SMT. RAJKUMARI DHARANPAL AGRAWAL, Nagpur V. A,C.I.T CENT CIR. 1(2), Nagpur

ITA 192/NAG/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4506 (ITAT-NAGPUR)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 30-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNES P THOMAS
• Assessee Lawyers: J M RANADE
• Keywords: Search and seizure; Reasonable cause
• Section: 273B; 143(3); 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) S.NO. ITA NO. ASSTT.YEAR APPELLANT RESPONDENT. 1 TO 6 192 TO 1 97/NAG/2016 2005 - 06 TO 2010 - 11. SMT. RAJKUMARI AGRAWAL, NAGPUR. ASSTT. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 1(2), NAGPUR. 7. 199/NAG/2016 2005 - 06 SHREE AGRAWAL FINANCE INDIA PVT. LTD., NAGPUR. ASSTT. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 1(2), NAGPUR. 8. 206/NAG/2016 2005 - 06 THANJAVUR COMMERCE PVT. LTD., NAGPUR. ASSTT. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 1(2), NAGPUR. 9 TO 11. 208 TO 2 10/NAG/2016 2007 - 08 TO 2009 - 10 THANJAVUR COMMERCE PVT. LTD., NAGPUR. ASSTT. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 1(2), NAGPUR. 12. 217/NAG/2016 2009 - 10. DHARAMPAL RAJKUMAR AGRAWAL, NAGPUR. ASSTT. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 1(2), NAGPUR. 13 TO 17. 222 TO 226/NAG/2016. 2007 - 08 TO 2011 - 12. MARYTIMES SUPPLIERS PVT. LTD., NAGPUR. ASSTT. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 1(2), NAGPUR. 18&19. 320 &321/NAG/2016 2006 - 07 & 2007 - 08 SHRI DARPAN AGRAWAL, NAGPUR. ASSTT. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 1(2), NAGPUR. 2 20 TO 22 326 TO 328/NAG/2016. 2005 - 06 TO 2007 - 08. MANSA AGRO FOOD PROCESSING PVT. LTD., NAGPUR. ASSTT. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 1(2), NAGPUR. APPELLANT BY : SHRI J.M. RANADE. RESPONDENT BY : SMT. AGNES P. THOMAS. DATE OF HEARING : 0 4 - 10 - 2016 DATE OF PRONOUNCEMENT : 4 TH OCT., 2016 O R D E R. THESE ARE APPEALS BY THE ASSESSEE S BELONGING TO THE SAME GROUP AGAINST THE RESPECTIVE ORDERS OF LEARNED CIT(APPEALS) CONFIRMING THE LEVY OF PENALTY U/S 271(1)(B) AMOUNTING TO RS.10,000/ - FOR EACH OF THE YEAR. 2. AT THE OUTSET IT IS NOTE D THAT THE ASSESSEE S BELONG TO THE SAME GROUP. SOME OF THE GROUP CASES HAVE ALREADY BEEN DECIDED BY THIS ITAT EARLIER. LEARNED COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT THE FACTS OF THESE CASES AND THOSE CASES EARLIER DEALT WITH BY THE TRIBUNAL ARE SAME EXCEPT FOR THE MINOR VARIATION THAT ASSESSMENT ORDER S IN THE CASE OF ITA NOS. 206, 208, 209 AND 210/NAG/2010 IN THE CASE OF THANJAVUR COMMERCE PVT. LTD., NAGPUR WERE PASSED U/S 144 OF THE I.T. ACT AND NOT U/S 143(2) OF THE I.T. ACT AS IN THE OTHER CASES. HOWEVER, LEARNED COU NSEL SUBMITTED THAT STILL THE ASSESSEE HAS A CASE OF REASONABLE CAUSE FOR NON APPEARANCE ON THE SPECIFIED DATE AS MENTIONED IN THE OTHER CASES. FURTHER MORE LEARNED COUNSEL SUBMITTED THAT THIS PENALTY IS ONLY FOR A TECHNICAL BREACH AND HENCE HE PLACED RELI ANCE UPON THE HONBLE APEX COURT DECISION IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA 83 ITR 26 FOR THE PROPOSITION THAT PENALTY NEED NOT BE LEVIED FOR TECHNICAL BREACH. 3 3. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELO W. SHE SUBMITTED THAT THE AO HAS LEVIED MINIMUM PENALTY FOR ONLY ONE DEFAULT AND THAT THE ASSESSEE CANNOT GET AWAY FOR NON APPEARANCE IN S EARCH CASES. 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. I FIND THAT THIS TRIBUNAL HAS CON SIDERED SIMILAR ISSUE IN THE CASE OF SHREE AGRAWAL OIL INDUSTRIES PVT. LTD., NAGPUR VS. ASSTT. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 1(2), NAGPUR IN ITA NOS. 313 TO 316/NAG/2016 VIDE O RDER DATED 26 - 09 - 2016 . THE ADJUDICATION OF THE ITAT IS AS UNDER : 9. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. I NOTE THAT IN THIS CASE AS PER THE FACTS EMANATING FROM THE ORDERS OF THE AUTHORITIES BELOW THE ASSESSEE WAS GIVEN NOTICE WHICH WAS SERVED ON 11 - 01 - 2013 BY WHICH THE ASSESSEE WAS REQUESTED TO ATTEN D AND SUBMIT THE DETAILS ON 15 - 01 - 2013. IT WAS THIS NON ATTENDANCE OF THE ASSESSEE AGAINST WHICH PENALTY U/S 271(1)(B) WAS LEVIED. ON 15 - 02 - 2013 A SHOW CAUSE LETTER WAS ISSUED WHICH WAS SERVED ON 18 - 02 - 2013 IN RESPONSE TO WHICH THE ASSESSEE SUBMITTED A REP LY. THEREAFTER ASSESSMENT ORDER U/S 143(3) WAS PASSED. NOW PERUSAL OF THE FACTS CLEARLY INDICATE THAT THIS WAS A CASE OF SEARCH AND SEIZURE ON A BIG GROUP. FOUR DAYS TIME TO SUBMIT DETAILS IN SUCH A CASE IS NOT AT ALL REASONABLE FROM ANY STRETCH OF IMAGINA TION. FURTHER MORE THE ASSESSEE DID REPLY TO THE SUBSEQUENT SHOW CAUSE NOTICE AND ASSESSMENT WAS FRAMED U/S 143(3) OF THE I.T. ACT. THIS HAS ALSO TO BE LOOKED INTO ON THE ANVIL OF ASSESSEES SUBMISSION THAT THE AO HAS REFUSED THE ASSESSEE RECORDING OF ATT ENDANCE THE SPECIFIED DATE AND FOR WHICH THE ASSESSEE HAS PETITIONED TO HIGHER AUTHORITIES. 10. IN THESE CIRCUMSTANCES, IN MY OPINION, THERE WAS A REASONABLE CAUSE FOR NON ATTENDANCE OF THE ASSESSEE. HENCE ON THE ANVIL OF SECTION 273B PENALTY IS NOT LE VIABLE. AGAIN THE ISSUE IS SQUARELY COVERED BY THE DECISION OF ITAT, DELHI BENCH IN THE CASE OF AKHIL BHARIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ASSTT. DIRECTOR OF INCOME - TAX (SUPRA). I MAY GAINFULLY REFER TO THE CONCLUDING PORTION OF THE TRIBUNALS ORDER AS UNDER : . .3 WE HAVE CONSIDERED THE FACTS OF THE CASE AND RIVAL SUBMISSIONS. WE FIND THAT THE HON' B LE GUJARAT (SIC - RAJASTHAN) HIGH ' COURT HAS CLEARLY DISTINGUISHED BETWEEN CLS. (A) AND (C) OF SUB - SO (1) OF S . 275 . UNDER CL . (A), THE LEVY OF PENALTY IS D EPENDENT UPON THE F I NDINGS OF THE APPELLATE AUTHORITIES, WHICH IS NOT THE CASE UNDER CL . (C). IN THIS CASE, THE DEFAULT OF NON - ATTEND ANCE TO NOT I CES WAS NOT THE SUBJECT - MATTER IN THE QUANTUR N T APPEAT AND I T I N NO WAY DEPENDED UPON THE OUTCOME IN THE APP EA L, THE 4 PENALTY DEPENDS UPON WHETHER THE DEFAULT WAS WI L FUL OR NO T , THEREFORE , WE ARE OF THE V I EW THAT THE RATIO O F THE CA S E OF H I SSAR I A BROS . (SUPRA) WILL BE APPLICABLE IN THIS CASE ALSO . CONSEQUENTLY, I T I S ALSO HELD THAT THE ORDE R OUGHT TO HAVE BE E N PASSED ON OR BEFORE 31ST SEPT., 2001, FAILING WHICH THE LEVY WILL BECOME BARRED BY L I M I TAT I ON . 2 . 4 COMIN G TO T H E I SSUE OF RECORDING OF SATISFACT I ON, I T MAY BE MENTIONED THAT MERE I NITIAT I ON OF PENALTY DOES NOT AMOUNT TO SATIS FA CTI ON AS HELD BY HON ' BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAM COMMERCIAL ENTERPRISES LTD . (2001) 167 CTR (DEL) 3 21 : ( 2000) 246 ITR 568 (DEL). IN ABSENCE OF RECORDING OF THE SATISFACTION IN THE ASSESSMENT ORDER , MERE IN I T I AT I ON OF PEN A LTY WIL L N O T C ONFER JUR I SDICTION ON THE AD TO LEVY THE PENALTY. 2.5 WE ALSO F I ND THAT FINALLY THE ORDER WAS PASSED UNDER S. 143(3) AND NOT UNDER S. 144 OF THE ACT . THIS MEANS THAT S U B SE Q UENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMP L IANCE AND THE DEFAU L TS COMM IT TE D EAR L I ER W ERE I GNORED BY THE AD . THEREFORE, I N SUCH C I RCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO COME TO THE C ONCLUSIO N T H AT THE DEFAU L T WAS WILLFUL . 2.6 IN VIEW OF THE AFORESAID D I SCUSSION, IT IS HELD THAT THE LEARNED CIT(A) WAS NOT R I GHT I N UPHO L D I NG THE L EVY OF P E NALTY. THUS, T H E APPEAL I S ALLOWED . 11. I FIND THAT THE ABOVE CASE LAW FULLY APPLIES ON THE FACTS OF THE CASE. LEARNED CIT(APPEALS) HAS ERRED IN DISTINGUISHING THIS CASE LAW AS HE HAS OPINED THAT THE ASSES SMENT ORDER IN THE PRESENT CASE THOUGH PASSED U/S 143(3) OF THE I.T. ACT IT APPEARED TO HIM TO BE PASSED U/S 144 OF THE I.T. ACT. IN MY CONSIDERED OPINION THIS IS NOT AT ALL A TENABLE GROUND FOR DISTINGUISHING THE DECISION OF THE ITAT. 12. FURTHER AS THE ABOVE FACTS CLEARLY INDICATE THAT IT IS A TECHNICAL BREACH AND IN SUCH CIRCUMSTANCES, AS HELD BY HONBLE APEX COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA 83 ITR 26, PENALTY NEED NOT BE LEVIED HENCE IN THE BACKGROUND OF AFORESAID DI SCUSSION AND PRECEDENT I HAVE NO HESITATION IN DELETING THE LEVY OF PENALTY. ACCORDINGLY THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 5. I FIND THAT THE FACTS IN THE PRESENT CASES ARE IDENTICAL TO THE ONE DEALT BY THE TRIBUNAL ABOVE EXCEPT FOR THE MINOR VARIATION IN THE CASE OF THANJAVUR COMMERCE PVT. LTD., WHEREIN ASSESSMENT ORDER WAS PASSED U/S 144 OF THE I.T. ACT. HOWEVER, STILL IN THIS CASE I FIND THAT THERE WAS SIMILAR REASONABLE CAUSE FOR NON APPEARANCE ON THE SPECIFIED DATE AS MENTIONED HEREIN ABOVE AND ALSO THE RATIO THAT HONBLE APEX COURT DECISION IN THE CASE OF HINDUSTAN STEEL LTD. (SUPRA) ALSO APPLIES. ACCORDINGLY IN THE BACKGROUND OF AFORESAID DISCUSSION AND 5 PR ECEDENT I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. 6. IN THE RESULT, THESE APPEALS FILED BY THE ASSESSEES STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF OCT., 2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 4 TH OCT. , 2016. COPY FORWARDED TO : 1. ________________________ 216, DEVI KRIPA SOCIETY, WARDHAMAN NAGAR, NAGPUR - 440001. 2. A.C.I.T., CENTRAL CIRCLE - 1(2), NAGPUR. 3. C.I.T. - (CENTRAL), NAGPUR. 4. CIT(APPEALS), - 3 , NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGIS TRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.