Allahabad Bank, Kanpur V. Joint Director of Income Tax (Intelligence), Kanpur

ITA 288/LKW/2015

• Counselvise Citation: 28823714 RSA 2015
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PUNEET KUMAR
• Keywords: Opportunity of being heard; Reasonable cause; Competent authority
• Section: 133(6); 131; 90; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.288/LKW/2015 ASSESSMENT YEAR:2012 - 13 INCOME TAX OFFICER (INTELLIGENCE)/ JT. DIRECTOR OF INCOME TAX (INTELLIGENCE), KANPUR. VS ALLAHABAD BANK, 113/58, OPP. MOTIJHEEL, SWAROOP NAGAR, KANPUR. PAN:AACCA8464F (RESPONDENT) (APPELLANT) SHRI S. K. JAIN, F.C.A. APPELLANT BY SHRI PUNEET KUMAR, D. R. RESPONDENT BY 16/06/2015 DATE OF HEARING 28 /07/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, KANPUR DATED 23/03/2015 FOR THE ASSESSMENT YEAR 2011 - 2012. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT THE LD. CIT(A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN REJECTING THE APPEAL EX - PARTE AND SUSTAINING THE PENALTY OF RS.36,000/ - IMPOSED ARBITRARILY BY THE LD. JT. DIRECTOR OF INCOME TAX (INTELLIGENCE) U/S 2 72A(2)(C) OF THE INCOME TAX ACT, 1961. 2. THAT THE LD. CIT (A) - II, KANPUR HAS ALSO ERRED IN LAW AND ON FACTS IN PASSING AN EX - PARTE ORDER DATED 23.03.2015, WITHOUT GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 3. THAT THE LD, CIT (A) - II, KANPUR HAS FAILED TO APPRECIATE THAT THE NOTICE U/S 133(6) OF THE INCOME TAX ACT, 1961 COULD HAVE BEEN ISSUED ONLY BY THE ASSESSING OFFICER OF 2 THE BANK SITUATED AT KOLKATA I.E. ITO, CIRCLE 6(1), KOLKATA, HENCE THE NOTICE'S DATED 28.09.2012 & 08.11.2012 ISSUED BY ITO (INTELLIGENCE), KANPUR U/S 133(6) OF THE INCOME TAX ACT, 1961 WERE ILLEGAL AND ARBITRARY , THEREFORE, CONSEQUENT IMPUGNED PENALTY ORDER U/S 272A(2)(C) OF THE INCOME TAX ACT, 1961 PASSED AGAINST AN ILLEGAL NOTICE WAS ALSO BAD IN L AW AND VOID - AB - INITIO. 4. THAT THE LD. CIT(A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE FACT THAT BANK IS NOT REQUIRED TO FURNISH ANY INFORMATION AGAINST GENERAL ENQUIRY OR ROVING/FISHING ENQUIRY, IN RESPONSE TO A NOTICE ISSUED U/S 1 33(6) OF THE INCOME TAX ACT, 1961, BY AN INCOME TAX AUTHORITY OTHER THAN AN ASSESSING OFFICER. 5. THAT THE LD. CIT (A) - II, KANPUR HAS FAILED TO CONSIDER THAT PRIOR APPROVAL, IF ANY, OBTAINED BY THE I. T.O (INTELLIGENCE) , KANPUR FROM THE DIRECTOR OR THE C OMMISSIONER/AND/OR ANY COMPETENT AUTHORITY AS REQUIRED U/S 133(6) (2 N PROVISO) OF THE INCOME TAX ACT, 1961, BEFORE ASSUMING JURISDICTION BY THE INCOME TAX OFFICER (INTELLIGENCE), KANPUR TO ISSUE NOTICE U/S 133(6) OF THE INCOME TAX ACT,1961, IS NOT MENTIONE D IN THE IMPUGNED NOTICE AND/OR IN THE PENALTY ORDER, THEREFORE, THE PROCEEDINGS WERE VOID - AB - INITIO AND UNSUSTAINABLE IN LAW. 6. THAT THE ORDER OF LD. CIT (A) - II, KANPUR CONFIRMING THE PENALTY LEVIED UNDER SECTION 272A(2)(C) OF THE INCOME TAX ACT, 1961 , IS UNSUPPORTABLE IN LAW AND ON FACTS AND IS LIABLE TO BE QUASHED. 7. THAT ANY OTHER RELIEF OR RELIEFS AS MAY BE DEEMED FIT IN THE CASE & CIRCUMSTANCES OF THE CASE BE GRANTED. 3. IT WAS THE FIRST SUBMISSION OF LEARNED A.R. OF THE ASSESSEE THAT AS PER THE PROVISIONS OF SECTION 133 (6) OF THE ACT, THE ASSESSING OFFICER OR THE DCIT(A) OR JT.CIT(A) OR CIT(A) MAY ISSUE NOTICE UNDER SUB SECTION (6) OF SECTION 133 BUT IN THE PRESENT CASE, THE IMPUGNED NOTICE U/S 133(6) WAS NOT ISSUED BY THE ASSESSING OFFICER OR THE DCIT(A) OR JT.CIT OR CIT(A) AND THEREFORE, THE NOTICE ISSUE U/S 133 (6) ITSELF IS NOT A VALID NOTICE AND 3 THEREFORE, ALTHOUGH THERE IS DEFAULT OF THE ASSESSEE IN COMPLYING WITH THE REQUIREMENT OF THE NOTICE BUT PENALTY U/S 272A(2)(C) IS NOT JUSTIFIE D. AS PER HIS SECOND SUBMISSION, HE SUBMITTED THAT THERE WAS REASONABLE CAUSE FOR THE DELAY AND HENCE, AS PER SECTION 273B, PENALTY IS NOT JUSTIFIED. IN THIS REGARD, HE SUBMITTED THAT THE SUBMISSIONS OF THE ASSESSEE EXPLAINING REASONS FOR DELAY ARE NOTED I N THE PENALTY ORDER. HE ALSO PLACED RELIANCE ON THE FOLLOWING TRIBUNAL ORDERS: - A) SBI VS. ADDL. CIT IN ITA NO. /HYD/2014 DATED 30.04.2015. B) ITO (TDS) VS. BRANCH MANAGER BANARAS STATE BANK LTD. IN ITA NO. 1379/ALLD/1998 DATED 24.11.2003 HE ALSO SUBMITTED THAT COPY OF THESE TRIBUNAL ORDERS ARE AVAILABLE ON PAGES 4 TO 8 AND 9 TO 11 OF THE PAPER BOOK RESPECTIVELY AND AS PER THE SAME, THE PENALTY IS NOT JUSTIFIED. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST WE DEAL WITH THE TECHNICAL OBJECTION THAT NOTICE U/S 133 (6) IS NOT VALID BECAUSE THE NOTICE WAS ISSUED BY THE INCOME TAX OFFICER (INTELLIGENCE), KANPUR, WHO IS NOT AUTHORIZED TO ISSUE NOTICE U/S 133 (6). IN T HIS REGARD, W E FIND THAT IT IS NOTED IN THE PENALTY ORDER THAT THIS NOTICE DATED 28/09/2012 U/S 133(6) OF THE ACT WAS ISSUED BY THE INCOME TAX OFFICER (INTELLIGENCE), KANPUR FOR SEEKING INFORMATION UNDER CIB COMPULSORY CODE. NOW WE REPRODUCE THE PROVISION S OF SECTION 133 OF THE ACT, WHICH ARE AS UNDER: THE ASSESSING OFFICER, THE DEPUTY COMMISSIONER (APPEALS), THE JOINT COMMISSIONER OR THE COMMISSIONER (APPEALS) MAY, FOR THE PURPOSES OF THIS ACT, -- (1) REQUIRE ANY FIRM TO FURNISH HIM WITH A RETURN OF THE NAMES AND ADDRESSES OF THE PARTNERS OF THE FIRM AND THEIR RESPECTIVE SHARES; 4 (2) REQUIRE ANY HINDU UNDIVIDED FAMILY TO FURNISH HIM WITH A RETURN OF THE NAMES AND ADDRESSES OF THE MANAGER AND THE MEMBERS OF THE FAMILY; (3) REQUIRE ANY PERSON WHOM HE HAS REA SON TO BELIEVE TO BE A TRUSTEE, GUARDIAN OR AGENT, TO FURNISH HIM WITH A RETURN OF THE NAMES OF THE PERSONS FOR OR OF WHOM HE IS TRUSTEE, GUARDIAN OR AGENT, AND OF THEIR ADDRESSES; (4) REQUIRE ANY ASSESSEE TO FURNISH A STATEMENT OF THE NAMES AND ADDRESSES OF ALL PERSONS TO WHOM HE HAS PAID IN ANY PREVIOUS YEAR RENT, INTEREST, COMMISSION, ROYALTY OR BROKERAGE, OR ANY ANNUITY, NOT BEING ANY ANNUITY TAXABLE UNDER THE HEAD 'SALARIES' AMOUNTING TO MORE THAN ONE THOUSAND RUPEES, OR SUCH HIGHER AMOUNT AS MAY BE PR ESCRIBED, TOGETHER WITH PARTICULARS OF ALL SUCH PAYMENTS MADE; (5) REQUIRE ANY DEALER, BROKER OR AGENT OR ANY PERSON CONCERNED IN THE MANAGEMENT OF A STOCK OR COMMODITY EXCHANGE TO FURNISH A STATEMENT OF THE NAMES AND ADDRESSES OF ALL PERSONS TO WHOM HE OR THE EXCHANGE HAS PAID ANY SUM IN CONNECTION WITH THE TRANSFER, WHETHER BY WAY OF SALE, EXCHANGE OR OTHERWISE, OF ASSETS, OR ON WHOSE BEHALF OR FROM WHOM HE OR THE EXCHANGE HAS RECEIVED ANY SUCH SUM, TOGETHER WITH PARTICULARS OF ALL SUCH PAYMENTS AND RECEI PTS; (6) REQUIRE ANY PERSON, INCLUDING A BANKING COMPANY OR ANY OFFICER THEREOF, TO FURNISH INFORMATION IN RELATION TO SUCH POINTS OR MATTERS, OR TO FURNISH STATEMENTS OF ACCOUNTS AND AFFAIRS VERIFIED IN THE MANNER SPECIFIED BY THE ASSESSING OFFICER, THE D EPUTY COMMISSIONER (APPEALS), THE JOINT COMMISSIONER OR THE COMMISSIONER (APPEALS), GIVING INFORMATION IN RELATION TO SUCH POINTS OR MATTERS AS, IN THE OPINION OF THE ASSESSING OFFICER, THE DEPUTY COMMISSIONER (APPEALS) THE JOINT COMMISSIONER OR THE COMMIS SIONER (APPEALS), WILL BE USEFUL FOR, OR RELEVANT TO, ANY INQUIRY OR PROCEEDING UNDER THIS ACT. PROVIDED THAT THE POWERS REFERRED TO IN CLAUSE (6), MAY ALSO BE EXERCISED BY THE DIRECTOR - GENERAL, THE CHIEF COMMISSIONER, THE DIRECTOR AND THE COMMISSIONER. PR OVIDED FURTHER THAT THE POWER IN RESPECT OF AN INQUIRY, IN A CASE WHERE NO PROCEEDING IS PENDING, SHALL NOT BE EXERCISED BY ANY INCOME - TAX AUTHORITY BELOW THE RANK OF DIRECTOR OR COMMISSIONER WITHOUT THE PRIOR APPROVAL OF THE DIRECTOR OR, AS THE CASE MAY B E, THE COMMISSIONER. 5 PROVIDED ALSO THAT FOR THE PURPOSES OF AN AGREEMENT REFERRED TO IN SECTION 90 OR SECTION 90A, AN INCOME - TAX AUTHORITY NOTIFIED UNDER SUB - SECTION (2) OF SECTION 131 MAY EXERCISE ALL THE POWERS CONFERRED UNDER THIS SECTION, NOTWITHSTANDI NG THAT NO PROCEEDINGS ARE PENDING BEFORE IT OR ANY OTHER INCOME - TAX AUTHORITY. 5.1 FROM THE ABOVE PROVISIONS OF SECTION 133 OF THE ACT, IT IS SEEN THAT THE POWER IS GIVEN TO THE ASSESSING OFFICER, THE DEPUTY COMMISSIONER (APPEALS), THE JOINT COMMISSIONER OR THE COMMISSIONER (APPEALS) FOR ISSUING NOTICE UNDER SUB SECTION (6) OF THIS SECTION REQUIRING ANY PERSON INCLUDING A BANKING COMPANY OR ANY OFFICER THEREOF, TO FURNISH INFORMATION IN RELATION TO SUCH POINTS OR MATTERS, OR TO FURNISH STATEMENTS OF ACCOU NTS AND AFFAIRS VERIFIED IN THE MANNER SPECIFIED BY THE ASSESSING OFFICER, THE DEPUTY COMMISSIONER (APPEALS), THE JOINT COMMISSIONER OR THE COMMISSIONER (APPEALS) . SINCE, THE NOTICE WAS ISSUED BY THE ITO, IT HAS TO BE SEEN THAT WHETHER HE IS AN ASSESSING OFFICER OR NOT AS PER SECTION 2 (7A) OF THE I. T. ACT. AS PER THIS SECTION, AN ITO IS ALSO AN ASSESSING OFFICER IF HE IS VESTED WITH THE RELEVANT JURISDICTION BY VIRTUE OF DIRECTIONS OR ORDERS ISSUED UNDER SUB SECTION (1) OR SUB SECTION (2) OF SECTION 120 OR ANY OTHER PROVISIONS OF THIS ACT. HENCE, IT HAS TO BE SEEN THAT WHETHER IN THE PRESENT CASE, THE ITO WHO ISSUED THE IMPUGNED NOTICE WAS ASSESSING OFFICER OR NOT AS PER THESE PROVISIONS OF SECTION 2 (7A) OF THE ACT. SINCE, THERE IS NO FINDING OF CIT (A) IN THIS REGARD, THE MATTER HAS TO GO BACK TO CIT (A) FOR FRESH DECISION AFTER GIVING SPECIFIC FINDING ON THIS ASPECT OF THE MATTER IF WE FIND THAT THE PENALTY IS OTHERWISE JUSTIFIED BECAUSE IF THE PENALTY IS NOT FOUND TO BE JUSTIFIED FOR OTHER REASONS, THI S ASPECT WILL BE OF ACADEMIC INTEREST ONLY AND HENCE, NO DECISION ON THIS ASPECT WILL BE NECESSARY AND THEREFORE , IN THAT SITUATION, WE WILL NOT RESTORE THE MATTER BACK TO CIT (A). 5.2 NOW, WE EXAMINE THE JUSTIFICATION OF PENALTY ON MERIT. WE FIND THAT IN THE PENALTY ORDER, THE SUBMISSION S OF THE ASSESSEE ARE TAKEN NOTE OF . AS PER THE SAME, IT WAS SUBMITTED BY THE ASSESSEE THAT DUE TO FAILURE OF THE 6 COMPUTER SERVER OF THE BRANCH OF THE ASSESSEE, THE REQUIRED REPORT COULD NOT BE SUBMITTED IN TIME. IN OUR CONSIDERED OPINION, IT SHOULD BE ACCEPTED AS REASONABLE CAUSE FOR THE FAILURE OF THE ASSESSEE TO FILE REPORT IN TIME. AS PER SECTION 273B, IF THE ASSESSEE CAN ESTABLISH THAT THERE WAS REASONABLE CAUSE FOR THE FAILURE OF THE ASSESSEE TO SUBMIT THE REPORT, P ENALTY U/S 272A (2) SHOULD NOT BE IMPOSED. THEREFORE, WE DELETE THE PENALTY BECAUSE IN OUR CONSIDERED OPINION, THERE WAS REASONABLE CAUSE FOR THE FAILURE OF THE ASSESSEE TO SUBMIT THE REPORT IN TIME. SINCE, WE FIND THAT THE PENALTY IS NOT JUSTIFIED IN VIEW OF THE FACTS OF THE PRESENT CASE AND THE PROVISIONS OF SECTION 273B, WE DO NOT RESTORE THE MATTER BACK TO THE FILE OF CIT (A) TO DECIDE THE TECHNICAL ASPECT AS DISCUSSED BY US IN PARA 5.1 ABOVE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 /07/2015 *C.L.SINGH COPY OF THE ORD ER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR