HEMA RAKESHKUMAR M. GUPTA, MUMBAI V. ITO., WARD-14(3)(2), MUMBAI

ITA 381/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83606 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 21-04-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 11-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: RAKESH KUMAR GUPTA
• Keywords: Reasonable cause
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUM BAI .. , , BEFORE SHRI H. L. KARWA, PRESIDENT AND SHRI SANJAY ARORA, AM ./ I.T.A. NOS. 381 TO 385/MUM/2013 ( / ASSESSMENT YEARS: 2003-04 TO 2006-07 & 2008-09) HEMA RAKESHKUMAR M. GUPTA, PROP. M/S. SHREE RAM SALES & SYNTHETICS SHOP NO.4, RAM GALLY, PANKAJ MARKET, CHAMPA GALLY, CROSS LANE, MUMBAI-400 002 / VS. ITO WARD 14(3)(2), MUMBAI ./ ./PAN/GIR NO. AAKPG 3030 E ( ! /APPELLANT ) : ( '#! / RESPONDENT ) ! $ % / APPELLANT BY : SHRI RAKESHKUMAR GUPTA '#! $ % / RESPONDENT BY : SHRI PITAMBAR DAS & '( $ )* / DATE OF HEARING : 28.07.2014 +,- $ )* / DATE OF PRONOUNCEMENT : 27.08.2014 . / O R D E R PER SANJAY ARORA, A. M.: THIS IS A SET OF FIVE APPEALS BY THE ASSESSEE, I.E. , FOR FIVE ASSESSMENT YEARS (A.YS.), BEING A.YS. 2003-04 TO 2006-07 AND 2008-09 , AGITATING THE PART CONFIRMATION OF THE PENALTY U/S.271(1)(B) OF THE INCOME TAX ACT, 19 61 (THE ACT HEREINAFTER) AT RS.20,000/- FOR EACH YEAR BY THE COMMISSIONER OF I NCOME TAX (APPEALS)-25, MUMBAI (CIT(A) FOR SHORT) VIDE HIS COMMON ORDER DATED 05 .10.2012. 2 ITA NOS. 381 TO 385/MUM/2013 (A.YS. 2003-04 TO 2006-07 & 2008-09) HEMA RAKESHKUMAR M. GUPTA VS. ITO 2. IT WOULD BE RELEVANT TO RECOUNT THE BACKGROUND F ACTS OF THE CASE, IDENTICAL FOR ALL THE YEARS, I.E., TO THE EXTENT RELEVANT, AND WHICH FIND DELINEATION IN THE PENALTY ORDER. THE ASSESSEE FAILING TO COMPLY WITH THE NOTICES U/S. 14 3(2) AND 142(1), CALLING FOR THE DETAILS IN CONNECTION WITH THE ASSESSMENT AS WELL AS SEEKIN G ATTENDANCE PERSONAL OR THROUGH THE REPRESENTATIVE TO LEAD EVIDENCE IN VERIFICATION O F THE RETURN/S, EITHER NOT REPRESENTING/ ATTENDING OR SEEKING ADJOURNMENT, HER ASSESSMENTS F OR THE RELEVANT YEARS CAME TO BE MADE U/S.144 R/W SS. 147 AND 145 OF THE ACT ON 27.12.201 0. NOTICES U/S. 271(1)(B) AND 271(1)(C) OF THE ACT WERE ALSO ISSUED ALONG WITH. S UBSEQUENTLY, PENALTY PROCEEDINGS U/S.271(1)(B), THUS INITIATED, WERE PROCEEDED WITH BY THE ASSESSING OFFICER (A.O.), AND THE ASSESSEE OFFERED FINAL OPPORTUNITY TO REPLY TO THE SHOW CAUSE NOTICES, I.E., DATED 27.12.2010, THE DATE OF THE ASSESSMENT ORDER, AND 0 7.12.2010, FIXING THE DATE OF HEARING FOR 06.05.2011. FINDING THE ASSESSEES REPLY, SUBMI TTED ON 04.05.2011, AS NOT SATISFACTORY; THE ASSESSEE HAVING DISPLAYED UNCOOPE RATIVE BEHAVIOR IN THE EXTREME, FAILING TO COMPLY WITH THE VARIOUS NOTICES AND REQUISITIONS , ENTERING INTO CORRESPONDENCE INSTEAD, WHICH IN FACT WAS IN LINE WITH ITS PAST CONDUCT, PE NALTY U/S.271(1)(B) WAS LEVIED AT RS.50,000/- FOR EACH YEAR VIDE SEPARATE ORDERS OF E VEN DATE, I.E., 12.05.2011. IN APPEAL, THE LD. CIT(A) ENDORSED THE FINDING/S QUA NON-COMPLIANCE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS; THE ASSESSEE CONTINUING TO EXHIBIT THE SAME BEHAVIOR AND ATTITUDE IN THE APPELLATE PROCEEDINGS (IN QUANTUM), EVEN AS STATED AT PARA 2 OF THE APPELLATE ORDER IN SUCH PROCEEDINGS. PENALTY U/S. 271(1)(B) WAS, THUS, LEVIABLE, BEING ONLY IN ACCORD WITH THE INTENT AND THE PURPOS ES OF THE ACT. ITS QUANTUM, HOWEVER, SPECIFIED AT RS.10,000/- FOR EACH DEFAULT, HAD THER EFORE TO BE WITH REFERENCE TO THE DEFAULTS. PENALTY HAVING BEEN LEVIED FOR TWO DEFAUL TS, I.E., CORRESPONDING TO NOTICES DATED 07.12.2010 (ISSUED DURING THE COURSE OF THE ASSESSM ENT PROCEEDINGS) AND 27.12.2010, HE RESTRICTED THE PENALTY FOR EACH YEAR TO RS.20,000/- . AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3 ITA NOS. 381 TO 385/MUM/2013 (A.YS. 2003-04 TO 2006-07 & 2008-09) HEMA RAKESHKUMAR M. GUPTA VS. ITO THE FIRST THING THAT STRIKES US IN THE MATTER IS TH E COMPLETE ABSENCE OF ANY REFERENCE TO THE PRIMARY FACTS IN THE IMPUGNED ORDE R, WHICH DOES NOT EVEN AS MUCH AS SPECIFY THE NATURE AND THE DATE OF THE NOTICES, THE DEFAULT BY WAY OF NON-COMPLIANCE OF WHICH STANDS CONFIRMED FOR BEING PENALIZED. SO MUCH SO THAT THE FIRST IMPRESSION THAT ONE GAINS ON READING THE SAID ORDER IS THAT THE PENALTY STANDS LEVIED FOR NON-COMPLIANCE OF THE NOTICES DATED 07.12.2010 AND 27.12.2010, AND IT IS ONLY ON A CLOSE READING THAT IT IS FOUND TO BE NOT SO, SO THAT NON-COMPLIANCE UNDER REFERENC E IS FOR TWO NOTICES AS PER THE NOTICES DATED 07.12.2010 AND 27.12.2010, I.E., QUA THE DEFAULTS SPECIFIED IN THE SAID SHOW CAUSE NOTICES. NOTWITHSTANDING THE GENERAL CONDUCT OF THE ASSESSEE, IT IS TO BE APPRECIATED, PENALTY STANDS LEVIED AND SUSTAINED FOR SPECIFIC DE FAULT/S, SO THAT THE NON-COMPLIANCE, WHERE AND TO THE EXTENT SO, AND THE ASSESSEES COND UCT WOULD HAVE TO BE EXAMINED WITH REFERENCE THERETO. WE SHALL THEREFORE PROCEED TO EXAMINE THE PRIMARY F ACTS QUA THE SAID TWO NOTICES, I.E., FOR DEFAULT OF COMPLIANCE OF WHICH PENALTY ST ANDS CONFIRMED; THE REVENUE BEING NOT IN APPEAL. THE SAME FIND MENTION AT PARAS 2 & 3 OF THE PENALTY ORDER. THE FACTS BEING IDENTICAL, EVEN AS CONFIRMED BY THE PARTIES BEFORE US, WE PROCEED WITH REFERENCE TO THE PENALTY ORDER FOR A.Y. 2003-04, THE FIRST YEAR. THE DATES OF THE TWO NOTICES UNDER REFERENCE ARE 06.10.2010 AND 11.11.2010 (ALSO REFER PARA 37, LAST PAGE OF THE ASSESSMENT ORDER). THE FIRST NOTICE, I.E., DATED 06.10.2010, I S A NOTICE U/S. 143(2), FIXING THE DATE OF HEARING FOR 25.10.2010 . NOTICE U/S. 143(2) WAS FIRST ISSUED IN THIS CASE ON 24.09.2010 FOR 12.10.2010. THE SAME WAS RESPONDED TO BY THE ASSESS EE BY FILING A LETTER IN TAPAL (ON 12.10.2010), FURNISHING AN AFFIDAVIT DATED 02.03.20 10 ALONG WITH. THE REQUIRED DETAILS BEING NOT FURNISHED, THE SAME CANNOT BE SAID TO BE A PROPER COMPLIANCE, BUT THEN IT CANNOT, AT THE SAME TIME, BE SAID TO BE A CASE OF N ON-COMPLIANCE. TRUE, THE NON- COMPLIANCE BEING PENALIZED IS FOR THE NOTICE U/S. 1 43(2) DATED 06.10.2010, BUT THEN THE SAME STANDS ISSUED PRIOR TO THE DATE OF HEARING FIX ED VIDE THE EARLIER NOTICE U/S.143(2), I.E., 12.10.2010. WE ARE AS SUCH UNABLE TO UNDERSTA ND THE PURPORT OF A FRESH NOTICE PENDING THE MATURITY OF THE OLD NOTICE. IN FACT, A FRESH NOTICE U/S. 143(2) IS GENERALLY 4 ITA NOS. 381 TO 385/MUM/2013 (A.YS. 2003-04 TO 2006-07 & 2008-09) HEMA RAKESHKUMAR M. GUPTA VS. ITO ISSUED, AND AGAIN ONLY BY WAY OF ABUNDANT CAUTION, ON A CHANGE IN THE INCUMBENT OFFICER, WHICH IS NOT THE CASE. THE SAID NOTICE IS IN ANY CA SE PREMATURE, ISSUED WITHOUT AWAITING THE RESPONSE TO THE EARLIER NOTICE U/S. 143(2), DUL Y SERVED (ON 28.09.2010), AND DUE FOR COMPLIANCE ON 12.10.2010. IN OUR VIEW, UNDER THE CI RCUMSTANCES, NO CASE FOR PENALTY IS MADE OUT. THE OTHER NOTICE FOR WHICH PENALTY STANDS LEVIED IS THAT ISSUED U/S. 142(1) ON 11.11.2010, CALLING FOR SPECIFIC DETAILS AND FIXING THE DATE OF HEARING ON 22.11.2010. THERE WAS NO COMPLIANCE ON 22.11.2010. THE ASSESSEE , HOWEVER, SOUGHT ADJOURNMENT VIDE LETTER DATED 25.11.2010, WHICH WAS GRANTED BY THE A.O. VIDE HIS OFFICE LETTER DATED 26.11.2010, FOR 30.11.2010. FURTHER TIME WAS SOUGHT ON 30.11.2010; THE ASSESSEE ALSO SEEKING COPIES OF SOME IMPOUNDED DOCUMENTS, FOR WHI CH TIME WAS ALSO GRANTED BY HIM (A.O.) FOR 03.12.2010. NOBODY IS STATED TO HAVE ATT ENDED ON 03.12.2010. HOWEVER, COULD IT BE SAID ON THE BASIS OF THE FOREGOING ADMITTED F ACTS THAT THERE WAS NO COMPLIANCE BY THE ASSESSEE ? THE ASSESSEE SOUGHT ADJOURNMENT, ALBEIT BELATEDLY , WHICH WAS GRANTED. THE SUBSEQUENT CONDUCT SHOWS THAT CERTAIN DOCUMENTS WER E REQUIRED FOR THE PURPOSE OF COMPLIANCE, AND FOR WHICH COPIES THEREOF APPLICATIO N WAS THEREFORE MADE, WHICH WAS ALSO ACCEPTED, ESTABLISHING IN TURN THAT THE ASSESSEE CO ULD NOT HAVE MEANINGFULLY COMPLIED WITHOUT THE INFORMATION CONTAINED IN THE DOCUMENTS/ MATERIAL WITH THE REVENUE, AND THAT SHE WAS NOT DISREGARDING HER OBLIGATIONS. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THE ASSESSEE TO HAVE SUBSEQUENTLY FILED LETTERS DATED 0 6.12.2010 (ON 09.12.2010) AND 09.12.2010 (ON 14.12.2010) (REFER PARAS 12, 13 OF T HE ASSESSMENT ORDER). FURTHER, WHATEVER BE THE MERITS OF THE ASSESSEES REPLIES, I .E., DATED 06.12.2010 AND 09.12.2010, WE ARE ON THE BASIS OF THE FOREGOING UNABLE TO STAT E THAT THERE WAS A DEFIANCE OF LAW ON THE ASSESSEES PART AND THAT HER CONDUCT MERITED BEING PENALIZED. IN FACT, IF THE INFORMATION SOUGHT THUS WAS, TO WHATEVER EXTENT, RELEVANT FOR T HE PURPOSE OF NOTICE DATED 24.09.2010, NON-COMPLIANCE OF THE SAID NOTICE IS ALSO, AT LEAST IN PART, UNDERSTANDABLE. THE ASSESSEES CASE WOULD THUS STAND TO BE CONSIDER ED AS OF SUBSTANTIAL COMPLIANCE AND, THEREFORE, SAVED BY REASONABLE CAUSE IN TERMS OF S. 273B. IN ANY CASE, IT CANNOT BE 5 ITA NOS. 381 TO 385/MUM/2013 (A.YS. 2003-04 TO 2006-07 & 2008-09) HEMA RAKESHKUMAR M. GUPTA VS. ITO SAID TO BE A CASE OF CONDUCT CONTUMACIOUS AND IN CO NSCIOUS DISREGARD OF ONES STATUTORY OBLIGATIONS. IN OUR VIEW, THEREFORE, THE LEVY OF PE NALTY U/S. 271(1)(B) IN THE INSTANT CASE IS NOT SUSTAINABLE IN THE EYES OF LAW AND, ACCORDINGLY , DIRECT ITS DELETION. 4. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. /-)0 1'2 /) $ 3 4 ) $ ) 56 ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 27, 20 14 SD/- SD/- (H. L. 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