C. Mahendra Infojewels Limited, Vadodara V. The Dy.CIT, Circle-1(1)(1), Vadodara

ITA 3203/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9592 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D V SINGH
• Assessee Lawyers: RAJENDRA MODI
• Section: 142(1); 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA K. YADAV, JUDICIAL MEMBER ./ ITA NO. 3203/AHD/2015 / ASSESSMENT YEAR: 2011-12 M/S. C. MAHENDRA INFOJEWELS LTD, 214/A, PARADISE COMPLEX, SAYAJIGUNJ ROAD, VADODARA .. APPELLANT PAN : AAECC 1021 C VS DCIT, CIRCLE 1(1)(1), VADODARA .. RESPONDENT ASSESSEE(S) BY : SHRI RAJENDRA MODI , AR REVENUE BY : SHRI D.V. SINGH , DR / DATE OF HEARING 06/01/2016 /DATE OF PRONOUNCEMENT 03/02/2016 / O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -1, VADODARA, DATED 12.08.2015 FOR ASSESSMENT YEAS 2011 -12. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOWIN G GROUNDS OF APPEAL:- I. THE LEARNED CIT(A) ERRED IN NOT HOLDING THAT THE P ENALTY LEVIED U/S 271(1)(B) IN REFERENCE WAS BAD IN LAW. II. THE LEARNED CIT(A) ERRED IN NOT HOLDING THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE PENALTY LEVIED IS HARSH AND EXCESSIVE. III. THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(B) MADE BY THE LEARNED AO U/S 68 IN (SMC) ITA NO. 3203/AHD/2015 C MAHENDRA INFOJEWELS LTD VS. DCIT AY : 2011-12 2 RELATION TO THE ALLEGED NON-COMPLIANCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IV. THE APPELLANT CRAVES YOUR HONOURS LEAVE TO ADD TO, MODIFY OR WITHDRAW ANY OF THE ABOVE GROUNDS AT OR BEFORE THE FINAL HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME ON 28.11.2011, DECLARING TOTAL INC OME AT RS.NIL. THE RETURN WAS TAKEN UP FOR SCRUTINY AND T HE ASSESSING OFFICER ISSUE SEVERAL NOTICES U/S 142(1)/143(2) R.W .S 129 OF THE ACT, WHEREBY THE ASSESSEE WAS ASKED TO FURNISH SEVE RAL DETAILS; HOWEVER, THE ASSESSEE DID NOT MAKE ANY COMPLIANCE T HERETO. THEREFORE, THE ASSESSING OFFICER SUBSEQUENTLY LEVIE D PENALTY OF RS.40,000/- U/S 271(1)(B) OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAS COMMITTED A DEFAULT WITHIN THE MEANING OF SECTION 271(1)(B) OF THE ACT. IN APPEAL, THE CIT(A) CONFIR MED THE PENALTY LEVIED BY THE ASSESSING OFFICER. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND MATERIAL AVAILABLE ON RECORD. THE LD. AUTHORIZED REPRESENTATIVE FOR T HE ASSESSEE POINTED OUT THAT SIMILAR ISSUE AROSE BEFORE THE ITA T D BENCH, AHMEDABAD IN THE CASE OF M/S. RAJ ENTERPRISE VS. IT O IN ITA NO.958/AHD/2011 FOR AY 2007-08, WHEREIN THE TRIBUNA L HAS HELD AS UNDER:- 8. WE FIND THAT IN THE SIMILAR CIRCUMSTANCES, THE C HENNAI BENCH OF THE TRIBUNAL, WHEREIN ONE OF US (N.S. SAIN I, ACCOUNTANT MEMBER) WAS A MEMBER CONSTITUTING THE BENCH, DELETED PENALTY BY ORDER PASSED IN THE CASE OF SARDARMAL KOTHARI VS. ACIT, IN ITA NO.210/MDS/2012 DATED 8.3.2013, AND HAS HELD AS UNDER: (SMC) ITA NO. 3203/AHD/2015 C MAHENDRA INFOJEWELS LTD VS. DCIT AY : 2011-12 3 THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-IX, CHENNAI , DATED 30.8.2012 FOR THE ASST. YEAR 2009-10. THE ONL Y GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT TH E COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY OF RS.10,000/- LEVIED BY THE ASSESSING OFFICER UNDER SEC.271(1)(B) OF THE I.T. A CT. 2. THE ASSESSING OFFICER LEVIED PENALTY OF RS.10,00 0/- UNDER SEC.271(1)(B) OF THE ACT AS THE ASSESSEE DID NOT RESPOND TO NOTICES ISSUED BY HIM UNDER SEC.143(2) & 142(1) OF THE I.T. ACT ON THREE OCCASIONS, IE., ON 2.9.2010, 8.9.2011 AND 15.10.2011, FIXING THE DATES OF HEARING ON 20.9.2010, 12.9.2011 AND 20.10.2011 RESPECTIVELY. SUBSEQUENTLY, THE ASSESSMENT WAS MADE UNDER SEC.143(3) OF THE ACT WHEREIN THE ASSESSEE APPEARED AND FURNISHED INFORMATION CALLED FOR BY TH E ASSESSING OFFICER. THE ASSESSEE PREFERRED APPEAL BE FORE THE COMMISSIONER OF INCOME TAX (APPEALS) AGAINST LE VY OF PENALTY CONTENDING THAT NO SHOW CAUSE NOTICE HAS BEEN ISSUED BY THE ASSESSING OFFICER BEFORE LEVY OF PENALTY UNDER SEC.271(1)(B) OF THE ACT. 3. THE ASSESSEE CONTENDED THAT HE HAS COOPERATED WI TH THE ASSESSING OFFICER BY RESPONDING TO THE NOTICES ISSUED THERE AFTER AND THE ASSESSMENT WAS COMPLETED UNDER SEC.143(3) OF THE ACT AND, THEREFORE, SINCE HE HAS COOPERATED WITH THE ASSESSMENT PROCEEDINGS COMPLYIN G WITH THE NOTICES SUBSEQUENTLY ISSUED AND SINCE THE ASSESSMENT WAS MADE UNDER SEC.143(3) OF THE ACT AND IT WAS NOT AN EX-PARTE ASSESSMENT UNDER SEC.144 OF THE ACT, THE ASSESSING OFFICER SHOULD NOT HAVE LEVIED P ENALTY UNDER SEC.271(1)(B) OF THE ACT. HE PLACED RELIANCE ON THE DECISION OF DELHI BENCH OF THE ITAT IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST V. ASST. DIRECTOR OF INCOME TAX (115 TTJ 419) AND THE DECISION OF AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF SWARNABEN M. KHANNA & OTHERS V. DCIT (132 TTJ 1). HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE PENALTY LEVIED BY THE ASSES SING OFFICER ON THE GROUND THAT THE ASSESSEE DID NOT RES POND TO THE NOTICES ISSUED BY THE ASSESSING OFFICER. (SMC) ITA NO. 3203/AHD/2015 C MAHENDRA INFOJEWELS LTD VS. DCIT AY : 2011-12 4 4. THE COUNSEL FOR THE ASSESSEE REITERATES THE SUBMISSIONS MADE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND SUBMITS THAT THERE IS NO JUSTIFIC ATION IN LEVYING PENALTY, ESPECIALLY WHEN THE ASSESSMENT WAS MADE UNDER SEC.143(3) OF THE ACT AND NOT UNDER SEC. 144 OF THE I.T. ACT. 5. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH SIDES. PERUSED THE MATERIALS ON RECORD AND THE ORDERS OF AUTHORITIES BELOW. WE HAVE GONE THROUGH THE DECISIONS RELIED ON BY THE COUNSEL FOR THE ASSESSEE. IN BOTH THESE DECISIONS, THE TRIBUNAL HEL D THAT WHEN AN ASSESSMENT HAS BEEN MADE UNDER SEC.143(3) AND NOT UNDER SEC.144 OF THE I.T. ACT, IT MEANS THA T SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMMITTED EARLIER WERE IGNORED BY THE ASSESSING OFF ICER AND, THEREFORE, THERE IS NO CASE FOR LEVY OF PENALT Y UNDER SEC.271(1)(B) OF THE ACT. IN THE PRESENT CASE, THE ASSESSEE SEEMS TO HAVE COOPERATED WITH THE ASSESSME NT PROCEEDINGS BY RESPONDING TO THE NOTICES AND FILING INFORMATION CALLED FOR AND THE ASSESSMENT WAS COMPLETED UNDER SEC.143(3) AND NOT SEC.144 OF THE A CT. THEREFORE, WE HOLD THAT THERE IS NO CASE FOR LEVY O F PENALTY UNDER SEC.271(1)(B) OF THE I.T. ACT THE ASS ESSEES CASE. 9. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TR IBUNAL, WE DELETE THE PENALTY OF RS.50,000/- LEVIED UNDER SECT ION 271(1)(B) OF THE ACT, AND ALLOW THE APPEAL OF THE A SSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 4.1 NOTHING CONTRARY WAS BROUGHT TO MY KNOWLEDGE ON BEHALF OF THE REVENUE. FACTS BEING SIMILAR, SO FOLLOWING T HE SAME REASONING I AM NOT INCLINED TO CONCUR WITH THE FIND INGS OF THE LD. CIT(A); THEREFORE, RESPECTFULLY FOLLOWING THE D ECISION OF CO- ORDINATE BENCH IN THE CASE OF M/S. RAJ ENTERPRISE ( SUPRA), THE (SMC) ITA NO. 3203/AHD/2015 C MAHENDRA INFOJEWELS LTD VS. DCIT AY : 2011-12 5 PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)( B) OF THE ACT AND CONFIRMED BY THE CIT(A) OF RS.40,000/- IS DIREC TED TO BE DELETED. THIS VIEW IS FURTHER FORTIFIED BY THE DEC ISION OF ITAT, DELHI BENCH F IN THE CASE OF SMT. REKHA RANI VS. DCIT IN ITA NO.6131/DEL/2013 FOR AY 2009-10. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 3RD FEBRUARY, 2016 AT AHMEDABAD. SD/- ( SHAILENDRA K. YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 03/02/2016 BIJU T., PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CONCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / DR, ITAT, AHMEDABAD 6. (- . / GUARD FILE. / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) !', / ITAT, AHMEDABAD