M/s Paul Brothers, Dakshin Dinajpur V. DCIT, CC-XXVII, Kolkata, Kolkata

ITA 1497/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1531 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 18-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Reasonable cause
• Section: 273B; 143(3); 142(1); 153A

Judgement Text

1 ITA NOS. 1497-1503/KOL/2016 ASSES SMENT YEARS: 2006-2007 TO 2012-2013 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NOS. 1497, 1498, 1499, 1500, 1501, 1502 & 15 03/KOL./2016 ASSESSMENT YEARS: 2006-07, 07-08, 08-09, 09-10, 10- 11, 11-12 & 2012-13 M/S. PAUL BROTHERS,................................ .........................APPELLANT THANA ROAD, GANGARAMPUR, DAKSHIN DINAJPUR-733 124 [PAN: AAJFP 7846 C ] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ......RESPONDENT CENTRAL CIRCLE-XXVII, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLI, E.M. BYE-PASS, KOLKATA-700 107 APPEARANCES BY: SHRI SIDDHARTH AGARWAL, ADVOCATE, FOR THE ASSESSEE MD. USMAN, CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : FEBRUARY 06, 2018 DATE OF PRONOUNCING THE ORDER : FEBRUARY 14, 2018 O R D E R PER BENCH: THESE SEVEN APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST SEVEN SEPARATE ORDERS PASSED BY THE LD. COMMISSIONE R OF INCOME TAX (APPEALS)-21, KOLKATA, ALL DATED 02.05.2016, WHEREB Y HE CONFIRMED THE PENALTIES IMPOSED BY THE ASSESSING OFFICER UNDER SE CTION 271(1)(B) OF THE ACT FOR ALL THE SEVEN YEARS UNDER CONSIDERATION, I. E. A.Y. 2006-07 TO 2012- 13. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM, WHICH BELONGS TO PAUL GROUP. A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) OF THE ACT WAS CONDUCTED IN THE CASES BELONGING TO PAUL GROUP INCLUDING THE CASE OF THE ASSESSEE. PURSUANT TO THE SAID ACTI ON, NOTICES UNDER 2 ITA NOS. 1497-1503/KOL/2016 ASSES SMENT YEARS: 2006-2007 TO 2012-2013 SECTION 153A WERE ISSUED BY THE ASSESSING OFFICER, IN RESPONSE TO WHICH, THE RETURNS OF INCOME FOR THE YEARS UNDER CONSIDERA TION WERE FILED BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS FOR ALL THE SEVEN YEARS UNDER CONSIDERATION, NOTICES UNDER SECTION 14 2(1) WERE ISSUED BY THE ASSESSING OFFICER CALLING FOR THE INFORMATION F ROM THE ASSESSEE AS REQUIRED FOR THE PURPOSE OF ASSESSMENTS. THERE WAS, HOWEVER, NO COMPLIANCE ON THE PART OF THE ASSESSEE TO SOME OF T HE NOTICES ISSUED BY THE ASSESSING OFFICER UNDER SECTION 142(1) AND ACCO RDINGLY PENALTY UNDER SECTION 271(1)(B) WAS IMPOSED BY THE ASSESSING OFFI CER AT THE RATE OF RS.10,000/- FOR EACH NON-COMPLIANCE FOR ALL THE SEV EN YEARS UNDER CONSIDERATION AGGREGATING AS UNDER:- ASSESSMENT YEAR AMOUNT 2006 - 07 RS. 4 0,000/ - 2007 - 08 RS. 4 0,000/ - 20 08 - 09 RS. 4 0,000/ - 2009 - 10 RS. 4 0,000/ - 2010 - 11 RS. 4 0,000/ - 2011 - 12 RS. 4 0,000/ - 2012 - 13 RS. 4 0,000/ - 3. THE PENALTIES IMPOSED BY THE ASSESSING OFFICER U NDER SECTION 271(1)(B) FOR ALL THE YEARS UNDER CONSIDERATION WER E CHALLENGED BY THE ASSESSEE IN THE APPEALS FILED BEFORE THE LD. CIT(AP PEALS) AND SINCE THE EXPLANATION OFFERED BY THE ASSESSEE DURING THE COUR SE OF APPELLATE PROCEEDINGS BEFORE HIM FOR NON-COMPLIANCE DURING TH E COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER WAS NOT FOUND ACCEPTABLE BY THE LD. CIT(APPEALS), HE PROCEEDED TO CONFIRM THE PENALTIES IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271( 1)(B) FOR ALL THE SEVEN YEARS UNDER CONSIDERATION UNDER SECTION 271(1 )(B). AGGRIEVED BY THE ORDERS OF THE LD. CIT(APPEALS), THE ASSESSEE HA S PREFERRED THESE APPEALS BEFORE THE TRIBUNAL. 3 ITA NOS. 1497-1503/KOL/2016 ASSES SMENT YEARS: 2006-2007 TO 2012-2013 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE ISSUE INVOLVED IN THE PRESENT CASE RELATING TO THE IMPOSI TION OF PENALTIES UNDER SECTION 271(1)(B) IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF RANJIT KUMAR PAUL, AN ASSESSEE BELONGING TO THE SAME GROUP RENDERED VIDE ORDER DATED DECEMBER 13, 2017 PASSED IN ITA NOS. 880 TO 8 86/KOL/2016, WHEREIN THE SIMILAR PENALTIES IMPOSED BY THE ASSESS ING OFFICER UNDER SECTION 271(1)(B) AND CONFIRMED BY THE LD. CIT(APPE ALS) WERE DELETED BY THE TRIBUNAL AFTER DEALING WITH AND DISCUSSING ALL THE RELEVANT ASPECTS INCLUDING THE ARGUMENTS OF BOTH THE SIDES VIDE PARA GRAPHS NO. 6 TO 8 OF ITS ORDER, WHICH READ AS UNDER:- 6. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSE T, HAS SUBMITTED THAT THE COMMON ISSUE INVOLVED IN THE CASE OF THE A SSESSEE IN THESE APPEALS IS SQUARELY COVERED IN FAVOUR OF THE ASSESS EE BY THE DECISION OF THE TRIBUNAL RENDERED IN THE CASE OF SM T. SHABARI PAUL, AN ASSESSEE BELONGING TO THE SAME GROUP RENDERED VI DE ITS ORDER DATED 17.11.2017 PASSED IN ITA NOS. 825-831/KOL/201 6, WHEREBY THE SIMILAR PENALTIES IMPOSED UNDER SECTION 271(1)( B) FOR A.YS. 2006-07 TO 2012-13 HAVE BEEN CANCELLED BY THE TRIBU NAL BY RELYING ON THE ORDER OF ITS BENCH AT DELHI IN THE C ASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS.- ASSISTANT DIRECTOR OF INCOME TAX [115 TTJ (DEL.) 419], WHEREI N IT WAS HELD THAT THE FACT THAT THE ASSESSMENT WAS FINALLY COMPL ETED BY THE ASSESSING OFFICER UNDER SECTION 143(3) WAS SUFFICIE NT TO SHOW THAT THERE WAS SUBSTANTIAL COMPLIANCE MADE BY THE ASSESS EE. IT WAS HELD THAT THE DEFAULT COMMITTED BY THE ASSESSEE THU S COULD NOT BE SAID TO BE WILFUL AND THE PENALTIES IMPOSED UNDER S ECTION 271(1)(B) WAS LIABLE TO BE CANCELLED. 7. THE LD. CIT( D.R.) IN THIS REGARD HAS RELIED ON THE DECISION OF THE DELHI BENCH OF THIS TRIBUNAL RENDERED ON 05.10. 2017 IN THE CASE OF SANJAY DALMIA (ITA NOS. 3795 TO 3801/DEL./2 014) AND SUBMITTED THAT THE PENALTIES IMPOSED UNDER SECTION 271(1)(B) IN THE SAID CASE FOR A.YS. 2006-07 TO 2012-13 WERE CON FIRMED BY THE TRIBUNAL AFTER TAKING INTO CONSIDERATION ITS EARLIE R DECISION RENDERED IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHI KSHAK SANGH BHAWAN TRUST (SUPRA). A PERUSAL OF THE ORDER PASSED BY THE TRIBUNAL IN THE SAID CASE, HOWEVER, SHOWS THAT ALTH OUGH THE DECISION IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHI KSHAK SANGH BHAWAN TRUST (SUPRA) WAS REFERRED TO BY THE TRIBUNA L IN PARAGRAPH NO. 17, AS A PART OF THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE, THE SAME HAD NOT BEEN DEALT WITH OR D ISCUSSED IN THE OPERATIVE PORTION OF THE ORDER. THERE IS THUS NO FI NDING OR OBSERVATION RECORDED BY THE TRIBUNAL IN THE ORDER P ASSED IN THE CASE OF SANJAY DALMIA (SUPRA) SO AS TO SAY THAT THE DECISION IN THE 4 ITA NOS. 1497-1503/KOL/2016 ASSES SMENT YEARS: 2006-2007 TO 2012-2013 CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAW AN TRUST WAS CONSIDERED AND DISTINGUISHED. IN ANY CASE, THE FACTS INVOLVED IN THE CASE OF SANJAY DALMIA (SUPRA) WERE MATERIALL Y DIFFERENT FROM THE FACTS INVOLVED IN THE CASE OF THE ASSESSEE AS RIGHTLY POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, IN ASMUCH AS, THE ASSESSEE IN THE SAID CASE HAD FAILED TO FURNISH THE INFORMATION REQUIRED BY THE ASSESSING OFFICER WITH RESPECT TO H IS ACCOUNT WITH HSBC BANK, GENEVA, SWITZERLAND AND HE HAD ALSO FAIL ED ALTERNATIVELY TO FURNISH NOTARIZED CONSENT LETTER C ONFIRMING THAT HE DID NOT HAVE ANY BANK ACCOUNT WITH HSBC BANK, GE NEVA, SWITZERLAND. AFTER TAKING NOTE OF THIS NON-COMPLIAN CE ON THE PART OF THE ASSESSEE, THE TRIBUNAL HELD THAT THE ASSESSE E WAS MAKING AN ATTEMPT TO FORESTALL THE ENQUIRY OF THE REVENUE AND THE PENALTIES IMPOSED UNDER SECTION 271(1)(B) WERE CONFIRMED BY T HE TRIBUNAL. THE FACTS INVOLVED IN THE PRESENT CASE, ON THE OTHE R HAND, ARE MATERIALLY DIFFERENT, INASMUCH AS, THOUGH THERE WAS NON- COMPLIANCE ON THE PART OF THE ASSESSEE TO TWO OF TH E NOTICES ISSUED BY THE ASSESSING OFFICER UNDER SECTION 142(1), HE C OMPLIED WITH THE OTHER NOTICES ISSUED BY THE ASSESSING OFFICER U NDER SECTION 142(1) BY FURNISHING INFORMATION REQUIRED BY THE AS SESSING OFFICER FOR THE PURPOSE OF ASSESSMENTS. AS POINTED OUT BY T HE LD. COUNSEL FOR THE ASSESSEE, THE ASSESSING OFFICER FOUND THE S AID INFORMATION FURNISHED BY THE ASSESSEE AS SUFFICIENT FOR THE PUR POSE OF ASSESSMENT AS NOTED IN PARAGRAPH NO. 7 OF THE ASSES SMENT ORDERS AND COMPLETED THE ASSESSMENTS UNDER SECTION 153A/14 3(3) OF THE ACT. THE INFORMATION REQUIRED BY THE ASSESSING OFFI CER FOR THE PURPOSE OF ASSESSMENTS THUS WAS DULY FURNISHED BY T HE ASSESSEE IN ORDER TO ENABLE THE ASSESSING OFFICER TO COMPLETE T HE ASSESSMENTS UNDER SECTION 153A/143(3) OF THE ACT AND THERE WAS THUS SUBSTANTIAL COMPLIANCE MADE BY THE ASSESSEE AND IT WAS NOT THE CASE OF WILFUL DEFAULT COMMITTED BY THE ASSESSEE TO JUSTIFY THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(B) AS HE LD BY HONBLE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST (SUPRA). 8. AT THE TIME OF HEARING BEFORE US, THE LD. CIT(D .R.) HAS ALSO RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MANMOHAD DAS VS.- VISHNU DAS [AIR 1967 SC 643 IN S UPPORT OF THE REVENUES CASE AND CONTENDED THAT THE ORDINARY RULE OF CONSTRUCTION, AS HELD BY THE HONBLE SUPREME COURT, IS THAT THE PROVISION OF A STATUTE MUST BE CONSTRUED IN ACCORDA NCE WITH THE LANGUAGE USED THEREIN UNLESS THERE ARE COMPELLING R EASONS, SUCH AS, WHERE A LITERAL CONSTRUCTION WOULD REDUCE THE P ROVISION TO ABSURDITY OR PREVENT MANIFEST INTENTION OF THE LEGI SLATURE FROM BEING CARRIED OUT. HOWEVER, AS RIGHTLY POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE FROM THE RELEVANT PROVISIO NS OF SECTION 271(1)(B), THE LANGUAGE USED THEREIN ............. .....HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY....... ... IS SUCH THAT THE AUTHORITIES ARE GIVEN DISCRETION TO IMPOSE PENA LTY. FURTHER, SECTION 273B PROVIDES THAT NO PENALTY SHALL BE IMPO SABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFERRED TO IN THE PROVISIONS OF SECTION 271(1)(B) IF HE PRO VES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. IN THIS REGARD, IT WOULD 5 ITA NOS. 1497-1503/KOL/2016 ASSES SMENT YEARS: 2006-2007 TO 2012-2013 BE USEFUL TO REFER TO THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF HINDUSTAN STEEL VS.- STATE OF ORISSA 8 3 ITR 26, WHEREIN IT WAS HELD THAT EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNIC AL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT. AS ALREADY NO TED BY US, SUBSTANTIAL COMPLIANCE WAS MADE BY THE ASSESSEE DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS BY FURNISHING THE RELEVANT DETAILS AND INFORMATION REQUIRED BY THE ASSESSING O FFICER FOR THE PURPOSE OF ASSESSMENT, AS IS EVIDENT FROM THE ASSES SMENT COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 15 3A/143(3) FOR ALL THE YEARS UNDER CONSIDERATION AND THEREFORE, TH E DEFAULT ON THE PART OF THE ASSESSEE IN NOT COMPLYING WITH THE TWO NOTICES ISSUED BY THE ASSESSING OFFICER UNDER SECTION 142(1) WAS M ERELY OF A TECHNICAL OR VENIAL NATURE FOR WHICH THE IMPOSITION OF PENALTIES UNDER SECTION 271(1)(B) WAS NOT JUSTIFIED. AS SUCH, CONSIDERING ALL THE FACTS OF THE CASE, WE HOLD THAT THE PENALTIES I MPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(B) AND CONFI RMED BY THE LD. CIT(APPEALS) FOR ALL THE YEARS UNDER CONSIDERATION ARE NOT SUSTAINABLE AND CANCELLING THE SAME, WE ALLOW THESE APPEALS FILED BY THE ASSESSEE. 5. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WEL L AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THAT OF THE C ASE OF RANJIT KUMAR PAUL (SUPRA), WE RESPECTFULLY FOLLOW THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL RENDERED IN THE SAID CASE AND CANCEL THE PENALTIES IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(B) AN D CONFIRMED BY THE LD. CIT(APPEALS) FOR ALL THE YEARS UNDER CONSIDERATION BY HOLDING THE SAME TO BE UNSUSTAINABLE. 6. IN THE RESULT, ALL THE SEVEN APPEALS FILED BY TH E ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH DAY OF FEBRUARY, 2018. SD/- SD/- (A.T. VARKEY) (P.M. JAGT AP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 14 TH DAY OF FEBRUARY, 2018 COPIES TO : (1) M/S. PAUL BROTHERS, THANA ROAD, GANGARAMPUR, DAKSHIN DINAJPUR-733 124 2) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-XXVII, KOLKATA, 6 ITA NOS. 1497-1503/KOL/2016 ASSES SMENT YEARS: 2006-2007 TO 2012-2013 AAYAKAR BHAWAN POORVA, 110, SHANTI PALLI, E.M. BYE-PASS, KOLKATA-700 107 (3) CIT(APPEALS)-21, KOLKATA, (4) CIT- , KOLKATA, (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO, INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.