Shri Sanjaybhai M Sachapara, Surat V. ITO, WArd- 9(4), , Surat

ITA 229/SRT/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9826 (ITAT-SURAT)
• Duration Of Justice: 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 18-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: RASESH SHAH
• Keywords: Reasonable cause
• Section: 144

Judgement Text

SANJAYBHAI M SACHAPARA VS. ITO, WARD-9(4), SURAT/I.T.A. NO.229/SRT/2019/A.Y.08-09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O. P. MEENA, ACCOUNTANT MEMBER I.T.A. NO.229/SRT/2019 : ASSESSMENT YEAR: 2008-09 SHRI SANJAYBHAI M SACHAPARA, 5, SWAMINARAYAN NAGAR, 3, VARACHHA ROAD, BH KALAKUNJ SOCIETY, OPP.JB DHARUKA COLLEGE, SURAT 395 008. [PAN: BDRPS 9197 M ] VS. THE INCOME TAX OFFICER, WARD-9(4), SURAT. APPELLANT RESPONDENT ASSESSEE BY SHRI RASESH SHAH CA REVENUE BY SMT. ANUPAMA SINGLA, SR.DR DATE OF HEARING 30.04.2019 DATE OF PRONOUNCEMENT 30 .04.2019 ORDER PER O. P. MEENA, AM 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, SURAT [IN SHORT CIT (A)] DATED 11.03.2019 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE HAS TAKEN THE GROUNDS OF APPEAL AGAINST THE CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN LEVYING THE PENALTY OF RS.40,000/- U/S.271(1)(B) OF THE ACT. 3. THE AO NOTED THAT HE HAS ISSUED NOTICE U/S.143(2) DATED 28.08.2009, NOTICE U/S.1423(1) DATED 07.04.2010, 12.07.2010, 14.09.2010 BUT NO COMPLIANCE WAS MADE, THEREFORE THE ASSESEE WAS ASKED TO SHOW CAUSE U/S.271(1)(B), BUT AGAINST ONLY PART COMPLIANCE WAS MADE. THEREFORE, THE AO LEVIED THE PENALTY OF RS.40,000/- OF DEFAULT U/S.271(1)(B) OF THE ACT ON FOUR OCCASIONS. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHEREIN IT WAS CONTENDED THAT NOTICES WERE SENT AT HIS OFFICE ADDRESS SITUATED AT VARACHHA ROAD, SURAT. HOWEVER, THESE NOTICES COULD NOT BE RECEIVED AS THE ASSESSEE HAS INCURRED HEAVY LOSSES AND THE SANJAYBHAI M SACHAPARA VS. ITO, WARD-9(4), SURAT/I.T.A. NO.229/SRT/2019/A.Y.08-09 PAGE 2 OF 3 SAID OFFICE WAS CLOSED DOWN. HOWEVER, THE CIT(A) HAS OBSERVED THAT THE CONTENTION OF THE ASSESSEE THAT NON-COMPLIANCE WAS DUE TO THE OFFICE WAS SOLD, THEREFORE HE WAS NOT AWARE OF THE PROCEEDINGS IS DEVOID OF MERITS AND LAW AND FACTS THAT THE ASSESSEE IS RESPONSIBLE FOR UPDATING THE ADDRESS OF CORRESPONDENCE WHICH WAS NOT DONE BY THE ASSESSEE. ACCORDINGLY, THE PENALTY LEVIED BY THE AO WAS CONFIRMED. 5. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THE CIT (A) HAS CONFIRMED THE PENALTY FOR DEFAULT COMMITTED AT FOUR TIMES WHEREAS THE PENALTY IS LEVIABLE ONLY IN RESPECT OF ONE DEFAULT OF NOTICE UNDER SECTION 142(1). THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IS COVERED BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF REKHA RANI DCIT 154 ITD 617 (DELHI-TRIB) HENCE, THE PENALTY IF SUSTAINED BE RESTRICTED TO RS. 10,000 FOR ONE DEFAULT. 6. PER CONTRA, THE LD. SR. D.R. RELIED ON THE ORDER OF LD. CIT (A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE AO IMPOSED PENALTY UNDER SECTION 271(1)(B) IN RESPECT OF FAILURE OF THE ASSESSEE ON FOUR OCCASIONS. HOWEVER, THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE IN THE CASE OF REKHA RANI V. DCIT 154 ITD 617 DELHI- TRIB WHEREIN IT WAS HELD THAT 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DR AND HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). WE FIND THAT THERE WAS NO REASONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NOT APPEARING ON THE DIFFERENT DATES OF HEARING BEFORE THE ASSESSING OFFICER IN RESPONSE TO NOTICE ISSUED UNDER SECTION 143(2) OF THE ACT. HOWEVER, WE FIND THAT THE DEFAULT IS SAME AND, THEREFORE, PENALTY OF RS. 10,000/- COULD BE IMPOSED FOR THE FIRST DEFAULT MADE BY THE ASSESSEE IN THIS REGARD. THE PENALTY UNDER SECTION 271(1)(B) COULD NOT BE IMPOSED FOR EACH AND EVERY NOTICE ISSUED UNDER SECTION 143(2), WHICH REMAINED NOT COMPLIED WITH ON THE PART OF THE ASSESSEE. THE PROVISION OF SECTION 271(1)(B) IS OF DETERRENT NATURE AND NOT FOR EARNING REVENUE. ANY OTHER VIEW TAKEN SHALL LEAD TO THE IMPOSITION OF PENALTY FOR ANY NUMBER OF TIMES (WITHOUT LIMITS) FOR THE SAME DEFAULT OF NOT APPEARING IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 143(2) OF THE ACT. THIS DOES NOT SEEM TO BE THE INTENTION OF THE LEGISLATURE IN ENACTING THE PROVISIONS OF SECTION 271(1)(B) OF THE SANJAYBHAI M SACHAPARA VS. ITO, WARD-9(4), SURAT/I.T.A. NO.229/SRT/2019/A.Y.08-09 PAGE 3 OF 3 ACT. IN CASE OF FAILURE OF THE ASSESSEE TO COMPLY WITH THE NOTICE UNDER SECTION 143(2) OF THE ACT, THE REMEDY WITH THE ASSESSING OFFICER LIES WITH FRAMING OF 'BEST JUDGEMENT ASSESSMENT' UNDER THE PROVISIONS OF SECTION 144 OF THE ACT AND NOT TO IMPOSE PENALTY UNDER SECTION 271(1)(B) OF THE ACT AGAIN AND AGAIN. IN THIS VIEW OF THE MATTER, WE RESTRICT THE PENALTY LEVIED UNDER SECTION 271(1)(B) OF THE ACT TO THE FIRST DEFAULT OF THE ASSESSEE IN NOT COMPLYING WITH THE NOTICE UNDER SECTION 143(2) OF THE ACT. ACCORDINGLY, THE PENALTY IMPOSED IS RESTRICTED TO RS. 10,000/- AS AGAINST RS. 50,000/- CONFIRMED BY THE LEARNED CIT(A). THE GROUNDS OF APPEAL OF THE ASSESSEE ARE THUS PARTLY ALLOWED . 8. IN THE LIGHT OF ABOVE FACTS AND CIRCUMSTANCES AND RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF DELHI TRIBUNAL, WE RESTRICT THE PENALTY TO RS. 10,000 /O ONLY FOR FIRST DEFAULTS. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.04.2019. SD/- SD/- (H. S. SIDHU) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT: DATED: 30 TH APRIL,2019/OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT