SCIL CAPITAL INDIA P.LTD, MUMBAI V. DCIT RG 3(3), MUMBAI

ITA 2840/MUM/2012

• Counselvise Citation: 284019914 RSA 2012
• Duration Of Justice: 3 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: K K VED
• Section: 143(3); 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ./ ITA NO . 2840 / MUM/20 1 2 ( / ASSESSMENT YEAR : 2008 - 09 ) SCIL CAPITAL INDIA PVT. LTD., 21, MITTAL CHAMBERS, 228 NARIMAN POINT, MUMBAI - 21 VS. DCIT, RANGE - 3(3), MUMBAI ./ ./ PAN/GIR NO. : A A A CS 8065 J ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI K.K.VED /REVENUE BY : SHRI NEIL PHILIP / DATE OF HEARING : 23 /0 3 /2015 / DATE OF PRONOUNCEMENT 08/05 /2015 / O R D E R PE R R.C.SHARMA (A.M) : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 1 - 11 - 2011 FOR THE ASSESSMENT YEAR 2008 - 09 IN THE MATTER OF IMPOSITION OF PENALTY OF RS.10,000/ - U/S.271(1)( B ) 2. THE SOLITARY ISSUE RAISED IN THIS APPEAL IS IN REG ARD TO LEVY OF PENALTY U/S.271(1)( B ) BY THE AO AND CONFIRMED BY THE CIT(A) ON ACCOUNT OF NON - APPEARANCE. 3 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT T HE ASSESSEE COMPANY IS A NON - BANKING FINANCE COMPANY AND ALSO IS ENGA GED IN THE BUSINESS OF TRADING IN COTTON BALES AND HERBS. THE ASSESSEE FILED ITS RETURN OF INCOME DISCLOSING LOSS OF RS.69,92,390/ - ITA NO. 2840 / 1 2 2 UNDER NORMAL PROVISIONS OF THE ACT AND BOOK PROFIT OF RS.15,43,368/ - COMPUTED UNDER THE PROVISIONS OF SECTION 115JB OF THE A CT. T HE CASE OF THE ASSESSEE WAS PROCESSED U/S.143(1). THEREAFTER THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICES U/S.142(1) AND 143(3) WERE ISSUED, WHICH WERE SERVED ON THE ASSESSEE. HOWEVER, NOBODY APPEARED BEFORE THE AO IN RESPONSE TO THE SAID NOTICES. AGAIN NOTICE U/S.142(1) WAS ISSUED BUT THERE WAS NO REPLY FROM THE ASSESSEE. THEREFORE, THE AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ON 20 - 7 - 2010 TO EXPLAIN AS TO WHY THE PENALTY U/S.271(1)( B ) OF THE ACT SHOULD NOT BE LEVIED ON THE ASSE SSEE. IN RESPONSE TO THE SAME, THE ASSESSEE APPEARED BEFORE THE AO, HOWEVER, HE COULD NOT FILED THE DETAILS IN TAPAL. THEREFORE, THE AO LEVIED THE PENALTY OF RS.10,000/ - FOR NON - COMPLIANCE TO THE STATUTORY NOTICES AS PER PROVISIONS OF SECTION 271(1)( B ) OF THE ACT. 4. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMING THE ACTION OF THE AO, DISMISSED THE APPEAL OF THE ASSESSEE, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. LD. AR BEFORE US CONTENDED THAT THE ASSESSEE HAD FILED RELEVANT DOCUMENTS AS REQUIRED BY THE AO PARTIALLY AND THE REPRESENTATIVE OF THE ASSESSEE HAD ATTENDED BEFORE THE AO, HOWEVER, THE AO WHIMSICALLY LEVIED PENALTY FOR NON - APPEARANCE, WHICH IS BASELESS AND THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. HE PLACE D RELIANCE ON TH E FOLLOWING DECISIONS : - I) S.VELU PALANDAR VS. DCIT (1972) 83 ITR 683; II) HINDUSTAN STEEL LTD. VS. STATE OF ORISSA, 83 ITR 26; AND III) SWARNABEN M. KHANNA VS. DCIT (2010) 37 SOT 25 (AHD.). ITA NO. 2840 / 1 2 3 6. ON CONTRARY, LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND CO NTENDED THAT THE ASSESSEE AVOIDED TO COMPLY THE NOTICE ISSUED BY THE AO AGAIN AND AGAIN, THEREFORE, LEVY OF PENALTY IN THE CASE OF ASSESSEE IS JUST AND PROPER. 7. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE RECORD CAREFULLY. FROM THE RECORD WE FOU ND THAT THE AO LEVIED PENALTY STATING THAT THE ASSESSEE DID NOT COOPERATE IN THE PROCEEDINGS. HOWEVER, FROM THE ORDER OF THE CIT(A) WE FOUND THAT THE ASSESSEE HAS APPEARED BEFORE THE AO AND FILED PARTIAL DOCUMENTS AS REQUIRED BY THE AO. LD. AR DREW OUR ATT ENTION TO THE LETTERS SUBMITTED BY THE ASSESSEE BEFORE THE AO, WHICH ARE PLACED IN THE PAPER BOOK. WE HAVE ALSO PERUSED THE LETTER DTD. 2 - 7 - 2010 ISSUED BY THE AO FROM WHICH IT IS FOUND THAT THE AO HAD NOT CALLED FOR ANY DETAILS AND, THEREFORE, WHICH DETAIL S THE AO WAS REFERRING TO, IS NOT CLEAR. THE AO HAS MENTIONED THAT THE ASSESSEE FILED PARTIAL DETAILS ON 19 - 7 - 2010, IS SELF CONTRADICTORY. IF NOBODY ATTENDED IN REPLY TO THE NOTICE ISSUED BY THE AO, THEN THE ASSESSEE COULD HAVE NEVER BECOME AWARE OF THE P ENDING DETAILS WHICH WERE REQUIRED TO BE SUBMITTED. FROM THE AFORESAID FACT, IT IS CLEAR THAT THE ASSESSEE HAS REPRESENTED THE CASE BEFORE THE AO , HOWEVER, THERE WAS SMALL DELAY IN ATTENDING TO THE HEARING . HONBLE MADRAS HIGH COURT IN THE CASE OF S.VELU P ALANDAR, 83 ITR 683 HAS HELD THAT IN VIEW OF PRACTICAL DIFFICULTIES FACED BY THE ASSESSEE, PENALTY U/S,271(1)( B ) SHOULD NOT BE IMPOSED. IN THE CASE OF HINDUSTAN STEEL LTD., 83 ITR 26, THE HONBLE SUPREME COURT HAS OPINED THAT PENALTY SHOULD NOT BE IMPOSED MERELY BECAUSE THE STATUTE ITA NO. 2840 / 1 2 4 EMPOWERS. IN THE SAID CASE, IT HAS FURTHER BEEN OBSERVED THAT FOR MERE TECHNICAL OR VENIAL BREACH OF LAW, PENALTY SHOULD NOT BE IMPOSED. WE ALSO FOUND FROM THE RECORD THAT THE AO LEFT OFFICE EARLY ON THE DAY THE ASSESSEE WAS TO BE PRESENT AND THEREAFTER THE ASSESSEE ONLY COULD HAVE FILED THE DETAILS PARTIALLY. T HERE MAY BE SOME INSTANCES WHERE THE AUTHORITY MAY NOT BE IN A POSITION TO TAKE UP THE CASE ON THE DATE FIXED FOR HEARING DUE TO OFFICIAL PRESSURE OR OTHER ASSIGNMENTS . KE EPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(B) FOR NON - APPEARANCE. 8 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 08/05 / 201 5 . SD/ - SD/ - ( ) ( SANJAY GARG ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 08/05 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, M UMBAI 6. / GUARD FILE. //TRUE COPY//