Sanskruti Mega Structure Pvt. Limited, Surat V. DCIT, Central Circle-2(1)(2), Surat

ITA 28/SRT/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4562 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 19-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPMA SINGLA
• Assessee Lawyers: PRAGNESH JAGASHETH
• Keywords: Business expenditure; TDS
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NO. 28/SRT/2018 (AY 2014-15) (H EARING IN VIRTUAL COURT) SANSKRUTI MEGA STRUCTURE PVT. LTD., 203, MNIRMAN BHAVAN, MAJURA GATE, SURAT. PAN : AAMCS 5055 Q VS THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 2(1)(2), SURAT. APPLICANT RESPONDENT ASSESSEE BY SHRI PRAGNESH JAGASHETH CA REVENUE BY MS. ANUPMA SINGLA SR. DR DATE OF HEARING 18.05.2021 DATE OF PRONOUNCEMENT 19.05.2021 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, SURAT, DATED 26.11.2017, FOR ASSESSMENT YEAR (AY) 2014-15. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY OF RS.10,000/- U/S.271(1)(B) OF THE INCOME TAX ACT, 1961. 2. IT IS THEREFORE PRAYED THAT THE ABOVE ADDITION MAY PLEASE BE DELETED AS LEARNED MEMBERS OF THE TRIBUNAL MAY DEEM IT PROPER. 3. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF THE HEARING OF THE APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR (AY) 2014-15, THE ASSESSING OFFICER (AO) ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT ON 11.08.2016 ALONG WITH CERTAIN QUESTIONNAIRES. THE AO NOTED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF ITA NO. 28/SRT/2018 SANSKRUTI MEGA STRUCTURE PVT. LTD., (AY 2014-15) 2 RS. 73,388/- ON ACCOUNT OF INTEREST ON TDS, THE AMOUNT DEBITED WAS NOT RELATED TO THE BUSINESS EXPENSES AND WERE PENAL IN NATURE AND THUS NOT ALLOWABLE AS BUSINESS EXPENSES. THE ASSESSEE APPEARED THROUGH HIS REPRESENTATIVE AND SUO MOTO OFFERED RS.73,388/-, ON ACCOUNT OF INTEREST ON TDS. THEREFORE, THE ASSESSEE SUO MOTO OFFERED THE AMOUNT FOR TAXATION. NO OTHER ADDITION EXCEPT THE SUO MOTO INCOME OFFERED BY ASSESSEE WAS MADE IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT ON 15.12.2016. THE AO VIDE HIS SEPARATE ORDER DATED 25.07.2016, LEVIED PENALTY UNDER SECTION 271(1)(B) OF THE ACT OF RS.10,000/- FOR NON- COMPLIANCE OF NOTICE UNDER SECTION 142(1) OF THE ACT DATED 13.06.2016. THE AO RECORDED THAT ASSESSEE HAS NOT FURNISHED ANY REPLY TO THE SHOW CAUSE NOTICE. THE AO LEVIED PENALTY OF RS.10,000/- VIDE ORDER DATED 25.07.2016. AGGRIEVED BY THE PENALTY UNDER SECTION 271(1)(B) OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE LD.CIT(A) ON 11.09.2016. THE LD.CIT(A) DISMISSED THE APPEAL OF ASSESSEE BY TAKING VIEW THAT DESPITE FIXING APPEAL FOR HEARING ON THREE (03) OCCASIONS THAT IS ON 21.09.2017, 30.11.2017 AND 21.12.2017, THE ASSESSEE NEITHER MADE COMPLIANCE NOR AVAILED ANY FURTHER OPPORTUNITY. THE LD.CIT(A) BY REFERRING SEVERAL DECISIONS DISMISSED THE APPEAL FOR NON-PROSECUTION BY TAKING VIEW THAT ASSESSEE IS NOT INTERESTED IN THE APPEAL. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 3. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (SR. DR) FOR THE REVENUE AND PERUSED THE ORDER OF LOWER AUTHORITIES. THE AR OF THE ASSESSEE ITA NO. 28/SRT/2018 SANSKRUTI MEGA STRUCTURE PVT. LTD., (AY 2014-15) 3 SUBMITS THAT THE LD.CIT(A) DISMISSED THE APPEAL FOR NON-PROSECUTION AND NO ORDER WAS PASSED ON MERIT. THE AR SUBMITS THAT INSTEAD OF GOING INTO ANY CONTROVERSY THAT IF ANY NOTICE FOR HEARING WAS RECEIVED OR NO BY THE ASSESSEE, THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO REPRESENT HIS CASE BEFORE LD CIT(A). 4. ON MERIT, THE LEARNED AR OF THE ASSESSEE SUBMITS THAT IN THE ASSESSMENT ORDER, THE AO HAS MENTIONED THAT NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED ON 11.08.2016. THE ASSESSEE COMPLIED WITH THE QUESTIONNAIRES ISSUED BY THE AO. THE AO SUO MOTO OFFERED THE INCOME OF RS.73,388/-, AND IT WAS ADDED BY THE AO IN THE TOTAL INCOME OF ASSESSEE. NO OTHER ADDITION WAS MADE. THE AO IN THE ASSESSMENT ORDER NOWHERE RECORDED THAT THERE WAS ANY NON-COMPLIANCE BY THE ASSESSEE OF ANY NOTICE ISSUED BY THE AO. IN THE PENALTY ORDER, THE AO LEVIED PENALTY FOR NON-COMPLIANCE OF NOTICE DATED 13.06.2016. THERE IS NO REFERENCE IN THE ASSESSMENT ABOUT THE NOTICE DATED 13.06.2016. THE LEARNED AR FOR THE ASSESSEE SUBMITS THAT THE ORDER PASSED BY THE LD.CIT(A) IS INVALID DUE TO CONFLICTING DATES MENTIONED IN THE ASSESSMENT ORDER AND IN PENALTY ORDER UNDER SECTION 271(1)(B). EVEN OTHERWISE, THE ASSESSEE HAS NOT DEFAULTED IN MAKING COMPLIANCE OF NOTICE OF AO, THE ASSESSEE HAS MADE HONEST COMPLIANCE OF THE NOTICES ISSUED BY THE ASSESSING OFFICER. 5. ON THE OTHER HAND, THE SR. DR FOR THE REVENUE SUBMITS THAT THOUGH THE LD. CIT(A) HAS NOT ADJUDICATED THE APPEAL ON MERIT AND THE MATTER MAY BE RESTORED TO THE FILE OF LD.CIT(A) TO ADJUDICATE THE ISSUE ON MERIT. ON THE OBJECTION OF THE LEARNED AR OF THE ASSESSEE THAT PENALTY ORDER IS INVALID ITA NO. 28/SRT/2018 SANSKRUTI MEGA STRUCTURE PVT. LTD., (AY 2014-15) 4 DUE TO CONFLICTING DATE MENTIONED IN THE ASSESSMENT ORDER AND THE PENALTY ORDER UNDER SECTION 271(1)(B) OF THE ACT. THE LD.SR.DR WOULD SUBMIT THAT WHILE ADJUDICATING THE APPEAL ON MERIT, THE LD.CIT(A) WILL EXAMINE THE RECORD ABOUT THE CONFLICTING DATES. IT MAY BE THAT THE ASSESSEE MAY NOT HAVE COMPLIED WITH THE NOTICE DATED 13.06.2016, WHICH MAY NOT HAVE REFERRED BY AO IN THE ASSESSMENT ORDER. 6. DURING THE HEARING OF THE APPEAL, WE CONFRONTED THE FACT OF CONFLICTING DATES AS MENTIONED IN PENALTY ORDER AS WELL AS IN ASSESSMENT ORDER WITH LD.SR.DR, SPECIFICALLY KEEPING IN VIEW, THE PECULIARITY OF THE FACT THE AO LEVIED PENALTY IS ONLY OF RS.10,000/- UNDER SECTION 271(1)(B) OF THE ACT FOR NON- COMPLIANCE OF NOTICES. AND THAT RESTORING THE APPEAL AGAIN TO THE FILE OF LD.CIT(A) ON SUCH SMALL ISSUES, IT MAY BE OF WASTAGE OF PRECIOUS TIME OF PUBLIC AUTHORITIES. FURTHER WE FIND THAT THIS APPEAL WAS FILED BEFORE THIS TRIBUNAL ON 19.01.2018 AND CAME UP FOR HEARING FOR THE FIRST TIME ON TODAY THAT IS 18.05.2021. THE LD. SR. DR FOR REVENUE AGAIN PRAYED FOR RESTORING TO THE FILE OF LEARNED CIT(A) AS THE APPEAL WAS NOT ADJUDICATED ON MERIT. 7. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES. THE AO LEVIED PENALTY UNDER SECTION 271(1)(B) OF THE ACT OF RS.10,000/- BY TAKING VIEW THAT HE ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT ON 13.06.2016 FOR FIXING THE HEARING ON 26.06.2016. NO COMPLIANCE WAS MADE BY THE AO AND THEREFORE A SHOW CAUSE NOTICE DATED 08.07.2016 WAS ISSUED FOR INITIATION OF PENALTY. HEARING OF CASE ON PENALTY WAS FIXED ON 15.07.2016 AND PENALTY ORDER WAS PASSED ON 25.07.2016 FOR LEVYING PENALTY OF RS.10,000/- UNDER SECTION 271(1)(B) ITA NO. 28/SRT/2018 SANSKRUTI MEGA STRUCTURE PVT. LTD., (AY 2014-15) 5 OF THE ACT. PERUSAL OF ASSESSMENT ORDER REVEALS THAT THERE IS NO REFERENCE OF ALLEGED NOTICE DATED 13.06.2016. WE FURTHER NOTE THAT NO ADDITION FOR NON-COMPLIANCE OF INFORMATION OR ANY EVIDENCE WERE MADE BY AO. THE WHILE PASSING THE ASSESSMENT ORDER. RATHER, THE ASSESSEE ITSELF SUO MOTO OFFERED THE ACTION OF RS.73,388/- WHICH WAS DEBITED ON ACCOUNT OF INTEREST ON TDS. 8. WE ARE CONSCIOUS OF THE FACT THAT AT FIRST APPELLATE STAGE, THE APPEAL OF THE ASSESSEE WAS DISMISSED IN NON-PROSECUTION FOR NON-COMPLIANCE OF NOTICES. HOWEVER, KEEPING IN VIEW THE SMALLNESS OF ISSUE AND AGAIN IN RESTORING THE MATTER TO THE FILE OF LD.CIT(A), IT MAY CAME UP ON HEARING AFTER LONG TIME. THEREFORE, CONSIDERING THE PECULIARITY OF THE CASE, WE DEEM IT APPROPRIATE TO ADJUDICATE THE APPEAL HERE ITSELF. 9. AS NOTED ABOVE, THERE IS A REFERENCE OF CONFLICTING IN DATES IN ORDER OF PENALTY UNDER SECTION 271(1)(B) OF THE ACT. THE AO LEVIED THE PENALTY FOR NON-COMPLIANCE OF NOTICE DATED 13.06.2016, HOWEVER, THERE IS NO REFERENCE OF SUCH NOTICE FOR THE ASSESSMENT ORDER, THEREFORE, THE ORDER IN LEVYING PENALTY UNDER SECTION 271(1)(B) IS INVALID. EVEN IF, WE ASSUME THAT THERE WAS A NON-COMPLIANCE OF NOTICE DATED 13.06.2016, BY INTENTIONALLY OR UNINTENTIONALLY, THE ASSESSEE ULTIMATELY IN RESPONSE TO NOTICE DATED 11.08.2016 MADE HONEST COMPLIANCE THEREFORE, IF ANY NON-COMPLIANCE COMMITTED ON EARLIER OCCASIONS DESERVES TO BE IGNORED, WHEN ASSESSEE ITSELF OFFERED ADDITIONAL INCOME, WHICH WAS DEBITED ON ACCOUNT OF INTEREST ON TDS AND THE SAME WAS ACCEPTED BY AO. AND NO OTHER ISSUE WAS IDENTIFIED NOR WAS ANY OTHER ADDITION MADE IN THE ASSESSMENT ORDER. CONSIDERING THE ITA NO. 28/SRT/2018 SANSKRUTI MEGA STRUCTURE PVT. LTD., (AY 2014-15) 6 AFORESAID FACTUAL DOCUMENTS, WE ARE OF THE VIEW THAT THE ASSESSEE HAS MADE A BONAFIDE COMPLIANCE, THEREFORE, NO PENALTY UNDER SECTION 271(1)(B) OF THE ACT. IN THE RESULT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER ANNOUNCED ON 19 TH MAY 2021 BY PLACING THE RESULT ON NOTICE BOARD. SD/- SD/- (DR ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 19/05/2021 / SGR COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GUARD FILE TRUE COPY/ BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, ITAT, SURAT TRUE COPY/