Shri Gaurav Gauba, Gurgaon V. DCIT, New Delhi

ITA 4325/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4712 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 03-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWETA NAKRA DATTA
• Assessee Lawyers: SSH GAUTAM JAIN; PIYUSH KUMAR KAMAL S
• Keywords: Reasonable cause
• Section: 273B; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E , NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO S . 4322 TO 4324 /DE L/ 2015 ASSESSMENT YEAR S : 2006 - 07 TO 2008 - 09 M/S. KAIRAV NON - WOVEN PVT. LTD., FLAT NO. 4 - R.R. APARTMENT, 3 - 4, MANGLAPURI, MEHRAULI, NEW DELHI VS. DCIT, CENTRAL CIRCLE - 14, NEW DELHI PAN : AACCK6104D (APPELLANT) (RESPONDENT) AND ITA NO S . 4325 TO 4330/DEL/2015 ASSESSMENT YEARS : 2003 - 04 TO 2008 - 09 SH. GAURAV GAUBA, H. NO. 29 (1 ST FLOOR), SECTOR - 15, PHASE - I, GURGAON VS. DCIT, CENTRAL CIRCLE - 14, NEW DELHI PAN : AIZPG2182J (APPELLANT) (RESPONDENT) ASSESSEE BY S/SH. GAUTAM JAIN & PIYUSH KUMAR KAMAL, ADVOCATES DEPARTMENT BY MS. SWETA NAKRA DATTA, SR.DR DATE OF HEARING 30.08.2017 DATE OF PRONOUNCEMENT 31.08.2017 ORDER PER BENCH : THESE APPEALS OF TWO ASSESSEES ARE DIRECTED AGAINST ORDER(S) PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - XXVI, NEW 2 DELHI [ IN SHORT THE CIT - (A) ] IN RELATION TO PENALTY PROCEEDINGS UNDER SECTION 271(1)(B) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT ). 2. SINCE IN ALL THESE APPEALS COMMON ISSUE OF LEVY OF PENALTY OF RS 20,000/ - UNDER SEC TION 271(1)(B) OF THE ACT ON ACCOUNT OF FAILURE TO COMPLY WITH THE STATUTORY NOTICES, ARISING OUT OF THE IDENTICAL SET OF FACTS, IS INVOLVED , THEREFORE , SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. 3. BOTH THE PA RTIES WERE AGREED THAT ISSUE IN DISPUTE IN ALL THE APPEALS IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF JAWALA PRASAD AGGARWAL (ITA NOS. 4392 TO 4398/DEL/2015) , W HEREIN THE TRIBUNAL HAS DELETED THE PENALTY UNDER SECTION 271(1)(B) OF THE ACT I N SIMILAR SET OF CIRCUMSTANCES. THE FACTS AND CIRCUMSTANCES MENTIONED IN THE ORDERS OF THE LOWER AUTHORITIES HAVE NOT BEEN DISPUTED BY THE PARTIES. 4. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN ALL THE INSTANT APPEALS, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(B) OF THE ACT FOR NON - COMPLIANCE OF STATUTORY NOTICES ON TWO OCCASIONS, REJECTING THE CONTENTION OF THE ASSESSEE OF HAVING REASONABLE CAUSE FOR NON - COMPLIANCE . THE LD. CIT - ( A ) ALSO DID NO T AGREE WITH THE CONTENTION OF THE ASSESSEE THAT THE KEY PERSON OF THE GROUP AWARE WITH THE TAX MATTERS WAS IN LEGAL CUSTODY DURING THE PERIOD OF COMPLIANCE OF NOTICES AND VOLUMINOUS SUBMISSION IN MORE THAN 300 ASSESSMENTS IN THE GROUP CASES ETC . CONSTIT UTE REASONABLE CAUSE FOR NON - COMPLIANCE . 5. WE FIND THAT AS FAR AS THE ISSUE IN DISPUTE OF LEVY OF PENALTY UNDER SECTION 271(1)(B) OF THE ACT IS CONCERNED, FACTS AND CIRCUMSTANCES OF ALL THE INSTANT APPEALS ARE IDENTICAL TO THE FACTS OF THE JAWALA PRASH AD AGGARWAL(SUPRA), WHEREIN THE TRIBUNAL HAS HELD AS UNDER: 3 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER. HERE IN THIS CASE, FIRST OF ALL, ON PERUSAL OF THE PENALTY NOTICE AS APPEARING AT PAGE NO. 6 OF THE PAPER BOOK, IT IS SEEN THAT NOWHERE THE ASSESSING OFFICER HAS MENTIONED ABOUT ANY PARTICULARS OF STATUTORY NOTICE/S FOR WHICH THERE WAS ANY DEFAULT ON PART OF THE ASSESSEE. SHOW CAUSE NOTICES ISSUED FOR INITIATING PENALTY PROCEEDINGS SHOULD BE SPECIFIC AND WITHOUT ANY AMBIGUITY, BECAUSE THE ASSESSEE WHILE GIVING THE EXPLANATION SHOULD BE AWARE OF THE CHARGE FOR WHICH PENALTY IS BEING INITIATED AND CAN GIVE HIS SPECIFIC REBUTTAL. SUCH VAGUE NOTICE IS FATAL TO THE INITIATION OF THE PROCEEDINGS IT SELF. FURTHER FROM THE PERUSAL OF THE ASSESSMENT ORDER, IT IS GATHERED THAT THE ASSESSEE DID NOT ATTEND THE PROCEEDINGS ON 20.11.2012 AND 30.11.2012. THE ASSESSING OFFICER FURTHER MENTIONS THAT ON 5.12.2012, SHRI VISHAL MEHTA, AR ALONG WITH OTHER AUTHORIZE D PERSONS APPEARED BEFORE HIM AND SUBMITTED THAT NON - COMPLIANCE ON THE PART OF THE ASSESSEE ON THE SAID DATE WERE DUE TO THE FACT THAT GROUP HEAD, SHRI GOPAL KUMAR GOYAL WAS CURRENTLY NOT AVAILABLE AND THE WHOLE FAMILY MEMBERS AND THE GROUP HEADS WERE ENGA GED IN ONGOING COURT PROCEEDINGS TO GET EARLY RELEASE OF SHRI GOPAL KUMAR GOYAL WHO WAS IN JUDICIAL CUSTODY. THIS CONTENTION RAISED BY THE ASSESSEE BEFORE THE LD. ASSESSING OFFICER, IN THE COURSE OF THE ASSESSMENT PROCEEDINGS HAVE NOT BEEN ACCEPTED AND HE PROCEEDED TO MAKE THE ASSESSMENT U/S 144 READ WITH SECTION 153A. HOWEVER ON PERUSAL OF VARIOUS REPLIES FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS, IT IS SEEN THAT MOST OF THE COMPLIANCES HAVE BEEN MADE THROUGH REPL IES/LETTERS SENT TO THE ASSESSING OFFICER EITHER BY FILING IN THE DAK OR THROUGH REGISTERED/SPEED POST. THIS IS FURTHER CORROBORATED BY DETAILS OF REPLIES FILED IN VARIOUS GROUP CASES AS REFERRED TO BY LD. COUNSEL BEFORE US. OSTENSIBLY THERE MAY BE A CASE OF DELAY IN COMPLIANCE OR FILING OF REPLIES BEFORE AO AND NOT PERSONALLY APPEARING BEFORE THE ASSESSING OFFICER ON A PARTICULAR DATE, BUT COMPLIANCES IN FORM OF REPLIES DO HAVE BEEN FILED IN THE COURSE OF ASSESSMENT PROCEEDINGS AND ALL THE NECESSARY DETAIL S REQUIRED FOR THE PURPOSE OF ASSESSMENT HAS BEEN PROVIDED. WHAT ARE REQUIRED TO BE SEEN WHILE LEVYING PENALTY FOR NON - COMPLIANCE OF STATUTORY NOTICES, IS THE FACTS AND CIRCUMSTANCES FOR NON - APPEARANCE ON THE SPECIFIED DATE, THAT IS, WHETHER THERE WAS ANY REASONABLE CAUSE AND THE OVERALL CONDUCT OF THE ASSESSEE. THE MAIN PLANKS FOR REASONABLE CAUSE PLEADED BY THE ASSESSEE HAS BEEN THAT, FIRSTLY, THE KEY PERSON/GROUP HEAD, SHRI GOPAL KUMAR GOYAL WHO WAS ENTRUSTED WITH INCOME TAX MATTERS AND WAS LOOKING AFTER THE ENTIRE WORKING OF THE GROUP WAS IN JUDICIAL CUSTODY IN SOME CRIMINAL 4 PROCEEDINGS AND THE ENTIRE GROUP AND FAMILY MEMBERS WERE ENGAGED IN ONGOING COURT PROCEEDINGS FOR HIS EARLY RELEASE AND VARIOUS EMPLOYEES WERE LEAVING THE GROUP FURTHER ACCENTUATING THE PROBLEMS; SECONDLY, MORE THAN 300 GROUP ASSESSMENTS WERE INITIATED IN THE WAKE OF SEARCH PROCEEDINGS WHICH WERE SIMULTANEOUSLY GOING ON, THEREFORE, IT WAS DIFFICULT TO COMPLY TO THE VARIOUS NOTICES ON SHORT DATES; LASTLY, IT HAS BEEN STRONGLY PLEADED B EFORE US, THAT THE COMPLIANCES HAD BEEN MADE THROUGH REPLIES FILED THROUGH DAK OR REGISTERED POST THOUGH BELATEDLY. THESE FACTS HAVE NOT BEEN CONTROVERTED BY THE AO OR CTT (APPEALS). ALL THESE FACTS AND CIRCUMSTANCES UNDER ANY PRUDENCE DO CONSTITUTE REASON ABLE CAUSE FALLING WITHIN THE SCOPE AND AMBIT OF SECTION 273B AND ACCORDINGLY, WE ARE OF THE CONSIDERED OPINION THAT FAILURE TO COMPLY WITH CERTAIN NOTICES ON A PARTICULAR DATE WAS DUE TO REASONABLE CAUSE AS HIGHLIGHTED BY THE ASSESSEE NOT ONLY DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS BUT ALSO BEFORE THE ASSESSING OFFICER AND LEARNED CIT(APPEALS) IN THE IMPUGNED PENALTY PROCEEDINGS AND HENCE PENALTY CANNOT BE LEVIED IN SUCH CIRCUMSTANCES . 10. APART FROM THAT, ONE IMPORTANT FACT BROUGHT ON RECORD I S THAT, THE DEMAND IN THE QUANTUM PROCEEDINGS HAS BEEN REDUCED TO NIL , AFTER GIVING EFFECT TO THE FIRST APPELLATE ORDER AND THERE HAS BEEN NO SUBSTANTIVE NON - COMPLIANCE EITHER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROCEE DINGS. IN SUCH CIRCUMSTANCES SUCH AN ALLEGED BREACH OR NON - COMPLIANCE IS MERE TECHNICAL AND VENIAL IN NATURE AND THEREFORE, PENALTY SHOULD NOT BE LEVIED FOR SUCH VENIAL BREACH. ACCORDINGLY, THE LEVY OF PENALTY OF RS. 20,000/ - U/S 271(L)(B) FOR ALL THE ASSE SSMENT YEARS IS UNSUSTAINABLE FOR THE REASONS GIVEN ABOVE AND IS DIRECTED TO BE DELETED. THUS, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 9. WE ALSO NOTE THAT IN THE CASE OF GOBIND GOYAL (ITA NO S. 4315 TO 4321 /DEL/2015 ) ALSO IN SIMILAR SET OF CIRCUMSTANCES, THIS BENCH HAS DELETED THE PENA LTY LEVIED UNDER SECTION 271(1)(B) OF THE ACT FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF JAWALA PRASHAD AGGARWAL(SUPRA). RESPECTFULLY, FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF JAWALA PRA SHAD AGGARWAL(SUPRA), WE HEREBY DIRECT THE ASSESSING O FFICER TO 5 DELETE PENALTY OF RS. 20,000/ - EACH LEVIED UNDER SECTION 271(1)(B) THE ACT IN ALL THE APPEALS. THE GROUNDS OF APPEALS ARE ACCORDINGLY ALLOWED. 10. IN THE RESULT , ALL THE APPEALS OF BOTH THE AS SESSEES ARE ALLOWED . THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 3 1 S T AUGUST , 201 7 . S D / - S D / - ( BHAVNESH SAINI ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 1 S T AUGUST , 201 7 . RK / - (D.T.D) COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI