M/s Consultancy Integrated Services (P) Ltd., New Delhi V. ACIT, New Delhi

ITA 4307/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7600 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 16-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Assessee Lawyers: B K DHINGRA
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI J. S. REDDY , ACCOUNTANT MEMBER AND SHRI C. M. GARG, JUDICIAL MEMBER I.T.A .NO. - 4307 /DEL/2013 (ASSESSMENT YEAR - 200 9 - 10 ) CONSULTANCY INTEGRATED SERVICES (P) L TD., VS. A CIT (NOW KNOWN AS FAITH AGENCIES PVT. LTD. CENTRAL CIRCLE - 21 RZ - 61, GALI NO. 25C, INDIRA PARK, JHANDEWALAN EXTN. PALAM COLONY, NEW DELHI - 110045 NEW DELHI. - 110055 PAN:AA C CC1012F (APPELLANT) (RESPONDENT) ASSESSEE BY: - SH. B. K. DHINGRA, CA . REVENUE BY: - SMT . PARWINDER KAUR , SR . DR ORDER PER C. M. GARG, JM. THIS APPEAL HAS BEEN DIRECTED AGAINST THE ORDER OF CIT (APPEALS) - II, NEW DELHI, VIDE DATED 30 .0 5.2013 IN APPEAL NO.35 /1 1 - 1 2 BY WHICH PENALTY OF RS.1 0,000/ - LEVIED BY THE AO U/S 271(1)(B) OF THE INCOME TAX ACT, 1961 ( FOR SHORT THE ACT) HAS BEEN CONFIRMED. 2. ALTHOUGH THE ASSESSEE HAS RAISED AS MANY AS SEVEN GROUNDS IN THIS APPEAL BUT EXCEPT GROUND NO 2, OTHER GROUNDS ARE ARGUMENTATIVE AND SUPPORTIVE TO THE MAIN GROUNDS WHICH READS AS UNDER: 2. (A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE LD. CIT(APPEALS) HAS FAILED TO APPRECIATE THAT THE NOTICE ISSUED U/S 142(1) DT. 08.11.2010 OF THE INCOME 2 TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2009 - 10 FIXING THE CASE FOR HE ARING ON DATED 18.11.2010, WAS NOT PROPERLY SERVED ON THE APPELLANT COMPANY AS PER THE RELEVANT PROVISIONS OF LAW; HENCE BAD IN LAW AND CONSEQUENTLY, PENALTY PROCEEDINGS WERE WRONGLY INITIATED AND THE PENALTY OF RS.10,000/ - LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) FOR NOT ATTENDING THE OFFICE OF THE ASSESSING OFFICER ON 20.12.2010 FOR THE ASS ESSMEN T. YEAR 2009 - 10 IS ILLEGAL. (B) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE LD. ASSESSING OFFICER HAS ER RED IN LEVYING AND LD. CIT (A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.10,000/ - U/S 271(1)(B) OF THE INCOME TAX ACT, 1961 FOR NON - COMPLIANCE OF NOTICE DATED 08.11.2010 FIXED FOR THE ASSESSMENT YEAR 2009 - 10. 3. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES A ND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. THE LD. ASSESSEE S REPRESENTATIVE SUBMITTED THAT THE NOTICE U/S 142(1) OF THE ACT , WAS ISSUED ON 8.11.2010 FOR A.Y. 2009 - 10 FIXING THE HEARING ON 18.11.2010 WHICH WAS NOT PROPERLY SERVED ON THE A SSESSEE, HENCE, PENALTY LEVIED BY THE AO AND UPHELD BY THE LD. CIT(A) FOR NOT ATTENDING THE OFFICE OF THE AO ON 20.12.2010 IS NOT SUSTAINABLE. THE LD. AR ALSO ARGUED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.10,000/ - U/S 271(1)(B) OF TH E ACT FOR NOT ATTENDING PROCEEDINGS ON 20.12.2010 IN COMPLIANCE TO THE NOTICE DATED 8.11.2010 IS NOT SUSTAINABLE AS THE NOTICE WAS NOT PROPERLY SERVED UPON THE ASSESSEE AND THE DATE OF HEARING FIXED THEREIN WAS 18.11.2010. 3 4. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) REPLIED THAT IF ASSESSEE IS NOT COMPLYING WITH THE NOTICES OF THE AUTHORITIES BELOW WITHOUT ANY SUFFICIENT CAUSE FOR THE NON - ATTENDANCE THEN PENALTY IS LEVIABLE. THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BE LOW. 5. ON CAREFUL PERUSAL OF THE IMPUGNED ORDER OF THE LD. CIT(A) AND HAVING HEARD ARGUMENT S AND CONTENTIONS OF BOTH THE SIDES AND VIGILANT PERUSAL OF THE RECORD . W E NOTE THAT THE AO ISSUED NOTICE U/S 142(1) OF THE ACT AGAINST THE ASSESSEE ON 8.11.2010 F IXING THE DATE OF HEARING ON 18.11.2010. THE ASSESSMENT WAS FRAMED ON 31.12.2010. THE LD. AR SUBMITTED THAT FIRSTLY, THE SAID NOTICE WAS NOT SERVED UPON THE ASSESSEE AND SECONDLY, THE ASSESSEE WAS GIVEN ONLY 8 - 9 DAYS TIME TO COMPLY WITH THE NOTICE. HENCE, THE LD. AR FURTHER PLEADED THAT THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY AND, THEREFORE, THE ASSESSEE CLAIM THAT THE PENALTY LEVIED IN THIS REGARD IS NOT SUSTAINABLE. IT WAS ALSO SUBMITTED THAT IN THE SIMILAR CIRCUMSTANCES THE PENALTY IMPOSED BY THE A O AND UPHELD BY THE LD. CIT(A) WAS DELETED BY THE ITAT, DELHI IN ITA NO. 4239/DEL/2013 IN THE CASE OF SHIVAANSH ADVERTISING AND PUBLICATIONS (P) LTD. VIDE ITS ORDER DATED 03.01.2014 WHEREIN IT WAS HELD THUS: WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE PENALTY HAD BEEN LEVIED BY THE ASSESSING OFFICER FOR NON - COMPLIANCE OF THE NOTICE DATED 8.11.2010. FROM THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE 4 NOTICE UNDER SECTION 142(1)/143(2) DATED 8.11.2010 ALONGWIT H THE DETAILED QUESTIONNAIRE WAS ISSUED FIXING THE CASE FOR 18.11.2010. THESE DETAILS HAVE BEEN MENTIONED BY THE ASSESSING OFFICER IN PARAGRAPH 2 PAGE 1 OF THE ASSESSMENT ORDER. THUS, TOTAL TEN DAYS TIME WAS ALLOWED FROM THE DATE OF ISSUE OF THE NOTICE. I N THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT MENTIONED THE DATE ON WHICH SUCH NOTICE WAS SERVED UPON THE ASSESSEE. THEREFORE, IN OUR OPINION, THE TIME OF LESS THAN TEN DAYS ALLOWED BY THE ASSESSING OFFICER FOR COMPLYING WITH THE DETAILED QUESTIONN AIRE CANNOT BE SAID TO BE A SUFFICIENT TIME BEING ALLOWED TO THE ASSESSEE AND, THEREFORE, FAILURE OF THE ASSESSEE TO COMPLY WITH SUCH NOTICE CANNOT BE SAID TO BE A DEFAULT WHICH MAY JUSTIFY THE LEVY OF PENALTY UNDER SECTION 271(1)(B) OF THE ACT. ACCORDINGL Y, THE SAME IS CANCELLED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. WE NOTE THAT THE ASSESSEE HAS BEEN GIVEN TIME OF 8 - 9 DAYS TO COMPLY WITH THE NOTICE. THE REASON OF NON - COMPLIANCE HAS BEEN GIVEN THAT THE TIME OF LESS THAN 10 DAYS FOR COMPL Y WITH THE DETAILED QUESTIONNAIRE CANNOT BE SAID TO BE A SUFFICIENT TIME BEING ALLOWED TO THE ASSESSEE COMPANY AND FAILURE OF THE ASSESSEE COMPANY COMPLY WITH SUCH NOTICE CANNOT BE SAID TO BE A DEFAULT WHICH MAY JUSTIFY THE LEVY OF PENALTY U/S 271(1)(B) OF THE ACT. IN OUR CONSIDERED OPINION THE SAID ACT OF THE ASSESSEE CANNOT BE SAID TO BE A WILFUL DEFAULT. IN THE SIMILAR CIRCUMSTANCES THE COORDINATE BENCH OF THE TRIBUNAL HAS DELETED THE PENALTY AS STATED ABOVE. 5 7. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS , WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE PENALTY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 /1 1 /2014. SD/ - SD/ - (J. S. REDDY ) (C. M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 /1 1 /2014 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR