR, WYRA AND ANOTHER AGAINST SUB-REGISTRAR OF ASSURANCES, WYRA, BOTH THE PARTIES BEING SAME. AS CAN BE SEEN FROM THE NARRATION OF THE FACTS STATED BY THE ADDL. CIT IN THE ORDERS BOTH THE PENALTY ORDERS REFERRED TO THE SAME NOTICES AND DEFAULT. I AM UNABLE TO UNDERSTAND HOW ON THE SAME GIVEN SET OF FACTS THERE I.T.A. NO. 1426/HYD/2014 SUB-REGISTRAR ASSURANCES, WYRA, KHAMMAM DIST., :- 4 -: COULD BE TWO PENALTIES, THAT TOO AFTER ISSUING ONLY ONE SHOW CAUSE NOTICE BY THE ADDL. CIT TO SUB-REGISTRAR, KHAMMAM DISTRICT . SURPRISINGLY, LD.CIT(A) IN HIS ORDER IN ITA/2030, WHILE DELETING THE PENALTY MENTIONS THE NAME OF THE APPELLANT AS SUB-REGISTRAR ASSURANC ES WHERE AS THE PENALTY ORDER WHICH WAS SUB MATTER OF THAT APPEAL W AS ONLY PASSED AGAINST THE NAME, THE SUB-REGISTRAR, WYRA ROAD, WY RA. THEREFORE, THE CONFUSION NOT ONLY STEMS FROM THE ORDER OF THE ADDL . CIT BUT ALSO FROM THE ORDER OF THE CIT(A) AS WELL. 6. BE THAT AS IT MAY, I AM NOT IN AGREEMENT WITH THE ORDER OF CIT(A) IN PARTLY CONFIRMING THE AMOUNT. THE REASONS FOR D ELETING ENTIRE PENALTY IN OTHER ORDER EQUALLY SATISFIES THE CONDITIONS IN THE SECOND ORDER, THOUGH MADE WITHOUT ANY AUTHORITY. SINCE THERE IS ONLY ONE NOTICE FROM THE ITO(CIB) TO SUB-REGISTRAR, WYRA, KHAMMAM AND TH ERE IS ONLY ONE PENALTY NOTICE FROM ADDL. CIT, LEVY OF PENALTY ON S UB-REGISTRAR ASSURANCES IS BAD IN LAW. SINCE AN ORDER WAS PASS ED IN THAT NAME, ASSESSEE BEING AN UNIT OF STATE GOVT. HAS TO NECES SARILY CONTEST THE SAME IN THAT NAME ONLY. MOREOVER, AS SEEN FROM THE NOTICE THE PERIOD FOR WHICH SHOW CAUSE WAS ISSUED WAS FIRST PART OF DELAY ONLY, WHICH STANDS DELETED BY LD.CIT(A). THERE WAS NO SHOW CAUSE FOR T HE SECOND PERIOD CONSIDERED FOR LEVY OF PENALTY. NO PENALTY CAN BE L EVIED WITHOUT GIVING AN OPPORTUNITY TO SHOW CAUSE WHY THE SAME SHOULD NOT B E LEVIED. ON THAT REASON ALSO THE LEVY OF PENALTY CAN NOT BE SUSTAINE D. IN VIEW OF THIS, I CANCEL THE PENALTY WHICH WAS LEVIED WRONGLY BUT CON FIRMED BY THE CIT(A). ASSESSEE'S GROUNDS ON THIS ARE ALLOWED. 7. IN THE COURSE OF PRESENT PROCEEDINGS, SUB-REGIST RAR, WYRA HAS CONTENDED VARIOUS OTHER ISSUES THAT UNDER PROVISION S OF SECTION 285BA, THE REGISTRAR OR SUB-REGISTRAR APPOINTED U/S. 6 OF THE REGISTRATION ACT, 1908, IS REQUIRED TO FURNISH INFORMATION IN THE ANN UAL INFORMATION I.T.A. NO. 1426/HYD/2014 SUB-REGISTRAR ASSURANCES, WYRA, KHAMMAM DIST., :- 5 -: RETURN ONLY, IF THE VALUE EXCEEDS RS. 30 LAKHS AND THEREFORE, THE NOTICE BY THE ITO CALLING FOR INFORMATION OF ABOVE 5 LAKHS BUT BELOW 30 LAKHS IS BEYOND THE JURISDICTION PROVIDED UNDER THE ACT. THIS ARGUMENT IS VALID TO THE EXTENT OF CANCELLING THE PENALTY, BUT THIS FORUM CANNOT ADJUDICATE ON MERITS WHETHER THE ITO IS COMPETENT T O ISSUE THOSE NOTICES WHEN STATUTE PRESCRIBES DIFFERENT AMOUNTS FOR COMPL IANCE. THIS HAS TO BE AGITATED IN APPROPRIATE FORUM IN AN APPROPRIATE CASE. SINCE ASSESSEE COMPLIED WITH THE NOTICE, THIS ARGUMENT IS ACADEMIC IN NATURE. ASSESSEE'S GROUNDS ARE ALLOWED. 8. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY, 2015. SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMB ER HYDERABAD, DATED 22 ND JULY, 2015 TNMM COPY TO : 1. SUB-REGISTRAR, ASSURANCES, WYRA, KHAMMAM DISTRI CT. C/O. MOHD. AFZAL, ADVOCATE, 11-5-465, SHERSON'S RESIDENC Y, FLAT NO. 402, CRIMINAL COURT ROAD, RED HILLS, HYDERABAD . 2. THE ADDL. COMMISSIONER OF INCOME TAX (CIB), AAYA KAR BHAVAN, HYDERABAD. 3. CIT(APPEALS)-VII, HYDERABAD. 4. THE CIT (CIB), HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.