Shri Dilip Chhagan Sojitra (Lakhiya), Surat V. The Addl. Director of Income Tax (Inv.) , Surat

ITA 181/SRT/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6734 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-05-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 02-06-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MITISH S. MODI AKSHAY M

Judgement Text

आयकर अपीलीय अिधकरण, सुरत Ɋायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.181/SRT/2022 (AY 2015-16) (penalty u/s 272A(1)(c) Shri Dilip Chhagan Sojitra (Lakhiya), 26, Shivshankar Parvati Society, Varachha Road, Surat-395006. [PAN No. AWMPS 1764 K] Vs Addl. Director of Income-tax, (Inv.) Room No. 521, Ayakar Bhavan, Majuragate, Surat-395001 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Mitish S. Modi with Akshay M. Modi CA’s (AR’s) राजˢ की ओर से /Revenue by Shri J.K. Chandnani Sr.DR अपील पंजीकरण/Appeal instituted on 06.06.2022 सुनवाई की तारीख/Date of hearing 15.05.2024 उद्घोषणा की तारीख/Date of pronouncement 31.05.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH JUDICIAL MEMBER; 1. This appeal is filed by the assessee against the order of ld. CIT(A)-4, Surat dated 22.03.2022 in confirming penalty of Rs. 80,000/-, levied under section 272A(1)(c) of the Act for the Assessment Year 2015-16. The provisions of section 272A(1)(c) deals with the non-compliance of summon under section 131(1) issued by Income Tax Authority for recoding the statement of any person. 2. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that the grounds of appeal raised by the assessee are similar as in case of Piyush Ghanshyam Modi Vs Addl.CIT in ITA No. 172/Srt/2022, which has been heard ITA 181/Srt/2022 Sh. Dilip Chhagan Sojitra (Lakhiya) Vs Addl.DIT 2 with this appeal. The decision in case of Piyush G Modi (supra) may be followed in the present appeal. 3. On the other hand, the ld Senior Departmental representative (Sr DR) for revenue supported the order of lower authorities. The ld Sr. DR for the revenue also agreed that the decision in Piyush G Modi (supra) may be followed in this appeal. 4. We have considered the rival submissions of the parties and have gone through the order of the lower authorities carefully. We find that facts of the present appeal and the grounds of appeal raised by the assessee are similar as has been decided by this Bench in the case of Piyush G. Modi (supra) in ITA No. 172/Srt/2022, vide order dated 21.05.2024. Penalty in both the cases were levied on identical facts. For completeness of this order, relevant part of decision of this Tribunal in Piyush G. Modi (supra) is extracted below: “6. We have considered the rival submissions of the parties and have gone through the order of the lower authorities carefully. We have already recorded the basis of levying the penalty of Rs. 80,000/- under section 272A(1)(c) by Assessing Officer as well as the basis of order of ld CIT(A) in upholding such penalty. We find that the AO before levying penalty recorded that the assessee defaulted on eight occasions. On perusal of penalty order, we find that for first summon, the AO recorded that it was return back by postal authorities” refused”. For second & third summon, he recorded that summon served through “affixture” but the assessee neither complied nor sought adjournment. For fourth summon, the AO recorded that it was sent through notice server, the assessee “refused” to accept summon. And for remaining three occasions, the AO recorded that assessee “neither complied nor submitted any adjournment”. We find that there is no independent satisfaction of the AO or the ld CIT(A) that they are satisfied with the report about the service of summon on assessee. Both the lower authority proceeded to accept the report of process server or postal authority, without ITA 181/Srt/2022 Sh. Dilip Chhagan Sojitra (Lakhiya) Vs Addl.DIT 3 recording their independent satisfaction about the service of summon on assessee for the dates fixed. 7. The Hon’ble Apex Court in Hindustan Steel Ltd. Vs State of Orissa [1972] / 83 ITR 26 has held that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. The Apex Court further observed that penalty will not also be imposed merely because it is lawful to do so. The powers are to be exercised judiciously. The relevant finding of Hon’ble Apex Court is as follows: ". . . Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. 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 technical or venial breach of the provisions 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. . . ." (p. 29) 8. We are conscious of the facts that the aforesaid finding was given by Hon’ble Court in the penalty levied under section 272A(2)(c). In our view, same principle can be applied in the case in hand that penalty cannot be levied in a routine manner. The discretion vested with the authority is to be exercised judiciously on consideration of all the relevant circumstances. A bona fide breach cannot lead to a penalty under section 272A. 9. Before us, the ld AR for the assessee vehemently argued that the assessee submits that assessee always cooperated with the investigation wing in the search action or in the post search action. The assessee never defaulted in attending the summons of the investigation team, the statement of the assessee was recorded on 15.12.2015. And that once the assessee made statement in compliance no cause of action for levying penalty would survive. Copy of statement of assessee recorded by investigation wing on 15.12.2015 is also placed on record. Considering overall facts and circumstances of the case, we find that it is not a case of complete non-compliance on the part of the assesse as the assessee attended the officer of investigation wing and given his statement. Thus, levying ITA 181/Srt/2022 Sh. Dilip Chhagan Sojitra (Lakhiya) Vs Addl.DIT 4 penalty under section 272A(1)(c) for all the alleged default, without recording the satisfaction of wilful default is not justified. 10. We find that, there is independent report of postal authority only with regard to first summon issued for the hearing fixed on 03.03.2014 as “refusal”, for which judicial notice for presumption under section 114(f) may be drawn against the assessee. Thus, the penalty for default of summon for appearance on 03.03.2014 is upheld and for remaining other remaining alleged seven default is deleted. The AO is directed accordingly. In the result, the ground of appeal raised by the assessee is partly allowed. 11. In the result, the appeals of assessee is partly allowed.” 5. In view of the aforesaid factual discussion and the decision of this Tribunal in assessee’s group case in Piyush G Modi (supra), and following the principle of consistency, the appeal of the assessee is also allowed with similar relief. In the result, grounds of appeal raised by the assessee are partly allowed. 6. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 31/05/2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) [लेखा सद˟/ACCOUNTANT MEMBER] [Ɋाियक सद˟ JUDICIAL MEMBER] Surat, Dated: 31/05/2024 *Amit Ranjan Copy to: 1. Appellant- 2. Respondent- 3. CIT(A) 4. CIT 5. DR 6. Guard File True copy/ By order Sr. Private Secretary /Private Secretary /Assistant Registrar, ITAT, Surat