M/s P. R. Trading Co., Hooghly V. ITO, WD-2(2), HOOGHLY, Hooghly

ITA 204/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1776 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 10-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ALOKESH KUNDU LD
• Keywords: Non compliance
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D B ENCH, KOLKATA BEFORE : SHRI M. BALAGANESH,ACCOUNTANT MEM BER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 204/KOL/2016 A.Y : 2010-11 M/S. P.R. TRADING CO. VS. I.T.O., WARD 2(3),HOOGH LY PAN: AAFFP4503L [APPELLANT-ASSESSEE ] [DEPARTMENT-RESPONDE NT ] APPELLANT BY : SHRI ALOKESH KUNDU, ADVOCATE, LD.AR RESPONDENT BY : SHRI ARINDAM BHATTACHARJEE, A DDL, CIT, LD.DR DATE OF HEARING : 14-11-2017 DATE OF PRONOUNCEMENT : 24-01-2018 ORDER SHRI S.S. VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DT: 16-11- 2015 PASSED BY THE CIT-(A), 6, KOLKATA FOR THE A.Y 2010-11. 2. THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER TH E CIT-A WAS JUSTIFIED IN CONFIRMING THE PENALTY OF RS.10,000/- IMPOSED U/S. 271(1)(B) OF THE ACT BY THE AO IN THE FACT AND CIRC UMSTANCES OF THE CASE. 3. THE LD. AR SUBMITS THAT THE AO INITIATED THE PRO CEEDINGS U/S. 271(1)(B) OF THE ACT ALLEGING THAT THE ASSESSEE DID NOT OFFER ANY EXPLANATION AS SOUGHT BY HIM ON 10-07-2012 IN THE A SSESSMENT PROCEEDINGS. 4. IN FIRST APPELLATE PROCEEDINGS, THE ASSESSEE CON TENDED THROUGH WRITTEN SUBMISSIONS DT. 3-3-2015 THAT THE ASSESSMEN T ORDER WAS NOT PASSED U/S. 144 OF THE ACT AND THE ASSESSEE HAD NEV ER BEEN MADE COMPLIANCE OF ANY NOTICE. ACCORDING TO CIT-A, THERE WAS NO REPRESENTATION ON BEHALF OF THE ASSESSEE INSPITE OF HAVING SUFFICIENT ITA NO. 204/KOL/2016 M/S.P.R. TRADING CO.. 2 OPPORTUNITIES OF HEARING AFFORDED BY THE CIT-A TO T HE ASSESSEE AND CONFIRMED THE PENALTY IMPOSED BY THE AO EX PARTE . 5. THE LD.AR SUBMITS THAT AO COMPLETED THE ASSESSM ENT U/S. 143(3) OF THE ACT AND REFERRED PARA 3 OF THE ASSESS MENT ORDER DT. 26- 03-2013 AND ARGUED THAT THE ASSESSEE THROUGH ITS A /R FILED ALL THE DETAILS IN RESPONSE TO NOTICES ISSUED U/S. 143(2) A ND 142(1) OF THE ACT BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS . THE AO DID NOT MAKE ANY ADVERSE REMARK IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS FAILED TO COMPLY WITH THE NOTICE ISSUE D U/S. 142(1) OF THE ACT AND THEREFORE, THE IMPOSITION OF SAID PENAL TY U/S. 271(1)(B) OF THE ACT AND CONFIRMATION OF THE SAME BY THE CIT-A O N THIS ISSUE IS NOT JUSTIFIED AND IN VIEW OF ABOVE, PRAYED TO CANCEL TH E SAID PENALTY OF RS.10,000/- IMPOSED BY THE AO U/S. 271(1)(B) OF THE ACT. THE LD.AR ALSO SUBMITS THAT HAVING COMPLETED THE ASSESSMENT U /S. 143(3) OF THE ACT, WHICH CLEARLY SHOWS THAT THERE WAS FULL CO MPLIANCE ON BEHALF OF THE ASSESSEE REGARDING REQUIREMENTS AS SOUGHT BY THE AO IN THE SAID PROCEEDINGS. THE LD. AR PLACED HIS RELIANCE ON THE DECISION OF ITAT, NEW DELHI IN THE CASE OF GLOBUS INFOCOM LTD A ND REFERRED TO PARA 3 OF THE SAID ORDER AND ARGUED THAT THE DELHI TRIBUNAL BY PLACING RELIANCE IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHI KSHAK SANGH BHAWAN TRUST VS. ACIT REPORTED IN (2008) 5 DTR (DE L) 429, HELD THAT IMPOSITION OF PENALTY U/S. 271(1)(B) OF THE ACT WAS PATENTLY WRONG IN VIEW OF THE FACT THAT THE IMPUGNED ASSESSMENT ORDER WAS PASSED U/S. 143(3) OF THE ACT. THE LD. AR PRAYED TO ALLOW THE G ROUND OF APPEAL IN THIS REGARD AND CANCEL THE PENALTY IMPOSED BY THE A O U/S. 271(1)(B) OF THE ACT. 6. THE LD.DR SUBMITS THAT THERE WERE TWO INSTANCES WHERE THE ASSESSEE DID NOT COMPLY THE NOTICE ISSUED U/S. 142( 1) OF THE ACT AND REFERRED TO THE PENALTY ORDER. FURTHER, THE ASSESSE E FAILED TO GIVE VALID REASONS FOR NON COMPLIANCE OF THE NOTICE ISSU ED U/S. 142(1) OF THE ACT AND ARGUED THAT IT IS A FIT CASE FOR IMPOSI NG THE PENALTY AND ITA NO. 204/KOL/2016 M/S.P.R. TRADING CO.. 3 THE AO RIGHTLY IMPOSED THE SAME, WHICH WAS CONFIRME D BY THE CIT-A AND IT IS JUSTIFIED. 7. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSMENT ORDER DT. 26-03-2013 PA SSED U/S. 143(3), WHEREIN WE NOTICED THAT THERE WAS NO ALLEGA TION OF NON COMPLIANCE WAS MADE BY THE ASSESSEE IN THE ASSESSME NT PROCEEDINGS AO. IT IS OBSERVED THAT THE ASSESSEE THROUGH HIS AR COMPLIED WITH THE NOTICE AND SUBMITTED BILLS, VAT CHALLAN ETC, WHICH WERE EXAMINED BY THE AO. WE FIND THAT THE LD.AR HAS RIGHTLY POINTED OUT THAT THERE WAS NO ALLEGATION BY THE AO IN NOT COMPLYING WITH THE N OTICE U/SEC 142(1) OF THE ACT IN THE ASSESSMENT ORDER. THE CIT- A CONFIRMED THE PENALTY BY EX PARTE FOR NON COMPLIANCE OF NOTICE DT. 18-05-2012 ISSUED U/S. 142(1). WE FIND THAT THE ASSESSEE FILED A REPLY DT. 29-08- 2012, WHICH WAS EXAMINED AND REPRODUCED BY THE AO I N HIS ORDER AT PAGE 2. HOWEVER, WE FIND THAT THE FACTS AND CIRCUM STANCES IN THE CASE OF DELHI TRIBUNAL IN THE CASE OF GLUBUS INFOCO M LTD SUPRA ARE SIMILAR WITH THAT OF PRESENT CASE AND THE SAME IS R EPRODUCED HEREIN BELOW:- 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE INSTANT APPEAL IS SQUARELY COVERED BY THE DECIS ION OF THE CO-ORDINATE BENCH OF ITAT DELHI IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSH AK SANGH BHAWAN TRUST VS ACIT 5 DTR 429 (DELHI TRIBUNAL) WHEREIN THE COORDINATE BENCH I N PARAS 2.4 AND 2.5 HAS HELD AS UNDER:- I.T.A. NO. 738/DEL/2014 ASSESSMENT YEAR 2010-11 '2. 4 COMING TO THE ISSUE OF RECORDING OF SATISFACTION, IT MAY BE MENTIONED THAT MERE INIT IATION OF PENALTY DOES NOT AMOUNT TO SATISFACTION AS HELD BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAM COMMERCIAL ENTERPRISES LTD . (2001) 167 CTR (DEL) 321 : (2000) 246 ITR 568 (DE L). IN ABSENCE OF RECORDING OF THE SATISFACTION IN THE ASSESSMENT ORD ER, MERE INITIATION OF PENALTY WILL NOT CONFER JURISDICTION ON THE AO TO LEVY THE PENALTY. 2.5 WE ALSO FIND THAT FINALLY THE ORDER WAS PASSED UNDER S. 143(3) AND NOT UNDER S. 144 OF THE ACT. THIS MEANS THAT SUBSEQUENT COMPLIANCE IN T HE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMM ITTED EARLIER WERE IGNORED BY THE AO. THEREFORE, IN SUCH CIRCUMSTANCES, THERE COULD H AVE BEEN NO REASON TO COME TO THE CONCLUSION THAT THE DEFAULT WAS WILLFUL.' 6. AS THE FACTS OF THIS CASE ARE IDENTICAL, WE HOLD THAT THE IMPOSITION OF PENALTY U/S 271(1)(B) OF THE ACT WAS PATENTLY WRONG, SPECIALLY IN VIEW OF THE FACT THAT THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED U/S 143(3). WHILE SETTING ASIDE THE IMPUGNED ORDER, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENAL TY. ITA NO. 204/KOL/2016 M/S.P.R. TRADING CO.. 4 8. IN VIEW OF ABOVE, WE CANCEL THE IMPUGNED PENALTY OF RS. 10,000/- IMPOSED BY THE AO AND CONFIRMED BY THE CIT -A. THUS, GROUND RAISED BY THE ASSESSEE IS ALLOWED. THE APPEA L ITA NO.204/KOL/2016 FOR THE A.Y 2010-11 IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 4-01-2018 SD/- SD/- M. BALAGANESH S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :24-01-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE : M/S.P.R. TRADING CO. VILL- & P .O- MALINAPUR, RAJHAT, DIST-HOOGHLY, PIN 712401. 2 RESPONDENT/REVENUE : THE ITO, WARD 2(2), HOOGHLY, AAYKAR BHAWAN, KHADINAMORE, P.O. CHINSURAH, DIST-HO OGHLY. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER SR.P.S, HEAD OF OFFICE ITAT KOLKATA