Shri Nemichand Arvindkumar,HUF, Ahmedabad V. The Income tax Officer,Ward-11(4), Ahmedabad

ITA 2541/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89407 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 12-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMARSR
• Assessee Lawyers: K M MEHTA
• Keywords: Principle of natural justice; Reasonable cause
• Section: 142(1)

Judgement Text

1 ITA.NO.2541 /AHD/2011 ASSESSMENT YEAR 2008-2009 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHM EDABAD (BEFORE SHRI N.S.SAINI ACCOUNT ANTMEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER.) ITA NO. 2541/AHD/2011 (ASSESSMENT YEAR: 2008-2009) SHRI NEMICHAD ARVINDKUMAR(HUF) 167 NEW CLOTH MARKET, IUTSIDE RAIPUR GATE,RAIPUR, AHMEDABAD. ...............APPELLANT [PAN:AABHN 7456 G] VS. INCOME TAX OFFICER, WARD 11(4), NARAYAN CHAMBER, AHMEDABAD. .................RESPONDE NT APPELLANT BY : SHRI K. M. MEHTA, A.R. RESPONDENT BY: SMT.SONIA KUMAR,SR.D.R. DATE OF HEARING : 05-05-2015. DATE OF PRONOUNCEMENT : 13-05-2015 O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 12-08- 2011 PASSED BY COMMISSIONER OF INCOME TAX (APPEALS) -XVI,AHMEDAAD. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 2 ITA.NO.2541 /AHD/2011 ASSESSMENT YEAR 2008-2009 (1) THAT THE CIT (A) HAS ERRED IN HOLDING THAT ASSE SSEE DID NOT HAVE REASONABLE CAUSE. (2) THAT ON FACTS AND IN LAW LD. CIT (A) OUGHT TO H AVE DELETED THE PENALTY U/S. 271(1)(B) OF THE I.T.ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ISSUED NOTICES U/S.142(1) DATED 3-2-2010 AND 24-5-2010.THE SAID NOTICES WERE NOT COMPLIED WITH. THEREFORE, THE A.O. LEVIED PENALTY OF RS.20,000/- U /S. 271(1)(B) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) . AGAINST THE SAID ASSESSMENT ORDER, ASSESSEE FILED APPEAL BEFORE THE CIT (A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISS ED THE APPEAL. 4. AGAINST THIS ORDER, THE ASSESSEE IS IN APPEAL BE FORE THIS TRIBUNAL. THE ONLY GROUND IS AGAINST THE CONFIRMATION OF THE PENA LTY BY THE CIT (A). 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ORDER U/S.143(3) WAS PASSED ON 26-11-2010. THE ASSESSEE HAS THUS PARTICI PATED IN THE ASSESSMENT PROCEEDINGS EXCEPT THE DEFAULTS IN QUEST ION. HE SUBMITTED THAT THE A.R. OF THE ASSESSEE WAS BUSY IN THE AUDIT AND LIMITATION MAT TERS AND THEREFORE, HE COULD NOT ATTEND THE HEARING . HE SUBMITTED THAT THE CO- ORDINATE BENCH HAVE TAKEN VIEW THAT WHERE THE ASSES SEE AFTER DEFAULT OF FIRST 3 ITA.NO.2541 /AHD/2011 ASSESSMENT YEAR 2008-2009 NOTICE ATTENDS THE PROCEEDINGS SUBSEQUENTLY NO PENA LTY U/S. 271(1)(B) IS LEVIABLE. 6. ON THE CONTRARY SR.D.R. VEHEMENTLY OPPOSED THE S UBMISSION OF THE ASSESSEE AND SUPPORTED THE ORDERS OF THE AUTHORITIE S BELOW. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AND RELEVANT REPORTS. WE FIND THAT THE ASSESSING OFFICE R IMPOSED THE PENALTY U/S. 271(1)(B). HOWEVER, IT IS NOT DISPUTED THAT THE ASS ESSMENT PROCEEDINGS WERE INITIATED SUBSEQUENTLY AND THE REQUISITE DETAILS WE RE FILED AS AND WHEN CALLED FOR. THE COORDINATE BENCH-D AHMEDABAD IN THE CASE O F SWARNABEN M. KHANNA VS. D.C.I.T. (2010) 37 SOT (25) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE HAS DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE AND AGAINST THE REVENUE BY HOLDING AS UNDER:- WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL ON RECORD. THE UNDISPUTED FACTS AS EMERGE FROM THE ABOVE DISCUSSION ARE THAT THE STATUTORY NOTICE UNDER SEC. 142(1) WAS ISSUED TO THE FOUR ASSESSEES FOR ASSESSMENT YEAR 2006-07 ONLY AND NOT FOR ANY OTHER ASSESSMENT YEARS. NO NOTICE UNDER SEC. 1412(1 ) WAS ISSUED TO THESE ASSESSEES IN RESPECT OF OTHER ASSESSMENT YEAR S. SO FAR AS LETTERS REQUIRING COMPLIANCE ISSUED BY THE ASSESSING OFFICE R ON 14-8-2007 / 17-8-2007 ARE CONCERNED, IT IS NOTICED THAT EXCEPT IN THE CASE OF SHRI KAUSHAL M. KHANNA, THE LETTERS DID NOT MENTION THAT COMPLIANCE IS REQUIRED TO BE MADE U/S.142(1). BEFORE LEVYING PENA LTY UNDER SEC. 4 ITA.NO.2541 /AHD/2011 ASSESSMENT YEAR 2008-2009 271(1)(B), THERE MUST BE SPECIFIC NOTICE TO THE ASS ESSEE FOR SPECIFIC ASSESSMENT YEAR WITH SPECIFIC REQUIREMENTS TO BE CO MPLIED WITH . THE COMPLIANCE MUST HAVE RELEVANCE TO THE ASSESSMENT YE AR IN QUESTION AND IT MUST HAVE APPARENT NEXUS WITH THE ASSESSMENT FOR THAT ASSESSMENT YEAR TO BE FRAMED. GENERAL INFORMATION S OUGHT MAY NOT BE RELEVANT FOR ANY PARTICULAR ASSESSMENT YEAR IN ADDI TION, ADEQUATE TIME SHOULD BE GIVEN TO THE ASSESSEE FOR MAKING COMPLIAN CE THE NOTICES WERE ISSUED ON 14-8-2007 IN SOME CASES AND COMPLIAN CE WERE REQUIRED TO BE MADE BY 24-8-2007. THEREAFTER THE A. O. PROCEEDED TO INITIATE THE PENALTY PROCEEDINGS. IN OUR CONSIDERED VIEW, IT IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS NO REASONABLE OPPORTUNITY IS GIVEN TO THEM FOR MAKING COMPLIANCE OF THE INFORMATION SOUGH T. FOR THE SAKE OF CONVENIENCE, WE REFER TO THE COMPLIANCE SOUGHT BY T HE AO. VIDE LETTER DATED 14-8-2007 CONTAINING FIVE PAGES FROM SHRI KAU SHAL M. KHANNA AS SIMILAR COMPLIANCE WAS SOUGHT BY HIM FROM OTHERS AS WELL. IF THERE IS APPARENT IMPOSSIBILITY OF COMPLIANCE OR COMPLIANCE COULD TAKE NATURALLY LONG TIME, THEN THE A.O. IS EXPECTED TO GIVE ADEQUA TE TIME TO THE ASSESSEE BEFORE HE INFERS THAT THEY ARE TENDING TO NON-COMPLIANCE AND AVOIDING TO FURNISH INFORMATION. THE STATUTORY PROV ISION FOR LEVY OF PENALTY IS NOT FOR MERE TECHNICAL NON-COMPLIANCE BU T FOR ACTUAL OR HABITUAL DEFAULTERS. ON THE FACE OF PRESENT FACTS W HERE THE ASSESSING OFFICER HAS HASTILY PROCEEDED TO INITIATE PENALTY P ROCEEDINGS IN ALL THE CASES, IT IS DIFFICULT TO INFER THAT THESE ASSESSEE S WERE INTENDING TO 5 ITA.NO.2541 /AHD/2011 ASSESSMENT YEAR 2008-2009 MAKE NON-COMPLIANCE, INFORMATION SOUGHT BY THE A.O. IS VERY DETAILED AND REQUIRES ASSISTANCE FROM PROFESSIONALS LIKE ADV OCATE OR CHARTERED ACCOUNTANT. AN AFFIDAVIT HAS BEEN FILED FROM SHRI K AUSHAL M. KHANNA BEFORE THE LD. CIT (A), I.E. ERSTWHILE CHARTERED AC COUNTANT WHO WAS HANDLING HIS TAX MATTERS, HAS LEFT ALL THESE ASSESS EES AND THE FAMILY IS IN SEARCH OF NEW COUNSEL FOR MAKING COMPLIANCE MADE BY THE INCOME TAX DEPARTMENT. IT SHOWS THAT THESE ASSESSEES HAD R EALLY INTENDED TO COMPLY WITH THE NOTICES AND, THEREFORE, IT SHOULD N OT BE INFERRED THAT THERE WAS A DEFAULT WHICH COULD INVITE PENALTY UNDE R SECTION 271(1)(B). THE ITAT DELHI BENCH-G IN THE CASE OF AKHIL BHARATI YA SHIKSHAK SANGH BHAWAN TRUST (SUPRA) HAS HELD THAT IF ASSESSMENT OR DER IS PASSED UNDER SEC. 143(3),AND NOT UNDER SECTION 144THEN NON -COMPLIANCE IS DEEMED TO HAVE BEEN WAIVED. CONSIDERING ALL THESE FACTS AND CIRCUMSTANCES AND THE AUTHORITY REFERRED TO ABOVE, WE HOLD THAT NEITHER THE A.O. NO R THE LD. C.I.T.(A) HAS MADE OUT A CASE FOR SUSTAINING THE PENALTIES. ACCORDINGLY, THE PENALTIES IN ALL THESE ASSESSMENT YEARS FOR ALL THE ASSESSEES ARE CANCELLED. FOLLOWING THE ABOVE ORDER OF THE COORDINATE BENCH, WE HAVE NO REASON TO TAKE A CONTRARY VIEW. THEREFORE, THE GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 6 ITA.NO.2541 /AHD/2011 ASSESSMENT YEAR 2008-2009 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ASSESSING OFFICER IS DIRECTED TO DELETE THE PENALTY. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, 13TH D AY OF MAY,2015. SD/- SD/- (N. S. SAINI) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, THE 13TH DAY OF MAY, 2015 COPIES TO: (1) THE APPELLANT (2) THE RESPON DENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT/DEPUTY REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD PATKI. 1. DATE OF DICTATION . 7-5-2015. (DICTATION-PAD PAG ES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..8-5-2015 & 12.5.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P .S./P.S 12-5-2015. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 13-5-2015 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S 14-5-2015. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK14.5. 2015 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER .. 10. DATE OF DESPATCH OF THE ORDER