The Joint Sub-Registrar, Distt. Gurdaspur V. The Director of Income-tax, Chandigarh

ITA 300/ASR/2012

• Counselvise Citation: 30020914 RSA 2012
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 29-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 19-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AMRIK SINGH
• Keywords: Opportunity of being heard; Reasonable cause; Ignorance of law

Judgement Text

ITA NO.300(ASR)/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO. 300(ASR)/2012 ASSESSMENT YEAR:2008-09 PAN :ABQPS0942J THE JOINT SUB REGISTRAR, VS. DIRECTOR OF INCOME T AX (CIB) FATEHGARH CHURIAN, CHANDIGARH. DISTT. GURDASPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:NONE RESPONDENT BY:SH.AMRIK SINGH, DR DATE OF HEARING: 29/07/2013 DATE OF PRONOUNCEMENT:07/08/2013 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), AMRITSAR, DATED 22.05.2012 FOR THE ASSESSMENT YEA R 2008-09. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER OF THE LD. CIT(A) CONFIRMING TH E PENALTY OF RS.36,800/- LEVIED UNDER SECTION 271FA OF THE I.T .ACT,1961 IN CONNECTION WITH A.Y. 2008-09, IS ILLEGAL, INVALID AND VOID AB INITIO AND THE PENALTY LEVIED MAY BE CANCELLED. ITA NO.300(ASR)/2012 2 2. THAT THE LD. CIT(A) DID NOT APPRECIATE THAT NO REAS ONABLE OPPORTUNITY OF BEING HEARD WAS ALLOWED AND AS SUCH THE ORDER OF LD. CIT(APPEALS) THEREBY CONFIRMING THE PENALTY IS LIABLE TO BE CANCELLED. 3. THAT THE AUTHORITIES BELOW DID NOT APPRECIATE THAT THIS CASE DOES NOT FALL WITHIN THE MISCHIEF OF SECTION 271FA OF TH E ACT AND AS SUCH THE ORDER LEVYING PENALTY OF RS.36,800/- U/S 2 71FA SHOULD HAVE BEEN CANCELLED. 4. THAT THE LD. CIT(A) HAS MISERABLY FAILED TO APPRECI ATE THAT THE FILLER WAS INNOCENT AND WAS UNAWARE OF THE IMPLICAT ION OF PROVISIONS OF SECTION 285BA OF THE ACT AND AS SUCH THERE WAS REASONABLE AND SUFFICIENT CAUSE FOR NOT COMPLYING WITH THE PROVISIONS OF SECTION 285BA OF THE ACT. AS SUCH THE LD. CIT(A) SHOULD HAVE CANCELLED THE PENALTY LEVIED U/S 271FA OF THE ACT AS THERE WAS REASONABLE AND SUFFICIENT CAUSE WHICH PREVENTED THE FILLER FROM COMPLYING WITH THE PROVISIONS OF LA W. 5. THAT THE FILLER FILED THE RETURN VOLUNTARILY AND TH E ORDER LEVYING PENALTY U/S 271FA OF THE ACT IS BAD IN LAW AND IS L IABLE TO BE CANCELLED. 6. THAT THE LD. CUT(A) DID NOT APPRECIATE THAT IT WAS A TECHNICAL DEFAULT FOR WHICH NO PENALTY SHOULD HAVE BEEN LEVIE D. AS SUCH, THE ORDER CONFIRMED BY THE LD. CIT(A) MAY BE CANCEL LED. 7. ANY OTHER GROUND OF APPEAL WHICH MAY BE URGED AT TH E TIME OF HEARING OF THE APPEAL. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE WAS REQUIR ED TO FILE ANNUAL INFORMATION RETURN FOR THE IMPUGNED YEAR IN RESPECT OF SPECIFIED FINANCIAL TRANSACTIONS IN FORM NO.61A AS PER RULE 116E OF INC OME TAX RULES, 1962 IN RESPECT OF TRANSACTIONS OF PURCHASE OR SALE OF I MMOVABLE PROPERTY VALUED AT RS.30 LAKHS OR MORE ON OR BEFORE THE DUE DATE F OR FILING THE ANNUAL INFORMATION RETURN ON 31 ST AUGUST,2008, WHICH IN FACT, WAS FILED ON 03.09.2009 LATE BY 368 DAYS. AS OBSERVED BY THE A. O., THE ASSESSEE HAS FILED RETURN FOR THE FINANCIAL YEAR 2004-05 ON 28.0 2.2006, FOR THE FINANCIAL ITA NO.300(ASR)/2012 3 YEAR 2005-06 ON 17.7.2007 AND FOR THE FINANCIAL YEA R 2006-07 ON 31.8.2007. A SHOW CAUSE WAS GIVEN TO THE ASSESSEE, WHICH WAS R EJECTED BY THE A.O. VIDE PARA 7 OF HIS ORDER. THE SAID PARA FOR THE SAK E OF CONVENIENCE IS REPRODUCED AS UNDER: 7. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE FILER AND PERUSED THE RELEVANT RECORD. THE EXPLANATION OF TH E FILER IS NOT ACCEPTABLE DUE TO THE FOLLOWING: I) THE PLEA TAKEN BY THE FILER THAT THE AIRS WERE FILE D WITH THE ITO PATHANKOT FROM TIME TO TIME IS NOT ACCEPTAB LE BECAUSE THE ITO, PATHANKOT IS NOT THE PRESCRIBED AUTHORITY TO RECEIVE THE AIRS. THESE ARE REQUIRED TO BE FURNISHED WITH NSDL. THE FILER ITSELF HAS SUBMITTED THE RETURNS WITH THE NSDL AND THE DELAY AS MENTIONED I N THE FOLLOWING PARAGRAPHS HAS BEEN COMPUTED WITH REFEREN CE TO THE DATES OF SUBMISSIONS OF AIRS WITH NSDL. FURTHERMORE THIS PLEA OF THE FILER IS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE THAT IT HAS BEEN FILING THE AI R WITH ITO PATHANKOT DUE TO IGNORANCE. THEREFORE, THE EXPLANATION OFFERED IS OF NO HELP TO THE FILER. II) FREQUENT TRANSFERS OF TEHSILDAR/NAIN TEHSILDARS IS NOT SOMETHING THIS OFFICE CAN HELP. IN ANY CASE THE PREPARATION AND SUBMISSION OF AIR IS TO BE DONE BY 31 ST AUGUST OF THE SUBSEQUENT YEAR, THEREFORE, THE FILE R GETS FULL 5 MONTHS TO DO SO. EVEN IF THERE IS FREQUENT TRANSFER OF OFFICERS THE AIR COULD HAVE BEEN FILED IN THESE 5 MONTHS OR WITH THE LITTLE BIT OF DELAY. MOREOVER, EVEN IF THERE IS A FREQUENT TRANSFER OF TEHSILDARS/NAIB TEH SILDARS THE OFFICE STAFF IS ALWAYS IN A POSITION TO PREPARE AND SUBMIT THE AIR. STILL FURTHER THE WORK OF REGISTRAT ION OF PROPERTIES AND OTHER ADMINISTRATIVE JOBS CAN BE DON E, EVEN WITH THE FREQUENT TRANSFERS OF OFFICERS, THER E IS NO REASON WHY THE FILING OF AIR WHICH IS ONLY REQUIRED TO BE DONE ANNUALLY, CANNOT BE DONE IN TIME. III) THEREFORE, THE EXPLANATION FILED BY THE FILER IS NO T ACCEPTABLE ON BOTH COUNTS. ITA NO.300(ASR)/2012 4 2.1. ACCORDINGLY, THE AO LEVIED PENALTY UNDER SECTI ON 271FA BEING THE RATE OF RS. 100/- PER DAY OF THE DEFAULT AT RS.36,8 00/-. THE SAID PENALTY WAS CONFIRMED BY THE LD. CIT(A). 3. NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF VALID SERVICE OF NOTICE. HOWEVER, WE ARE PROCEEDING TO DECIDE THE IS SUE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 4. THE LD. DR ARGUED THAT THE PRESENT ISSUE IS IDEN TICAL TO THE ISSUE DECIDED IN THE CASE OF THE SUB REGISTRAR, BARIWALA, DISTT. MUKTSAR AND OTHERS VS. DIRECTOR OF INCOME TAX (CIB), CHANDIGARH , WHICH HAS BEEN DECIDED BY THE ITAT, AMRITSAR BENCH VIDE ORDER DA TED 30/05/2013 IN I.T.A. NOS.137 TO 140(ASR)/2013 FOR THE ASSESSMENT YEARS:2006-07 TO 2009- 2010. THEREFORE, HE PRAYED TO DECIDE THE ISSUE BEI NG ON IDENTICAL FACTS IN THE PRESENT APPEAL, ON THE BASIS OF THE DECISION OF ITA T, AMRITSAR BENCH IN THE CASE OF THE SUB REGISTRAR, BARIWALA, DISTT. MUKTSAR AND OTHERS VS. DIRECTOR OF INCOME TAX (CIB), CHANDIGARH (SUPRA). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE FACTS IN THE PRESENT APPEAL ARE IDENTICAL TO TH E FACTS IN THE CASE OF THE SUB REGISTRAR, BARIWALA, DISTT. MUKTSAR AND OTHERS VS. DIRECTOR OF INCOME TAX (CIB), CHANDIGARH, (SUPRA), WHICH HAS BEEN DECI DED BY THIS BENCH IN I.T.A. NOS.137 TO 140(ASR)/2013 FOR THE ASSESSMENT YEARS:2006-07 TO 2009- ITA NO.300(ASR)/2012 5 2010, VIDE ORDER DATED 30/05/2013 AND OUR ORDER THE REIN SHALL IDENTICALLY BE APPLICABLE IN THE PRESENT APPEAL. FOR THE SAKE OF C ONVENIENCE, WE REPRODUCE THE RELEVANT PART OF THE SAID ORDER IN PARA 15 TO 15.6 AS UNDER: 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. IN THE PRESENT CASE, THE MAIN ARGUMENT O F THE LD. COUNSEL FOR THE ASSESSEE, MR. P.N.ARORA WAS THAT THE ASSESSEE WAS IGNORANT OF LAW I.E. ABOUT SECTION 285BA OF THE ACT. HE ARGUED THA T THE INCOME TAX AUTHORITY HAS NOT SERVED ANY NOTICES ON THE ASSESS EE AND WHEN THE NOTICE WAS SERVED, THE ASSESSEE FILED THE ANNUAL I NFORMATION RETURN (IN SHORT AIR) AND NO PENALTY SHOULD BE ACCORDINGLY LEVIED UPON THE ASSESSEE. IN THIS REGARD, WE ARE OF THE VIEW ON PE RUSAL OF SECTION 285BA OF THE ACT, WHICH WAS INTRODUCED BY THE FINA NCE (NO.2) ACT, 2004 W.E.F.1.4.2005, IT IS NOT THE CASE THAT THIS SECTION HAS BEEN INTRODUCED FOR THE FIRST TIME BY FINANCE (NO.2) AC T, 2004. PRIOR TO ITS SUBSTITUTION, SECTION 285BA WAS INSERTED BY THE F INANCE ACT, 2003 W.E.F. 1.4.2004, WHERE ANY ASSESSEE WHO ENTERS INT O ANY FINANCIAL TRANSACTION, AS MAY BE PRESCRIBED, WITH ANY OTHER PERSON, SHALL FURNISH, WITHIN THE PRESCRIBED TIME, AN ANNUAL INF ORMATION RETURN IN SUCH FORM AND MANNER, AS MAY BE PRESCRIBED IN RESP ECT OF SUCH FINANCIAL TRANSACTION ENTERED INTO BY HIM DURING ANY PREVIOUS YEAR. RULE 114A TO 114E PRESCRIBES SUCH RETURN TO BE FU RNISHED IN FORM NO.61A AND SHALL BE VERIFIED IN THE MANNER INDICAT ED THEREIN. AT ITEM NO.6 OF THE SAID RULE, RETURN SHALL BE FURNISHED ON OR BEFORE 31 ST AUGUST, IMMEDIATELY FOLLOWING THE FINANCIAL YEAR I N WHICH THE TRANSACTION IS REGISTERED OR RECORDED. SECTION 285 BA(5) IS REPRODUCED FOR THE SAKE OF CLARITY AS UNDER: SECTION 285BA(5) WHERE A PERSON WHO IS REQUIRED TO FURNISH AN ANNU AL INFORMATION RETURN UNDER SUB-SECTION (1) HAS NOT FURNISHED THE SAME WITHIN THE PRESCRIBED TIME, THE PRESCRIBED INCOME-TAX AUTHORI TY MAY SERVE UPON SUCH PERSON A NOTICE REQUIRING HIM TO FURNISH SUC H RETURN WITHIN A PERIOD NOT EXCEEDING SIXTY DAYS FROM THE DATE OF S ERVICE OF SUCH NOTICE AND HE SHALL FURNISH THE ANNUAL INFORMATION RETURN WITHIN THE TIME SPECIFIED IN THE NOTICE.] 15.1. THE LD. COUNSEL FOR THE ASSESSEE HAS TAKEN T HE SHELTER OF SECTION 285BA(5) OF THE ACT, WHICH IS REPRODUCED HEREINABO VE THAT THE ITA NO.300(ASR)/2012 6 INCOME TAX AUTHORITY ARE UNDER A MANDATE TO SERVE THE NOTICE TO THE ASSESSEE IN CASE ANNUAL INFORMATION RETURN IS NOT FILED FOR YEARS TOGETHER AFTER INSERTION OF THE SECTION BY THE FI NANCE (NO.2) ACT, 2003 W.E.F. 1.4.2004 INITIALLY AND THEREAFTER BY FINANC E (NO.2) ACT, 2004 W.E.F. 1.4.2005 MENTIONED HEREINABOVE. WHEREAS THI S IS NOT A CASE, THE WORDS USED BY THE STATUTE IN SECTION 285BA(5) GIV ES OPTION FOR THE INCOME TAX AUTHORITY TO SERVE NOTICE WHICH MAY OR MAY NOT BE SERVED UPON. THE WORD MAY USED IN SECTION 285BA(5) CLEA RLY INDICATES THE OPTION FOR THE INCOME TAX AUTHORITY. IT IS NOT OBL IGATORY ON THE INCOME TAX AUTHORITY TO SERVE SUCH NOTICE. THEREFO RE, INTERPRETATION HAS TO BE STRICTLY CONSTRUED. THERE IS NO AMBIGUIT Y IN THE SAME. THE COURTS CANNOT ADD OR AMEND AND BY CONSTRUCTION CAN NOT MAKE UP THE DEFICIENCIES IN THE ACT. IT IS CONTRARY TO ALL RUL ES OF CONSTRUCTION UNLESS THE PROVISION AS IT STANDS IS MEANINGLESS OR HAVIN G A DOUBTFUL MEANING. WE ARE NOT ENTITLED TO USURP LEGISLATIV E FUNCTION DISGUISE OF INTERPRETATION. THE COURTS ARE MEANT TO INTERPRET LAW, CANNOT LEGISLATE IT. OUR VIEWS FIND SUPPORTS FROM THE JUDGMENT OF H ONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND OTHERS VS. DHARMENDRA TEXTILES PROCESSORS AND OTHERS REPORTED IN (2008) 306 ITR 277. IN THE PRESENT CASE, ISSUANCE AND SERVICE OF NOTICE UNDER SECTION 285BA(5) IS NOT OBLIGATORY ON THE INCOME TAX AUTHO RITY. THEREFORE, ARGUMENTS MADE BY THE LD. COUNSEL FOR THE ASSESSEE , MR. P.N.ARORA, ARE REJECTED TO THIS EXTENT. 15.2. AS REGARDS THE NOTICE DATED 20.11.2006 ISSUE D BY CIT (CIB), CHANDIGARH TO THE ASSESSEE, IT IS SURPRISING THAT HOW THE SAID NOTICE HAS BEEN IN THE POSSESSION OF THE ASSESSEE. NOTHIN G HAS BEEN BROUGHT ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE IN T HIS RESPECT. REASONABLE PRESUMPTION IS MADE THAT THIS NOTICE HA S ALSO BEEN SERVED UPON THE ASSESSEE DATED 20.11.2006 AND WHICH HAS NOT BEEN COMPLIED WITH. AS PER REMAND REPORT, AS ARGUED BY THE LD. D R AND ALSO RECORD OF DIT(CIB) WHICH HAS BEEN VERIFIED BY THE LD. COU NSEL THAT VARIOUS NOTICES HAVE BEEN SERVED I.E. ON 20.11.2006, 04.04 .2007, 11.01.2008, 12.12.2008, 21.05.2009, 20.01.2010 & 12.03.2010. A LL THE SAID SEVEN NOTICES REMAINED UN-COMPLIED WITH, AT THE LAST KN OWN ADDRESS GIVEN BY THE ASSESSEE WHICH IS AS UNDER: SUB REGISTRAR BARIWALA MUKTSAR ITA NO.300(ASR)/2012 7 15.3. PENALTY ORDER DATED 22.12.2010 HAS BEEN SERV ED ON THE ASSESSEE IS NOT IN DISPUTE AGAINST WHICH THE ASSES SEE FILED APPEAL ON 31.01.2011 BEFORE THE LD. CIT(A), BATHINDA. THE L D. CIT(A)S ORDER DATED 14.12.2012 HAS ALSO BEEN SERVED UPON THE ASS ESSEE ON 09.01.2013 AT THE SAME ADDRESS HAS ALSO NOT BEEN D ISPUTED BY THE LD. COUNSEL FOR THE ASSESSEE. THEREFORE, THE ARGUMENT S MADE BY THE LD. COUNSEL FOR THE ASSESSEE THAT ONE NOTICE DATED 20. 11.2006 HAVING MENTIONED WRONG DISTRICT IS PART OF THE PAPER BOO K CANNOT PROVE THAT THE NOTICE DATED 20.11.2006 AND OTHER SIX NOTICES AS MENTIONED HEREINABOVE HAVE NOT BEEN ISSUED AND SERVED ON TH E ASSESSEE. THEREFORE, THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSE IS REJECTED THAT NO NOTICE U/S 285BA(5) HAS BEEN ISSUED/SERVED UPON THE ASSESSEE EVEN IN REMAND PROCEEDINGS WHEN ALL NOTICES WERE C ONFRONTED. THEREFORE, THE RELIANCE PLACED BY THE LD. COUNSEL FOR THE ASSESSEE ON THE DECISIONS OF VARIOUS COURTS OF LAW ON SERVICE OF NOTICE CANNOT BE MADE APPLICABLE IN THE PRESENT CASE AND CANNOT HEL P THE ASSESSEE. 15.4. AS REGARDS THE DECISION OF THE HONBLE GUJAR AT HIGH COURT IN THE CASE OF PATAN NAGRIK SAHAKARI BANK LTD. VS. DI RECTOR OF INCOME TAX (SUPRA), THE LD. CIT(A) HAS TAKEN FULL COGNIZA NCE OF THE SAID DECISION AND HAS DIRECTED THE CIT(CIB) TO RECOMPUT E THE DEFAULT W.E.F. 01.12.2006 INSTEAD OF 31.08.2006 FOR THE ASSESSMEN T YEAR 2006-07 AND THEREAFTER IN THE FOLLOWING YEARS HAS RIGHTLY CONFIRMED THE DEFAULT BEING THE FIRST ADVISORY LETTER ISSUED ON 20.11.20 06 IN VIEW OF OUR FINDINGS HEREINABOVE. 15.5. AS REGARDS THE REASONABLE CAUSE, AS MENTIONE D HEREINABOVE, THE LD. CIT(A) HAS TAKEN COGNIZANCE IN THE CASE O F PATAN NAGRIK SAHAKARI BANK LTD. VS. DIRECTOR OF INCOME TAX (SUP RA), DECIDED BY THE HONBLE GUJARAT HIGH COURT. BUT AT THE SAME TIME, WE MAY REFER THAT IGNORANCE OF LAW IS NOT AN EXCUSE, AS PER OUR FIND INGS HEREINABOVE AND ALSO AS PER DECISION OF THE HONBLE GUJRAT HIG H COURT IN THE CASE OF PATTAN NAGRIK SAHAKARI BANK LTD. (SUPRAAND THE SUB REGISTRAR CANNOT BE AN EXCEPTION TO THE LAW LAID DOWN BY TH E HONBLE SUPREME COURT MENTIONED HEREINABOVE. IT IS SETTLED LAW THA T IGNORANCE OF LAW IS OF NO EXCUSE, AS DECIDED BY THE HONBLE SUPREME CO URT IN THE CASE OF MOTILAL PADAMPAT SUGAR MILLS CO. LTD. VS. STATE OF UTTAR PRADESH & ORS REPORTED IN (1979) 118 ITR 326 (SC). 15.6. IN VIEW OF THE ABOVE DISCUSSIONS, ALL THE G ROUNDS RAISED BY THE ASSESSEE IN ITA NOS. 137 TO 140(ASR)/2013 ARE DISM ISSED. ITA NO.300(ASR)/2012 8 6. IN VIEW OF OUR FINDINGS HEREINABOVE AND OUR DECISIO N IN I.T.A. NOS.137 TO 140(ASR)/2013 FOR THE ASSESSMENT YEARS:2 006-07 TO 2009-2010 (SUPRA) REPRODUCED HEREINABOVE, WHICH DECISION IS IDENTICALLY APPLICABLE IN THE PRESENT APPEAL AND ACCORDINGLY ALL THE GROUNDS RAISED BY THE ASSESSEE IN THE PRESENT APPEAL ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.300(ASR)/2012 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7TH AU GUST, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 7TH AUGUST, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:THE SUB REGISTRAR, FATEHGARH CHURIAN, DISTT. GURDIASPUR. 2. THE DIRECTOR OF INCOME (CIB), CHANDIGARH. 3. THE CIT(A), ASR. 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.