Sh. Kailash Chand Jain, Agra V. A.C.I.T.(Asstt) Circle-1(1), Agra

ITA 329/AGR/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9595 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: WASHIM ARSHAD
• Assessee Lawyers: DIPENDRA MOHAN
• Keywords: Non compliance
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO. 3 29 /AGR/2014 ASSESSMENT YEAR: 2010 - 11 KAILASH CHAND JAIN , (PROP) ,DIAMOND EXPORT, AGRA VS. ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE - 1(1), AGRA PAN: AABCA1510B APPELLANT RESPONDENT ASSESSEE BY: DIPENDRA MOHAN, CA REVENUE BY: WASHIM ARSHAD, SR. DR DATE OF HEARING: 02/03/2017 DATE OF PRONOUNCEMENT: 30 /03 /2017 ORDER PER, DR. MITHA LAL MEENA, AM: THE APPEAL , BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX, (APPEALS) - 1, AGRA, [ HEREIN AFTER REFERRED TO AS THE CIT(A)], CHALLENGING CONFIRMING PENALTY U/S 271 (1)(B) OF THE INCOME TAX ACT, 1961(I N SHORT THE ACT) IN RESPECT OF ASSESSMENT YEAR 2010 - 11 . 1 . IN THE PRESEN T CASE, PENALTY OF RS. 10,000/ - IS LEVIED U/S 271(1)(B) OF THE ACT , IN RESPECT OF NON COMPLIANCE OF NOTICE DATED 01/06/2012 2 ITA NO. 329 /AGR/2014 ASSESSMENT YEAR: 2010 - 11 ISSUED UNDER SAID SECTION 142(1) BY THE ASSESSING OFFICER ( THE AO IN SHORT) . IT STATED IN THE IMPUGNED PENALTY ORDER THAT COMPLIANCE TO THE SAID NOTICE WAS NOT MADE EVEN THOUGH OPPORTUNITY TO DO SO WAS GIVEN ON SUBSEQUENT DATE 09/07/2012, 12/07/2012 AND 23/07/ 2012 ALTHOUGH THE AR ATTENDED ON 09/07/2012 AND HE HAD A LSO FILED A WRITTEN REPLY ON 24/07/2017 BUT STILL REQUISITE DOCUMENTS/ INFORMATION WERE NOT PROVIDED. 2. THE LD. CIT ( A) HAS CONFIRMED THE PENALTY VIDE ORDER DATED 08/08/2014 , WITH THE OBSERV ATION THAT THE UN COMPLIED NOTICE U/S 142(1) OF THE ACT, IN THIS CASE IS DATED 01/06/2012, MUCH LATER TO THE DATE OF FILING OF RETURN (14/10/2010) AND IT IS NOT ARGUED OR MENTIONED BY THE APPELLANT THE SAID BOOKS OF ACCOUNTS WERE AGAIN IMPOUNDED AFTER THE DATE OF FILING OF RETURN OF INCOME ; AND THE INFORMATION REQUISITIONED BY THE AO VIDE NOTICE U/S 143(2) DATED 01/06/2012 AS WELL AS DATED 29/02/2012 WAS SAME PROVES THE FACT THAT THE APPELLANT HAS ACCESS TO THE RELEVANT DOCUMENTS AND THAT DELIBERATE NONCOMPLIANCE WAS DISPL AYED BY HIM WHICH CONTINUED AT LEAST UP TO THE DATE OF IMPOSITION OF PENALTY. 3. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE PENALTY OF RS. 10,000/ - IS WRONGLY CONFIRMED BY THE LD CIT (A ) AGAINST THE FACTS OF THE CASE. HE PLACED R ELIANCE UPON THE CASE OF PUSPA GARG IN ITA NOS. 4852 TO 4855/ DEL/2013 DATED 06/02/2014 AND HINDUSTAN STEEL LTD VS. 3 ITA NO. 329 /AGR/2014 ASSESSMENT YEAR: 2010 - 11 STATE OF ORRISA (1972) ; 83 ITR 26 (SC) AND THAT AKHIL BHARTIYA PRATHMIK SHIK S HA K SANGH BHAWAN TRUST VS. ACIT (2008) ITJ 419 (DELHI) , CONTENDING THAT IN THOSE CASES , SIMILAR ISSUE ON IDENTICAL FACTS IS CONSIDERED AS INVOLVED IN THE PRESENT PROCEEDINGS AND RENDERED IN FAVOUR OF ASSESSEE. 4. THE LD. DR , ON THE OTHER HAND, DEFENDED THE IMPUGNED PENALTY ORDER . 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL PLACED ON RECORD AND THE CITATION, IN SUPPORT, THEREOF. 6. IT IS NOT DISPUTED FACT THAT A NOTICE DATED 01/06/2012 WAS ISSUED UNDER SAID SECTION142 (1) BY THE AO BUT WHAT IS THE DATE OF SERVICE OF THE SAID NOTICE IS NOT ESTABLISHED EITHER FROM ORD ER S OF THE LOWER AUTHORITIES , OR FROM THE SUBMISSIONS OF THE LD. DR. IT IS ALSO NOT DISPUTED THAT THE ORDER OF LD CIT (A) IS DATED 08/08/2014 AND THE ASSESSMENT ORDER IS DATED 30/01/2013 . I T IS CATEGORICALLY DISCUSSED IN 1 ST PARA, ON THE VERY 1 ST PAGE OF THE ASSESSMENT ORDER , THAT SH. M L AGRA WAL, AR FOR THE ASSESSEE ATTENDED FROM TIME TO TIME AND FILED WRITTEN SUBMISSION AND DETAILS IN COMPLIANCE TO SAID NOTICE U/S 142(1) OF THE ACT . IT IS SEEN THAT THE AR ATTENDED ON 09/07/2012 IN COMPLIANCE TO THE SAID NOTICE , ON THE SUBSEQUENT DATE OF HEARING . H OWEVER , NOTHING SPECIFICALLY MENTIONED IN 4 ITA NO. 329 /AGR/2014 ASSESSMENT YEAR: 2010 - 11 RESPECT OF THE DOCUMENTARY EVIDENCES CALLED FOR ON 12/07/2012 AND 23/07/2012 ALTHOUGH MOST OF THE RELEVANT DOCUMENTARY EVIDENCES WERE AVAILABLE WITH THE AO IN T HE FORM OF IMPOUNDED DOCUMENTS , SINCE THIS WAS A SURVEY CASE AND THAT ASSESSEE HAD ALSO FILED A WRITTEN REPLY ON 24/07/2017 , ON THE VERY SAME DATE AS ON WHICH THE PENALTY ORDER WAS PASSED . 7. I T IS SEEN THAT T HE LD CIT ( A) HAS REJECTED THE SUBMISSION OF THE ASSESSEE INTER ALIA HOLDING THAT I AM NOT INCLINED TO AGREE WITH THE ARGUMENT OF VAGUE NESS OF NOTICE CAUSED DELAY IN THE FURNISHING OF INFORMATION ; AND BOOKS OF ACCOUNTS LYING IN THE CUSTODY OF THE DEPARTMENT ; AND AR APPEARED ON 09/07/2012 I S EVIDENT FROM PENALTY ORDER AND THAT ASSESSEE HAD ALSO FILED A WRITTEN REPLY ON 24/07/2017 . 8. T HE LD CIT(A) HAS MENTI ONED THE FACTUM OF THE ISSUANCE OF NOTICE U/S 142(1) , BUT HE HAD NEITHER MENTION ED THE FACTUM OF SERVICE OF THE SAID NOTICE , NOR THE FACTUM OF D ETAILS OF WRITTEN REPLY FILED BY AR FOR THE ASSESSEE IN COMPLIANCE TO THE SAID NOTICE , AS DISCUSSED IN THE ASSESSMENT ORDER THAT WAS PASSED MUCH BEFORE TH IS APPELLATE ORDER. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT SH. M L AGRAWAL, AR FOR THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED WRITTEN SUBMISSION AND 5 ITA NO. 329 /AGR/2014 ASSESSMENT YEAR: 2010 - 11 DETAILS IN COMPLIANCE TO SAID NOTICE 142(1), AS DISCUSSED IN 1 ST PARA, ON THE 1 ST PAGE OF THE ASSESSMENT ORDER PASSED ON 30/01/2013. 9. CONSIDERING THE LEGAL PRECEDENTS CITED ON THE FACT OF THE PRESENT CASE IN SUPPORT BY THE LD AR, WE FIND THAT THE INSTANT CASE DOES NOT FALL IN THE ARENA OF DELIBERATE OR WILFUL DEFIANCE BY NOT APPEARING BEFORE THE AO ON THE SPECIFIED DATE. NOTHING HAS BEEN BROUGHT ON RECORD BY THE LOWER AUTHORITIES TO SHOW THAT THE INSTANT CASE IS AN ATTEMPT OF DELIBERATE DEFIANCE ON THE PART OF THE ASSESSEE . IN FACT, THE ASSESSMENT HAVING BEEN COMPLETED U/S 143(3) OF THE ACT WITH THE DISCUSSION ON 1 ST PARA AT 1 ST PAGE OF THE ASSESSMENT ORDER THAT SH. M L AGRAWAL, AR FOR THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED WRITTEN SUBMISSION AND DETAILS IN COMPLIANCE TO SAID NOTICE 142 (1) , MEANS THAT NOT ONLY THE SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE , BUT THE VERY CHARGE OF NON - COMPLIANCE TO THE STATUTORY NOTICES WA S ITSELF CONCEDED. IT IS SEEN THAT LD CIT (A) HAS REJECTED THE SUBMISSION OF THE ASSESSEE ON MERE PRESUMPTIONS AND SURMISE S, WITHOUT S UPPORT OF ANY SPECIFIC DOCUMENTARY EVIDENCE AND LEGAL PRECEDENT. 10. IT IS EVIDENT THAT DATE OF SERVICE OF THE STATUTORY NOTICE IN QUESTION ISSUED U/S 142(1), HAS NOT BEEN ESTABLISHED BY THE LD DR . IT S DATE OF 6 ITA NO. 329 /AGR/2014 ASSESSMENT YEAR: 2010 - 11 SERVICE IS ALSO NOT MENTIONED IN THE PENALTY ORDER AND ASSESSMENT ORDER PASSED BY THE AO AND TH E APPELLATE ORDER BEING PASSED BY THE CIT ( A) . WE FIND THAT THE INSTANT CASE IS SQUARELY COVERED BY THE DECISION OF ITAT DELHI BENCH , DELHI IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST , (S UPRA ), WHEREIN IN PARA S 2.4 AND 2.5 IT HAS BEEN HELD AS UNDER - 2.4 COMING TO THE ISSUE OF RECORDING SATISFACTION , IT MAY BE MENTIONED THAT MERE INITIATION OF PENALTY DOES NOT AMOUNT TO SATISHFACTION AS HELD BY HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. R AM COMMERCIAL ENTERPRISES LTD. (2001)167 CTR ( DEL ) 321 : (2000) 246 ITR 568(DEL). IN ABSENCE OF RECORDING OF THE SATISFACTION IN THE ASSESSMENT ORDER, MERE INITIATION OF PENALTY WILL NOT CONFER JURISDICTION ON THE AO TO LEVY THE PENALTY. 2.5 WE ALSO FIND THAT FINALLY THE ORDER WAS PASSED U/S 143(3) AND NOT UNDER SECTION 144 OF THE ACT. THIS MEANS THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULT COMMITTED EAR L IER WERE IGNORED BY THE AO. THEREFORE, IN SUCH CIRCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO COME TO THE CONCLUSION THAT THE DEFAULT WAS WILFUL. 11. FOLLOWING THE DECISION OF THE AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST, ( SUPRA ) ON FACTS IDENTICAL TO THOSE OF THE INSTANT CASE , WE HOLD THAT THE LEVY OF PENALTY U/S 271(1)(B) OF THE ACT IS PATENTLY WRONG , ESPECIALLY IN VIEW OF THE FACT THAT THE IMPUGNED 7 ITA NO. 329 /AGR/2014 ASSESSMENT YEAR: 2010 - 11 ASSESSMENT ORDER HAS BEEN PASSED U/S 143(3) . WHILE REVERSING THE IMPUGNED ORDER , WE DIRECT THE AO TO DELETE THE PENALTY. 12. EVEN OTHERWISE, THIS APPEAL IS NOT MAINTAINABLE FOR THE REASON OF BAD SERVICE OF STATUTORY NOTICE INTER - ALIA HOLD ING THE PENALTY ORDER VOID AB INITIO . 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED, IN THE OPEN COURT ON 30 /03/2017. SD/ - SD/ - (A. D. JA IN) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 /0 3 /2017 * R COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR FIT FOR PUBLICATION SD/ - SD/ - J.M. A.M.