M/s Partek Computers and Software Solutions Private Limited , Mangaluru V. Income tax officer Ward-1(1), , Mangaluru

ITA 221/BANG/2018

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5534 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 24-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALAKRISHNAN N
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Principle of natural justice; Reasonable cause
• Section: 273B; 27; 10; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO S . 220 TO 222 / BANG/201 8 ASSESSMENT YEAR S : 2009 - 10 TO 2011 - 12 M/S. PARTEK COMPUTERS AND SOFTWARE SOLUTIONS PVT. LTD., NO. 102, DEVAKI APARTMENTS, SRIDEVI COLLEGE ROAD, BALLALGAGH, MANGALURU 575 003. PAN: AACCP4229K THE INCOME TAX OFFICER, WARD 1 (1), MANGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI R. CHANDRASHEKAR, ADVOCATE RESPONDENT BY : SHRI BALAKRISHNAN .N, ADDL. CIT (DR) DATE OF HEARING : 28.02.2018 DATE OF PRONOUNCEMENT : 28.02.2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER ALL THESE THEE APPEALS ARE FILED BY THE ASSESSEE AN D THESE ARE DIRECTED AGAINST THREE SEPARATE ORDERS OF LD. CIT(A)-10, BANGALORE A LL DATED 25.10.2017 FOR ASSESSMENT YEARS 2009-10, 2010-11 AND 2011-12. 2. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BE ING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE GROU NDS RAISED BY THE ASSESSEE IN THESE THREE APPEALS ARE IDENTICAL EXCEP T DIFFERENCE IN AMOUNTS AND THEREFORE, I REPRODUCE THE GROUNDS FROM ASSESSMENT YEAR 2009-10 IN ITA NO. 220/BANG/2018. THE GROUNDS ARE AS UNDER. 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THE ORDER OF PENALTY IS NOT OPPOSED TO PRIN CIPLES OF NATURAL JUSTICE, WHEN THE SUBMISSION OF THE APPELLANT WAS T HAT THE LEARNED RESPONDENT WITHOUT CONSIDERING THE REPLY TO SHOW CA USE NOTICE, CONCLUDED ORDER OF PENALTY. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO ITA NOS. 220 TO 222/BANG/2018 PAGE 2 OF 4 APPRECIATE THAT THERE IS NO ABSOLUTE DEFAULT AND TH E APPELLANT OBTAINED AUDIT REPORT AS REQUIRED U/S.44AB OF THE ACT AND HA S FILED THE SAME ALONG WITH RETURN, WHICH SHOWS THE BONAFIDES OF THE APPELLANT IN COMPLYING THE PROVISIONS OF THE ACT. 3. LEVY OF PENALTY OF RS.49,727/- U/S.271B OF THE A CT, WHEN COMPARED TO TAX PAYABLE WHICH IS NIL OUGHT TO HAVE CONSIDERE D IN CONSIDERING THE CIRCUMSTANCES, AN PROVISIONS OF SECTION 273B OF THE ACT, OUGHTTO HAVE BEEN CONSIDERED BY THE LEARNED AUTHORITY. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THE CONSIDERATION OF EXPLANATION TO SECTION 27 1F OF THE ACT IS RELEVANT IN DECIDING THE ISSUE IN RELATION TO PENAL TY U/S.271B OF THE ACT. APPELLANT CRAVES LEAVE OF THE HON'BLE TRIBUNAL TO A DD/MODIFY/DELETE ANY OTHER GROUND OR GROUNDS AT THE TIME OF HEARING 3. THE AMOUNT OF PENALTY IMPOSED BY THE AO IN ASSES SMENT YEAR 2010-11 IS RS.67,158/- AND IN ASSESSMENT YEAR 2011-12, THE AMO UNT OF PENALTY IS RS. 61,773/-. IT WAS SUBMITTED BY LD. AR OF ASSESSEE T HAT THE DECISION OF CIT(A) IS CONTAINED IN THE PARA ON PAGE NOS. 5 AND 6 OF HIS O RDER AS PER WHICH IT WAS SUBMITTED BY LD. AR OF ASSESSEE BEFORE CIT(A) THAT IN RESPONSE TO THE NOTICE ISSUED BY THE AO FOR IMPOSING PENALTY, THE ASSESSEE FILED ITS REPLY ON 26.06.2015 BUT IT WAS NOT CONSIDERED AND ON THE SAM E DATE, THE AO ISSUED THE PENALTY ORDER U/S. 271B. HE SUBMITTED THAT IN THE INTEREST OF JUSTICE, THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF AO FOR FRESH DECISION AFTER CONSIDERING THE REPLY OF THE ASSESSEE FILED BEFORE HIM ON 26.06.201 5. HE ALSO SUBMITTED THAT THE COPY OF SAID REPLY IS AVAILABLE ON PAGE NO. 1 O F THE PAPER BOOK. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELO W. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT THE REPLY FILED BY THE ASSESSEE BEFORE THE AO ON 26.06.2015 WAS NOT CONSID ERED BY THE AO. IN THE SAID REPLY, THE ASSESSEE HAS NARRATED THE REASONS F OR THE DELAY IN OBTAINING TAX AUDIT REPORT AS PER WHICH IT IS STATED THAT THERE W AS COMPLETE LOSS OF ACCOUNTING DATA IN ASSESSMENT YEAR 2009-10 CAUSED BY CRASH OF HARD DISK DUE TO THE EFFECT OF SHORT CIRCUIT IN THE BUSINESS PREMISES OF THE ASSESSEE IN THE MONTH JULY 2009 AND THE BACK-UP COMPUTER WAS ALSO DAMAGED IN THAT ACCIDENT OF ITA NOS. 220 TO 222/BANG/2018 PAGE 3 OF 4 SHORT CIRCUIT AND AS SUCH, THERE WAS NO DATA AVAILA BLE AT THAT TIME. IT IS ALSO STATED IN THE SAID APPLICATION THAT IT TOOK THE ASS ESSEE NEARLY ONE YEAR TO REBUILD THE DATA BY GETTING COPIES OF INVOICES, STATEMENTS ETC. SO THAT THE ASSESSEE COULD PREPARE THE FINAL ACCOUNTS FOR ASSESSMENT YEA R 2010-11 AND LATER YEARS. AS PER THE PROVISIONS OF SECTION 273B OF IT ACT, TH E PENALTY UNDER VARIOUS SECTIONS INCLUDING SECTION 271B OF THE IT ACT CANNO T BE IMPOSED IF ASSESSEE IS ABLE TO ESTABLISH THAT THERE WAS REASONABLE CAUSE F OR THE ASSESSEES FAILURE FOR WHICH PENALTY IS BEING PROPOSED. REGARDING THE APP LICABILITY OF SECTION 273B IN THE PRESENT CASE, THERE IS NO FINDING GIVEN BY AO O R CIT(A). THE CIT(A) HAS ALSO NOTED THAT IT WAS STATED BEFORE HIM THAT PENAL TY PROCEEDINGS INITIATED BY AO U/S. 271F OF IT ACT WERE DROPPED BY THE AO AND T HEREFORE, IT WAS A REQUEST OF THE ASSESSEE THAT SINCE PENALTY WAS DROPPED U/S. 271F ON CONSIDERING THE SAME REASONING GIVEN BY THE ASSESSEE, THE PENALTY S HOULD BE DROPPED U/S. 271B ALSO. ABOUT THIS ASPECT, THE CIT(A) HAS HELD THAT PROCEEDINGS U/S. 271F AND 271B ARE SEPARATE AND THEREFORE, THE DECISION I N ONE PROCEEDINGS CANNOT BE CONSIDERED IN SECOND PROCEEDINGS. I FIND THAT P ENALTY U/S. 271F IS IMPOSABLE IF THE ASSESSEE DOES NOT FURNISH THE RETU RN OF INCOME WITHIN THE TIME PRESCRIBED U/S. 139 (1) OF IT ACT. U/S. 273B, SECT ION 271F IS ALSO COVERED AND THIS IS ESSENTIAL TO SEE AS TO WHAT IS THE BASIS AD OPTED BY AO FOR DROPPING PENALTY PROCEEDINGS U/S. 271F. IF THE PENALTY PROC EEDINGS U/S. 271F IS DROPPED BY THE AO ON THE BASIS OF SAME REASONING WHICH ARE GIVEN BY THE ASSESSEE FOR DROPPING OF PENALTY U/S. 271B, AND IF THE APPLICABI LITY OF SECTION 273B HAS BEEN ACCEPTED IN THE COURSE OF THOSE PROCEEDINGS, IT CAN NOT BE REJECTED IN THE PRESENT PROCEEDINGS. 5. HENCE UNDER THESE FACTS, I FEEL IT PROPER TO RES TORE THE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION. ACCORDINGLY, I SET ASID E THE ORDER OF CIT(A) IN ALL THESE THREE YEARS AND RESTORE THE MATTER BACK TO TH E FILE OF CIT(A) FOR FRESH DECISION WITH THE DIRECTION THAT CIT(A) SHOULD EXAM INE THE BASIS ADOPTED BY THE AO FOR DROPPING THE PENALTY U/S. 271F OF THE IT ACT . THE CIT(A) SHOULD ALSO EXAMINE THE APPLICABILITY OF SECTION 273B OF THE IT ACT IN PRESENT PROCEEDINGS IN THESE YEARS IN RESPECT OF PENALTY PROCEEDINGS U/S. 271B AND THEN DECIDE THE ISSUE AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY O F BEING HEARD TO BOTH SIDES. ITA NOS. 220 TO 222/BANG/2018 PAGE 4 OF 4 IF REQUIRED, CIT (A) MAY OBTAIN REMAND REPORT REGAR DING APPLICABILITY OF SECTION 273B IN THE FACTS OF THE PRESENT CASE. 6. IN THE RESULT, ALL THE THREE APPEALS FILED BY TH E ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 28 TH FEBRUARY, 2018. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.