M/s Hyderabad Distilleries & Wineries (P) Ltd., Hyderabad V. DCIT, Hyderabad

ITA 437/HYD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3182 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 22-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: K V RAMAKRISHNA MURTHY
• Keywords: Reasonable cause
• Section: 142(1)

Judgement Text

ITA NO.437/HYD/2010 HYD DISTILLERIES IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.:437/HYD/2010 ASSTT. YEAR 2007-08 M/S HYDERABAD DISTILLERIES & WINERIES (P) LTD.,HYDERABAD VS DCIT, CIRCLE 2(2) HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.V.RAMAKRISHNA MURTHY RESPONDENT BY : SHRI K.V.N CHARYA, DR O R D E R PER: CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER PASSED BY THE CIT(A)-III, HYDERABAD, DATED 29.01 .2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE RAISED THE GROUNDS THAT CIT (A) ERRED IN CONFIRMING THE ORDER OF THE DCIT CIRCLE-2(2) HYDERABAD PASSED U/S 271 (1) (B) OF THE IT ACT IMPOSING PENALTY OF RS.10,000/- AND WHICH TO BE DELETED. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 2007-08, THE ASSESSING OFFICE R HAS ISSUED NOTICES U/S 142(1) / 143(2) OF THE I.T. ACT, ON 0 3-02-2009, 13- 02-2009 AND 18-03-2009 TO THE ASSESSEE FOR FURNISHING R EQUIRED DETAILS ITA NO.437/HYD/2010 HYD DISTILLERIES 2 2 AND FOR MAKING DESIRED COMPLIANCE. HOWEVER, AS THE ASSESSE E HAS NOT MADE COMPLETE COMPLIANCE AND HAS NOT PRODUCED THE BOOKS O F ACCOUNTS AND VOUCHERS FOR SELLING EXPENSES, THE ASSESSING OFFICER HAS I SSUED ANOTHER NOTICE U/S 142 (1) ON 23-04-2009 REQUIRING TH E ASSESSEE FURNISH THE BALANCE INFORMATION AND TO MAKE COMPLIANCE IN TERM S OF THE SAID NOTICE ON 08-05-2009. HOWEVER, IN RESPONSE TO THAT NOT ICE, THOUGH THE ASSESSEE FURNISHED INFORMATION PARTLY ON SUBSEQUENT DATES, IT DID NOT FILE THE DETAILS OF SELLING EXPENSES AND DID NOT PRODUCE THE BOOKS OF ACCOUNTS. UNDER THE CIRCUMSTANCE, AS THE APPELLANT HAS FAI LED TO MAKE NECESSARY COMPLIANCE IN TERMS OF THE SAID NOTICE ISSUED U/S 14 2 (1) OF THE ACT, THE ASSESSING OFFICE HAS ISSUED A SHOW CAUSE NOTICE U/ S 271 (1) (B) OF THE ACT ON 25-05-2009 REQUIRING THE ASSESSEE TO E XPLAIN AS TO WHY PENALTY UNDER THAT SECTION SHOULD NOT BE LEVIED ON IT. IN RESPONSE TO THIS, THE APPELLANT HAS FILED A REPLY ON 02-06-2009. IN THAT LETTER THE ASSESSEE HAS SUBMITTED THAT THE NOTICE DATED 18-03-2009 R EQUIRING TO FURNISH DETAILS, WAS SERVED ON THEM ON 30-03-2009. REF ERRING TO THE NOTICE DATED 23-04-2009 ISSUED U/S 142 (1) OF THE ACT, T HE ASSESSEE SUBMITTED THAT IT HAS FILED FURTHER INFORMATION ON 08 -05-2009 AND 26- 05-2009. IT WAS SUBMITTED THAT IN SPITE OF SHORT TIME A LLOWED TO THEM, THEY HAVE FURNISHED THE INFORMATION. IT WAS FURTHER SU BMITTED THAT THE COMPANY IS BUSY IN COMPILING THE TDS CERTIFICATES ETC., FOR THE CURRENT YEAR AND ALSO IS PURSUING THE APPEAL FILED AGAINST THE ASSESSMENT ORDER ITA NO.437/HYD/2010 HYD DISTILLERIES 3 3 FOR A.Y 2006-07. WITH THESE SUBMISSIONS, THE ASSESSEE HAS RE QUESTED THE ASSESSING OFFICER TO DROP THE PENALTY PROCEEDINGS. HO WEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED SUCH SUBMISSIONS OF THE ASSESSEE. HE NOTED THAT NEITHER THE BOOKS OF ACCOUNTS NOR THE VOUCHER S OF SELLING EXPENSES HAVE BEEN PRODUCED SO FAR. HE NOTED THAT THE ASSE SSEE HAS NOT COMPILED WITH THE NOTICE DATED 23-04-2009 AS THEY HAVE NOT FURNISHED ALL THE DETAILS. STATING THAT THERE WAS NO REASONABLE CAUSE FOR NOT COMPLYING WITH THE SAID STATUTORY NOTICE, HE HELD T HAT THE ASSESSEE IS LIABLE FOR PENALTY U/S 271 (1) (B) OF THE ACT. ACCORD INGLY, HE LEVIED A PENALTY OF RS.10,000/- VIDE ORDER DATED 08-06-2009 P ASSED U/S 271 (1) (B) OF THE ACT. 4. ON FURTHER APPEAL TO CIT (A), HE CONFIRMED THE O RDER OF THE ASSESSING OFFICER HOLDING THAT EVEN AFTER ALLOWANCE OF SUF FICIENT TIME AND FRESH NOTICE U/S 142 (1) DATED 23-04-2009, THE ASSESSEE H AS NOT PRODUCED THE BOOKS OF ACCOUNTS AND VOUCHERS OF SELLING EXP ENSES AND THE REASONS EXPLAINED BY THE ASSESSEE IS NOT SATISFACTORY TO EXPLAIN THE LAPSE. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. THE MAIN CONTENTION OF THE ASSESEE IS THAT THE NO TICE DATED 18 TH MARCH, 2009 IS SAID TO BE ISSUED TO THE ASSESSEE ON 30 TH MARCH, 2009 ITA NO.437/HYD/2010 HYD DISTILLERIES 4 4 FIXING THE CASE OF HEARING ON 30 TH MARCH, 2009 AT 11.30 AM. IT WAS HIGHLY IMPOSSIBLE TO THE ASSESSEE TO APPEAR ON THIS DATE BEFORE THE ASSESSING OFFICER AND HAVING NO OTHER OPTION THE ASSESSEE SOU GHT FOR ADJOURNMENT TO COMPLY THE REQUIREMENT OF THE NOTICE. THE LATTER THE CASE WAS RE-FIXED FOR HEARING ON 20 TH APRIL, 2009. THE ASSESSEE COMPLIED WITH THIS NOTICE AND FILED PART OF THE INFORMATION VI DE LETTER DATED 20 TH APRIL, 2009. LATER THE ASSESSING OFFICE ISSUED NOTICE U/S 14 2 (1) / 143 (2) ON 23 RD APRIL, 2009 FIXING THE CASE ON 8 TH MAY, 2009. THE ASSESSEE FURNISHED FURTHER DETAILS VIDE ITS LETTER DATED 8 TH MAY, 2009 AND 21 ST MAY, 2009 FILED ON 26 TH MAY, 2009. THE ASSESSEE FURTHER SUBMITTED TO THE ASSESSING OFFICER VIDE ITS LETTER 2 ND JUNE, 2009 THAT IT HAS ALREADY FURNISHED SEVERAL DETAILS FOR THE PURPOSE OF COMPLETION OF ASSESSMENT. FURTHER IT WAS STATED BEFORE THE ASSESSING OFFICER THAT T HERE WAS CERTAIN FAILURE ON THE PART OF THE ASSESSEE TO FURNISH FULL INFO RMATION AS REQUIRED BY THE ASSESSING OFFICER IN VIEW OF THE COMPLYING ITS TDS CERTIFICATE AND TDS RETURN FOR THE AY 2008-09 WHICH WERE DUE IN JUNE , 2009. IT WAS ALSO SUBMITTED THAT DUE TO FINANCIAL YEAR ENDING, THE ASSESSEE WAS BUSY IN FINALIZING ITS FINAL ACCOUNT FOR THE YEAR ENDING 31 ST MARCH, 2009. ACCORDINGLY THE ASSESSEE REQUESTED TO DROP THE PENALTY PR OCEEDINGS. AS SEEN FROM THE ABOVE, IN OUR OPINION, THE ASSESSEE HAS FIL ED THE AVAILABLE INFORMATION TO THE ASSESSING OFFICER AND TO FILE FURTHER INFORMATION THE ASSESSEES HAS ASKED TIME VIDE ITS LETTER DATED 2 ND JUNE, 2009. INSPITE OF ITA NO.437/HYD/2010 HYD DISTILLERIES 5 5 THIS THE ASSESSING OFFICER ISSUED NOTICE U/S 274 ON 25-05-200 9 REQUIRING THE ASSESSEE WHY THE PENALTY U/S 271 (B) OF THE ACT COULD NOT BE LEVIED. IN OUR OPINION IN THIS CASE THE ASSESSING OFFICER NOT GIVEN ADEQUATE TIME TO FURNISH THE REQUIRED INFORMATION. HOWEVER, THE ASSE SSEE IN COMPLIANCE WITH THE NOTICE ISSUED BY THE ASSESSING OFFICER FI LED REPLIES ON 20 TH APRIL, 2009, 8 TH APRIL, 2009, 29 TH JUNE, 2009 AND 6 TH JULY,2009 BEFORE THE DCIT. THE ASSESSMENT WAS COMPLETED ON 31-12-20 09. THE GRIEVANCE OF THE DEPARTMENT IS THAT THE ASSESSEE HAS NOT F URNISHED THE FULL INFORMATION. AS SEEN FROM THE ASTO, THE CASE WAS AT TENDED BY THE ASSESSEE ON 2-6-2009, 12-6-2009, 22-6-2009, 29-6-2009, 6-7-2009, 15-7-2009, 10-11-2009, 8-12-2009, 17-12-2009 AND 21 -12-2009. THIS SHOWS THAT THE ASSESSEE HAS COOPERATED WITH THE DEPARTMENT TO COMPLETE THE ASSESSMENT OF A.Y 2007-08. THE ASSESSEE WAS BU SY IN COMPLYING THE REQUIREMENT OF FILING OF TDS RETURN AN D FINALIZATION OF ANNUAL ACCOUNTS, THERE WAS CERTAIN LAPSE ON THE PART OF THE ASSESSEE IN FURNISHING THE INFORMATION AS REQUIRED BY THE ASSESSING O FFICER. IT IS NOT INTENTIONAL OR WANTON. THE LAPSE ON THE PART OF THE ASSESSEE IS BEYOND ITS CONTROL AND THE ASSESEE IS HAVING GOOD AND SUFFICIENT CA USE AND IT IS TO BE CONSIDERED BEFORE LEVYING THE PENALTY. THE PREO CCUPATION OF THE ASSESSEE IS A REASONABLE CAUSE FOR NOT FURNISHING THE REQUIR ED INFORMATION TO THE ASSESSING OFFICER AS CALLED BY HIM IN H IS NOTICE ISSUED U/S 142 (1) AND 143 (2) OF THE ACT. IN OUR OPINION TH IS IS NOT A FIT CASE TO ITA NO.437/HYD/2010 HYD DISTILLERIES 6 6 LEVY A PENALTY UNDER 271 (1) (B) OF THE I.T. ACT. ACCO RDINGLY, WE ARE INCLINED TO DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT 11-06-2010. SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER PVV/SPS DATED 11 TH JUNE, 2010. COPY FORWARDED TO: 1. M/S HYDERABAD DISTILLERIES & WINERIES (P) LTD.,A-4 I NDUSTRIAL DEVELOPMENT AREA, UPPAL, HYDERABAD 2. THE DY.COMMISSIONER OF INCOME TAX CIRCLE-2(2) R.N. 8 26, 3. THE CIT(A)- III HYDERABAD 4. THE CIT-II, HYDERABAD 5. THE D.R., ITAT, HYDERABAD.