Nirwana Enterprises, SRIGANGANAGAR V. ITO, SRIGANGANAGAR

ITA 165/JODH/2011

• Counselvise Citation: 16523314 RSA 2011
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 29-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: GAUTAM BAID
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JODHPUR (SMC) BENCH, JODHPUR BEFORE : SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO. 163/JODH/2011 ASSTT. YEAR : 2006-07 KASTURI LAL VIKASH GARG, VS. INCOME-TAX OFFICER, WARD-2 56-G-BLOCK, SRIGANGANAGAR. SRIGANGANAGAR. (PAN : AAHFK 4854 D) ITA NO. 164/JODH/2011 ASSTT. YEAR : 2006-07 MITTAL GINNING & PRESSING FACTORY, VS. INCOME-TAX OFFICER, WARD-2 56-G-BLOCK, SRIGANGANAGAR. SRIGANGANAGAR. (PAN : AABFM 5293 P). ITA NO. 165/JODH/2011 ASSTT. YEAR : 2006-07 NIRWAN ENTERPRISES VS. INCOME-TAX OFFICER, WARD- 2 74-KOTWALI ROAD,SRIGANGANAGAR. SRIGANGANAGAR. (PAN : AAFFN 5906 K) (APPELLANTS) (RESPONDENT) APPELLANTS BY : S/SRI GAUTAM BAID & RAJENDRA JAIN, AR RESPONDENT BY : SHRI G.R. KOKANI, D.R. DATE OF HEARING : 10.07.2012 DATE OF PRONOUNCEMENT : 10.07.2012 ORDER THESE APPEALS BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS EACH DATED 08.02.2011 OF LD. CIT(A), BIKANER. SINCE THE ISSUE INVOLVED IS COMMON, HAVING THE IDENTICAL FACTS, THE APPEALS WERE HEARD TOGETHER AND THE SAME ARE BEING ITA NO. 163, 164 & 165/JODH/2011 2 DISPOSED OF BY THIS COMMON ORDER. FOR THE SAKE OF C ONVENIENCE, I WILL FIRST TAKE UP ITA NO. 163/JODH/2011. 2. THE ONLY GRIEVANCE OF ASSESSEE IN THIS APPEAL RE LATES TO THE CONFIRMATION OF PENALTY OF RS.76,500/- LEVIED BY THE AO U/S. 271FB OF THE INCOME-TAX ACT (HEREINAFTER REFERRED TO AS THE ACT IN SHORT). 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE FILED ITS RETURN OF INCOME ON 30.10.2006 DECLARING AN INCOME OF RS.1,54,070/-, WHICH WAS ASSESSED U/S. 143(3) OF THE ACT ON 05.12.2008. THE AO POINTED OUT THAT THE ASSESSEE FILED FBT (FRINGE BENEFIT TAX) RETURN ONLY ON 05.12.2008, WHI CH WAS DUE TO BE FILED ON 31.10.2006. THE AO OBSERVED THAT A SHOW CAUSE NOTIC E WAS ISSUED TO THE ASSESSEE ON 23.04.2009 AND THE DATE FOR GIVING THE REPLY WAS 04.05.2009, BUT ON THE SAID DATE NOBODY APPEARED. THE AO LEVIED THE PENALTY U/S . 271FB OF THE ACT AMOUNTING TO RS.76,500/-. 4. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A ) AND SUBMITTED THAT THIS WAS THE FIRST YEAR, FOR WHICH FBT WAS REQUIRED TO BE PA ID AND EVEN AFTER THE INTRODUCTION OF THE FBT, THERE WAS ENORMOUS CONFUSI ON ABOUT THE UNDERSTANDING AND INTERPRETATION OF FBT. IT WAS ALSO STATED THAT THERE WAS NO LOSS OF REVENUE DUE TO DELAY IN FILING THE FBT RETURN BECAUSE THE ASSES SEE HAD DEPOSITED DUE TAX ALONG ITA NO. 163, 164 & 165/JODH/2011 3 WITH INTEREST. IT WAS ALSO STATED THAT FBT RETURN W AS FILED BY THE ASSESSEE VOLUNTARILY WITHOUT ANY NOTICE BEING ISSUED BY THE AO AND THAT AS AGAINST FBT OF RS.4326/- ONLY, PENALTY LEVIED WAS RS.76,500/- WHIC H WAS INEQUITABLE. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE AS SESSEE, OBSERVED THAT THE ASSESSEE COULD NOT GIVE ANY EXPLANATION, MUCH LESS, A SATISFACTORY EXPLANATION ABOUT THE NON-FURNISHING OF ANY REPLY BEFORE THE AO WHEN SHOW CAUSE NOTICE WAS ISSUED AND SERVED ON THE ASSESSEE BEFORE IMPOSITION OF PENALTY. HE FURTHER OBSERVED THAT IN THE ABSENCE OF ANY REASONABLE CAUS E PREVENTING THE ASSESSEE FOR FILING THE REPLY BEFORE THE AO, THE IMPOSITION OF P ENALTY WAS JUSTIFIED. NOW, THE ASSESSEE IS IN APPEAL. 5. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. IT WAS FURTHER SUBMITTED THAT DU RING THE PENDENCY OF ASSESSMENT PROCEEDINGS, THE AO ISSUED NOTICE U/S. 115WH OF THE ACT AND ASKED THE ASSESSEE TO FILE RETURN OF FBT. AS SUCH, THE ASSESSEE CAME TO K NOW ITS FAULT ONLY ON THE RECEIPT OF NOTICE. IT WAS FURTHER SUBMITTED THAT THE TAX AL ONG WITH INTEREST WAS AT RS.4326/- ONLY, BUT THE AO LEVIED PENALTY OF RS.76,500/-. IT WAS CONTENDED THAT THE LD. CIT(A) UPHELD THE PENALTY IMPOSED BY THE AO ON THE GROUND THAT THE ASSESSEE FAILED TO APPEAR BEFORE THE AO. AS SUCH, THE UPHOLD ING OF PENALTY BY THE LD. CIT(A) WAS ERRONEOUS, AS THE RIGHT OF ASSESSEE FOR FURNISHING EXPLANATION OR ARGUMENTS COULD NOT BE CEASED MERELY ON THE GROUND THAT IT COULD NOT APPEAR BEFORE ITA NO. 163, 164 & 165/JODH/2011 4 THE ASSESSING OFFICER. IT WAS FURTHER CONTENDED THA T THE EXPLANATION, WHICH OTHERWISE WAS REASONABLE, WAS NOT TAKEN INTO CONSID ERATION BY THE LD. CIT(A) ONLY BECAUSE THE ASSESSEE FAILED TO APPEAR BEFORE THE AO . THEREFORE, NON-CONSIDERATION OF THE EXPLANATION BY THE LD. COUNSEL WAS ERRONEOUS AND CONSEQUENTLY, THE UPHOLDING OF THE PENALTY WAS ALSO ERRONEOUS. RELIAN CE WAS PLACED ON THE JUDGMENT OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. SHRI KRISHANDAS AGARWAL & ORS. (1983) 143 ITR 798 (MP). 6. IN HIS RIVAL SUBMISSIONS, THE LD. DR STRONGLY SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PR ESENT CASE, IT IS NOTICED THAT THE LD. CIT(A), WHILE CONFIRMING THE PENALTY LEVIED BY THE AO U/S. 271FB OF THE ACT, HAS NOT CONSIDERED THE EXPLANATION GIVEN BY THE ASS ESSEE. IT ALSO APPEARS THAT THE AO HAS NOT GIVEN PROPER AND DUE OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE TO EXPLAIN ITS CASE SINCE THE DEFAULT CAME TO THE KNOW LEDGE OF THE ASSESSEE DURING THE PENDENCY OF THE ASSESSMENT PROCEEDINGS AND THE AO A LSO ISSUED THE NOTICE DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON 05.12.2008 AND PASSED ORDER U/S. 115WE(3) OF THE ACT ON 10.12.2008. THE AO ISSUED NO TICE DATED 23.04.2009 U/S. 271FB OF THE ACT AND ASKED THE ASSESSEE TO APPEAR O R FURNISH THE REPLY ON ITA NO. 163, 164 & 165/JODH/2011 5 04.05.2009. THEREFORE, ONLY ONE OPPORTUNITY WAS GIV EN, HOWEVER, IT APPEARS THAT THE TIME GIVEN WAS NOT SUFFICIENT. IT IS WELL SETTL ED THAT NOBODY SHOULD BE CONDEMNED UN-HEARD AS PER THE MAXIM AUDI ALTERAM PERTAM. THEREFORE, KEEPING IN VIEW THE AFORESAID FACTS OF THE PRESENT CASE, I DEEM IT APPROPRIATE TO REMAND THIS ISSUE BACK TO THE FILE OF THE AO TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. 8. IN ITA NO. 164/JODH/2011, THE FACTS ARE IDENTICA L AND EVEN THE AMOUNT OF PENALTY IS ALSO THE SAME AT RS.76,500/-. THE ONLY D IFFERENCE IS THAT THE FBT (FRINGE BENEFIT TAX) WAS OF ONLY RS.650/- INSTEAD OF RS.432 6/- INVOLVED IN ITA NO. 163/JODH/2011 WHILE IN THE CASE RELATING TO ITA NO. 165/JODH/2011, THE FBT WAS OF RS.1600/- ONLY AND PENALTY LEVIED WAS RS.74,100/ -, OTHERWISE THE FACTS IN ITA NOS. 164 & 165/JODH/2011 ARE SIMILAR TO THE FACTS I N ITA NO.163/JODH/2011. THEREFORE, MY FINDINGS GIVEN IN RESPECT OF ITA 163/ JODH/2011 IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS IN ITA NOS. 164 & 165/JODH/2011. 9. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 10.07.2012. ) SD/- (N.K. SAINI) ACCOUNTANT MEMBER DATE: 10 TH JULY, 2012 ITA NO. 163, 164 & 165/JODH/2011 6 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, JODHPUR 6. GUARD FILE ASSTT. REGISTRAR TRUE COPY