Md. Mofazzalur Rahaman, Keonjhar V. ACIT, Bhubaneswar

ITA 29/CTK/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7754 (ITAT-CUTTACK)
• Duration Of Justice: 5 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-07-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 31-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: I T A NOS; ITA NO; CTK ASSESSMENT YEAR S; PR J; CTK ASSESSMENT YEAR; CTK; S ERAJUDDIN
• Assessee Lawyers: SUNI MISHRA SHRI S M KESHK
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Principle of natural justice; Period of limitation; Source of fund; Retrospective amendment; Reasonable cause; Time period of passing order; Documents seized; TDS
• Section: 273B; 142(1); 201; 32; 147; 148; 132; 144; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM . / ITA NO. 29 & 30 /CTK/201 4 ( / ASSESSMENT YEAR S : 20 08 - 20 09 & 2009 - 2010 ) MD. MOFAZZALUR RAHMAN, SERAJUDDIN SQUARE(NEAR MASJID) AT/PO: KEONJHAR - 758001 VS. ACIT, CIRCLE - 1(2), BHUBANESWAR ./ PANNO. : A BYPR 0862 J AND . / ITA NO S . 575 & 576 /CTK/201 3 ( / ASSESSMENT YEAR S :20 08 - 20 09 & 2009 - 2010 ) F.SERAJUDDIN EX PORTS (P) LTD. FORTUNE TOWER, 7 TH FLOOR, CHANDRASEKHARPUR, BHUBANESWAR - 751007 VS. ACIT, CIRCLE - 1(2), BHUBANESWAR ./ PANNO. : A ABCF 1469 J AND . / ITA NO S . 577 & 578 /CTK/201 3 ( / ASSESSMENT YEAR S :20 08 - 20 09 & 2009 - 2010 ) S ERAJUDDIN & CO. (P) LTD. FORTUNE TOWER, 7 TH FLOOR, CHANDRASEKHARPUR, BHUBANESWAR - 751007 VS. ACIT, CIRCLE - 1(2), BHUBANESWAR ./ PANNO. : A AICS 3545 F AND . / ITA NO. 15 /CTK/201 4 ( / ASSESSMENT YEAR :20 0 9 - 20 10 ) ALIZA INTER NATIONAL (P) LTD., HIG - 19, BDA HOUSING BOARD COLONY, JAYDEV VIHAR, BHUBANESWAR - 751013 VS. ACIT, CIRCLE - 1(2), BHUBANESWAR ./ PANNO. : A AFCA 9579 A ( / APPELLANT ) .. ( / RESPONDENT ) ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 2 AND . / ITA NO. 16 & 17 /CTK/201 4 ( / ASSESSMENT YEAR :20 08 - 20 09 & 2009 - 2010 ) YAZDANI INTERNATIONAL (P) LTD., 7 TH FLOOR, C - WING, FORTUNE TOWER, BHUBANESWAR - 751023 VS. ACIT, CIRCLE - 1(2), BHUBANESWAR ./ PANNO. : A AACY 2872 M ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI SUNI MISHRA, ADVOCA T E /REVENUE BY : SHRI S.M.KESHKAMAT, CITDR / DATE OF HEARING : 25 /0 9 /2019 / DATE OF PRONOUNCEMENT : 14 / 10 /2019 / O R D E R PER BENCH : TH ESE ARE THE APPEALS FILED BY DIFFERENT ASSESSEES, AS MENTIONED ABOVE, AGAINST THE SEPARATE ORDER S OF CIT(A) - 1 , BHUBANESWAR , DATED 15.11.2013, 24.10.201 3 , 25.10.2013, 07.11.2013 & 05.11.2013 ARISING OUT OF THE ORDER DATED 30.06.2011, W HEREBY CONFIRMING THE PENALTY LEVIED U/S.271F OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) FOR THE ASSESSMENT YEAR S 2008 - 2009 & 2009 - 2010 . 2. FIRST OF ALL, FOR CLARITY, WE WOULD LIKE TO MENTION THE DATE OF ORDERS OF THE AUTHORITIES BELOW AT DIFFERENT S TAGE S FOR DIFFERENT ASSESSMENT YEARS IN RESPECTIVE APPEALS, AS UNDER : - ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 3 SL. NO ITA NO. NAME OF ASSESSEE ASSESSMENT YEAR ASSESSMENT ORDER PENALTY ORDER CIT(A)S ORDER 1. 29/CTK/14 MD. MOFAZZALUR RAHMAN 2008 - 20 09 22.12.2010 30.06. 20 11 15.11. 20 13 2. 30/CTK /14 MD. MOFAZZALUR RAHMAN 200 9 - 20 10 22.12.2010 30.06.2011 15.11.2013 3. 575/CTK/13 F.SERAJUDDIN EXPORTS (P) LTD. 2008 - 2009 29.12.2010 30.06.2011 24.10.2013 4. 576/CTK/13 F.SERAJUDDIN EXPORTS (P) LTD. 2009 - 2010 29.12.2010 30.06.2011 24.10.2013 5. 577/CT K/13 SERAJUDDIN & CO.(P) LTD 2008 - 2009 29.12.2010 30.06.2011 25.10.2013 6. 578/CTK/13 SERAJUDDIN & CO.(P) LTD 2009 - 2010 29.12.2010 30.06.2011 25.10.2013 7. 15/CTK/1 4 ALIZA INTERNATIONAL (P) LTD. 2009 - 2010 29.12.2010 30.06.2011 07 .1 1 .2013 8. 16/CTK/14 YA ZDANI INTERNATIONAL (P) LTD. 2008 - 2009 29.12.2010 30.06.2011 05.11.2013 9. 17/CTK/14 YAZDANI INTERNATIONAL (P) LTD. 2008 - 2009 29.12.2010 30.06.2011 05.11.2013 3 . SINCE THE ISSUES INVOLVED IN ALL THE APPEALS ARE IDENTICAL TO EACH OTHER, EXCEPT DIFFERENT IN FIGURE, THEREFORE, WITH THE CONSENT OF BOTH THE PARTIES, ALL THE APPEALS ARE HEARD ANALOGOUSLY AND DISPOSED OFF BY THIS CONSOLIDATED ORDER . FOR THE SAKE OF CONVENIENCE, WE SHALL TAKE INTO CONSIDERATION THE FACTS AND GROUNDS MENTIONED IN ITA NO. 29/CTK/20 14 FOR THE ASSESSMENT YEAR 2008 - 2009 FOR DECIDING ALL THE APPEALS. GROUNDS TAKEN BY THE ASSESSEE IN THE SAID APPEAL FOR ASSESSMENT YEAR 2008 - 2009 ARE AS UNDER : - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FAILING TO CONSIDER THAT THE PENALTY ORDER PASSED U/S.271F OF THE INCOME TAX ACT,1961(HEREIN AFTER REFERRED AS X THE ACT') IS BAD IN LAW AND LIABLE TO BE QUASHED INASMUCH AS THAT: - 1. NO NOTICE U/S 153(L)(A) OF THE ACT WAS ISSUED AND SERVED ON THE APPELLANT TO SUBMIT THE RETURN OF INCOME FOR WHICH THE PENALTY ORDER U/S 271F OF THE ACT IS ILLEGAL, PREMATURE AND BEYOND JURISDICTION; ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 4 2. NO REASONABLE OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE APPELLANT BEFORE IMPOSITION OF PENALTY U/S 271F OF THE ACT AND FOR THAT MATTER THE ORDER IMPOSING THE PENALTY IS VIOLATING THE PRINCIPLES OF NATURAL JUSTICE; 3. DUE TO FAILURE ON THE PART OF THE AO TO PROVIDE EXTRACTS OF COMPLETE SEIZED RECORDS THE APPELLANT COULD NOT FINALISE THE ACCOUNTS TO SUBMIT THE RETURN OF INCOME FOR WHICH THE PENALTY ORDER U/S 271F OF THE ACT IS ARBITRARY, ILLEGAL AND WITHOUT JURISDICTION; 4. THE IMPOSITION OF PENALTY U/S 271F OF THE ACT IS BARRED BY LIMITATION AS THE ORDER IMPOSING PENALTY WAS SERVED ON THE AP PELLANT ON 18.08.2011 I.E MORE THAN 45 DAYS BEYOND THE PERIOD OF LIMITATION; 5. NON FURNISHING OF RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153A(L)(A) OF THE ACT DOES NOT EMPOWER THE ASSESSING OFFICER TO IMPOSE PENALTY U/S 271F OF THE ACT AND FOR THAT MA TTER THE ORDER IMPOSING PENALTY U/S 27IF OF THE ACT IS ILLEGAL AND WITHOUT JURISDICTION; 6. THE PENALTY U/S 271F OF THE ACT IS DIRECTORY AND NOT MANDATORY AND IN VIEW OF EXISTENCE OF REASONABLE CAUSE FOR NOT FILING THE RETURN OF INCOME THE PENALTY ORDER P ASSED U/S 271F OF THE ACT IS ARBITRARY, ILLEGAL AND WITHOUT JURISDICTION; 7. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ALL OR ANY OF THE AFORESAID GROUNDS OF APPEAL. 4 . BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S.1 32 OF THE ACT WAS CONDUCTED BY THE INCOME TAX DEPARTMENT ON 28.05.2008 IN THE OFFICE PREMISES AND RESIDENTIAL PREMISES OF THE M/S SERAJUDDIN & CO. & GROUPS ALONG WITH IN THE CASE OF THE ASSESSEE. THE ASSESSEE IS THE ONE OF THE PRINCIPAL ASSESSEES OF THE GR OUP. DURING THE COURSE OF SEARCH OPERATION, VARIOUS DOCUMENTS, BOOKS OF ACCOUNT ETC. WERE FOUND AND SEIZED. ACCORDINGLY, NOTICE U/S. 1 53A(A) OF THE I T ACT, 1961 WAS ISSUED ON 05/03/10 THROUGH RPAD , WHICH WAS DULY SERVED UPON THE ASSESSEE BUT THE ASSESSEE D ID NOT FILE HIS RETURN OF INCOME FOR ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 5 THE ASSESSMENT YEAR 2008 - 2009 IN COMPLIANCE WITH THE NOTICE. THE FINDINGS RECORDED BY THE AO IN THE QUANTUM ORDER ARE AS UNDER : - ON 10/03/10 ASSESSEE ASKED FOR EXTRACTS OF THE SEIZED MATERIAL AND SAME WAS PROVIDED TO THE ASSESSEE. FURTHER ASSESSEE WAS REQUESTED ON 29/06/10 TO FILE HIS RETURN OF INCOME, ASSESSEE DID NOT TURNED UP. A NOTICE U/S 142(1) ALONGWITH DETAIL QUESTIONNAIRE WAS SEND TO THE ASSESSEE ON 28/07/10 AND DATE OF COMPLIANCE WAS FIXED ON 12/08/10. ON SAID DATE ASSESSEE DID NOT COMPLY WITH THE QUESTIONNAIRE RATHER HE CHALLENGED THE AUTHORITY OF JOINT DIRECTOR OF INCOME TAX TO ISSUE THE WARRANT. ASSESSEE WAS INFORMED THAT JOINT DIRECTOR OR JOINT COMMISSIONER IS ALSO EMPOWERED TO ISSUE WARRANT OF AUTHORISATIO N BY FINANCE ACT (NO.2), 2009 WITH RETROSPECTIVE EFFECT FROM 01/06/1994; HENCE, SEARCH CONDUCTED IN YOUR CASE WAS LEGAL AND ASSESSEE WAS ALSO INFORMED THAT THIS MATTER IS TO BE DECIDED BY ANY COURT OF LAW. ASSESSEE WAS ONCE AGAIN REQUESTED TO CO - OPERATE WI TH THE 'PROCEEDINGS AND FILE THE RETURN OF INCOME. NO REPLY WAS RECEIVED FROM ASSESSEE'S END. ON 02/09/10, ASSESSEE WAS FURTHER ASKED TO COMPLY WITH THE NOTICES, BUT NO ONE TURNED UP. A FINAL SHOW CAUSE WAS ISSUED TO THE ASSESSEE ON 13/10/10 TO FILE HIS R ETURN OF INCOME AND COMPLY WITH THE NOTICES; FURTHER ASSESSEE CHOSE NOT TO COMPLY. ON DTD.28/10/10 ASSESSEE WROTE A LETTER WITHOUT ANY REFERENCE THAT IT IS NOT POSSIBLE TO COMPLY WITH THE SUMMONS ISSUED BY THIS OFFICE AS TIME GIVEN WAS NOT PROPER AND ATLEA ST 15 DAYS TIME SHOULD BE GIVEN TO COMPLY WITH THE SUMMONS. IT IS NEEDLESS TO MENTION HERE THAT ASSESSEE ADOPTED A TOTAL NON - COMPLIANCE ATTITUDE DURING THE ASSESSMENT PROCEEDINGS AND DURING POST SEARCH INVESTIGATION, THOUGH THE FULL CO - OPERATION WAS EXTEND ED BY THE OFFICE. ASSESSEE WROTE ANOTHER LETTER ON 26/11/10 STATING THAT THE PRINT OUT OF SEIZED CDS AND HARD DISK HAS NOT GIVEN TILL DATE, ASSESSEE IN UNABLE TO FILE HIS RETURN OF INCOME. THIS IS TO BE MENTIONED HERE THAT WORK OF TAKING EXTRACT OF SEIZED /IMPOUNDED MATERIAL WAS COMPLETED ON 13/08/10 FOR THE WHOLE GROUP AND THE AUTHORISED PERSON STOPPED COMING. ON 31/08/10 LETTER WAS WRITTEN TO THE ASSESSEES, BELONG TO THE SEARCH GROUP, STATING THAT IF ANY DOCUMENT IS LEFT OUT PLEASE DO INTIMATE TO THE OFFI CE AND TAKE THE EXTRACT. ON 13/09/10 ONLY ONE ASSESSEE THAT IS ALIZA INTERNATIONAL (P) LTD, THROUGH ITS AUTHORISED PERSON MR SUNIL KUMAR SATPATHY, TURNED UP AND ASKED FOR EXTRACT OF SEIZED CDS/HARD DISK BY WRITING A LETTER AND SAME WAS RECEIVED BY INSPECTO R OF INCOME TAX. HOWEVER, WITH CONSENT OF MR SUNIL KUMAR SATPATHY, DATE WAS FIXED ON 11/10/10 TO TAKE THE EXTRACT OF SEIZED CD/HARD DISK BUT NO ONE TURNED UP ON SAID DATE. IN ABSENCE OF THE RETURN OF INCOME IN RESPONSE TO NOTICE U / S .153A, THE UNDERSIGNED IS FORCED TO TAKE RECOURSE OF SEC. 144 OF THE INCOME TAX ACT AND TO ASSESS THE INCOME OF THE ASSESSEE AS PER MATERIAL AND INFORMATION AVAILABLE WITH /COLLECTED BY THE UNDERSIGNED AND THE SAME IS ALSO INTIMATED TO THE ASSESSEE ON DTD. 13/10/10. TO MAKE A FA IR, REASONABLE ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 6 AND JUSTIFIED CALCULATION OF THE INCOME OF THE ASSESSEE, INFORMATION WERE CALLED FOR FROM VARIOUS DEPARTMENTS AND AUTHORITIES, SUCH AS, TDS RETURNS FILED BY THE CONCERN IN WHICH ASSESSEE IS A DIRECTOR/MEMBER/PARTNER, BANK STATEMENTS, INFORMA TION FROM VARIOUS MUTUAL FUNDS AND INSURANCE POLICIES. ALONG WITH THAT THE SEIZED/IMPOUNDED DOCUMENTS WERE ALSO USED FOR THE ASSESSMENT. DURING THE COURSE OF SEARCH AND SEIZURE ACTION, RS.6.50 CRORES WORTH OF BANK FIXED DEPOSITS AND OTHER INVESTMENT PAPER S HAVE BEEN SEIZED FROM THE RESIDENCE OF THE ASSESSEE AS THEY WERE FOUND NOT ACCOUNTED FOR. THE DEPOSITS HAD BEEN MADE IN THE NAME OF THE ASSESSEE AND SEVERAL FAMILY MEMBERS WHO HAD NO SOURCES OF INCOME TO SPEAK OF. THUS, THE ENTIRE AMOUNT OF THE INVESTMEN TS ARE SOURCED FROM THE ASSESSEE AND HENCE, THE SOURCE OF THE SAME BEING UNEXPLAINED THE SAME ARE TREATED AS UNEXPLAINED AND CONCEALED INCOME IN THE HANDS OF THE ASSESSEE. ADDITION : RS.6,50,00,000/ - DURING THE COURSE OF SEARCH OPERATION IT IS FOUND THAT ASSESSEE WAS MAINTAINING A BANK ACCOUNT IN BANK OF INDIA, JHUMPURA BRANCH, JHUMPURA, DIST: KEONJHAR WAITH ACCOUNT NO. SB - 1250. WIDE LETTER NO. ACIT/C - L(2)/133(6)/2010 - 2011/4170 DTD 19/11/10 THE BRANCH MANAGER WAS ASKED TO PROVIDE THE BANK STATEMENT OF THE ABOVEMENTIONED BANK ACCOUNT AND OTHER DETAILS RELATED TO THE ASSESSEE. ON 29/11/10, BANK FORWARDED THE BANK STATEMENT ALONGWITH FIXED DEPOSIT A/C DETAILS AND INTEREST ACCRUED BY THE ASSESSEE ON THOSE ACCOUNTS. IN THE SAID ACCOUNT ASSESSEE HAS EARNED R S.4,77,141/ - AS INTEREST INCOME, IT IS SEEN THAT ASSESSEE HAS EARNED TOTAL INTEREST ON SAID FIXED DEPOSIT TO THE TUNE OF RS.39,38,724/ - ON FIXED DEPOSITS MAINTAINED IN THE SAME BANK FROM SR NO. 1933 TO 1942 (RS.50.001ACS EACH) THESE SERIAL NOS. BEARS FD A/ C NO. DBD - 3500064 TO A/C NO.DBD - 3500073(MENTIONED IN PARA ABOVE). THUS ASSESSEE HAS EARNED TOTAL INTEREST INCOME TO THE TUNE OF RS. 44,16,138/ - DURING THE YEAR. SUBJECT TO THE ABOVE DISCUSSION, INCOME IS DETERMINED AND ASSESSED AS UNDER: UNEXPLAINED INV ESTMENT IN BANK ACCOUNT (AS DISCUSSED ABOVE) ' - RS. 6,50,00,000/ - INTEREST INCOME (AS DISCUSSED ABOVE - RS. 44,16,138/ - TOTAL INCOME RS.6,94,16,138/ - O R RS.6,94,16,140/ - ============= TAX ON TO TAL INCOME : 2,07,73,842 ADD: SURCHARGE : 20,77,384 2,28,51,226 EC+SHEC 6,85,537 [4,57,025+2,28,512] TOTAL TAX 2,35,36,763 ADD: INTEREST U/S.234A 21,18,309 ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 7 INTEREST U/S.234B 77,67,132 INTEREST U/S.234C - -- ------- TOTAL TAX & INTEREST PAYABLE 3,34,22,204 LESS : TAX PAID : NIL NET TAX PAYABLE : 3,34,22,204 ASSESSED U/S.143(3) /153A/144 OF THE I.T. ACT, 1961 ON A TOTAL INCOME OF RS. 6,140/ - . PENALTY U/S 271(L)(C) IS INITIATED. ISSUED DEMAND NOT ICE AND A COPY OF THE ORDER. 5 . ACCORDINGLY, THE AO FRAMED THE ASSESSMENT U/S.143(3)/153A/144 OF THE ACT ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS.6,140/ - FOR THE ASSESSMENT YEAR 2008 - 2009 VIDE ORDER DATED 29.12.2010 . THEREAFTER THE AO LEVIED PENA LTY U/S. 271F OF THE ACT VIDE ORDER DATED 30.06.2011 AND PASSED THE ORDER IN THE FOLLOWING MANNER : - ORDER UNDER SECTION 271 F OF THE INCOME TAX ACT, 1961 ON 28.05.2008, A SEARCH AND SEIZURE OPERATION U/S.132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED BY TH E DEPARTMENT IN THE OFFICE PREMISES AND RESIDENTIAL PREMISES OF THE M/S SERAJUDDIN T CO. & GROUP IN CASE OF THE ASSESSEE. ASSESSEE IS ONE OF THE PRINCIPAL ASSESSEES OF THE GROUP. DURING THE COURSE OF SEARCH OPERATION, INCRIMINATING DOCUMENTS, BOOKS OF ACC OUNT ETC. WERE FOUND AND SEIZED. ACCORDINGLY, NOTICE U/S.153A(A) OF THE I T ACT, 1961 WAS ISSUED ON 03/03/10 THROUGH RPAD AND DULY SERVED UPON THE ASSESSEE. HOWEVER, ASSESSEE DID NOT FILE ITS RETURN OF INCOME FOR THE A/Y 2008 - 09 IN COMPLIANCE WITH THE NO TICE. SINCE THE ASSESSEE FAILED TO FILE RETURN OF INCOME AS REQUIRED U/S. 153A(A) OF THE ACT, PENALTY PROCEEDINGS U/S.271F WAS INITIATED AND PENALTY NOTICE U/S.271F ISSUED TO THE ASSESSEE ON 29.12.2010 FIXING THE DATE FOR HEARING ON 21.01.2011. ON THE DA TE OF HEARING NEITHER THE ASSESSEE NOR THE A.R. OF THE ASSESSEE APPEARED. ANOTHER OPPORTUNITY WAS ALSO GIVEN TO ASSESSEE ON 02.06.2011 FIXING THE DATE FOR HEARING ON 13.06.2011. ON 13.06.2011 ASSESSEE SUBMITTED A WRITTEN SUBMISSION THAT AS THE ASSESSEE HAS GONE FOR AN APPEAL BEFORE THE CIT(A) - I, BHUBANESWAR THEREFORE ALL THE PENALTY PROCEEDINGS MAY BE KEPT IN ABEYANCE. WHEN CALLING FOR A RETURN U/S.153A(A) OF THE ACT IN A SEARCH CASE, THE PROVISION OF THIS ACT SHALL SO FAR AS APPLY , AS IF IT REQUIRED UNDE R SUB - SECTION (1) OF SECTION 139 OF THE I. T.ACT, 1961. AS THE ASSESSEE FAILED TO ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 8 FURNISH A RETURN, HE IS LIABLE TO PENALTY OF RS.5,000/ - U/S.271F AND ACCORDINGLY, AN AMOUNT OF RS.5,000/ - IS IMPOSED AS PENALTY U/S.271F OF THE I.T.ACT,1961. ISSUE COPY OF T HE ORDER AND DEMAND NOTICE TO THE ASSESSEE . SD/ - (TARUN JARWAL) ASST. COMMISSIONER OF INCOME - TAX, CIRCLE. - 1(2), BHUBANESWAR. 6 . FEELING AGGRIEVED FROM THE PENALTY ORDER, THE ASSESSEE APPEALED BEFORE THE CIT(A) TAKING VARIOUS GROUNDS AND THE C IT(A) DISMISSED THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2008 - 2009 AFTER OBSERVING AS UNDER : - 4. I HAVE CONSIDERED THE MATTER CAREFULLY. NO RETURN OF INCOME WAS FILED U/S.139 OR IN RESPONSE TO NOTICE U/S.L53A(A). AS ALREADY DECIDED IN THE QUANTUM A PPEAL VIDE ORDER DT. 07 . 1 2.201 2 IN ITA NO. 0278 /10 - 11, IN THE CASE OF THE APPELLANT FOR THE AY 2008 - 09, THE AO HAS PROPER JURISDICTION FOR ISSUE OF NOTICE U/S.L53A(A) AND OTHER SECTIONS. FURTHER, THERE HAS BEEN NO DEFICIENCY IN SERVICE OF NOTICES. ACCORDINGL Y, THE GROUNDS OF APPEAL PREFERRED AGAINST JURISDICTION, ISSUE OF NOTICES AND DELAY IN ISSUE OF NOTICE U/S.271F ARE DISMISSED. APART FROM RAISING TECHNICAL ISSUES, THE APPELLANT HAS FAILED TO JUSTIFY THE NON - FILING OF RETURN OF INCOME. THE FILING OF RETURN OF INCOME IS A VITAL STEP IN THE ASSESSMENT PROCEEDING AND COMPUTATION OF TOTAL INCOME. THE APPELLANT HAS FAILED TO FILE THE RETURN OF INCOME WITHOUT ANY REASONABLE CAUSE. LACK OF FULL EXTRACTS - OF THE BOOKS OF ACCOUNTS COULD BE A GROUND FOR DELAY IN FILI NG THE RETURN BUT CANNOT BE A GROUND FOR NON - FILING OF RETURN. FURTHER, THE APPELLANT HAS NOT EXPLAINED THE DETAILS OF BOOKS OF ACCOUNTS, EXTRACTS OF WHICH COULD NOT BE TAKEN WHICH WERE VITAL FOR FILING OF RETURN. IN VIEW OF THE SAME, THE AO IS CORRECT IN LEVYING PENALTY U/S.271F. ACCORDINGLY, THE PENALTY ORDER U/S.271F IMPOSING PENALTY OF RS.5,000/ - IS CONFIRMED. 7 . AGGRIEVED FROM THE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE INCOME TAX TRIBUNAL. 8 . LD. AR SUBMITTED THAT THE PENALTY P ROCEEDINGS U/S.271F OF THE ACT WAS BEYOND JURISDICTION AND ILLEGAL. HE ALSO SUBMITTED THAT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE IMPOSING ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 9 THE PENALTY U/S.271F OF THE ACT WAS NOT GIVEN TO THE ASSESSEE, THEREFORE, IT WAS A VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. LD. AR FURTHER SUBMITTED THAT THE BOOKS OF ACCOUNTS /DOCUMENTS WERE NOT GIVEN TO THE ASSESSEE BY THE INCOME TAX DEPARTMENT IN SPITE OF LETTERS GIVEN BY M/S SERA JUDDIN & CO. DATED 15.03.2010 AND 02.08.2010, THEREFORE, THE ASS ESSEE WAS UNABLE TO FILE HIS RETURN OF INCOME AND HE ALSO SUBMITTED THAT THE ORDER PASSED BY THE AO WAS BARRED BY LIMITATION BECAUSE THE PENALTY NOTICE U/S.271F OF THE ACT WAS SERVED ON 18.08.2011, WHICH WAS MORE THAN 45 DAYS OF THE LIMITATION PERIOD. HE ALSO AGITATED THAT NON - COMPLIANCE OF NOTICE U/S.153A(1)(A) OF THE ACT DOES NOT EMPOWER TO THE AO FOR IMPOSING PENALTY U/S.271F OF THE ACT, THEREFORE, PENALTY IS ILLEGAL. LD. AR FURTHER SUBMITTED THAT PENALTY IS NOT A MANDATORY; HOWEVER, IT IS A DIRECTORY. HE FURTHER SUBMITTED THAT THERE WAS A REASONABLE CAUSE U/S.273B OF THE ACT FOR IMMUNITY PROVIDED U/S.273B OF THE ACT CONTAINING REASONABLE CAUSE IN WHICH PENALTY CANNOT BE IMPOSED. LD. AR ALSO PLACED RELIANCE ON THE DECISION OF HONBLE PATNA HIGH COURT IN THE CASE OF LAL SARAF VS. STATE OF BIHAR & ANR., [1999] 235 ITR 116(PATNA) , COPY OF WHICH IS PLACED ON RECORD. 9 . ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF AO AND HE SUBMITTED THAT THE LOWER AUTHORITIES WERE JUSTIFIED TO IMPOSE THE PENALTY U/S.271F OF THE ACT. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 10 NEVER FILED RETURN OF INCOME TILL THE COMPLETION OF ASSESSMENT . IT IS CLEAR FROM THE ORDER OF ASSESSMENT THAT THE ASSESSEE WAS PROVIDED SUFFICIENT OPPORTUNITIES TO COMPLY THE NOTICE ISSUED BY THE AO A ND ALL THE DOCUMENTS WERE ALSO PROVIDED TO THE ASSESSEE WHICH WAS IMPOUNDED DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS, THEREFORE, THE ASSESSEE CANNOT TAKE THE SHELTER OF THE LETTERS PRODUCED BEFORE THE BENCH ON 15.03.2010 & 02.08.2010. HE ALSO REF ERRED TO THE ORDER OF AO IN WHICH THE AO HAS CLEARLY MENTIONED THAT ON 13.08.2010 THE COMPLETE SET OF DOCUMENTS WHICH WERE SEIZED/ IMPOUNDED WERE PROVIDED TO THE ASSESSEE AND ON 31.08.2010 A LETTER WAS ALSO WRITTEN TO THE ASSESSEE STATING THAT, IF ANY DOCU MENT IS LEFT OUT PLEASE INTIMATE TO THE OFFICE AND TAKE THE EXTRACT. HE FURTHER SUBMITTED THAT THE LD. AO PASSED THE PENALTY ORDER U/S.271 F OF THE ACT WITHIN THE STIPULATED TIME AS PER SECTION 275 OF THE ACT FOR PASSING OF ORDER. LD. DR FURTHER SUBMITTED THAT THE AO HAS RIGHTLY PASSED THE ORDER FOR NON - COMPLIANCE OF NOTICE U/S.153A(1)(A) OF THE ACT. LD. DR FURTHER SUBMITTED THAT DIFFERENT PENALTIES HAVE BEEN SPECIFIED FOR DIFFERENT MISTAKES AND THE ASSESSEE HAS NOT COMPLIED THE MANDATORY PROVISIONS OF THE INCOME TAX ACT, THEREFORE, IN TOTALITY OF FACTS OF THE ASSESSEES CASE, THE LOWER AUTHORITIES ARE JUSTIFIED TO IMPOSE THE PENALTY U/S.271F OF THE ACT. ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 11 10 . AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIALS ON RECORD AND SUBMISSIONS OF BOTH THE SIDES, PRIMA FACIE , WE FOUND FROM THE GROUNDS TAKEN BY THE ASSESSEE THAT ALL THE GROUNDS RELATED TO THE LEGALITY OF IMPOSITION OF PENALTY U/S.271F OF THE ACT FOR NON - COMPLIANCE OF THE NOTICE U/S.153A(1)(A) OF THE ACT. A SEARCH AND SEIZURE OPERATION WAS CA RRIED OUT BY THE DEPARTMENT ON 28.05.2008 IN THE OFFICE PREMISES AND RESIDENTIAL PREMISES OF THE M/S SERAJUDDIN & CO. & GROUPS ALONG WITH IN THE CASE OF THE ASSESSEE. THE ASSESSEE IS THE ONE OF THE PRINCIPAL ASSESSEES OF THE GROUP. A NOTICE WAS ISSUED TO T HE ASSESSEE U/S.153A OF THE ACT, HOWEVER, THE ASSESSEE DID NOT TURN UP TO FILE HIS RETURN OF INCOME TILL THE FINALIZATION OF THE ASSESSMENT. ON PERUSAL OF THE ASSESSMENT ORDER, IT WAS NOTICED THAT THE ASSESSEE ASKED THE EXTRACTS OF THE SEIZED DOCUMENTS ON 10.03.2010, WHICH WAS PROVIDED TO THE ASSESSEE. THEREAFTER NOTICE U/S.142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE AND ASSESSEE WAS ASKED TO FILE THE RETURN OF INCOME ALSO. FURTHER THE ASSESSEE WAS GIVEN AMPLE OPPORTUNITY TO COMPLY THE NOTICE AND SUMMONS W HICH WERE ALSO ISSUED TO THE ASSESSEE ON 26.11.2010. THE ASSESSEE WROTE ANOTHER LETTER TO THE REVENUE TO TAKE EXTRACTS OF THE HARD DISC FOR FILING THE RETURN OF INCOME. IT IS CLEAR FROM THE ORDER OF THE AO THAT ON 13.08.2010, THE AO HAS PROVIDED EXTRACT OF THE SEIZED/IMPOUNDED MATERIAL IN THE PRESEN CE OF AUTHORIZED ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 12 PERSON AND AGAIN ON 31.08.2010 A LETTER WAS ALSO WRITTEN TO THE ASSESSEE AND BELONGING TO THE SEARCH GROUP STATING THAT IF ANY DOCUMENT IS LEFT OUT PLEASE DO INTIMATE TO THE OFFICE AND TAKE THE E XTRACT BUT NO ANY LETTER WAS RECEIVED FROM THE ASSESSEES SIDE EXCEPT IN CASE OF ALIZA INTERNATIONAL PVT. LTD. THE AO AGAIN FIXED THE CASE ON 11.10.2010 FOR TAKING EXTRACT OF THE SEIZED CDS/HARD DISCS BUT NO ONE WAS TURNED UP ON THE SAID DATE FOR TAKING T HE EXTRACTS. THE AO COMPLETED THE ASSESSMENT U/S.144 OF THE ACT AFTER CALLING INFORMATION FROM THE VARIOUS RELATED TRANSACTIONS/PARTIES AND IT WAS ALSO NOTICED THAT IN THE NAME OF ASSESSEE THE BANK HAD PAID INTEREST TO THE TUNE OF RS.4,77,141/ - ON FIXED DE POSITS. WE ALSO PERUSED THE LETTERS PRODUCED BEFORE US BY THE LD. AR OF THE ASSESSEE DATED 02.08.2010 WHICH HAS BEEN GIVEN IN CASE OF M/S SEIRAJUDDIN & CO. BEARING PAN ABIFS 3758 G. THE LETTER HAS NOT BEEN FURNISHED BY THE ASSESSEE IN THE INDIVIDUAL CAPACI TY AND WE ALSO NOTICED DIFFERENCE IN DATES MENTIONED IN THE LETTER SUBMITTED BEFORE US REGARDING NOTICE U/S.142(1) OF THE ACT. THE AO HAS MENTIONED THE DATE IN HIS ORDER AS 28.07.2010 WHEREAS THE ASSESSEE HAS SHOWN LETTER DATED 21.07.2010 VIDE HIS LETTER D ATED 02.08.2010. THE ASSESSEE WAS PROVIDED THE COPIES OF SEIZED MATERIALS/DOCUMENTS WHICH WERE IMPOUNDED DURING THE SEARCH PROCEEDINGS AND THE AO ALSO REMINDED TO THE ASSESSEE AS TO INTIMATE THE OFFICE IF ANY DOCUMENTS ARE ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 13 LEFT OUT. BUT IN THIS REGARD HE C OULD NOT PRODUCE ANY LETTER/DOCUMENTS THAT THERE IS ANY PHOTOCOPY OF PAPERS OR DOCUMENTS ARE TO BE TAKEN FROM THE DEPARTMENT, MEANING THEREBY A COMPLETE SET OF DOCUMENTS HAVE BEEN PROVIDED TO THE ASSESSEE. THE ASSESSEE SHOULD HAVE FILED RETURN OF INCOME BU T HE DID NOT DO SO. EVEN THE ASSESSEES TOTAL INCOME DURING THE IMPUGNED ASSESSMENT YEAR WAS MORE THAN THE THRESHOLD LIMITS WHICH IS NOT CHARGEABLE TO THE INCOME TAX ACT. IN VIEW OF THIS ALSO, HE SHOULD HAVE FILED RETURN U/S.139(1) OF THE ACT AND THEIR REL ATED PROVISO, WHICH IS ALSO LACK/ABSENT HERE. IT IS CLEAR FROM THE ORDER OF THE AUTHORITIES BELOW THAT T HE ASSESSEE WAS PROVIDED AMPLE OPPORTUNITIES. THE CONTENTION OF LD. AR IN REGARD TO ORDER PASSED BY THE AO IS BARRED BY LIMITATION, WE REFER TO THE SECT ION 275 OF THE ACT IN WHICH WE OBSERVE THAT THE ORDER SHOULD BE PASSED WITHIN THE STIPULATED TIME AS PER THE CHAPTER XXI OF THE INCOME TAX ACT, NOWHERE IN THE PROVISIONS THERE IS ANY REFERENCE REGARDING SERVICE TO THE ASSESSEE. UNDER THE PROVISIONS OF INCOME TAX ACT, WHERE THERE IS QUESTION OF SERVICE, THERE HAS BEEN SPECIFIED FOR SERVICE ONLY AND WHERE THERE IS QUESTION OF PASSING , IT HAS BEEN SPECIFIED ONLY TO THE EXTENT OF PASSING. IN SECTION 275 OF THE ACT, NOWHERE IT IS MENTIONED THAT THE ORD ER SHOULD BE SERVED ON THE ASSESSEE WITHIN THE STIPULATED TIME. THE ANOTHER CONTENTION OF LD. AR THAT THE AO CANNOT LEVY PENALTY U/S.153(A)(1)(A) ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 14 OF THE ACT, HOWEVER, ON PERUSAL OF THE SECTION 153A(1)(A), IT IS CLEAR THAT THE AO SHALL ISSUE NOTICE U/S.153A (1)(A) OF THE ACT TO A PERSON REQUIRING HIM TO FURNISH RETURN OF INCOME WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE. FOR COMPLETENESS OF THE ORDER, WE MAY REPRODUCE THE PROVISIONS OF SECTION 153A(1)(A) OF THE ACT, WHICH READ AS UNDER : - [ ASSESSMEN T IN CASE OF SEARCH OR REQUISITION. 153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL ( A ) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS [AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS] REFERRED TO IN CLAUSE ( B ), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PA RTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 ; 11 . FURTHER SECTION 271F OF THE ACT EMPOWERS THE AO TO LEVY PENALTY FOR A SUM OF RS.5000/ - IF A PERSON FAILS TO FILE HIS RETURN OF INCOME WITHIN THE STIPULATED TIME. FOR MORE CLARITY, WE WOULD LIKE TO REPRODUCE THE PROVISIONS OF SECTION 271F OF THE ACT, WHICH READ AS UNDER : - [ PENALTY FOR FAILURE TO FURNISH RETURN OF INCOME. 271F. IF A PERSON WHO IS REQUIRED TO FURNISH A RETURN OF HIS INCOME, AS REQUIRED UNDER SUB - SECTION (1) OF SECTION 139 OR BY THE PROVISOS TO THAT SUB - SECTION, FAILS TO FURNISH SUCH RETURN BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR, THE ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY, BY WAY OF PENALTY, A SUM OF FIVE THOUSAND RUPEES:] ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 15 [ PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY TO AND IN RELATION TO THE RETURN OF INCOME REQUIRED TO BE FURNISHED FOR ANY ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 2018.] 12 . FROM THE READI NG OF THE ABOVE PROVISIONS OF THE ACT, WE ARE OF THE OPINION THAT THE CONTENTION OF THE ASSESSEE THAT THE AO IS NOT EMPOWERED TO ISSUE NOTICE U/S.153A(1)(A) OF THE ACT AND CANNOT LEVY PENALTY U/S.271F OF THE ACT, IS NOT ACCEPTED AS IT IS MANDATORY AND NO D IRECTORY. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE CASE LAW RELIED ON BY THE AR OF THE ASSESSEE IS NOT APPLICABLE IN THE PRESENT CASE. WE ALSO MAKE IT CLEAR THAT THE CASE LAW RELIED ON BY THE AR OF THE ASSESSEE RELATES TO SECTION 276CC OF T HE ACT WHICH RELATES TO PROSECUTION, PENALTY AND PROSECUTION BOTH ARE SEPARATE IN NATURE, WHICH CANNOT BE EQUATED WITH. 13 . WITH REGARD TO THE CONTENTION OF LD. AR THAT THERE WAS A REASONABLE CAUSE U/S.273B OF THE ACT FOR IMMUNITY PROVIDED U/S.273B OF TH E ACT CONTAINING REASONABLE CAUSE IN WHICH PENALTY CANNOT BE IMPOSED. FROM THE ABOVE OBSERVATIONS AND ON CAREFUL PERUSAL OF THE ORDERS OF AUTHORITIES BELOW, SPECIFICALLY THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSEE HAS BEEN GIVEN AMPLE OPPORTUNITIES OF HEARING AND THE AO HAS MENTIONED THE DATES WITH REGARD TO OPPORTUNITY GIVEN TO THE ASSESSEE TO REPRESENT HIS CASE, HOWEVER, THE ASSESSEE HAS NOT COMPLIED THE NOTICE ISSUED BY THE AO EVEN AFTER ISSUANCE OF REMINDERS BY THE AO ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 16 TO THE ASSESSEE, THE ASSESSEE HAS NOT BOTHERED TO COMPLY THE SAME, WHICH ENABLING THE ASSESSEE TO FRAME THE ASSESSMENT U/S.144 OF THE ACT. ACCORDINGLY, THE ABOVE CONTENTION OF THE LD. AR OF THE ASSESSEE THAT THE ASSESSEE GETS IMMUNITY FROM THE PROVISIONS OF SECTION 273B OF THE ACT, IS REJECTED. THUS, ALL THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL FOR ASSESSMENT YEAR 2008 - 2009 ARE DISMISSED. 14 . SINCE, THE GROUNDS RAISED IN OTHER APPEALS UNDER CONSIDERATION ARE SIMILAR, THEREFORE, OUR OBSERVATIONS MADE IN THE APPEAL OF ONE OF THE ASSESSEE - MD. MOFAZZALUR RAHMAN FOR ASSESSMENT YEAR 2008 - 2009 IN ITA NO.29/CTK/201 3 , SHALL APPLY MUTATIS MUTANDIS TO THE GROUNDS RAISED IN THE APPEALS OF OTHER ASSESSEES I.E. ITA NO S .30/CTK/201 4, 575&576/CTK/201 3 , 577&578/CTK/2013, 15/CTK/2014 AND 16&17/CTK/2014. ACCORDINGLY, THE SE APPEAL S OF THE ASSESSEE ARE ALSO DISMISSED. 15 . IN THE RESULT, APPEALS OF THE ALL THE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 / 10 / 201 9 . SD / - ( C.M.GARG ) SD/ - ( L.P.SAHU ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 14 / 10 /201 9 PRAKASH KUMAR MISHRA, SR.P.S. ITA NOS.29&30/CTK/2014, 575&576/CTK/201 3 , 577&578/CTK/2013, 15 /CTK/2014 AND 16&17/CTK/2014 17 / COPY OF THE ORDER FORWARDED TO : / BY ORDER , ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//