Shri Sojitra Piyushbhai Vajubhai, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(4), RAJKOT-GUJARAT

ITA 266/RJT/2013

• Counselvise Citation: 26624914 RSA 2013
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 05-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT B JHAVERI
• Assessee Lawyers: WRITTEN SUBMISSIONS FILED
• Keywords: Opportunity of being heard; Reasonable cause; Non compliance
• Section: 144; 273B; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 266/RJT/2013 ASSESSMENT YEAR : 2008-09 SHRI SOJITRA PIYUSHBHAI VAJUBHAI RAJKOT PAN : AWGPS 2200 J ( / APPELLANT) ITO, WARD-1(4) RAJKOT / RESPONDENT / ASSESSEE BY WRITTEN SUBMISSIONS FILED / REVENUE BY DR JAYANT B. JHAVERI, DR / DATE OF HEARING 21.11.2013 !'# / DATE OF PRONOUNCEMENT 13.12.2013 / ORDER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 11.03.2013 OF CIT(A)-I, RAJKOT FOR THE ASSESSMENT YEAR 2008-09 CO NFIRMING THE PENALTY OF RS.40,000/- IMPOSED U/S 271 OF THE LEVIED BY THE AS SESSING OFFICER U/S 271(1)(B) OF THE INCOME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCOME ON 18.08.2008 DECLARING TOTAL INCOME AT RS.1,93,050/-. THE CASE OF THE ASSESSEE WAS SEL ECTED FOR SCRUTINY AND FINALLY, THE ASSESSMENT WAS FRAMED U/S 143 R.W.S. 144 OF THE INC OME-TAX ACT ON 20.12.2010, DETERMINING TOTAL INCOME AT RS.15,33,390/-. WHILE F RAMING THE ASSESSMENT, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(B) OF THE INCOME-TAX ACT FOR NON-COMPLIANCE ON THE PART OF THE ASSESSEE TO T HE STATUTORY NOTICE ISSUED U/S 142(1) AND 143(2) OF THE INCOME-TAX ACT. A SHOW-CAU SE NOTICE DATED 22.11.2010 WAS ALSO ISSUED TO THE ASSESSEE ASKING THE ASSESSEE TO SHOW-CAUSE WHY THE PENALTY U/S 271(1)(B) SHOULD NOT BE INITIATED AGAINST THE ASSES SEE FOR NOT APPEARING BEFORE THE ASSESSING OFFICER ON FOLLOWING DATES:- SR. NO. DATE OF NOTICE DATE OF HEARING REMARKS 1 30.06.2010 20.07.2010 NOBODY ATTENDED NOR ANY ADJ OURNMENT SOUGHT 2 26.07.2010 26.08.2010 NOBODY ATTENDED NOR ANY ADJ OURNMENT SOUGHT 3 27.09.2010 07.10.2010 NOBODY ATTENDED NOR ANY ADJ OURNMENT SOUGHT 4 29.10.2010 09.11.2010 NOBODY ATTENDED NOR ANY ADJ OURNMENT SOUGHT 2 301266-RJT-2013 - SHRI SOJITRA PIYUSHBHAI VAJUBHAI (SMC) 2. IN RESPONSE TO THE NOTICES U/S 142(1) AND 143(2) , THE ASSESSEE NEITHER APPEARED BEFORE THE ASSESSING OFFICER NOR FILED ANY REPLY DESPITE OF THE FACT THAT ALL THOSE NOTICES WERE DULY SERVED UPON THE ASSESSEE. F INALLY, THE ASSESSING OFFICER LEVIED PENALTY OF RS.40,000/- U/S 271(1)(B) OF THE INCOME-TAX ACT WITH THE APPROVAL OF JOINT COMMISSIONER OF INCOME-TAX, RR-1, RAJKOT. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE FILED WRITTEN SUBMISSION WHICH ARE REP RODUCED BY HIM IN PARAGRAPH NO.4 OF THE IMPUGNED ORDER WHEREIN IT IS MENTIONED THAT ONLY TWO NOTICES WERE SERVED UPON THE ASSESSEE. AFTER CONSIDERING THE WRITTEN SU BMISSIONS, IN PARAGRAPH 5 OF THE IMPUGNED ORDER, THE LD CIT(A) CONFIRMED THE PENALTY OF RS.40,000/- LEVIED BY THE ASSESSING OFFICER. THE RELEVANT PARAGRAPH OF THE IMPUGNED ORDER READS AS UNDER:- 4. I HAVE PERUSED THE PENALTY ORDER AS WELL AS THE SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE COPY OF THE ASSESSMENT ORDER DATED 20.12.2010 PASSED U/S 143(3) R.W.S. 144 OF THE ACT. I FIND THAT IN PARA-2 OF THE ASSESSMENT ORDER, THE A.O. HAS MENTIONED THAT NOBOD Y HAD ATTENDED IN RESPONSE TO VARIOUS NOTICES ISSUED BY HIM U/S 143(2 ) / 142(1). MOREOVER, THE ADDRESS OF THE APPELLANT REMAINS THE SAME IN THE AS SESSMENT ORDER AS WELL AS IN FORM NO.35 AS 3, JAWAHAR SOCIETY, AT UPLETA, H OWEVER THE APPELLANT HAS FAILED TO PUT FORTH ANY REASONABLE CAUSE FOR NON-CO MPLIANCE TO THE STATUTORY NOTICES ISSUED TO HIM DURING ASSESSMENT PROCEEDINGS . APART FROM THIS, THE APPELLANT HAS CONTENDED IN THE STATEMENT OF FACTS T HAT A REPLY DATED 27.05.2011 WAS FILED BEFORE THE A.O. IN RESPONSE TO PENALTY NOTICE WHEREIN IN PARA-3 HE HAD REQUESTED THE A.O. TO KEEP THE PENALT Y PROCEEDINGS IN ABEYANCE TILL FINALIZATION OF THE APPEAL OR THE HEA RING MAY BE KEPT AFTER 15.06.2011 TO ENABLE HIM TO ESTABLISH REASONABLE CA USE. THUS, THE SUBMISSIONS OF THE APPELLANT APPEAR TO BE CONTRADIC TORY AS COMPARED TO THAT OF IN PARA-4 REPRODUCED ABOVE. IN VIEW OF THE FACTS AN D CIRCUMSTANCES OF THE APPELLANTS CASE, IT IS HELD THAT THE APPELLANT HAS FAILED TO FURNISH A REASONABLE CAUSE FOR FAILURE TO COMPLY WITH THE STATUTORY NOTI CES ISSUED TO HIM DURING THE ASSESSMENT PROCEEDINGS AND THEREFORE THE PENALTY LE VIED BY THE A.O. IS HEREBY CONFIRMED. AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE ASSESS EE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 3. BEFORE THE TRIBUNAL, NONE WAS PRESENT FROM THE S IDE OF THE ASSESSEE. ONLY WRITTEN SUBMISSION WERE FILED WHICH READS AS UNDER: - 1. ALL THE GROUNDS OF THE APPEAL ARE CO-RELATED RE GARDING THE IMPOSITION OF PENALTY U/S 271(1)(B) BY THE INCOME-TAX OFFICER AND WHICH IS UPHOLD BY THE CIT(A). YOUR HONOUR IS REQUESTED TO HOLD THIS MATTE R OR RESTORE THE MATTER BACK TO THE FILE OF THE CIT(A) WITH DIRECTION TO DISPOSE OFF THIS MATTER WITH THE APPEAL FILED AGAINST THE ORDER U/S 143(3) FOR THE FOLLOWIN G REASONS:- 3 301266-RJT-2013 - SHRI SOJITRA PIYUSHBHAI VAJUBHAI (SMC) 1.1 THE ASSESSMENT ORDER PASSED U/S 143(3) IS UNDER APPEAL AND STILL IT IS NOT DISPOSED OFF BY THE CIT(A). PROOF OF WHICH IS E NCLOSED HEREWITH FOR YORU KIND RECORD. 1.2 THE APPELLANT HAS INVITED THE ATTENTION OF THE CIT(A)-I THAT ACTUALLY THE ORDER PASSED U/S 143(3) IS BAD IN LAW BECAUSE THE I NCOME-TAX OFFICER WAS FAILED TO SERVE THE NOTICE U/S 143(2) UPON THE APPE LLANT IN TIME. 1.3 THE APPELLANT HAS ALSO REQUESTED THE CIT(A)-I T O CALL FOR THE CASE RECORD BUT HE DID NOT TAKE SUCH PAIN AND PASSED THE ORDER HURRIEDLY. IT IS THEREFORE REQUESTED YOUR HONOUR TO HOLD THIS MATTER TILL DISPOSAL OF THE FIRST APPEAL AGAINST THE ASSES SMENT ORDER OR RESTORE THIS MATTER BACK TO THE FILE OF TH E CIT-(A)I WITH DIRECTION TO DISPOSE OFF THIS APPEAL WITH THE APPEAL FILED AGAINST THE ORDER U/S 143(3). FOR WHICH ACT O F KINDNESS, YOUR APPELLANT SHALL EVER PRAY. 2. WITHOUT PREJUDICE TO THE ABOVE STAND, IF YOUR HO NOUR IS WILLING TO BRING EARLY END OF THE MATTER THEN THE P RINCIPLES LAID DOWN BY THE FOLLOWING COURTS SHOULD BE ADOPTED: 2.1 THE APPELLANT HAS PREVENTED HIMSELF FROM APPEAR ING IN THE ASSESSMENT PROCEEDINGS BECAUSE IT WAS ADVISED BY THE PREVIOUS ADVOCATE THAT THE FIRST NOTICE U/S 143(2) WAS NOT PROPERLY SERVED UPON THE APPELLANT IN TIME AND IF THE HE WOULD APPEAR IN THE ASSESSMENT PROCEEDINGS THAN THE DEEM PROVISIONS OF SEC. 292BB MIGHT BE APPLIED AND THEY CANNOT TAKE ST AND OF NON SERVICE OF NOTICE. 2.2 IT IS THE ONLY REASON AND IF THERE IS A REASONA BLE CAUSE FOR NON COMPLIANCE OF THE IMPUGNED NOTICES, THE DEFAULT MAY BE WAIVED AND U/S 273B AND NO PENALTY ARE REQUIRED TO BE IMPOSED. 2.3 SIMILAR ISSUE CAME BEFORE THE ITAT BENCH, DELHI IN THE CASE OF HARESH KUAMR JAIN V. ITO (2006) 10 (I) ITCL 51 AND THE HON OURABLE COURT AHS REMOVED THE PENALTY LEVIED U/S 271(1)(B) BY HOLDING THAT:- THERE WAS NO DEFAULT ON THE PART OF THE ASSESSEE W HO DID NOT APPEAR BEFORE THE ASSESSING OFFICER. IF THERE WAS ANY DEFAULT, I T WAS THE DEFAULT OF THE COUNSEL OF THE ASSESSEE. IN THE CIRCUMSTANCES, WE D ELETE THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(B). 2.4. IT IS ALSO HELD BY THE FOLLOWING COURTS THAT I F THE ASSESSMENT IS PASSED U/S 143(3), PENALTY U/S 271(1)(B) SHOULD NOT BE LEV IED. THE PRESENT APPELLANT IS ALSO RELISH UPON THE FOLLOWING RULING SETTLED BY TH E FOLLOWING COURTS AND EVEN UPON THE DECISION GIVEN BY THE PRESENT ITAT RAJKOT BENCH: ITAT DELHI G BENCH IN THE CASE OF AHIL BHARTIYA PRATHMIK SHIKSHAK, SANGHBHAWAN TRUST V. ADIT, 115 TTJ 449 THE ASSESSMENT IS COMPLETED U/S 143(3). IT IS NOT COMPLETED U/S 144. IT MEANS THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMMITTED EARLIER WERE IGNORED BY THE AO, HENCE PENALTY U/S 271(1)(B) COULD NOT BE LEVIED AS HELD BY THE HON. PARMESHWARI TEXTILES VS. ITO 92 TTJ 764 (JD.) WHEN ASSESSMENT IS NOT COMPLETED ON THE DATE OF WA RNING OF EXPARTE ASSESSMENT THEN IT COULD BE IMPLIED THAT SUCH HARSH ACTION ARE GIVEN UP / FORSAKEN / ABANDONED AND SUBSEQUENTLY COMPLETED U /S 143(3), PENALTY U/S 271(1)(B) CANNOT BE LEVIED. 4 301266-RJT-2013 - SHRI SOJITRA PIYUSHBHAI VAJUBHAI (SMC) THE HON. ITAT RAJKOT IN THE CASE OF M/S JAY CONSTR UCTION HAS ALSO HELD THAT WHERE ASSESSMENT IS COMPLETED U/S 143(3), PENA LTY 271(1)(B) CANNOT BE LEVIED. NOW THE MATTER IS LEFT IN YOUR ABLE HANDS AND APPEL LANT HOPES THAT PREYER OF THE PRESENT APPELLANT MAY BE ACCEPTED AND PENALTY MAY BE DELETED. 4. THE AFORESAID WRITTEN SUBMISSIONS WERE HANDED OV ER TO THE LD. DEPARTMENTAL REPRESENTATIVE FOR HIS COMMENTS. THE LD. DEPARTMENT AL REPRESENTATIVE SUBMITTED THAT BEFORE THE ASSESSING OFFICER THE ASSESSEE HAS NOT SUBMITTED ANY REPLY. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ONLY IN RESPECT OF FIRST NOTICE, THE LD. COUNSEL OF THE ASSESSEE ADVISED THE ASSESSEE NOT TO APPEAR IN THE ASSESSMENT PROCEEDINGS AS FIRST NOTICE U/S 143(2) WAS NOT PROP ERLY SERVED UPON THE ASSESSEE IN TIME AND IF ASSESSEE WOULD APPEAR IN ASSESSMENT PRO CEEDINGS THEN DEEM PROVISIONS OF SECTION 292BB MIGHT BE APPLIED AND THEY CANNOT T AKE STAND OF NON SERVICE OF NOTICE. THE LD. DEPARTMENTAL REPRESENTATIVE POINTE D OUT THAT BE THAT IT MAY BE, IT WAS THE DUTY OF THE ASSESSEE TO APPEAR BEFORE IN THE AS SESSMENT PROCEEDINGS AND SINCE IN ANY OF THE FOUR DATES, NEITHER THE ASSESSEE NOR HIS REPRESENTATIVE APPEARED BEFORE THE ASSESSING OFFICER, THE PENALTY OF RS.40,000/- W AS RIGHTLY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD CIT(A); THEREFORE T HE VIEW TAKEN BY THE LD.CIT(A) IN THIS REGARD BE UPHELD. 5. RIVAL SUBMISSIONS WERE CONSIDERED. IN THE WRITTE N SUBMISSIONS FILED BEFORE THE TRIBUNAL, IT IS CONTENDED THAT AGAINST THE ASSESSME NT FRAMED U/S 143(3) R.W.S. 144, THE ASSESSEE HAS FILED AN APPEAL WITH CIT(A)-I, RAJ KOT ON 03.01.2011 VIDE RECEIPT NO.Y790533; THEREFORE, THE ASSESSEE REQUESTED TO EI THER HOLD THIS APPEAL OR RESTORE THIS MATTER BACK TO THE FILE OF THE LD. CIT(A) WITH DIRECTION TO DISPOSE OFF THE MATTER WITH THE APPEAL FILED AGAINST THE ORDER U/S 143(3) R.W.S. 144 ON 03.01.2011. THE DECISION IN QUANTUM APPEAL MAY HAVE SOME BEARING ON PENALTY APPEAL AGAINST ORDER U/S 271(1)(C). IN THIS VIEW OF THE MATTER, I SET AS IDE THE IMPUGNED ORDER OF LD. CIT(A) AND RESTORE THIS APPEAL TO HIM WITH THE DIRECTION T O DECIDE THIS APPEAL AFTER DECIDING THE QUANTUM APPEAL AGAINST THE ORDER U/S 143(3) R.W .S. 144 OF THE INCOME-TAX ACT, WHICH WAS FILED WITH HIM ON 03.01.201 VIDE RECEIPT NO.Y790533, AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 5 301266-RJT-2013 - SHRI SOJITRA PIYUSHBHAI VAJUBHAI (SMC) 6. BEFORE PARTING WITH, I MAY ADD THAT I AM NOT EXP RESSING ANY OPINION ON MERIT IN THIS MATTER AND THE LD. CIT(A) IS AT LIBERTY TO CON SIDER ALL THE CONTENTIONS FOR AND AGAINST THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 13.12.2013 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- SHRI SOJITRA PIYUSHBHAI VAJUBHAI, RAJ KOT 2. / RESPONDENT- ITO, WARD-1(4), RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT, RAJKOT-1, RAJKOT 4. * * 2- / CIT (A)-I, RAJKOT 5 . 567 1, * 1#, !$ / DR, ITAT, RAJKOT 6 . 79 :; / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT