J. Ravinder Reddy, Nalgonda, Hyderabad V. ITO, Suryapet, Suryapet

ITA 244/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6390 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 06-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2016
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: S RAMA RAO
• Keywords: Reasonable cause
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 244/HYD/2016 ASSESSMENT YEAR: 2009-10 J. RAVINDER REDDY, ALIAR, NALGONDA DIST., [PAN: ABAPJ3771A] VS INCOME TAX OFFICER, SURYAPET (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SMT. U. MINICHANDRAN, DR DATE OF HEARING : 09-08-2016 DATE OF PRONOUNCEMENT : 19-08-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-3, HYDERABAD, DATED 11-01-2016 CONFIRMING THE PENALTY OF RS. 30,000/- U/ S. 271(1)(B) OF THE INCOME TAX ACT [ACT]. ASSESSEE IS CONTESTING A BOUT CONFIRMATION OF PENALTY. 2. BRIEFLY STATED, ASSESSEE, AN LIC AGENT HAD FILED HI S RETURN OF INCOME ADMITTING AN AMOUNT OF RS. 1,86,640/-. THERE A RE CERTAIN CASH DEPOSITS IN THE BANK ACCOUNT OF ASSESSEE CONSEQU ENT TO I.T.A. NO. 244/HYD/2016 J. RAVINDER REDDY :- 2 -: WHICH, THE CASE WAS SELECTED FOR SCRUTINY UNDER THE CA SS. ASSESSING OFFICER (AO) IT SEEMS HAS ISSUED VARIOUS N OTICES POSITING THE CASE AS UNDER: S.NO. NOTICE(S) ISSUED U/S. DATE OF ISSUE 1. 143(2) 31 - 08 - 2010 2. 143(2) & 142(1) 15 - 06 - 2011 3. 143(2) & 142(1) 26 - 07 - 2011 4. 14 3(2) & 142(1) 08 - 09 - 2011 5. 143(2) 30 - 09 - 2011 6. 143(2) 14 - 11 - 2011 7. 143(2) 13 - 12 - 2011 AS ASSESSEE HAS NOT RESPONDED TO THE ABOVE NOTICES, AO COMPLETED THE ASSESSMENT U/S. 144 OF THE ACT AND ALSO INITIATED TH E PENALTY PROCEEDINGS U/S. 271(1)(B). AS THERE IS NO RESPONS E EVEN TO THE NOTICE OF PENALTY, THE AO VIDE ORDERS DT. 28-06-2012 LEVIED PENALTY AT RS. 10,000/- PER EACH OCCASION AS DEFAULT AND LEVI ED TOTAL AMOUNT OF RS. 70,000/- FOR SEVEN OCCASIONS FOR FAILU RE TO APPLY WITH THE NOTICES ISSUED U/S. 142(1) AND 143(2). 3. EVEN THOUGH ASSESSEE PREFERRED AN APPEAL BEFORE TH E CIT(A) AND SUBMITTED THAT THE ADDITION MADE BY THE AO IN THE QUA NTUM DOES NOT PERTAIN TO ASSESSEE AND ASSESSEE GOT RELIEF IN AN APPEAL ON THE ORDER U/S. 144, IT WAS PRAYED THAT PENALTY MAY PLEA SE BE CANCELLED. LD. CIT(A) HOWEVER, REDUCED THE PENALTY BY STATING AS UNDER: 1. PENALTY U/S. 271(1)(B) IS LEVIED WHEN THE ASSES SEE FAILS TO SUBMIT THE INFORMATION CALLED FOR/FAILS TO COMPLY W ITH THE NOTICES ISSUED. IT HAS GOT NOTHING TO DO WITH WHETHER THE ADDITION MADE BY AO ARE SUSTAINED OR DELETED. AS EVIDENT FROM THE A BOVE, THESE NOTICES WERE ISSUED DURING SCRUTINY PROCEEDINGS, AL L WERE SERVED, BUT THERE WAS NO COMPLIANCE FROM THE ASSESSEE. EVE N DURING I.T.A. NO. 244/HYD/2016 J. RAVINDER REDDY :- 3 -: PENALTY PROCEEDINGS, THERE WAS SCANT RESPONSE FROM THE ASSESSEE. THE A.O. LEVIED PENALTY OF RS. 10,000 FOR EACH FAIL URE WHICH I CONSIDER IS SLIGHTLY EXCESSIVE. THEREFORE, I CONFI RM THE PENALTY TO THE EXTENT OF RS. 30,000 WITH ADVISE TO THE APPELLANT T O COMPLY WITH NOTICES IN FUTURE. 4. LD. COUNSEL SUBMITTED THAT THE ORDER OF THE CIT(A) SU FFERS FROM INCONSISTENCIES AS THERE CAN ONLY ONE PENALTY OF RS. 10,000/- WHICH CAN ONLY BE CONFIRMED IF AT ALL, BUT NOT TO THE EX TENT OF RS. 30,000/-. 5. LD. DR, HOWEVER, WHILE ADMITTING THAT REVENUE HAS N OT COME IN APPEAL OR FILED CROSS-OBJECTION, SUBMITTED THAT CIT( A) IS NOT CORRECT IN REDUCING THE PENALTY, WHEN STATUTE SPECIFIES RS. 10,000/- PENALTY FOR EACH OF SUCH FAILURE. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS. WE ARE UNABLE TO APPRECIATE THE ORDER OF THE CIT(A) FOR THE SIMPLE FACT THAT THERE IS NO MENTION OF ANY REASON WHY THE PENALTY IS REDUCED FROM RS. 70,000/- TO RS. 30,000/-. THE P ROVISIONS OF SECTION 271(1)(B) HAS NO SUCH CLASSIFICATION AS TO LE VY OF PENALTY IN A RANGE, SO AS TO REDUCE IT FOR SLIGHTLY EXCESSIVE. THE PENALTY SPECIFIED IS RS. 10,000/- PER EACH FAILURE TO COMPLY WITH THE NOTICE. AO LEVIED THE PENALTY AT RS. 10,000/- PER FAILURE AS THERE ARE SEVEN SUCH OCCASIONS AND THE COMPOSITE PENALTY LEVIED WAS T O THE EXTENT OF RS. 70,000/-. IN CASE ASSESSEE HAS ANY REASONAB LE CAUSE OF NOT APPEARING FOR ANY OF THE NOTICES ISSUED OR PARTIALLY C OMPLIED WITH ANY OF SUCH NOTICES OR AT LEAST SOUGHT ADJOURNMENT OF A NY OF THE OCCASIONS, THEN, LEVY OF PENALTY ON SUCH OCCASIONS C AN BE EXAMINED WHETHER THERE IS REASONABLE CAUSE FOR NOT AP PEARING BEFORE THE AO. THEN ONLY THE PENALTY TO THAT EXTENT I.T.A. NO. 244/HYD/2016 J. RAVINDER REDDY :- 4 -: CAN BE CANCELLED OR REDUCED. THERE IS NO SUCH EXAM INATION BY THE LD. CIT(A). WHILE REDUCING THE PENALTY ALSO, LD. CI T(A) HAS NOT GIVEN WHY PENALTY FOR FOUR OCCASIONS WAS REDUCED OR CANCELLED. SINCE THE ORDERS OF THE CIT(A) IS NOT ACCORDING TO THE PROVISIONS OF THE ACT AND AS THERE IS NO PROVISION TO REDUCE THE PENAL TY, AS WAS DONE BY THE LD. CIT(A), WE HAVE NO OPTION THAN TO SE T ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE ENTIRE ISSUE TO THE F ILE OF THE CIT(A). ALL THE CONTENTIONS RAISED BY ASSESSEE BEFOR E US WITH REFERENCE TO LEVY OF ONLY ONE PENALTY PER PROCEEDING CAN ALSO BE RAISED BEFORE THE CIT(A). WE ALSO MAKE IT CLEAR THAT C IT(A) SHOULD EXAMINE THE ISSUES AND CONFIRM OR REDUCE OR DELETE TH E PENALTY, AS THE FACTS MAY PRESENT BUT IN NO CASE, THE PENALTY U/S. 2 71(1)(B) SHOULD BE REDUCED ON A DISCRETIONARY BASIS AGAINST THE STATUTORY PROVISIONS. WITH THESE OBSERVATIONS, ENTIRE APPEAL IS RESTORED TO THE FILE OF THE CIT(A). ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY TO MAKE SUBMISSIONS. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 19 TH AUGUST, 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 19 TH AUGUST, 2016 TNMM I.T.A. NO. 244/HYD/2016 J. RAVINDER REDDY :- 5 -: COPY TO: 1. J. RAVINDER REDDY, ALIAR, NALGONDA DIST., C/O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYATNAGAR, HYDERABAD. 2. INCOME TAX OFFICER, SURYAPET. 3. CIT (APPEALS)-3, HYDERABAD. 4. PR.CIT-3, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.