Sureshbhai Makanshi Gadesha, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-5(2), RAJKOT-GUJARAT

ITA 183/RJT/2013

• Counselvise Citation: 18324914 RSA 2013
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 21-08-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 03-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE
• Assessee Lawyers: WRITTEN SUBMISSION FILED
• Keywords: Reasonable cause; Non compliance
• Section: 142(1); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI D K SRIVASTAVA, AM ITA NO. 183 /RJT/2013 ASSESSMENT YEAR: 2004 - 05 SURESHBHAI M GADESHA V. ITO, WARD - 5(2), RAJKOT AMARDEEP, 2 - JAYANT KG SOCIETY CLOSED STREET, NR. JAIN UPASHR AY KRISHNA NAGAR MAIN ROAD, RAJKOT DATE OF HEARING : 21 . 0 8. 201 3 DATE OF PRONOUNCEMENT : 06 . 0 9 . 201 3 ASSESSEE BY : WRITTEN SUBMISSION FILED REVENUE BY : SHRI VILAS V. SHINDE, DR ORDER THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - IV, RAJKOT ON 28.02.2013, ON THE FOLLOWING GROUNDS : - 1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING ORDER LEVYING PENALTY U/S 271(1)(B) OF RS.10,000/ - . THE SAME NEEDS CA NCELLATION. 2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT CONSIDERING THE ASPECT THAT THE ORDER LEVYING PENALTY HAS BEEN PASSED WITHOUT CONSIDERING STATUTORY POSITION. THE PENALTY ORDER PASSED IS BAD IN LAW. THE PENALTY NEEDS CANCELLATION. 3. THE L D. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT CONSIDERING THE ASPECT THAT THE ORDER LEVYING PENALTY IS BAD IN LAW, ILLEGAL AND NOT SUSTAINABLE IN THE EYE OF LAWS. THE PENALTY NEEDS CANCELLATION. 4. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT CONSIDERIN G THE ASPECT THAT THE INITIATION OF THE PENALTY PROCEEDINGS ITSELF WAS BAD IN LAW. THE PENALTY NEEDS CANCELLATION. 5. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT CONSIDERING THE ASPECT THAT NO LEGAL NOTICE WAS SERVED UPON THE ASSESSEE GIVING REASONAB LE TIME. THE PENALTY NEEDS CANCELLATION. 6. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT PROVIDING ADEQUATE AND REASONABLE TIME. THE PENALTY NEEDS CANCELLATION. 2 183 - RJT - 2013 - SURESHBHAI M. GADESHA 7. WITHOUT PREJUDICE, THE ASSESSEE WAS HAVING REASONABLE CAUSE ON CONSIDERATION OF WHICH NO PENALTY OUGHT TO HAVE BEEN LEVIED. THE PENALTY NEEDS CANCELLATION. 8. TAKING INTO CONSIDERATION OVER ALL LEGAL, STATUTORY AND SETTLED LAW BESIDE FACTUAL ASPECTS OF THE CASE NO PENALTY OUGHT TO HAVE BEEN LEVIED. THE PENALTY NEEDS CANCELLATION. 9. THE APPELLANT CRAVES LEAVE TO RESERVE HIS RIGHT TO AMEND/ALTER/ADD AND/OR SUBSTITUTE ANY/ALL GROUNDS OF APPEAL BEFORE THE ACTUAL HEARING TAKES PLACE. 2 . THE ASSESSEE IS AN INDIVIDUAL. NOTICE U/S 147/148 WAS ISSUED BY THE ASSESSING OFFICER ON 06.02.2009 AND SENT BY SPEED POST TO THE ASSESSEE CALLING UPON THE ASSESSEE TO FILE HIS RETURN OF INCOME . THE SAID NOTICE, HOWEVER, WAS RETURNED BACK BY THE POSTAL AUTHORITIES UN - SERVED WITH THE REMARKS LEFT. THE SAID NOTICE THEREAFTER WAS SERVED BY AFFIXTURE . THE ASSE SSEE NEVER FILED HIS RETURN OF INCOME. ASSESSMENT U/S 144 WAS THEREFORE COMPLETED ON 31.12.2009 ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS.2,50,000/ - . PERUSAL OF THE ORDERS PASSED BY THE ASSESSING OFFICER AND LD CIT(A) SHOWS THAT INFORMATION WAS OBTA INED FROM THE DIRECTORATE OF REVENUE INTELLIGENCE (D RI ), GANDHIDHAM THAT THE ASSESSEE HAD IMPORTED 1250 MT OF CPO (NEG) DURING TWO F INANCIAL Y EARS , I.E., FY 2003 - 04 AND 2004 - 05 PERTAINING TO THE A SSESSMENT Y EAR UNDER APPEAL AND A SSESSMENT Y EAR 2005 - 06 . THE AFORESAID GOODS WERE IMPORTED ON BEHALF OF M/S. GUJARAT AMBUJA EXPORTS FOR WHICH THE ASSESSEE IS REPORTED TO HAVE RECEIVED A SUM OF RS.2.50 LACS AS HIS INCOME FOR EACH BILL OF LADING BY WHICH 250 MT OF CPO (NEG) WAS IMPORTED. DURING THE YEAR UNDER APPEAL , THE ASSESSEE WAS FOUND TO HAVE IMPORTED ONE CONSIGNMENT OF 250 MT OF CPO (NEG) VIDE BILL OF ENTRY NO. 3357 DATED 05.03.2004 THROUGH VESSEL NOVENA . IN ORDER TO ASSESS THE INCOME OF THE ASSESSEE, THE ASSESSING OFFICER CALLED FOR CERTAIN INFORMATION , VIDE NOTICE U/S 142(1) OF THE INCOME - TAX ACT. THE SAID NOTICE ISSUED U/S 142(1) WAS SERVED BY AFFIXTURE ON THE ADDRESS OF THE ASSESSEE AVAILABLE WITH THE ASSESSING OFFICER ON 05.12.2009. THE ASSESSING OFFICER ALSO SENT A LETTER TO THE COMMISSIONER OF POLICE, R AJKOT TO TRACE OUT THE ASSESSEE WITHOUT ANY POSITIVE 3 183 - RJT - 2013 - SURESHBHAI M. GADESHA RESULT. IT IS IN THIS BACKGROUND THAT THE INCOME OF THE ASSESSEE WAS ASSESSED BY THE ASSESSING OFFICER AT RS.2.50 LACS U/S 144 OF THE INCOME - TAX ACT ON 31.12.2009. SINCE THERE WAS FAILURE ON THE PART OF THE ASSESSE E IN COMPL YING WITH THE NOTICE ISSUED U/S 142(1) BY THE ASSESSING OFFICER, THE ASSESSING OFFICER INITIATED PROCEEDINGS FOR LEVY OF PENALTY. THE SHOW - CAUSE NOTICES ISSUED BY THE ASSESSING OFFICER U/S 271(1)(B) WERE ALSO NOT COMPLIED WITH BY THE A SSESSEE. THE ASSESSING OFFICER, THEREFORE, LEVIED THE IMPUGNED PENALTY. 3. ON APPEAL, THE LD CIT(A) HAS CONFIRMED THE IMPUGNED PENALTY WITH THE FOLLOWING OBSERVATIONS : - 3.1 DURING THE FINANCIAL YEAR UNDER CONSIDERATION THE APPELLANT HAS IMPORTED ONE CO NSIGNMENT OF 250 MT OF CP (NEG) VIDE BILL OF ENTRY 3357 DATED 05.03.2004 THROUGH VESSEL NOVENA. THE APPELLANT HAS NOT FURNISHED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004 - 05. NOTICE U/S 148 HAS BEEN SERVED BY WAY OF AFFIXTURE ON THE ADDRESS GIVEN ON 16/ 02/2009. THERE WAS NO RESPONSE FROM THE APPELLANT TO NOTICES ISSUED U/S 148/142(1) OF THE IT ACT 1961. EVEN THE NOTICE ISSUED U/S 142(1) HAS BEEN AFFIXED ON THE ADDRESS GIVEN BY THE APPELLANT ON 05/12/09. THE ASSESSING OFFICER HAS SENT A LETTER TO COMMISSI ONER OF POLICE, RAJKOT TO HELP IN TRACING OUT THE APPELLANT, BUT, THE SAME WAS IN VAIN. FURTHER, THE DRI, GANDHIDHAM (KUTCH) INFORMED THE ASSESSING OFFICER THAT WHEREABOUTS OF THE APPELLANT ARE NOT KNOW. IN THESE CIRCUMSTANCES, BASED ON THE MATERIAL/INFORM ATION AVAILABLE, THE ASSESSMENT WAS COMPLETED BY DETERMINING THE TOTAL INCOME AT RS.2.50 LACS U/S 144 OF THE IT ACT 1961 ON 31/12/09. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER U/S 144 HAS ALSO INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(B) OF THE IT ACT 1961. AS THERE WAS NO COMPLIANCE TO THE NOTICE ISSUED U/S 142(1), THE APPELLANT WAS ASKED TO SHOW CAUSE AS TO WHY NOT PENALTY BE LEVIED U/S 271(1)(B) BY SERVING THE NOTICE BY THE INSPECTOR OF THE INCOME TAX ON 15/06/10. AS THERE IS NO COMPLIA NCE FROM THE APPELLANT TO THE NOTICE ISSUED U/S 142(1) OF THE IT ACT 1961 THE ASSESSING OFFICER LEVIED PENALTY OF RS.10000/ - U/S 271(1)(B) FOR ONE DEFAULT. DURING THE COURSE OF APPELLATE PROCEEDINGS, SHRI D.R. ADHIA, THE AUTHORIZED REPRESENTATIVE HAS SUBMI TTED THAT SINCE THE NOTICE 4 183 - RJT - 2013 - SURESHBHAI M. GADESHA SHOW - CAUSING THE APPELLANT FOR LEVYING PENALTY U/S 271(1)(B) HAS NOT BEEN SERVED, NO PENALTY IS HEREBY LEVIABLE. 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT , THE ASSESSMENT ORDERS PASSED U/S 144 AND PENALTY O RDER PASSED U/S 271(1)(B) OF THE IT ACT 1961. FROM THE FACTS OF THE CASE IT IS QUITE EVIDENT THAT IT IS A DELIBERATE ACT ON THE PART OF THE APPELLANT NOT TO COMPLY WITH THE STATUTORY NOTICES ISSUED UNDER RELEVANT SECTIONS OF THE IT ACT 1961. THE APPELLANT HAS NOT COMPLIED WITH THE NOTICES ISSUED U/S 142(1) DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ON PERUSAL OF ASSESSMENT ORDER, IT CAN BE SEEN THAT THE NOTICE U/S 142(1) HAS BEEN AFFIXED ON THE ADDRESS PROVED BY THE APPELLANT. THEREFORE, THIS AMOUNTS TO V ALID SERVICE. HENCE, THE ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY U/S 271 (1)(B) FOR NON - COMPLIANCE TO THE NOTICE ISSUED U/S 142(1) OF THE IT ACT 1961 IS JUSTIFIED. NO INTERFERENCE IS THEREFORE CALLED FOR IN RESPECT OF THE PENALTY LEVIED BY THE A SSESSING OFFICER AT RS.10000/ - FOR ONE DEFAULT U/S 271(1)(C) OF THE IT ACT 1961. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. IN SUPPORT OF APPEAL, THE LD . AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS, WHICH READ AS UNDER: - 1. THE LD. ITO HAS LEVIED PENALTY OF RS.10,000/ - FOR NOTICE ISSUED BY HIM U/S 142(1) MENTIONED IN THE PENALTY ORDER. 2. THE LD. A.O. MENTIONED AT PARA 1 THAT SUBSEQUENTLY NOTICE U/S 142(1) OF THE ACT DATED 23 - 11 - 2009 WAS ISSUED AND SENT TO THE A SSESSEE BY SPEED POST BUT THE SAME WAS RETURNED BACK WITH THE POSTAL REMARKS LEFT. THEREFORE THE SAME WAS AFFIXED BY THE WARD INSPECTOR ON 5 - 12 - 2009 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE. THUS THE LD. A.O. ADMITS THAT AT BOTH THE TIMES NOTICES WHER E SENT ONLY AT RESIDENTIAL PREMISES OF THE ASSESSEE. 3. A COPY OF ASSESSMENT PASSED BY THE LD. A.O. SENT HERE WITH AT PARA 3 ON PAGE 1 OF THE LD. A.O. MENTIONED AS UNDER: 3. THE WHEREABOUTS OF THE ASSESSEE IS NOT KNOWN AND SEVERAL NOTICES ISSUED BY THIS OFFICE EITHER RETURN BACK UN SERVED OR SERVED BY 5 183 - RJT - 2013 - SURESHBHAI M. GADESHA AFFIXTURE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A LETTER WAS ISSUED TO THE POLICE COMMISSIONER OF RAJKOT TO TRACE OUT THE PERSON CONCERN. HOWEVER, NO REPLY IS RECEIVED TILL DATE. THIS OFFICE HAS ALSO WRITTEN SEVERAL LETTERS TO THE DRI, GANDHIDHAM (KUTCH) TO OBTAIN NECESSARY DOCUMENTARY EVIDENCE AS REGARDS TO SHOW CAUSE NOTICES AND TO KNOW THE PRESENT STATUS OF THE ASSESSEE. THE DRI GANDHIDHAM (KUTCH) VIDE LETTER NO. F.N.DRI/RRU/INV.13/2005 DATED 24 - 12 - 2009 INFORMED THAT THE PRESENT WHEREABOUTS OF THE CONCERNED ASSESSEE ARE NOT KNOWN TO THIS OFFICE. 4. THUS IT IS ESTABLISHED THAT THE NOTICE U/S 142(1) WAS NOT RECEIVED BY THE ASSESSEE AND HE WAS ALSO NOT AWARE OF THE PROCEEDINGS BECAUSE OF CIRCUMSTANCES BEYOND HIS CONTROL AND EVEN POLICE COMMISSIONER AND DRI GANDHIDHAM ALSO WITNESS THAT THE WHERE ABOUT OF THE ASSESSEE WERE NOT KNOWN AND THEREFORE WHEN THE ASSESSEE WAS NOT AWARE OF THE SERVICE OF THE NOTICE HE COULD NOT COMPLY WITH THE. THUS THE NON COMPLI ANCE IS FOR NON RECEIPT OF INFORMATION / AWARENESS AND AS SUCH ASSESSEE HAD REASONABLE CAUSE. 5. IN VIEW OF THE ABOVE POSITION THAT THE NON COMPLIANCE OF THE NOTICE IS TOTALLY DUE TO UNAWARENESS AND THEREFORE THIS BEING THE REASONABLE CAUSE PENALTY LEVIE D MAY KINDLY BE DELETED. MOREOVER IT IS ALSO MENTIONED BY THE LD. A.O. THAT THERE IS ONLY ONE COMPLIANCE AT AFORE SAID AND HE HAS NOT ISSUED ANY FURTHER NOTICE. THUS FOR ONLY ONE NON COMPLIANCE AND THAT ALSO IN A VERY PECULIAR CIRCUMSTANCES AS AFORE SAID, LEVY OF PENALTY IS NOT JUSTIFIABLE AND DESERVES A SYMPATHETIC CONSIDERATION AND APPROACH. 6. NOT ONLY THIS, THE NON COMPLIANCE IS ALSO NOT INTENTIONAL. WHEN EVER THE ASSESSEE WAS CALLED FOR HE ATTENDED BEFORE THE DRI GANDHIDHAM FROM TIME TO TIME. THIS SHO WS THAT WHENEVER THERE WAS INFORMATION / AWARENESS THE ASSESSEE DID COMPLIED EVEN BEFORE THE DRI GANDHIDHAM. THUS THE ASSESSEE HAS NOT ACTED DELIBERATELY. THE HON. SUPREME COURT IN THE CASE OF HINDUSTAN 6 183 - RJT - 2013 - SURESHBHAI M. GADESHA STEEL LTD., 83 ITR 26 (SC) HAS BEEN PLEASED TO HOLD T HAT PENALTY IS NOT LEVIABLE IN SUCH CIRCUMSTANCES. 7. IT IS THEREFORE PRAYED THAT PENALTY LEVIED MAY KINDLY BE DELETED IN THE LARGER INTEREST OF JUSTICE. 5. OPPORTUNITIES FOR ORAL HEARING WERE ALSO PROVIDED TO THE ASSESSEE TO REBUT THE FINDINGS RECORDE D BY THE CIT(A) ON 26.07.2013, 08.08.2013, 14.08.2013 AND 21.08.2013 . HE, HOWEVER, KEPT ON SEEKING ADJOURNMENT ON ONE GROUND OR THE O THER. ULTIMATELY, HIS APPLICATION FOR FURTHER ADJOURNMENT WAS REJECTED. THE APPEAL FILED BY THE ASSESSEE IS BEING DISPOSED OF ON THE BASIS OF MATERIALS AVAILABLE ON RECORD AND THE WRITTEN SUBMISSIONS FILED ON HIS BEHALF . 6. THE LD . DEPARTMENTAL REPRESENTATIVE HAS BEEN HEARD. 7. PERUSAL OF THE RECORD SHOWS THAT THE ASSESSEE HAS ALL ALONG BEEN NON - COOPERATIVE BEFORE THE ASS ESSING OFFICER. HE NEITHER FILED RETURN OF INCOME NOR COMPLIED WITH THE STATUTORY NOTICES ISSUED BY HIM U/S 142(1) OF THE INCOME - TAX ACT. HE DID NOT ACCEPT THE NOTICES ISSUED BY THE ASSESSING OFFICER IN NORMAL COURSE . THEY WERE THEREFORE SERVED B Y AFFIXTUR E. THE PLEA THAT WHEREABOUTS OF THE ASSESSEE WAS NOT KNOWN DOES NOT HELP THE ASSESSEE UNLESS THE ASSESSEE COMES WITH CLEAN HAND AND PLACES ALL RELEVANT FACTS ON RECORD ABOUT HIS MOVEMENTS AND SHOWS REASONABLE CAUSE FOR NOT COMPLYING WITH THE STATUTORY NOT ICES. THE LD . CIT(A) HAS DULY CONSIDERED ALL THE SUBMISSIONS MADE BY THE ASSESSEE WHILE CONFIRMING THE IMPUGNED PENALTY LEVIED BY THE ASSESSING OFFICER. NO CASE HAS BEEN MADE OUT FOR TAKING A VIEW DIFFERENT FROM THE ONE TAKEN BY THE LD. CIT(A). THE APPEAL FILED BY THE ASSESSEE IS THEREFORE DISMISSED. ORDER PRONOUNCED ON 06 .0 9 . 201 3 SD/ - ( D. K. SRIVASTAVA) ACCOUNTANT MEMBER RAJKOT: 06 .0 9 .2013 * BT 7 183 - RJT - 2013 - SURESHBHAI M. GADESHA COPY OF ORDER FORWARDED TO: - 1. APPELLANT - SU RESHBHAI M GADESHA, AMARDEEP, 2 - JAYANT KG SOCIETY CLOSED STREET, NR. JAIN UPASHRAY, KRISHNA NAGAR MAIN ROAD, RAJKOT 2 . RESPONDENT - ITO, WARD - 5(2), RAJKOT 3 . CONCERNED CIT - III, RAJKOT , 4. CIT(A) - IV, RAJKOT 4 . DR, ITAT, RAJKOT 5 . GUARD FILE. BY OR DER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT