Pillala Visshnu Vindana, Visakhapatnam V. THE ACIT, Visakhapatnam

ITA 31/VIZ/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6596 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 27-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSWAMY
• Keywords: Search and seizure
• Section: 273B; 143(3); 142(1); 153A; 132

Judgement Text

ITA NO.30/VIZAG/2016 PILLALA VISHNU VANDANA, VSKP 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.30 & 31/VIZAG/2016 ( / ASSESSMENT YEAR: 2012-13 & 2013-14) PILLALA VISHNU VANDANA, VISAKHAPATNAM VS. ACIT, CENTRAL CIRCLE - 2, VISAKHAPATNAM [PAN: ACSPP8504C ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI G. GURUSWAMY, DR / DATE OF HEARING : 02.01.2017 / DATE OF PRONOUNCEMENT : 06.01.2017 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST THE ORDER OF THE CIT(A)-3, VISAKHAPATNAM DATED 21.1 2.2015 FOR THE ASSESSMENT YEARS 2012-13 & 2013-14, CONFIRMING LEVY OF PENALTY U/S 271(1)(B) R.W.S. 274 OF THE INCOME TAX ACT, 1961 (H EREINAFTER CALLED AS ITA NO.30/VIZAG/2016 PILLALA VISHNU VANDANA, VSKP 2 'THE ACT'). SINCE, THE FACTS ARE IDENTICAL AND ISS UES ARE COMMON, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED-OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THERE WAS A SEARCH AND SEIZURE ACTION IN THE CASE OF M/S. GAYATRI CONSTRUCTIONS ON 20.12.2012. THE ASSESSEE WAS ALSO SUBJECTED TO SEARCH U/S 132 OF TH E ACT. CONSEQUENTLY, THE ASSESSMENT PROCEEDINGS U/S 153A O F THE ACT WAS INITIATED. IN RESPONSE TO NOTICE U/S 153A OF THE A CT, THE ASSESSEE FILED E RETURNS FOR THE ASSESSMENT YEAR 2007-08 TO ASSE SSMENT YEAR 2013- 14. SUBSEQUENTLY, NOTICES U/S 142(1) & 143(2) OF T HE ACT WERE ISSUED CALLING FOR CERTAIN INFORMATION IN CONNECTION WITH THE ASSESSMENT PROCEEDINGS. THE ASSESSEE NEITHER APPEARED BEFORE THE A.O. NOR FURNISHED ANY INFORMATION AS REQUIRED BY THE A.O. ACCORDINGLY, THE A.O. INITIATED PENALTY PROCEEDINGS U/S 271(1)(B) OF THE ACT. HOWEVER, THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 153A OF THE ACT FOR THE ASSESSMENT YEARS 2007-08 TO 2013-14. 4. IN RESPONSE TO PENALTY NOTICE, THE ASSESSEE FILE D A REPLY AND SUBMITTED THAT NON-ATTENDANCE ON THE DATE OF HEARIN G IS NOT INTENTIONAL, AS SHE WAS BUSY IN COLLECTING INFORMATION SOUGHT BY THE A.O. IN CONNECTION WITH THE ASSESSMENT PROCEEDINGS. THE AS SESSEE FURTHER SUBMITTED THAT THE A.O. HAS SOUGHT HUGE INFORMATION FOR A PERIOD OF 7 ITA NO.30/VIZAG/2016 PILLALA VISHNU VANDANA, VSKP 3 YEARS, AS SUCH SHE COULD NOT ABLE TO GATHER ALL THE INFORMATION WITHIN THE TIME GIVEN IN THE NOTICE. HOWEVER, THE FACT IS THA T SHE HAD COMPLIED WITH ALL THE INFORMATION SOUGHT BY THE A.O. AND THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT AND ACCORDINGLY, LEVY OF PENALTY FOR INITIAL FAILURE TO ATTEND FOR HEARING IS UNJUSTIFIED. THE A.O. AFTER CONSIDERING THE EXPLAN ATIONS FURNISHED BY THE ASSESSEE, HELD THAT THE ASSESSEE FAILED TO APPEAR O N THE DATE OF HEARING AND ALSO FAILED TO SEEK ADJOURNMENT. THE A.O. FURT HER HELD THAT THE ASSESSEE HAS NOT OFFERED ANY EXPLANATIONS FOR NOT A PPEARING ON THE DATE FIXED FOR HEARING, THEREFORE, OPINED THAT THE ASSES SEE HAS NOT COMPLIED WITH STATUTORY NOTICES AND HENCE, SHE IS LIABLE TO PAY PENALTY FOR FAILURE TO COMPLY WITH THE NOTICES ISSUED U/S 143(2) & 142( 1) OF THE ACT. ACCORDINGLY, LEVIED PENALTY U/S 271(1)(B) OF THE AC T, FOR EACH SUCH FAILURE FOR THE ASSESSMENT YEARS 2007-08 TO 2013-14 . 5. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. THE ASSESSEE FURT HER SUBMITTED THAT THE A.O. WAS NOT CORRECT IN LEVYING PENALTY U/S 271 (1)(B) OF THE ACT AS SHE HAD COOPERATED WITH THE A.O. FOR COMPLETION OF ASSESSMENT, WHICH IS EVIDENT FROM THE FACT THAT THE ASSESSMENT ORDER IS PASSED U/S 143(3) R.W.S. 153A OF THE ACT. THE ASSESSEE FURTHER SUBMI TTED THAT THE A.O. ITA NO.30/VIZAG/2016 PILLALA VISHNU VANDANA, VSKP 4 HAS ISSUED ALL THE NOTICES WITH A SHORT PERIOD OF 7 DAYS TO 15 DAYS TO FURNISH HUGE INFORMATION FOR A PERIOD OF 7 YEARS. SINCE, THE INFORMATION CALLED FOR BY THE A.O. IS VOLUMINOUS, SHE COULD NOT GATHER ALL THE INFORMATION WITHIN A SPAN OF SHORT PERIOD GIVEN IN THE NOTICE AND HENCE COULD NOT APPEAR ON THE DATE FIXED FOR HEARING, THE REFORE, REQUESTED TO DELETE PENALTY LEVIED U/S 271(1)(B) OF THE ACT. IN SUPPORT OF HER CONTENTION RELIED UPON THE FOLLOWING JUDGEMENTS: 1) SWARNABEN M. KHANNA & ORS VS. DCIT (2010) 132 TTJ 0 001(UO) AHD TRIB. 2) AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ADIT (2008) 115 TTJ 0419 AHD TRIB 3) KARNAVATI CIT(A), RAJAHMUNDRY AIR CONDITINERS (P) L TD VS. ITO (2012) 32 CCH AHD. TRIB. 4) POLE STAR SECURITIES LTD. VS. ACIT (2014) 40 CCH 03 74 DEL TRIB. 6. THE CIT(A) AFTER CONSIDERING THE EXPLANATIONS FU RNISHED BY THE ASSESSEE, HELD THAT A MERE NON-COMPLIANCE OF INITIA L NOTICES WITHOUT A DIFFERENT RECOURSE TAKEN BY THE A.O. DOES NOT WARRA NT LEVY OF PENALTY U/S 271(1)(B) OF THE ACT. THE INTENTION FOR NON-COMPLI ANCE MUST PERSIST AND THAT ALONE CAN GIVE INFERENCE TO THE ASSESSING OFFI CER FOR LEVYING PENALTY. IN THE INSTANT CASE, THOUGH THERE WAS INITIAL FAILU RE ON THE PART OF THE ASSESSEE FOR COMPLIANCE OF NOTICES, THE PROCEEDINGS WERE COMPLETED U/S 143(3) OF THE ACT AFTER SUPPLYING FULL INFORMATION TO THE SATISFACTION OF THE A.O., THEREFORE, THE NON-COMPLIANCE WILL BECOME TECHNICAL AND NON- SERIOUS IN SO FAR AS ASSESSMENT PROCEEDINGS U/S 143 (3) OF THE ACT. WITH ITA NO.30/VIZAG/2016 PILLALA VISHNU VANDANA, VSKP 5 THESE OBSERVATIONS, DIRECTED THE A.O. TO DELETE PEN ALTY LEVIED IN CASES WHERE THE A.O. HAS GIVEN 8 DAYS TIME FOR APPEARANCE . HOWEVER, IN THE CASES WHERE THE A.O. HAS GIVEN 26 DAYS TIME, THE CI T(A) OPINED THAT THE ASSESSEE FAILED TO OFFER ANY EXPLANATIONS FOR NOT A PPEARING ON THE DATE FIXED FOR HEARING AND HENCE, THE A.O. WAS RIGHT IN LEVY OF PENALTY U/S 271(1)(B) OF THE ACT. AGGRIEVED BY THE CIT(A) ORDE R, THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. A.R. FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) IS NOT JUSTIFIED IN PARTLY SUSTAINING PENALTY LEVIED U/S 2 71(1)(B) OF THE ACT FOR THE ASSESSMENT YEARS 2012-13 AND 2013-14, AS THE AS SESSEE HAS EXPLAINED BEFORE THE A.O., THE REASONS FOR NON-APPE ARANCE AS ON THE DATE OF HEARING. THE A.R. FURTHER SUBMITTED THAT T HE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEES CASE FALLS WITHIN THE SCOPE OF SECTION 273B OF THE ACT, AS SUCH LEVY OF PENALTY IS NOT WARRANTED. THE LD. A.R. FURTHER DREW OUR ATTENTION TO THE DECI SION OF COORDINATE BENCH OF ITAT, VISAKHAPATNAM IN ASSESSEES HUSBAND CASE IN ITA NO.81/VIZAG/2016 DATED 26.8.2016 AND SUBMITTED THAT UNDER SIMILAR SET OF FACTS, THE ITAT HELD THAT THE EXPLANATIONS OFFER ED BY THE ASSESSEE THAT SHE COULD NOT ATTEND ON THE DATES OF HEARING B ECAUSE OF INSUFFICIENT TIME GIVEN BY THE A.O. TO COLLECT VOLUMINOUS INFORM ATION APPEARS TO BE REASONABLE AND BONAFIDE. SINCE, THE FACTS OF THE P RESENT CASE ARE ITA NO.30/VIZAG/2016 PILLALA VISHNU VANDANA, VSKP 6 IDENTICAL TO THE FACTS OF THE CASE DECIDED BY THE I TAT, THE PENALTY LEVIED BY THE A.O. MAY BE DELETED. 8. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORT ING THE ORDER OF CIT(A) SUBMITTED THAT THE A.O. HAS GIVEN SUFFICIENT TIME FOR THE ASSESSEE TO APPEAR FOR HEARING. THE ASSESSEE NEITHER APPEAR ED NOR SOUGHT ANY ADJOURNMENT, THEREFORE, THE A.O. WAS RIGHT IN LEVY OF PENALTY FOR NON- COMPLIANCE OF STATUTORY NOTICES ISSUED U/S 143(2) & 142(1) OF THE ACT AND HIS ORDER SHOULD BE UPHELD. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. LEVIED PENALTY U/S 271(1)(B) OF THE ACT, FOR F AILURE TO COMPLY WITH STATUTORY NOTICES ISSUED U/S 142(1) OF THE ACT. TH E A.O. WAS OF THE OPINION THAT THE ASSESSEE HAS FAILED TO OFFER PROPE R EXPLANATION FOR NON- ATTENDANCE AS ON THE DATE OF HEARING. IT IS THE CO NTENTION OF THE ASSESSEE THAT NON-ATTENDANCE AS ON THE DATE OF HEAR ING IS NOT INTENTIONAL AS THE A.O. HAS CALLED FOR VOLUMINOUS I NFORMATION FOR 7 ASSESSMENT YEARS, WITHIN A SHORT PERIOD OF 7 TO 15 DAYS. THE INFORMATION CALLED FOR BY THE A.O. IS VOLUMINOUS AN D SHE COULD NOT GATHER ALL THE INFORMATION WITHIN A SPAN OF SHORT P ERIOD OF 7 TO 15 DAYS AND ACCORDINGLY, NOT ABLE TO APPEAR BEFORE THE A.O. AS ON THE DATE OF HEARING. ITA NO.30/VIZAG/2016 PILLALA VISHNU VANDANA, VSKP 7 10. HAVING HEARD BOTH THE SIDES, WE FIND FORCE IN T HE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT THE A.O. HAS GIVEN INS UFFICIENT TIME TO GATHER VOLUMINOUS INFORMATION FOR A PERIOD OF SEVEN YEARS. WE FURTHER OBSERVED THAT THE ASSESSMENT WAS FINALLY COMPLETED U/S 143(3) R.W.S. 153A OF THE ACT, AFTER FULLY SUPPLIED WITH ALL MATE RIAL FACTS REQUIRED FOR ASSESSMENT PROCEEDINGS. HENCE, WE ARE OF THE VIEW THAT THE INITIAL FAILURE BECOMES TECHNICAL, WHICH DOES NOT WARRANT L EVY OF PENALTY U/S 271(1)(B) OF THE ACT. WE FURTHER OBSERVED THAT A SI MILAR ISSUE HAS BEEN CONSIDERED BY THIS BENCH, IN ASSESSEES HUSBAND CAS E IN ITA NO.81/VIZAG/2016 DATED 26.8.2016, WHEREIN THE COORD INATE BENCH OF THIS TRIBUNAL, UNDER SIMILAR SET OF FACTS HAS HELD THAT THE EXPLANATIONS OFFERED BY THE ASSESSEE THAT SHE COULD NOT ATTEND A S ON THE DATE OF HEARING BECAUSE OF INSUFFICIENT TIME GIVEN BY THE A .O. TO COLLECT VOLUMINOUS INFORMATION APPEARS TO BE REASONABLE AND BONAFIDE. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: 21. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE A.O. LEVIED PENALTY U/S 271(1)(B) OF THE ACT FOR FAILURE TO COMPLY WITH STATUTORY NOTICES ISSUED U/S 142(1) OF THE ACT. THE A.O. WAS OF THE OPINION THAT THE ASSESSEE HAS FAILED TO OFFER PROPER EXPLANATION FOR NON-ATTENDANCE AS ON THE DATE OF HEARING. IT IS THE CONTENTION OF THE AS SESSEE THAT NON- ATTENDANCE AS ON THE DATE OF HEARING IS NOT INTENTI ONAL, AS THE A.O. HAS CALLED FOR VOLUMINOUS INFORMATION FOR 7 ASSESSMENT YEARS WITHIN A SHORT PERIOD OF 7 TO 15 DAYS. THE INFORMATION CALLED FOR BY THE A.O. IS VOLUMINOUS AND HE COULD NOT GATHER ALL THE INFORMAT ION AND ACCORDINGLY, NOT ABLE TO APPEAR BEFORE THE A.O. AS ON THE DATE O F HEARING. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REAS ON THAT THE ASSESSEE HAS APPEARED ON ALL THE OCCASIONS AND FURNISHED NEC ESSARY INFORMATION FOR ITA NO.30/VIZAG/2016 PILLALA VISHNU VANDANA, VSKP 8 COMPLETION OF ASSESSMENT WHICH IS EVIDENT FROM THE FACT THAT THE A.O. HAS COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT. TH OUGH, ASSESSEE INITIALLY NOT APPEARED BEFORE THE A.O. IN ONE OR TW O OCCASIONS, THE REASON GIVEN BY THE ASSESSEE FOR NON-APPEARANCE APPEARS TO BE REASONABLE AND BONAFIDE. THEREFORE, WE ARE OF THE VIEW THAT THE A .O. WAS NOT CORRECT IN LEVYING PENALTY U/S 271(1)(B) OF THE ACT. THOUGH, THE CIT(A) APPRECIATED THE FACTS, FAILED TO CONSIDER THE EXPLANATION OFFER ED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2013-14, IN VIEW OF VOLUMINOUS INFORMATION CALLED FOR BY THE A.O. AND ALSO THE ASSESSMENT BEING A SEARCH ASSESSMENT. NORMALLY, SEARCH ASSESSMENTS ARE DONE FOR 7 YEARS, WHEREIN THE ASSESSEE IS REQUIRED TO FURNISH INFORMATION AT ONE STRETCH F OR ALL THE ASSESSMENT YEARS, FOR WHICH SUFFICIENT TIME IS REQUIRED. IN T HE PRESENT CASE ON HAND, THE A.O. HAS GIVEN 7 TO 15 DAYS TIME. IN OUR OPINIO N, IT IS DIFFICULT TO GATHER ALL THE REQUIRED INFORMATION WITHIN A SHORT PERIOD. THEREFORE, WE ARE OF THE VIEW THAT THE EXPLANATIONS OFFERED BY TH E ASSESSEE THAT HE COULD NOT ATTEND ON THE DATES OF HEARING BECAUSE OF INSUFFICIENT TIME TO COLLECT VOLUMINOUS INFORMATION APPEARS TO BE REASON ABLE AND BONAFIDE. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE PENAL TY LEVIED FOR THE ASSESSMENT YEAR 2013-14. 11. IN THIS VIEW OF THE MATTER AND ALSO RESPECTFULL Y FOLLOWING THE COORDINATE BENCH DECISION, IN THE CASE OF PILLALA R AMAKRISHNA RAO VS. ACIT IN ITA NO.81/VIZAG/2016, WE ARE OF THE VIEW TH AT THE REASONS GIVEN BY THE ASSESSEE FOR NON-APPEARANCE FOR HEARIN G ON THE DATE FIXED FOR HEARING APPEARS TO BE REASONABLE AND BONAFIDE. THEREFORE, WE DIRECT THE A.O. TO DELETE PENALTY LEVIED U/S 271(1) (B) OF THE ACT FOR THE ASSESSMENT YEARS 2012-13 & 2013-14. 12. IN THE RESULT, APPEALS FILED BY THE ASSESSEE AR E ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6 TH JAN17. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 06.01.2017 VG/SPS ITA NO.30/VIZAG/2016 PILLALA VISHNU VANDANA, VSKP 9 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT PILLALA VISHNU VANDANA, F.NO.101 , FAIR FIELDS APARTMENTS, KIRLAMPUDI LAYOUT, VISAKHAPATNAM 2. / THE RESPONDENT THE ACIT, CENTRAL CIRCLE-2, VIS AKHAPATNAM 3. + / THE PRINCIPAL CIT (CENTRAL), VISAKHAPATNAM 4. + ( ) / THE CIT (A)-3, VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM