M/s Shivganesh Builders Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 4615/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4572 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 14-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 273B; 144

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 4615 TO 4618/ DEL/2015 (ASSESSMENT YEAR: 2005 - 06 TO 2008 - 09 ) M/S. SHIVGANESH BUILDERS PVT LTD, FLAT NO. 4 - RR, APARTMENT, 3 - 4 MANGLAPURI, MEHRAULI, NEW DELHI PAN:AAICS5796A VS. DCIT, CENTRAL CIRCLE 15( CENTRAL CIRCLE - 14), NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 4619 TO 4625/DEL/2015 (ASSESSMENT YEAR: 2002 - 03 TO 2008 - 09) M/S. WORLDWIDE REALTORS PVT. LTD, FLAT NO. 4 - RR, APARTMENT, 3 - 4 MANGLAPURI, MEHRAULI, NEW DELHI PAN:AAICS5796A VS. DCIT, CENTRAL CIRCLE 15( CENTRAL CIRCLE - 14), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GAUTAM JAIN, ADV REVENUE BY: SHRI ANSHU PRAKASH, SR DR DATE OF HEARING 04/09 / 2017 DATE OF PRONOUNCEMENT 04 / 0 9 / 2017 O R D E R PER PRASHANT MAHARISHI , A. M. 1. ALL THESE APPEALS HAVE BEEN FILED AGAINST THE ORDER OF THE LD CIT(A) - XXVI, NEW DELHI DATED 08.05.25015 FOR THE AY 2005 - 06 TO 2008 - 09 IN CASE OF M/S. SHIVGANESH BUILDERS PVT. LTD AND FOR AY 2002 - 03 TO 2008 - 09 CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER VIDE ORDER DATED 09.05.2014 AND 26.05.2014 RESPECTIVELY OF RS. 20000/ - EACH. THEREFORE, THOUGH ASSESSEE HAS RAISED SEV ERAL GROUNDS OF APPEAL BUT THE SOLITARY OBJECTION IS WITH RESPECT TO LEVY CONFIRMATION OF THE PENALTY BY THE LD CIT(A). 2. THE LD AR SUBMITTED BEFORE US THAT ISSUE IS IDENTICAL AND IS COVERED IN CASE OF OTHER GROUP CONCERNS WHEREIN, SUCH PENALTIES ARE DELETE D BY THE COORDINATE BENCH. HE REFERRED TO 43 ORDERS OF THE COORDINATE BENCH WHEREIN ON IDENTICAL FACTS AND CIRCUMSTANCES THE PENALTIES LEVIED BY THE AO AND CONFIRMED BY THE LD CIT(A) WAS PAGE 2 OF 4 DELETED BY THE COORDINATE BENCHES. HE THEREFORE, PLEADED THAT THE PEN ALTIES MAY BE DELETED. 3. THE LD DR VEHEMENTLY RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES . 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THE LD ASSESSING OFFICER HAS NOTED THAT ASSESSEE FAILED TO ATTEND THE PROCEEDINGS OF THE ASSESSMENT AND THEREFORE, CONSEQUENT ORDERS WERE PASSED U/S 144A OF THE ACT AND THEREFORE, PENALTIES WERE LEVIED. THE LD CIT(A) NOTED THAT PENALTIES HAVE BEEN RIGHTLY LEVIED AND HE FURTHER NOTED THAT IN THE APPELLATE PROCEEDINGS ALSO THE NOTICES WERE IGNORED. WE HAVE ALS O PERUSED THE ORDERS PASSED BY THE COORDINATE BENCHES WHEREIN, IT HAS BEEN HELD AS UNDER: - 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER. HERE IN THIS CASE, I.T.A. NO.4429 TO 4434/DEL/2015 6 FIRS T 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 C AUSE 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. SU CH VAGUE NOTICE IS FATAL TO THE INITIATION OF THE PROCEEDINGS ITSELF. 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 THA T ON 5.12.2012, SHRI VISHAL MEHTA, AR ALONG WITH OTHER AUTHORIZED PERSONS APPEARED BEFORE HIM AND SUBMITTED THAT NON - COMPLIANCE ON THE PART THE ASSESSEE ON THE SAID DATE WERE DUE TO THE FACT THAT GROUP HEAD, SHRI GOPAL KUMAR GOYAL WAS CURRENTLY NOT AVAILAB LE AND THE WHOLE FAMILY MEMBERS AND THE GROUP HEADS WERE ENGAGED 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. 10. HOWEVER, IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS FILED REPLIES BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSME NT PROCEEDINGS BY FILING THE SAME EITHER IN DAK OR REGISTERED/SPEED POST. I.T.A. NO.4429 TO 4434/DEL/2015 7 11. 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 DETAILS 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 PAGE 3 OF 4 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 A SSESSEE 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 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 BEFORE US, THAT THE COMPLIANCES HAD BEEN MADE THROUGH REPLIES FILED THROUGH DAK OR REGISTERED POST THOUGH BELATE DLY. THESE FACTS HAVE NOT BEEN CONTROVERTED BY THE AO OR CIT (APPEALS). ALL THESE FACTS AND CIRCUMSTANCES UNDER ANY PRUDENCE DO CONSTITUTE REASONABLE 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 I.T.A. NO.4429 TO 4434/DEL/2015 8 PROCEEDINGS BUT ALSO BEFORE THE ASSESSING OFFICER AN D LEARNED CIT(APPEALS) IN THE IMPUGNED PENALTY PROCEEDINGS AND HENCE PENALTY CANNOT BE LEVIED IN SUCH CIRCUMSTANCES. 12. APART FROM THAT, ONE IMPORTANT FACT BROUGHT ON RECORD IS 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 PROCEEDINGS. IN SUCH CIRCUMSTANCES SUCH AN ALLEGED BREACH OR NON - COMPLIANCE IS MERE T ECHNICAL 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(1)(B) FOR ALL THE ASSESSMENT YEARS IS UNSUSTAINABLE FOR THE REASONS GIVEN ABOVE AND IS DIRECTED TO BE DELETED. THUS, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 13. SINCE SIMILAR FACTS ARE PERMEATING THROUGH IN ALL THE ASSESSMENT YEARS, THEREFORE OUR FINDING GIVEN ABOVE WILL APPLY MUTATIS MUTANDIS FOR ALL THE YEARS APPEALED BEFORE US AND ACCORDINGLY PEN ALTY LEVIED U/S 271(1)(B) ARE DIRECTED TO BE DELETED. 14. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. 5. THE LD DR COULD NOT CONTROVERT THAT HOW THE ISSUE IS NOT COVERED BY THE ABOVE ORDER OF THE COORDINATE BENCH. IT COULD ALSO NOT BE CONTROVE RTED THAT FACTS ARE DIFFERENT IN THE PRESENT CASES. IN VIEW OF THE DECISION OF THE COORDINATE BENCH, WE RESPECTFULLY FOLLOWING THE SAME, THE LEVY OF PENALTY U/S 271(1)(B) OF RS. 20000/ - EACH FOR ALL THE PAGE 4 OF 4 ASSESSMENT YEARS IN BOTH THE ABOVE ASSESSES CASE IS U NSUSTAINABLE AND LD ASSESSING OFFICER IS DIRECTED TO DELETE THE SAME IN ALL THESE APPEALS. 6. IN THE RESULT ALL THE ABOVE STATED APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 0 4 / 0 9 / 2017 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 4 / 0 9 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI