Ratan Kumar Paul, Dakshin Dinajpur V. DCIT, CC-XXVII, Kolkata, Kolkata

ITA 1504/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1454 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 18-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SIDDHARTH AGARWAL RESPONDEN
• Assessee Lawyers: PASS KOLKATA
• Keywords: Reasonable cause
• Section: 143(3); 142(1); 153A; 132; 144

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1504 / KOL / 20 16 ASSESSMENT YEAR :2012-13 RATAN KUMAR PAUL THANA ROAD, GANGARAMPUR, DAKSHIN DINAJPUR, PIN 733 124 [ PAN NO.AKLP 6116 F ] V/S . DCIT, CC-XXVII, AAYAKAR BHAWAN, PURVA, 110, SHANTI PALLY, EM BY-PASS KOLKATA-107 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SIDDHARTH AGARWAL, ADVOCATE /BY RESPONDENT SHRI A.K.TIWARI, CIT-DR /DATE OF HEARING 05-02-2018 /DATE OF PRONOUNCEMENT 21-02-2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKATA DA TED 04.05.2016. ASSESSMENT WAS FRAMED BY DCIT, CENTRAL CIRCLE-XXVII , KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) VIDE HIS ORDER DATED 28.03.2014 FOR ASSESSMENT YEAR 2012-13. PENAL TY LEVIED BY ASSESSING OFFICER U/S 271(1)(B) OF THE ACT VIDE HIS ORDER DAT ED 03.09.2014. SHRI SIDDHARTH AGARWAL, LD. ADVOCATE APPEARED ON BE HALF OF ASSESSEE AND SHRI A.K. TIWARI, LD. DEPARTMENTAL REPRESENTATIVE A PPEARED ON BEHALF OF REVENUE. 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. FOR THAT ON THE FATS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY U/S 271(1)(B) OF THE ACT. ITA NO.1504/KOL/2016 A.Y. 2012 -13 RATAN KR. PAUL VS. DCIT, CC-XXVII, KOL PAGE 2 2. FOR THAT THE LD. CIT(A) OUGHT TO HAVE DELETED TH E ENTIRE PENALTY OF RS.10,000/- IMPOSED U/S 271(1)(B) SINCE THE ASSESSE E WAS PREVENTED BY REASONABLE CAUSE FOR NON-APPEARANCE DURING THE COUR SE OF ASSESSMENT PROCEEDING. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 3. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL IS THAT LD CIT(A) ERRED IN CONFIRMING THE PENALTY ORDER OF AO U/S 271 (1)(B) OF THE ACT. 4. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE IS AN I NDIVIDUAL AND BELONGS TO PAUL GROUP WHERE A SEARCH & SEIZURE OPERATION WAS C ONDUCTED U/S 132 OF THE ACT. THEREFORE, THE ASSESSEE WAS COVERED UNDER THE SEARCH PROCEEDINGS U/S 153A OF THE ACT. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A/143(3) OF THE ACT ISSUED NOTIC E U/S 142(1) OF THE ACT BUT THE ASSESSEE FAILED TO COMPLY THE SAME. THE NECESSA RY DETAILS STAND AS UNDER. S.NO. DATE PARTICULARS REMARKS 1. 12.4.2013 NOTICE ISSUED U/S 142(1) COMPLIANC E BY THE ASSESSEE 2. 28.10.2013 NOTICE ISSUED U/S 142(1) NON-COMPLIAN CE BY THE ASSESSEE. IN THIS NOTICE THE HEARING DATE WAS FIXED ON 6.11.2 013 BUT THE REPLY WAS FILED LATE I.E. 13.11.2013 IN VIEW OF ABOVE, THE AO DURING ASSESSMENT PROCEEDI NGS INITIATED PENALTY PROCEEDINGS U/S 271(1)(B) OF THE ACT. FINALLY, THE AO AFTER CONSIDERING THE REPLY OF THE ASSESSEE IMPOSED THE PENALTY FOR RS.10 ,000/- FOR THE DEFAULT COMMITTED BY THE ASSESSEE AS DISCUSSED ABOVE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT THE HEALT H CONDITION OF ONE OF THE PARTNER OF THE FIRM WAS VERY CRITICAL, THEREFORE TH E COMPLIANCES COULD NOT MADE. THE ASSESSEE IN SUPPORT OF ITS CLAIM HAS ALSO PRODU CED THE COPY OF MEDICAL CERTIFICATES. THE ASSESSEE IN SUPPORT OF ITS CLAIM HAS ALSO RELIED ON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF HINDUSTAN STEEL LIMITED V. STATE OF ORISSA REPORTED IN 83 ITR 26(SC). ITA NO.1504/KOL/2016 A.Y. 2012 -13 RATAN KR. PAUL VS. DCIT, CC-XXVII, KOL PAGE 3 HOWEVER, LD. CIT(A) DISREGARDED THE CONTENTION OF T HE ASSESSEE AND CONFIRMED THE ORDER OF AO. BEING AGGRIEVED BY THE ABOVE FINDING OF LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. AR BEFORE US SUBMITTED THAT THE IDENTICA L ISSUE IN THE OWN CASE OF THE ASSESSEE HAS BEEN DECIDED IN FAVOUR OF ASSES SEE BY THE HONBLE TRIBUNAL IN ITA 820-824/KOL/2016 VIDE ORDER DATED 1 7-11-2017. HE REQUESTED BEFORE THE BENCH THAT ISSUE MAY BE DECIDED ON MERIT . ON THE OTHER HAND, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; IN CLUDING THE JUDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. AT T HE OUTSET, IT WAS OBSERVED THAT IN THE IDENTICAL FACTS AND CIRCUMSTAN CES IN THE OWN CASE OF THE ASSESSEE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE BY THE HONBLE TRIBUNAL IN ITA 820-824/KOL/2016 VIDE ORDER DATED 17-11-2017. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW : 7. THE LD. AR BEFORE US SUBMITTED THAT ALL THE QUER IES RAISED BY THE AO DURING ASSESSMENT PROCEEDINGS WERE DULY REPLIED BY THE ASSESSEE AS EVIDENT FROM THE ORDER OF AO -PARAGRAPH NUMBER 6 WHICH READ S AS UNDER:- 6.0 FURTHER VARIOUS QUERIES WERE RAISED BEFORE THE ASSESSEE ON DIFFERENT DATES, REPLY OF WHICH HAS BEEN SUBMITTED, PERUSED A ND PLACED ON RECORD. ACCORDINGLY THE LD AR SUBMITTED THAT SUBSTANTIAL CO MPLIANCES WERE MADE BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DINGS. THEREFORE NO PENALTY IN THE INSTANT CASE IS CALLED FOR. THE LD A R IN THIS REGARD HAS RELIED ON THE ORDER OF HONBLE ITAT IN THE CASE OF AKHIL BHAR TIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ASSISTANT DIRECTOR OF INCOME TAX REPORTED IN 115 TTJ (DEL) 419. THE RELEVANT EXTRACT READS AS UNDER:- 2.5 WE ALSO FIND THAT FINALLY THE ORDER WAS PASSED UNDE R S. 143(3) AND NOT UNDER S. 144 OF THE ACT. THIS MEANS THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPL IANCE AND THE DEFAULTS COMMITTED EARLIER WERE IGNORED BY THE AO. THEREFORE, IN SUCH CIRCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO C OME TO THE CONCLUSION THAT THE DEFAULT WAS WILLFUL. ITA NO.1504/KOL/2016 A.Y. 2012 -13 RATAN KR. PAUL VS. DCIT, CC-XXVII, KOL PAGE 4 ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE ME DICAL CERTIFICATES WERE NOT PRODUCED BEFORE THE AO TO JUSTIFY THAT THERE WAS RE ASONABLE CAUSE WHICH PREVENTED THE ASSESSEE TO RESPONSE THE NOTICE ISSUE D UNDER SECTION 142(1) OF THE ACT. THE LD. DR ALSO CONTENDED THAT THE ASSESSE E IN THE INSTANT CASE WAS INTENTIONALLY DELAYING THE PROCEEDINGS TO TAKE THE ASSESSMENT AT THE FAG-END IN ORDER TO DIVERT THE ATTENTION OF THE AO. HE VEHE MENTLY SUPPORTED THE ORDER OF LOWER AUTHORITIES. IN REJOINDER, LD AR SUBMITTED THAT ALL THE MEDICALS BILLS WERE DULY PRODUCED BEFORE THE LD CIT(A) AND HE GOT CO-TERMINUS POWER T O VERIFY THE SAME BUT HE FAILED TO DO SO. THE LD AR ALSO SUBMITTED THAT THE PENALTY CANNOT BE IMPOSED ON ACCOUNT OF TECHNICAL GROUND. IN THIS REGARD THE LEARNED AR RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF HI NDUSTAN STEEL (SUPRA). 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; IN CLUDING THE JUDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. AT T HE OUTSET IT WAS OBSERVED THAT IN THE IDENTICAL FACTS AND CIRCUMSTAN CES THE HONBLE DELHI TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSE E IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST (SUPR A) BY OBSERVING THAT THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF T HE ACT WHICH PROVES THAT SUBSTANTIAL COMPLIANCES WERE MADE BY THE ASSESSEE. THUS IT CANNOT BE HELD THAT THE DEFAULT COMMITTED BY THE ASSESSEE WAS WILL FUL. THUS, WE ARE INCLINED NOT TO UPHOLD THE ORDER OF LOWER AUTHORITIES. 9. SIMILARLY, WE ALSO FIND THAT THE HONBLE APEX CO URT IN THE CASE OF HINDUSTAN STEEL (SUPRA) HAS HELD THAT THE PENALTY S HOULD NOT BE IMPOSED UNLESS THE ASSESSEE ACTED DELIBERATELY. THE RELEVAN T EXTRACT READS AS UNDER : OBLIGATION IS THE RESULT OF A QUASI- CRIMINAL PROC EEDING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED, EIT HER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIO US OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY W ILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENAL TY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATT ER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION O F ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRI BED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED I N REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE P ROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. AS WE HAVE ALREADY DECIDED THE ISSUE IN FAVOUR OF A SSESSEE IN VIEW OF THE ABOVE FACTS, THEREFORE WE ARE NOT INCLINED TO COMME NT ON THE CONTENTIONS RAISED BY THE LD DR AT THE TIME OF HEARING AS WELL AS OBSERVATIONS MADE BY THE LD CIT(A) IN HIS ORDER. RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENTS WE REVERSE THE ORDER OF AUTHORITIES BELOW. ACCORDINGLY , AO IS DIRECTED TO DELETE THE SAME. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED . CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE A ND IN VIEW OF THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OW N CASE (SUPRA), WE ARE OF ITA NO.1504/KOL/2016 A.Y. 2012 -13 RATAN KR. PAUL VS. DCIT, CC-XXVII, KOL PAGE 5 THE CONSIDERED OPINION THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(B) OF THE ACT, WE THEREFORE, SET ASIDE THE O RDER OF LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO CANCEL THE PENALTY. THE GR OUND RAISED BY ASSESSEE IS ACCORDINGLY ALLOWED. 8. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 21/ 02/2018 SD/- SD/- ($ &) ( &) (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S (- 21 / 02 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-RATAN KR. PAUL, THANA ROAD, GANGARAMPUR, DAKSHIN DINAJPUR PIN.733 124 2. /RESPONDENT-DCIT, CC-XXVII, AAYAKAR BHAWAN, PURVA,1 10, SHANTI PALLY, EM BY-PASS KOLK ATA-107 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 $$3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,