Ivan Infotech Private Ltd., New Delhi V. ACIT, New Delhi

ITA 4460/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74041 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 25-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: B K DHINGRA
• Keywords: Bonafide belief
• Section: 142(1); 2

Judgement Text

ITA NO. 4460/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER I.T.A. NO. 4460/DEL/2013 A.Y. : 2009-10 IVAN INFOTECH PRIVATE LIMITED, (NOW KNOWN AS ORIANA TEX FAB PVT. LTD.), FARM NO. 8, ASHOKA AVENUE, CENTRAL DRIVE, DLF CHATTARPUR, NEW DELHI 110 074 (PAN: AABCI4819D) VS. ACIT, CENTRAL CIRCLE - 21, JHANDEWALAN EXTENSION, NEW DELHI 110 055 (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. B.K. DHINGRA, CA DEPARTMENT BY : SH. SATPAL SINGH, DR ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-II), NEW DE LHI DATED 25.6.2013 PERTAINING TO ASSESSMENT YEAR 2009-10, WH EREIN PENALTY OF RS. 10,000/- UNDER SECTION 271(1)(B) HAS BEEN SU STAINED. 2. IN THIS CASE AO NOTED THAT ASSESSEE DID NOT COMP LY WITH THE STATUTORY NOTICE ISSUED UNDER SECTION 142(1) DATED 8.11.2010. THIS WAS CONSIDERED BY THE AO AS WILLFUL DEFAULT OF THE ASSESSEE AND PENALTY OF RS. 10,000/- WAS IMPOSED UNDER SECTION 2 71(1)(B) OF THE IT ACT. ITA NO. 4460/DEL/2013 2 3. UPON ASSESSEES APPEAL LD. CIT(A) CONFIRMED THE PENALTY. 4. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LD. DR POINTED OUT THAT NOTICE UNDER SECTION 142(1) DAT ED 8.11.2010 WAS SENT, FIXING THE CASE FOR HEARING ON 18.11.20 10. THE ASSESSMENT WAS FRAMED ON 31.12.2010. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ASSESSEE WAS VIRTUALLY GIVE N ONLY 8-9 DAYS TIME TO COMPLY WITH THE NOTICE. HENCE, HE PLEADED THAT THE ASSESSEE WAS NOT GIVEN ADEQUATE OPPORTUNITY AND HEN CE, HE CLAIMED THAT THE PENALTY LEVIED IN THIS REGARD IS N OT SUSTAINABLE. IN THIS REGARD, HE SUBMITTED THAT IN IDENTICAL CIRCUMS TANCES, THIS TRIBUNAL IN ITA NO. 4239/DEL/2013 IN THE CASE OF S HIVAANSH ADVERTISING AND PUBLICATIONS (P) LTD. VIDE ITS ORDE R DATED 3.1.2014 HAS DELETE D THE SIMILAR PENALTY HOLDING AS UNDER: - WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATER IAL PLACED BEFORE US. THE PENALTY HAD BEEN LEVIED BY T HE ASSESSING OFFICER FOR NON-COMPLIANCE OF THE NOTICE DATED 8.11.2010. FROM THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE NOTICE UNDER SECTION 142(1)/143(2) DATED 8.11.2 010 ALONGWITH THE DETAILED QUESTIONNAIRE WAS ISSUED FI XING THE CASE FOR 18.11.2010. THESE DETAILS HAVE BEEN MENTIONED BY THE ASSESSING OFFICER IN PARAGRAPH 2 P AGE 1 OF THE ASSESSMENT ORDER. THUS, TOTAL TEN DAYS TI ME WAS ALLOWED FROM THE DATE OF ISSUE OF THE NOTICE. IN TH E ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT MENTIONED THE DATE ON WHICH SUCH NOTICE WAS SERVED UPON THE ASSESSEE. THEREFORE, IN OUR OPINION, THE T IME OF LESS THAN TEN DAYS ALLOWED BY THE ASSESSING OFFICER FOR COMPLYING WITH THE DETAILED QUESTIONNAIRE CANNOT BE SAID ITA NO. 4460/DEL/2013 3 TO BE A SUFFICIENT TIME BEING ALLOWED TO THE ASSESS EE AND, THEREFORE, FAILURE OF THE ASSESSEE TO COMPLY WITH S UCH NOTICE CANNOT BE SAID TO BE A DEFAULT WHICH MAY JUS TIFY THE LEVY OF PENALTY UNDER SECTION 271(1)((B) OF THE ACT. ACCORDINGLY, THE SAME IS CANCELLED. 6. ACCORDINGLY, LD. COUNSEL OF THE ASSESSEE PLEADE D THAT THE PENALTY MAY BE DELETED. 7. LD. DR ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. WE FIND THAT ASSESSEE HAS BEEN GIVEN ONLY 8-9 DAYS TO MAKE COMP LIANCE. THE REASON FOR NON-COMPLIANCE HAS BEEN GIVEN TO BE OC CUPATION OF THE CONCERNED CONSULTANTS. WE FIND THAT NO OTHER NOTI CE WAS GIVEN. IN OUR CONSIDERED OPINION, THIS CANNOT BE TREATED AS W ILLFUL DEFAULT. IN SIMILAR CIRCUMSTANCES, THE COORDINATE BENCH OF THIS TRIBUNAL HAS DELETED THE SIMILAR PENALTY AS STATED ABOVE. 9. FURTHERMORE, WE FIND THAT HONBLE APEX COURT REN DERED BY A LARGER BENCH COMPRISING OF THREE OF THEIR LORDSHIP S IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 H ELD THAT THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A S TATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITH ER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CO NDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DI SREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MEREL Y BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCR ETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSI DERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, ITA NO. 4460/DEL/2013 4 THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNIC AL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT, OR WHERE THE B REACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 10. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AN D DELETE THE LEVY OF PENALTY. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/1/2014, UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [C.M. GARG C.M. GARG C.M. GARG C.M. GARG] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 23/1/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 4460/DEL/2013 5