Brahamputra Enterprises Private Ltd., New Delhi V. DCIT, New Delhi

ITA 4264/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7102 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 15-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: R S AHUJA
• Keywords: Reasonable cause; Non compliance
• Section: 142(1); 153A; 132

Judgement Text

1 ITA 4258 TO 4264/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SMT. SUCHITRA KAMBLE : JUDICIAL MEMBER ITA NOS. 4258/DEL/2013 (AY: 2005-06) 4259/DEL/2013 (AY: 2006-07) 4260/DEL/2013 (AY: 2007-08) 4261/DEL/2013 (AY: 2008-09) 4262/DEL/2013 (AY: 2009-10) 4263/DEL/2013 (AY: 2010-11) 4264/DEL/2013 (AY: 2011-12) BRAHAMPUTRA ENTERPRISES PVT. LTD., VS. DCIT CEN. C IR. 17, A-7, MAHIPALPUR, NH-8, NEW DELHI. MAHIPALUR CROSSING, MAHIPALPUR, NEW DELHI-110037. PAN: AAACI 0214 P ( APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI R.S. AHUJA ADV. RESPONDENT BY : SHRI RAVI JAIN CIT (DR) DATE OF HEARING : 29/06/2016. DATE OF ORDER : 30/06/20126. O R D E R PER BENCH: THESE ARE ASSESSEES APPEALS AGAINST SEPARATE ORD ERS OF LD. CIT(A) RELATING TO AY 2005-06 TO 2011-12. SOLE EFFECTIVE G ROUND, RAISED BY THE REVENUE IN THESE APPEALS, IS TO CHALLENGE THE ACT ION OF LD. CIT(A) IN SUSTAINING THE IMPOSITION OF PENALTY U/S 271(1)(B) FOR NON-COMPLIANCE OF 2 ITA 4258 TO 4264/DEL/2013 NOTICES U/S 143(2) AND 142(1) OF I.T. ACT, AMOUNTIN G TO RS. 10,000/- FOR EACH YEAR. 2. FACTS IN ALL THE APPEALS ARE IDENTICAL, THEREFOR E, WE ARE REFERRING TO THE FACTS AS OBTAINING IN AY 2005-06. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD F ILED RETURN DECLARING LOSS OF RS. 15,659/-. ACTION U/S 132 OF THE I.T. ACT WAS CARRIED OUT BY THE DEPARTMENT ON 28.9.2010 IN BRAHAMPUTRA GROUP OF CAS ES, INCLUDING THE ASSESSEE, AT THEIR BUSINESS PREMISES AND RESIDENTIA L PREMISES OF THE DIRECTORS. NOTICE U/S 153A WAS ISSUED ON 2.2.2012, REQUIRING T HE ASSESSEE TO FILE THE RETURN OF ITS INCOME WITHIN 15 DAYS OF THE SERVICE OF THE SAID NOTICE. THE ASSESSEE FILED LETTER DATED 14.3.2012, SUBMITTING T HAT THE ASSESSEE HAD ALREADY FILED RETURN OF ITS INCOME IN DUE COURSE OF TIME AN D THE ORIGINAL RETURN FILED BY THE ASSESSEE MAY BE TREATED TO HAVE BEEN FILED I N RESPONSE TO NOTICE U/S 153A OF THE ACT. THE ASSESSEES OBJECTIONS DATED 10 .5.2012 AGAINST THE NOTICE U/S 153A WERE DISPOSED OFF BY AO VIDE ORDER DATED 7.2.2013. 4. IN COURSE OF ASSESSMENT PROCEEDINGS THE AO HAD I SSUED NOTICES U/S 143(2) AND 142(1) DATED 5.9.2012 ALONG WITH QUESTIO NNAIRE FIXING THE CASE FOR 20.9.2012. SINCE NEITHER ANYBODY ATTENDED ON TH E APPOINTED DATE NOR ANY APPLICATION FOR ADJOURNMENT WAS FILED, A SHOW CAUSE NOTICE U/S 274 READ WITH SECTION 271 OF THE I.T. ACT WAS ISSUED ON 21.9.2012 , REQUIRING THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY U/S 271(1)(B) SHOULD NOT BE LEVIED. 5. IN THE PENALTY ORDER DATED 6.11.2012 THE AO HAS, INTER ALIA, OBSERVED AS UNDER: THE CASE WAS FIXED FOR HEARING ON 05.10.2012 ON WH ICH DATE AGAIN, NONE ATTENDED NOR ANYB APPLICATION FOR ADJOU RNMENT ETC. WAS FILED. HOWEVER, ON 08.10.2012 THE ASSESSEE HAS FILED LETTER STATED THAT NON COMPLIANCE OF THESE NOTICES IS PURE LY UNINTENTIONAL AND COMPLIANCE WITH THE SAID NOTICE W ILL BE DONE 3 ITA 4258 TO 4264/DEL/2013 IN NEXT 20 DAYS. FROM THE RECORDS IT IS NOTICED THA T TILL DATE I.E. TODAY THE 06.11.2012 ASSESSEE HAS NOT MADE THE COMP LIANCE. 6. HE, THEREFORE, LEVIED PENALTY OF RS. 10,000/- U/ S 271(1)(B) OF THE I.T. ACT. 7. BEFORE LD. CIT(A) IT WAS SUBMITTED THAT THE ASSE SSEE GROUP, COMPRISING OF COMPANIES, INDIVIDUALS AND JOINT VENT URES, HAD CO-OPERATED FULLY WITH THE DEPARTMENT AND THE RECORDS OF THE EN TIRE ASSESSEE GROUP, NUMBERING 275 ASSESSMENT ORDERS, MAY BE EXAMINED A ND A HOLISTIC VIEW OF THE COMPLIANCE IN GENERAL MAY BE TAKEN IN THE MAT TER. FURTHER, ASSESSEE HAD ALSO MADE REFERENCE TO THE SEQUENCE OF EVENTS AND P OINTED OUT THAT THE ADJOURNMENT LETTER WAS FILED BY THE ASSESSEE ON 27. 9.2012; THAT THE REPLY TO THE SHOW CAUSE, FILED ON 8.10.2012, ALSO MENTIONED FINALIZATION OF ACCOUNTS FOR FY 11-12 AND NON-AVAILABILITY OF ACCOUNT STAFF TILL 30.9.2012 AS REASONS FOR DELAY IN COMPLIANCE WITH THE NOTICES; AND THAT THESE REASONS DO NOT FIND MENTION IN THE IMPUGNED ORDER; AND THAT THE ASSESS MENT PROCEEDINGS WERE IN A STATE OF LIMBO SINCE OBJECTIONS HAD BEEN FILED AGAINST THE ASSESSMENT U/S 153A. COPIES OF LETTERS DATED 9.11.2012, 10.12.2012 AND 14.1.2013, WHEREBY DETAILS WERE FURNISHED IN RESPONSE TO THE QUESTIONN AIRE ISSUED BY THE AO ALONG WITH THE NOTICE U/S 143(2) AND 142(1) DATED 5 .9.2012, AND COPY OF THE ASSESSMENT ORDER DATED 11.3.2013 ACCEPTING THE RETU RNED LOSS WERE FILED. IT WAS FURTHER, INTER ALIA, SUBMITTED THAT THE PROVISI ON FOR PENALTY WAS NOT FOR MERE TECHNICAL NON-COMPLIANCE BUT FOR THE ACTUAL OR HABITUAL DEFAULTERS. ASSESSEE HAD RELIED ON THE DECISION OF ITAT DELHI B ENCH G IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ADIT 115 TTJ 419, WHEREIN IT WAS HELD THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS GOOD COMPLIANCE AND THE DEFAULT C OMMITTED EARLIER MAY 4 ITA 4258 TO 4264/DEL/2013 BE IGNORED. LD. CIT(A), HOWEVER, DID NOT ACCEPT THE ASSESSEES CONTENTION AND CONFIRMED THE ACTION OF AO. AGGRIEVED, THE ASSE SSEE IS IN APPEAL BEFORE THE ITAT. 8. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ITAT DELHI BENCH IN THE CASE OF MANAGING DIRECTOR SHRI MANOJ KUMAR PRIT HANI BEING ITA NOS. 4251, 4252 TO 4257/EL/2013 FOR AY 2005-06 TO 2011- 12 VIDE ORDER DATED 28.11.2014 HAD DELETED THE PENALTY. HE SUBMITTED TH AT THE PENALTY ORDER AND LD. CIT(A)S ORDER IS IDENTICALLY WORDED IN THE PRE SENT CASE AND, THEREFORE, THE SAID DECISION IS APPLICABLE. LD. COUNSEL FURTHE R REFERRED TO THE ASSESSMENT ORDER AND POINTED OUT THAT AO HAS, INTER ALIA, OBSE RVED AS UNDER: NOTICES U/S 143(2), 142(1) AND THE QUESTIONNAIRE W ERE ISSUED ON 05.09.2012 AND IN RESPONSE THERETO SHRI RAJESH S HARMA, AR OF THE ASSESSEE COMPANY ATTENDED THE PROCEEDINGS F ROM TIME TO TIME, FILED THE REQUIRED DETAILS AND THE CASE WAS D ISCUSSED WITH HIM. 9. HE, THEREFORE, SUBMITTED THAT AO HAS NOT POINTED OUT ANY DEFAULT IN THE ASSESSMENT ORDER IN REGARD TO THE NON-COMPLIANCE OF NOTICE U/S 143(2)/142(1) DATED 5.9.2012. 10. LD. CIT(DR) SUBMITTED THAT THE PROCEEDINGS FOR LEVY OF PENALTY U/S 271(1)(B) ARE TAKEN IN COURSE OF ASSESSMENT PROCEE DINGS AND IN THE PENALTY ORDER PASSED BY THE AO, THE ASSESSEE HAS CLEARLY AD MITTED THAT THERE WAS NON-COMPLIANCE OF THESE NOTICES, THOUGH PURELY UNIN TENTIONAL AND COMPLIANCE WAS TO BE MADE WITHIN 20 DAYS. HOWEVER, NO COMPLIANCE WAS MADE TILL THE PASSING OF PENALTY ORDER. HE SUBMITTE D THAT IT IS NOT NECESSARY FOR AO TO MENTION EACH NON-COMPLIANCE OF NOTICE IN THE ASSESSMENT ORDER. 5 ITA 4258 TO 4264/DEL/2013 11. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. PENALTY U/S 271(1)( B) IS LEVIABLE IF AN ASSESSEE FAILS TO COMPLY WITH A NOTICE, INTER ALIA, U/S 142(1)/143(2). THEREFORE, MERELY BECAUSE NO REFERENCE HAS BEEN MAD E IN THE ASSESSMENT ORDER REGARDING NON-COMPLIANCE, WOULD NOT LEAD TO T HE CONCLUSION THAT THE PENALTY U/S 271(1)(B) WAS NOT LEVIABLE. THIS PENALT Y HAS BEEN MANDATED IN ORDER TO ENSURE DUE COMPLIANCE OF VARIOUS NOTICES B Y ASSESSEE. LD. CIT(DR) HAS RIGHTLY POINTED OUT THAT PENALTY U/S 271(1)(B) IS NORMALLY LEVIED IN COURSE OF ASSESSMENT PROCEEDINGS. THE REASONS FOR DEFAULT OF ASSESSEE IN COMPLYING WITH THE NOTICE HAVE TO BE CONSIDERED QUA EACH SUCH NOTICE INDEPENDENT OF THE FACT AS TO WHAT SUBSEQUENTLY TRANSPIRED THROUGH IT MAY BE A MITIGATING FACTOR. 12. NOW COMING TO THE MERITS OF THE CASE, WE FIND T HAT AS FAR AS RELIANCE PLACED BY LD. COUNSEL FOR THE ASSESSEE ON THE ORDER OF THE ITAT IN THE CASE OF MANAGING DIRECTORS CASE (SUPRA) IS CONCERNED, THE SAME IS DISTINGUISHABLE ON FACTS BECAUSE IN THE PRESENT CASE AO HAS SPECIF ICALLY OBSERVED THAT TILL DATE OF PASSING OF THE PENALTY ORDER VIZ. 6.11.2012 , ASSESSEE HAD NOT MADE THE COMPLIANCE. WE FIND THAT THE PENALTY HAS BEEN L EVIED FOR NON-COMPLIANCE OF ONLY ONE DATE I.E. 5.9.2012, FOR WHICH THE ASSES SEES EXPLANATION HAD BEEN NOTICED IN LD. CIT(A)S ORDER. IN OUR OPINION, THE EXPLANATION GIVEN BY ASSESSEE WAS QUITE REASONABLE BECAUSE IN THE ENTIR E ASSESSEES GROUP 275 ASSESSMENT ORDERS WERE PASSED AND WE NOTICE FROM TH E ASSESSMENT ORDER, AS REPRODUCED EARLIER, THAT ASSESSEE HAD MADE COMPLIAN CE BEFORE PASSING OF THE ASSESSMENT ORDER. THERE WAS NO DELIBERATE ATTEMPT O N THE PART OF ASSESSEE TO DISREGARD THE NOTICE ISSUED BY THE DEPARTMENT. SEPT EMBER BEING THE MONTH 6 ITA 4258 TO 4264/DEL/2013 FOR FINALIZATION OF ACCOUNTS, THE ASSESSEES EXPLAN ATION THAT THERE WAS NON- AVAILABILITY OF ACCOUNTING STAFF, CANNOT BE DOUBTED . WE, THEREFORE, HOLD THAT ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FROM ATT ENDING THE PROCEEDINGS ON 20.9.2012. WE, ACCORDINGLY, DELETE THE PENALTY. 13. FACTS AND CIRCUMSTANCES IN THE REMAINING ASSESS MENT YEARS BEING IDENTICAL WE FOLLOW THE SAME COURSE OF ACTION THERE ALSO. ACCORDINGLY, WE DELETE THE PENALTY LEVIED U/S 271(1)(B) IN ALL THE ASSESSMENT YEARS UNDER CONSIDERATION. 14. IN THE RESULT, ALL THE APPEALS STAND ALLOWED. ORDER PRONOUNCEMENT IN OPEN COURT ON 30/06/2016. SD/- SD/- (SUCHITRA KAMBLE (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30/06/2016. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI.