MS. DIVYA DHARAMPAL AGRAWAL, Nagpur V. A,C.I.T CENT CIR. 1(2), Nagpur

ITA 342/NAG/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4518 (ITAT-NAGPUR)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 17-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNES P THOMAS
• Assessee Lawyers: DR J M RANADE
• Keywords: Search and seizure; Reasonable cause; Non compliance
• Section: 273B; 143(3); 153A; 132; 12; 144

Judgement Text

1 ITA NOS. 342, 346 TO 351/NAG/2016 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) S.NO. ITA NO. ASSTT. YEA R. 1. 3 42 /NAG/2016 2005 - 06. 2. 3 46 /NAG/2016 2006 - 07. 3. 3 47 /NAG/2016 2007 - 08. 4. 3 48 /NAG/2016 2008 - 09. 5. 3 49 /NAG/2016 2009 - 10. 6. 3 50 /NAG/2016 2010 - 11. 7. 3 51 /NAG/2016. 2011 - 12. MS. DIVYA DHARAMPAL AGRAWAL ., ASSTT. COMMISSIONER OF INCOME - TAX, NAGPUR. VS. CENTRAL CIRCLE - 1(2), NAGPUR. PAN AABCP0526C. APPELLANT. RESPONDENT. APPELLANT BY : DR. J.M. RANADE. RESPONDENT BY : S MT. AGNES P. THOMAS. DATE OF HEARING : 2 6 - 09 - 2016 DATE OF PRONOUNCEMENT : 26 TH SEPT., 2016 O R D E R THESE ARE APPEALS BY THE ASSESSEE AGAINST COMMON ORDER OF LEARNED CIT(APPEALS) DATED 0 3 - 0 5 - 2016 PERTAINING TO ASSESSMENT YEARS 2005 - 06 TO 2011 - 2012. 2. COMMON ISSUE RAISED IS THAT THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S 271(1(B) OF RS.10,000/ - E ACH. 3. IN THIS CASE THE AO HAS PASSED THE ORDER U/S 143(3) OF THE I.T. ACT READ WITH SECTION 153A. IN THIS CASE PENALTY U/S 271(1)(B) WAS IMPOSED ON THE 2 ITA NOS. 342, 346 TO 351/NAG/2016 GROUND THAT AS PER NOTICE U/S 143(2) ISSUED ON 18 - 01 - 2013 AND SERVED ON 2 1 - 01 - 2013 THE ASSESSEE WAS REQUESTED TO ATTEND AND SUBMIT DETAILS ON 28 - 01 - 2013. BUT THE ASSESSEE DID NOT COMPLY WITH THE ABOVE. ON 15 - 02 - 2013 SHOW CAUSE LETTER WAS ISSUED AND THE SAME WAS SERVED ON 18 - 02 - 2013 IN RESPONSE TO WHICH THE ASSESSEE SUBMITTED THE REPLY. THEREAFTER THE ASS ESSMENT WAS FRAMED U/S 143(3) OF THE I.T. ACT. IN THESE FACTS PENALTY U/S 271(1)(B) WAS LEVIED. 4. BEFORE THE LEARNED CIT(APPEALS) THE ASSESSEE, INTER ALIA, MADE THE FOLLOWING SUBMISSIONS : 1. THE ASSESSEE IS A MEMBER OF GROUP KNOWN AS SHREE AGRAWAL COAL GROUP. THE SEARCH U/S 132 OF INCOME - TAX ACT, 1961, WAS CONDUCTED ON THIS GROUP INCLUDING THE ASSESSEE ON 16 TH MARCH, 2011. THE ASSESSMENT IN THIS CASE WAS FINALIZED ON 04.03.2013 U/S 143(3) R.W.S. 153A OF INCOME TAX ACT, 1961. 2. NOTICE U/S 143(2) WAS IS SUED ON 07.01.2013, HOWEVER IN THE CASE OF A.Y. 2011 - 12 THE NOTICE U/S 143(2) WAS ISSUED ON 24.09.2012. COUNSEL OF ASSESSEE FILED HIS POWER OF ATTORNEY ON 18.12.2012. THE ASSESSEES ACCOUNTANT WAS PRESENT IN INCOME TAX OFFICE WITH BOOKS OF ACCOUNTS, DOCUME NTS, PAPERS ETC. ON VARIOUS DATES BUT HOWEVER, THE AO DID NOT RECORD HIS PRESENCE AND DECLINED TO SEE THE BOOKS OF ACCOUNTS, DOCUMENTS, PAPERS PRODUCED. THE ASSESSEE HAD ALSO FILED ADJOURNMENT APPLICATION ON DATE OF HEARING. ASSESSEE COUNSEL ALSO APPEARED ON SEVERAL OCCASIONS BUT HIS ATTENDANCE WAS NOT MARKED. SINCE THE ASSESSEE WAS NOT ABLE TO SUBMIT THE DETAILS DUE TO ABOVE REASONS THE ASSESSEE APPROACHED THE HIGHER AUTHORITIES JCIT AND CIT (CENTRAL) STATING THE FACT THAT ITS ACCOUNTANT AND STAFF WAS NOT ALLOWED TO SUBMIT THE DETAILS OR TO PRODUCE BOOKS OF ACCOUNT. THE ASSESSEE HAD MET THE CHIEF COMMISSIONER AND COMPLAINED ABOUT HARASSMENT BEING METED OUT TO THIS GROUP AS HE WAS NOT ABLE TO PLEASE THE AO. THE CC DIRECTED THE ASSE SSEE TO MEET CIT (CENTRAL) AND EXPLAIN HIS GRIEVANCE. THE ASSESSEE MET CIT(CENTRAL) AND EXPLAINED HIS SITUATION AND FEAR THAT AO WILL ADD HUGE AMOUNT IN HIS CASES AS HE IS UNABLE TO PLEASE HIM. BUT NO ACTION WAS TAKEN ON ASSESSEE COMPLAINS. THE ASSESSEE EV EN WROTE GRIEVANCE LETTER TO CBDT, VIGILANCE MINISTRY OF FINANCE, ETC. BUT STILL AO MADE HUGE ADDITIONS OF RS. 215 CRORES. THIS IS A CLEAR CASE OF HIGH PITCHED ASSESSMENTS. THUS THE ASSESSEE WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE AS EXPLAINED ABO VE. COPIES OF LETTERS WRITTEN TO HIGHER AUTHORITIES ARE ENCLOSED HEREWITH. THUS ASSESSEE WAS PREVENTED BY 3 ITA NOS. 342, 346 TO 351/NAG/2016 SUFFICIENT CAUSE FROM PRODUCING BOOKS OF ACCOUNTS AND DETAILS BEFORE THE AO IN THIS CASE. AS A RESULT, THE AO DID NOT VERIFY THE BOOKS OF ACCOUNT, B ILLS, VOUCHERS AND OTHER DOCUMENTS. IN APPEAL BEFORE CIT(A) THE ASSESSEE, REQUESTED HIM TO ALLOW ASSESSEE TO SUBMIT DETAILS WHICH ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FROM FILING WITH AO. CIT(A) ACCEPTED THE REQUEST OF ASSESSEE AND ALLOWED IT TO FILE FRESH EVIDENCE UNDER RULE 46A OF INCOME - TAX RULES, 1962. ACCORDINGLY THE QUANTUM APPEALS WERE DECIDED BY CIT(A) ON MERITS. 5. ASSESSEE ALSO REFERRED TO DECISION OF ITAT IN THE CASE OF AKHIL BHARIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ASSTT. DIRECTOR OF INCOME - TAX 5 DTR 429. HOWEVER, LEARNED CIT(APPEALS) DID NOT FIND THE CONTENTIONS ACCEPTABLE. HE CONCLUDED AS UNDER : IN THE CASE OF AKHIL BHARIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ASSTT. DIRECTOR OF INCOME - TAX AS WELL AS IN THE CASE OF SWARNAB EN M. KHANNA & ORS., IT WAS HELD THAT IF THE ASSESSMENT ORDER IS PASSED U/S 143(3) AND NOT U/S 144 THEN NON COMPLIANCE IS DEEMED TO HAVE BEEN WAIVED. IN THE PRESENT CASE, ALTHOUGH THE ASSESSMENTS HAVE BEEN MADE U/S 143(3) AND NOT U/S 144, YET IT IS SEEN TH AT THE ASSESSEE HAS NOT FURNISHED THE DETAILS AND DOCUMENTS REQUESTED BY THE AO. IT IS SEEN FROM THE ASSESSMENT ORDERS FOR EACH YEAR THAT THE AO HAS STATED IN THE ORDER THAT NO COMPLIANCES WERE MADE BY THE ASSESSEE AND NO DOCUMENTS AND DETAILS WERE SUBMIT TED BY THE ASSESSEE. THEREFORE, THE FACTS ARE CLEARLY DISTINGUISHABLE IN VIEW OF THE SPECIFIC OBSERVATION OF THE AO THAT NO DETAILS WHATSOEVER WERE FURNISHED. IN FACT, A READING OF THE ASSESSMENT ORDERS GIVES AN IDEA THAT THE ASSESSMENT ORDERS READ LIKE BE ST JUDGMENT ORDERS U/S 144 IN WHICH THE AO HAD TO MAKE ADDITIONS FOR WANT OF ANY DETAILS ON RECORD. IN FACT, IN APPEAL ON QUANTUM ISSUES, ON ALL ISSUES THE DETAILED REMAND REPORT HAD TO BE CALLED FOR THE AO IN WHICH THE ASSESSEE ASKED TO SUBMIT THE DETAILS IN THE REMAND PROCEEDINGS. IN VIEW OF THE FACTS DISCUSSED ABOVE, IT IS HELD THAT IN ANY CASE, THE ASSESSMENT ORDERS WERE PASSED U/S 143(3) SINCE THE ASSESSEE DID NOT GIVE ANY DETAILS DURING ASSESSMENT PROCEEDINGS AND THE AO HAD TO PASS THE ORDERS WITHOUT THE DETAILS ON RECORD. IT IS HELD THAT THE ASSESSEE HAS NOT COMPLIED WITH THE NOTICES OF THE AO ISSUED BY HIM U/S 143(2). IN THE CIRCUMSTANCES, THE PENALTY LEVIED BY HIM OF RS.10,000/ - FOR EACH OF THE ASSESSMENT YEARS FROM AY 2005 - 06 TO 2011 - 12 IS UPHELD. 6. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 4 ITA NOS. 342, 346 TO 351/NAG/2016 7. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. AT THE OUTSET LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEES COUNSEL AND STAFF DID GO TO THE AO ON THE SPECIFIE D DATE BUT THE AO REFUSED TO ADMIT THEIR ENTRANCE. LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE HAS ALSO FILED PETITION BEFORE THE HIGHER AUTHORITIES IN THIS REGARD. LEARNED COUNSEL FURTHER SUBMITTED THAT ASSESSMENT IN THIS CASE HAS BEEN COMPLETED U/S 143(3 ) OF THE I.T. ACT AND NOT SECTION 144 OF THE I.T. ACT. HENCE LEARNED COUNSEL SUBMITTED THAT IN THESE CIRCUMSTANCES, THE RATIO FROM THE CASE LAW REFERRED ABOVE FULLY APPLIES TO THE ASSESSEES CASE. HENCE LEARNED COUNSEL SUBMITTED THAT THERE WAS DUE REASONA BLE CAUSE FOR NON ATTENDANCE AS WELL AS THE CASE LAW IN ASSESSEES FAVOUR. HENCE LEARNED COUNSEL SUBMITTED THAT THE PENALTY OF RS.10,000/ - LEVIED IN THIS CASE DESERVES TO BE SET ASIDE. 8. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BE LOW. 9. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. I NOTE THAT IN THIS CASE AS PER THE FACTS EMANAT ING FROM THE ORDERS OF THE AUTHORITIES BELOW THE ASSESSEE WAS GIVEN NOTICE WHICH WAS SERVED ON 11 - 01 - 2013 BY WHICH THE ASSESSEE WAS REQUESTED TO ATTEND AND SUBMIT THE DETAILS ON 15 - 01 - 2013. IT WAS THIS NON ATTENDANCE OF THE ASSESSEE AGAINST WHICH PENALTY U/S 271(1)(B) WAS LEVIED. ON 15 - 02 - 2013 A SHOW CAUSE LETTER WAS ISSUED WHICH WAS SERVED ON 18 - 02 - 2013 IN RESPONSE TO WHICH THE ASSESSEE SUBMITTED A REPLY. T HEREAFTER ASSESSMENT ORDER U/S 143(3) WAS PASSED. NOW PERUSAL OF THE FACTS CLEARLY INDICATE THAT THIS WAS A CASE OF SEARCH AND SEIZURE ON A BIG GROUP. FOUR DAYS TIME TO SUBMIT DETAILS IN SUCH A CASE IS NOT AT ALL REASONABLE FROM ANY STRETCH OF IMAGINATION. FURTHER MORE THE ASSESSEE DID REPLY TO THE SUBSE QUENT SHOW CAUSE NOTICE AND ASSESSMENT WAS FRAMED U/S 143(3) OF THE I.T. ACT. THIS HAS ALSO TO BE LOOKED INTO ON THE ANVIL OF ASSESSEES SUBMISSION THAT THE AO HAS REFUSED THE ASSESSEE RECORDING OF ATTENDANCE ON THE SPECIFIED DATE AND FOR WHICH THE ASSESS EE HAS PETITIONED TO HIGHER AUTHORITIES. 5 ITA NOS. 342, 346 TO 351/NAG/2016 10. IN THESE CIRCUMSTANCES, IN MY OPINION, THERE WAS A REASONABLE CAUSE FOR NON ATTENDANCE OF THE ASSESSEE. HENCE ON THE ANVIL OF SECTION 273B PENALTY IS NOT LEVIABLE. AGAIN THE ISSUE IS SQUARELY COVERED BY THE DECISION OF ITAT, DELHI BENCH IN THE CASE OF AKHIL BHARIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ASSTT. DIRECTOR OF INCOME - TAX (SUPRA). I MAY GAINFULLY REFER TO THE CONCLUDING PORTION OF THE TRIBUNALS ORDER AS UNDER : . .3 WE HAVE CONSIDERED THE FACTS OF THE CASE AND RIVAL SUBMISSIONS. WE FIND THAT THE HON' B LE GUJARAT (SIC - RAJASTHAN) HIGH ' COURT HAS CLEARLY DISTINGUISHED BETWEEN CLS. (A) AND (C) OF SUB - SO (1) OF S . 275 . UNDER CL . (A), THE LEVY OF PENALTY IS D EPENDENT UPON THE F I NDINGS OF THE APPELLATE AUTHORITIES, WHICH IS NOT THE CASE UNDER CL . (C). IN THIS CASE, THE DEFAULT OF NON - ATTEND ANCE TO NOT I CES WAS NOT THE SUBJECT - MATTER IN THE QUANTUR N T APPEAT AND I T I N NO WAY DEPENDED UPON THE OUTCOME IN THE APP EA L, THE PENALTY DEPENDS UPON WHETHER THE DEFAULT WAS WI L LRUL OR NO T , THEREFORE , WE ARE OF THE V I EW THAT THE RATIO O F THE CA S E OF H I SSAR I A BROS . (SUPRA) WILL BE APPLICABLE IN THIS CASE ALSO . CONSEQUENTLY, I T I S ALSO HELD THAT THE ORDE R OUGHT TO HAVE BE E N PASSED ON OR BEFORE 31ST SEPT., 2001, FAILING WHICH THE LEVY WILL BECOME BARRED BY L I M I TAT I ON . 2 . 4 COMIN G TO T H E I SSUE OF RECORDING OF SATISFACT I ON, I T MAY BE MENTIONED THAT MERE I NITIAT I ON OF PENALTY DOES NOT AMOUNT TO SATIS FA CTI ON AS HELD BY HON ' BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAM COMMERCIAL ENTERPRISES LTD . (2001) 167 CTR (DEL) 3 21 : ( 2000) 246 ITR 568 (DEL). IN ABSENCE OF RECORDING OF THE SATISFACTION IN THE ASSESSMENT ORDER , MERE IN I T I AT I ON OF PEN A LTY WIL L N O T CONFER JUR I SDICTION ON THE AD TO LEVY THE PENALTY. 2.5 WE ALSO F I ND THAT FINALLY THE ORDER WAS PASSED UNDER S. 143(3) AND NOT UNDER S. 144 OF THE ACT . THIS MEANS THAT S U B SE Q UENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMP L IANCE AND THE DEFAU L TS COMM IT TE D EAR L I ER W ERE I GNORED BY THE AD . THEREFOR E, I N SUCH C I RCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO COME TO THE C ONCLUSIO N T H AT THE DEFAU L T WAS WILLFUL . 2.6 IN VIEW OF THE AFORESAID D I SCUSSION, IT IS HELD THAT THE LEARNED CIT(A) WAS NOT R I GHT I N UPHO L D I NG THE L EVY OF P E NALTY. THUS, T H E APPEAL I S ALLOWED . 11. I FIND THAT THE ABOVE CASE LAW FULLY APPLIES ON THE FACTS OF THE CASE. LEARNED CIT(APPEALS) HAS ERRED IN DISTINGUISHING THIS CASE LAW AS HE HAS OPINED THAT THE ASSESSMENT ORDER IN THE PRESENT CASE THOUGH PASSED U/S 143(3) OF THE I.T. ACT IT APPEAR ED TO HIM TO BE PASSED U/S 144 OF THE I.T. ACT. IN MY CONSIDERED OPINION THIS IS NOT AT ALL A TENABLE GROUND FOR DISTINGUISHING THE DECISION OF THE ITAT. 6 ITA NOS. 342, 346 TO 351/NAG/2016 12. FURTHER AS THE ABOVE FACT CLEARLY INDICATES IT IS A TECHNICAL BREACH AND IN SUCH CIRCUMSTANCES, AS HELD BY HONBLE APEX COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA 83 ITR 26 PENALTY NEED NOT BE LEVIED. HENCE IN THE BACKGROUND OF AFORESA ID DISCUSSION AND PRECEDENT I HAVE NO HESITATION IN DELETING THE LEVY OF PENALTY. ACCORDINGLY THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 1 3 . IN THE RESULT, THESE APPEALS FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF SEPT., 2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 26 TH SEPT., 2016. COPY FORWARDED TO : 1. M S . DIVYA DHARAMPAL AGRAWAL , 2 90, SATNAMI LAYOUT , WARDHAMAN NAGAR, NAGPUR - 440006. 2. A.C.I.T., CENTRAL CIRCLE - 1(2), NAGPUR. 3. C.I.T. - (CENTRAL), NAGPUR. 4. CIT(APPEALS), - 3, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.