M/s. Shiven Infrastructure, Ahmedabad V. The ACIT, Cent. Circle-1(4), Ahmedabad

ITA 1942/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1162 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 15-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANTONY PARIATH
• Assessee Lawyers: ANKIT TALSANIA
• Keywords: Document seized; Reasonable cause; Non compliance; Documents seized
• Section: 273B; 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ASSESSEE(S) BY : SHRI ANKIT TALSANIA, AR REVENUE BY : SHRI ANTONY PARIATH, SR DR / // / DATE OF HEARING : 07/07/2016 / // / DATE OF PRONOUNCEMENT: 11/07/2016 / // / O R D E R THESE APPEALS BY SIX DIFFERENT ASSESSEES ARE DIREC TED AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)- I, AHMEDABAD OF EVEN DATE 16.05.2013, CONFIRMING THE LEVY OF PENALTY OF RS.10,000/- IN EACH SN ITA NO. AY APPELLANT RESPONDENT 1 1939/AHD/2013 2011-12 M/S. KANHAI CORPORATION, ARJUN EXOTICA, B/H. ARJUN TOWER, NR. PAYAL PARTY PLOT, GHATLODIA, AHMEDABAD PAN : AAKFK 2600 G ACIT, CENTRAL CIRCLE-1(4), AHMEDABAD 2 1940/AHD/2013 2011-12 M/S. SCARLET INFRASTRUCTURE PVT. LTD., B/H. ADISHWAR TVS, OPP.RAHUL TOWER, PRAHLADNAGAR ROAD, SATELLITE, AHMEDABAD PAN : AAOCS 1992 A ACIT, CENTRAL CIRCLE-1(4), AHMEDABAD 3 1941/AHD/2013 2011-12 M/S. PRANALI CORPORATION, B/H. KARMACHARI NAGAR SCHOOL, NR. CP NAGAR, PART-2, ARJUN TOWER ROAD, GHATLODIA, AHMEDABAD PAN : AALFP 4878 J ACIT, CENTRAL CIRCLE-1(4), AHMEDABAD 4 1942/AHD/2013 2011-12 M/S. SHIVEN INFRASTRUCTURE, B/H. VISHVESHWAR FLATS, NR.MENARAV HALL, NILKANTH MAHADEV ROAD, RANNAPARK, AHMEDABAD PAN : ABOFS 5092 B ACIT, CENTRAL CIRCLE-1(4), AHMEDABAD 5 1943/AHD/2013 2011-12 M/S. AARYA INFRASTRUCTURE, B/H. VISHVESHWAR FLATS, NR.MENARAV HALL, NILKANTH MAHADEV ROAD, RANNAPARK, AHMEDABAD PAN : AAPFA 9740 C ACIT, CENTRAL CIRCLE-1(4), AHMEDABAD 6 1944/AHD/2013 2011-12 M/S. VAIDEHI CORPORATION, B/H. SHIVNAGAR SOCIETY, NR. CHANAKYAPURI CROSSING, GHATLODIA, AHMEDABAD PAN : AAHFV 7897 F ACIT, CENTRAL CIRCLE-1(4), AHMEDABAD SMC-ITA NOS. 1939 TO 1944/AHD/2013 - SIX DIFFERENT COMPANIES AY : 2011-2012 2 IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(B) OF T HE ACT FOR THE DEFAULTS OF NOT COMPLYING WITH NOTICES FOR ASSESSMENT YEAR 2011 -12. SINCE ALL THESE APPEALS PERTAIN TO SAME GROUP AND RAISE IDENTICAL I SSUES; THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR TH E ASSESSEE CONTENDS IN RESPONSE TO CORRESPONDING SHOW CAUSE NOTICES, LD. A SSESSING OFFICER WAS INFORMED THAT ALL THE CASES OF PRADIP OVERSEAS GROU P WERE FIXED ON THE SAME DATE AND SINCE IT WAS NOT POSSIBLE FOR THE ASS ESSEE AND AS ALSO FOR THE ASSESSING OFFICER TO TAKE UP ALL CASES AT A TIME, T HE ASSESSEES REPRESENTATIVE REQUESTED TO THE ASSESSING OFFICER THAT INDIVIDUAL CASES MAY BE TAKEN UP FIRST AND THEREAFTER THE CASES OF THE COMPANIES AND FIRMS MAY BE TAKEN UP. ACCORDING TO ASSESSEE, AO AGREED FOR THIS, THEREFOR E, NOBODY ATTENDED THE PROCEEDINGS. ACCORDINGLY, IT WAS REQUESTED TO DROP THE PENALTY PROCEEDINGS INITIATED U/S 271(1)(B) OF THE ACT. HE FURTHER CON TENDS THAT THE ASSESSEE WAS ALSO SUBMITTED TO THE ASSESSING OFFICER THAT THE RE QUIRED SUBMISSION WAS BEING MADE ON 18.12.2012 AND FURTHER SUBMISSION SHA LL BE MADE AS REQUIRED DURING THE COURSE OF ASSESSMENT PROCEEDINGS TILL 15 .01.2013 AND NO- COMPLIANCE SHALL BE MADE. WITHOUT DISPUTING THESE FACTS, LD. AO LEVIED THE PENALTY OF RS.10,000/- FOR EACH DEFAULT BY IMPUGNED ORDERS ON 19.12.2012. 2.1 IT IS SUBMITTED THAT BEFORE THE LD. CIT(A), VID E LETTER DATED 16.04.2013, ASSESSEE REITERATED THE STAND AND FURTHER SUBMITTED THAT TIME-BARRING FOR THE IMPUGNED ASSESSMENT WAS 31.03.2014 AND THE ASSESSME NT ORDER WAS NOT PASSED TILL 31.03.2013, EVEN THOUGH THE ASSESSEE HA S FURNISHED ALL THE DETAILS CALLED FOR BY THE ASSESSING OFFICER. 2.2 THE ASSESSMENT PROCEEDINGS HAVE BEEN PASSED U/S 143(3) OF THE ACT AND NOT U/S 144 OF THE ACT WITHOUT, RELIANCE IS PLA CED ON FOLLOWING CASES HAS SMC-ITA NOS. 1939 TO 1944/AHD/2013 - SIX DIFFERENT COMPANIES AY : 2011-2012 3 HELD THAT WHEN THE ASSESSMENT ORDER HAS BEEN PASSED U/S 143(3) OF THE ACT AND NOT U/S 144 OF THE ACT, THEN THE NON-COMPLIANCE IS DEEMED TO HAVE BEEN WAIVED, AND ACCORDINGLY, PENALTY LEVIED U/S 271(1)( B) OF THE ACT HAS BEEN DELETED BY THE TRIBUNAL:- I) SHRI ARVINDBHAI CHANDULAL SHAH VS. ITO IN ITA NO.553/AHD/2013, DATED 09.03.2016. II) PRAKASH DALICHAND BAGRECHA VS. ITO IN ITA NO.2544/A HD/2011, DATED 10.03.2016 2.3 IT IS FURTHER SUBMITTED THAT IN VIEW OF THE CLE AR UNDERSTANDING THAT ALL GROUP CASES BEING CONNECTED, THE INDIVIDUAL CASES M AY BE TAKEN UP FIRST AND THEREAFTER THE CASES OF THE COMPANIES AND FIRMS MAY BE TAKEN UP, THERE WAS A REASONABLE CAUSE FOR THE ALLEGED NON-COMPLIANCE O F THE NOTICE ISSUED ON 17.10.2012, AND THEREFORE ALSO, PENALTY COULD NOT H AVE BEEN LEVIED IN PURSUANT TO THE PROVISIONS OF SECTION 273B OF THE A CT. 3. LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HA ND VEHEMENTLY CONTENDS THAT THE ASSESSING OFFICER WAS RIGHT IN IM POSING THE PENALTY IN QUESTION AS THE ASSESSEE FAILED TO COMPLY WITH THE NOTICES ISSUED BY THE ASSESSING OFFICER. NO SUCH UNDERSTANDING AS CLAIME D BY THE ASSESSEE EMERGES FROM THE RECORD, BESIDES IF THERE WAS ANY S EMBLANCE OF ANY MERIT IN ASSESSEES CONTENTION, THESE FACTS SHOULD HAVE BEEN MENTIONED IN THE ADJOURNMENT APPLICATIONS. THE SURVEY PROCEEDINGS AR E SERIOUS IN NATURE AND ASSESSEE UNDER ANY CIRCUMSTANCES WAS SUPPOSED T O FILE ADJOURNMENT APPLICATIONS. NON SUBMISSION OF ADJOURNMENT APPLICA TIONS AND NON ATTENDANCE INDICATE ASSESSEES DEFIANT ATTITUDE IN MEETING WITH THEIR STATUTORY OBLIGATIONS. PENALTY U/S 271(1)(B) IS AT A MINOR SUM OF RS. 10,000/- FOR EACH DEFAULT AND HAS BEEN BROUGHT ON THE STATUT E BOOK TO CURB SUCH DEFIANT TENDENCY OF NOT COMPLYING WITH STATUTORY NO TICES. ATTENTION IS DRAWN TO THE OBSERVATIONS OF LD. AO AND LD. CIT(A) IN THIS BEHALF IN THE LEAD CASE OF KANHAI CORPORATION: SMC-ITA NOS. 1939 TO 1944/AHD/2013 - SIX DIFFERENT COMPANIES AY : 2011-2012 4 OBSERVATIONS OF LD. AO 5. THE SUBMISSION OF THE ASSESSEE IS NOT ACCEPTAB LE. THE SURVEY IN THE CASE OF ASSESSEE GROUP WAS CONDUCTED ON 21.09.2010, ASSE SSEE FILED ITS RETURNS ON 28.09.2011 AND THE NOTICE U/S 143(2) OF THE ACT WAS I SSUED ON 17.09.2012. THEREAFTER, NOTICE U/S 142(1) OF THE ACT WAS ISSUED O N 17.10.2012 ASKING THE ASSESSEE TO FURNISH DETAILS ON 30.10.2012. IT IS A LSO PERTINENT TO MENTION HERE THAT THE XEROX COPIES OF ALL SEIZED DOCUMENTS RELAT ING TO THE ENTIRE PRADIP OVERSEAS GROUP WAS PROVIDED TO THE ASSESSEES BY THE INVESTIGATION WING IMMEDIATELY AFTER CONCLUSION OF THE SEARCH PROCEEDI NGS. THEREFORE, THE ASSESSEE WAS WELL IN POSSESSION OF ALL THE ACCOUNTS /DETAILS/DOCUMENTS IN RELATION TO THE ACTIVITIES OF THE ASSESSEE. FROM T HE DATE OF SEARCH TILL ISSUE OF NOTICE U/S 142(1), THERE IS SUBSTANTIAL & SIZEABLE GAP OF AROUND TWO YEARS AND THUS, THE ASSESSEE OUGHT TO HAVE SUBMITTED THE DETA ILS CALLED FOR. HOWEVER, FOR REASONS BEST KNOWN TO THE ASSESSEE, IT OPTED NO T TO COMPLY WITH THE TERMS OF NOTICE U/S 142(1) OF THE ACT. THEREFORE, THE ASSE SSEE HAS NO REASONABLE CAUSE TO OFFER FOR THE INORDINATE DELAY IN COMPLYIN G TO THE TERMS OF STATUTORY NOTICE ISSUED U/S 142(1) OF THE ACT. ACCORDINGLY, THE UNDERSIGNED IS SATISFIED THAT THIS IS A FIT CASE FOR LEVY OF PENALTY UNDER S ECTION 271(1)(B) OF THE INCOME TAX ACT, 1961. OBSERVATIONS OF LD. CIT(A) 5.1 THE RELIANCE OF THE AR OF THE APPELLANT ON TH E DECISION OF THE AHMEDABAD TRIBUNAL IN THE CASE OF SWARNABEN M. KHANN A & OTHERS VS. DCIT, REPORTED IN [2010] 132 TTJ 419 AND ZUNZUBHAI P PATE VS. ASSISTANT COMMISSIONER OF INCOME TAX AND THE DECISION OF THE JODHPUR BENCH OF THE ITAT IN THE CASE OF PARMESHWARI TEXTILES VS. INCOME TAX OFFICER REPORTED IN 92 TTJ (JD) 764 IS ALSO MISPLACED. IN THOSE CASES THE AO HAD LEVIED THE PENALTY AFTER THE ASSESSMENT ORDER WAS PASSED U/S 1 43(3) AND NOT U/S 144 OF THE ACT. IN THOSE CASES THE ITAT HELD THAT SINCE THE ASSESSMENT ORDER WAS PASSED U/S 143(3) AND NOT U/S 144 OF THE ACT, THE AO HAD WAIVED THE NON- COMPLIANCE. IN THE INSTANT CASE THE ASSESSMENT HAS NOT BEEN COMPLETED AS YET HENCE IT CANNOT BE PRESUMED THAT THE AO HAS WAIVED T HE NON-COMPLIANCE. RATHER THE REVERSE IS TRUE THAT THE AO HAS HELD THAT THE APPELLANT HAS NOT BOTHERED TO COMPLY WITH THE NOTICE DELIBERATELY AND MADE OBSERVATIONS ABOUT MISPLACED UNDERSTANDING WHICH WAS NEVER THE CASE HE NCE HE PROCEEDED TO LEVY THE PENALTY EVEN BEFORE THE ASSESSMENT WAS COM PLETED WHICH IS NORMALLY THE CASE. 3.1 APROPOS CASE LAWS IT IS CONTENDED THAT THE SAME ARE NOT APPLICABLE AS RIGHTLY HELD BY LD. CIT(A). THE PENALTY U/S 271(1)( B) CAN BE IMPOSED PRIOR TO ASSESSMENTS, THEREFORE, WHETHER THE ASSESSMENTS MAY BE FRAMED SMC-ITA NOS. 1939 TO 1944/AHD/2013 - SIX DIFFERENT COMPANIES AY : 2011-2012 5 SUBSEQUENTLY U/S 143(3) OR 144 CANNOT HAVE ANY IMPL ICATION OF THE PENALTY WHEN THE ASSESSMENT ITSELF IS NOT FRAMED. IN THESE CASES THE PENALTY U/S 271(1)(B) HAVE BEEN IMPOSED ON 19-12-2012 MUCH PRI OR TO THE FRAMING OF ASSESSMENTS ON 17-01-2014, CONSEQUENTLY IT CAN BE S AID THAT AT THE TIME OF IMPOSITION OF PENALTY AO KNEW UNDER WHAT SECTION TH E ASSESSMENTS WILL BE FRAMED. PENALTY U/S 271(1)(B) IS FOR NON COMPLIANCE WITH A STATUTORY NOTICE AND HAS NO CONNECTION WITH ASSESSMENT. SINCE THE PE NALTIES WERE IMPOSED MUCH PRIOR TO ASSESSMENTS, THE CASE LAW CITED BY AS SESSEE ARE CLEARLY DISTINGUISHABLE ON FACTS. 4. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE CONTENTIONS OF LD. DR CARRY MERITS I NASMUCH AS THE IMPUGNED PENALTIES WERE IMPOSED ON 19-12-2012 MUCH PRIOR TO THE FRAMING OF ASSESSMENTS ON 17-1-2014. IN VIEW THEREOF THE CA SE LAWS CITED BY THE ASSESSEE ARE DISTINGUISHABLE. ASSESSEE HAS FAILED T O DEMONSTRATE THAT THERE WAS ANY UNDERSTANDING WITH LD. AO AS TRIED TO BE CA NVASSED. BESIDES IN ANY CASE ADJOURNMENT APPLICATIONS OUGHT TO HAVE BEEN FI LED CITING ANY REASON WHICH EXISTED. NON FILING OF ADJOURNMENT APPLICATIO NS AND NON ATTENDANCE OF PROCEEDINGS CANNOT BE VIEWED LIGHTLY. THE ASSESS EE HAS THUS FAILED TO SHOW ANY DEMONSTRABLE REASONS OF SUFFICIENT CAUSE F OR NON COMPLIANCE. IN VIEW THEREOF, I SEE NO INFIRMITY IN THE ORDERS OF L OWER AUTHORITIES IMPOSING THE IMPUGNED PENALTIES. 5. IN THE RESULT, ASSESSEES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH JULY, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 11/07/2016 *BIJU T. SMC-ITA NOS. 1939 TO 1944/AHD/2013 - SIX DIFFERENT COMPANIES AY : 2011-2012 6 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, TRUE COPY / // / ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD