Sh. Rajeev Dhingra, New Delhi V. ACIT, New Delhi

ITA 4620/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5469 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 30-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 05-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Bonafide belief; Non compliance
• Section: 143(3); 142(1); 144

Judgement Text

ITA NOS. 4620-4625/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NOS. 4620, 4621, 4622, 4623, 4624 & 4625/DEL/2013 SH. RAJEEV DHINGRA, C/O RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-1, NEW DELHI 110 049 (PAN: AEZPD6347N) A.YRS. : 2004-05, 2005-06, 2006-07, 2007- 08, 2008-09 & 2009-2010 ASSTT. CIT, CENTRAL CIRCLE-IX, NEW DELHI VS. (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. ASHWANI TANEJA, ADV. & SOMIL AGARWAL, CA DEPARTMENT BY : MS. MEENAKSHI VOHRA, DR ORDER ORDER ORDER ORDER PER PER PER PER BENCH BENCH BENCH BENCH THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF THE LD. CIT(A) FOR ASSTT. YEARS 200 4-05 TO 2009-10 VIDE ORDER DATED 29.5.2013. 2. THE COMMON ISSUE RAISED IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN IMPOSING THE PENALTY OF RS. 10,000/- U/S. 271(1)(B) OF THE INCOME TAX ACT FOR ALLEGED DEFAULT COMMITTED BY THE ASSESSEE ON 31.10.2011. 3. IN THIS CASE THE AO LEVIED THE PENALTY U/S. 271( 1)(B) HOLDING AS UNDER:- ITA NOS. 4620-4625/DEL/2013 2 THE ASSESSEE HAS COMPLETELY FAILED TO SHOW ANY CAUSE FOR FAILURE ON HIS PART TO COMPLY WITH THE NOTICE U/S. 143(2) OF THE ACT DATED 10.10.2011, ISSUED TO AND DULY SERVED ON HIM, THE PROVISIONS CONTAINED IN SECTION 271(1)(B) OF THE INCOME TAX ACT, 1961 ARE HEREBY INVOKED AND ACCORDINGLY A PENALTY OF RS. 10,000/- IS HEREBY IMPOSED ON THE ASSESSEE. AS THE ASSESSEE HAS ALSO COMPLETELY FAILED TO SHOW ANY CAUSE FOR FAILURE ON HIS PART TO COMPLY WITH A NOTICE U/S. 142(1) READ WITH LETTER DATED 24.10.201 1 ISSUED TO AND DULY SERVED ON HIM, THE PROVISIONS CONTAINED IN SECTION 271(1)(B) OF THE INCOME TAX ACT, 1961 ARE HEREBY INVOKED AND ACCORDINGLY A PENALTY OF RS. 10,000/- IS HEREBY IMPOSED ON THE ASSESSEE. 4. UPON ASSESSEES APPEAL LD. CIT(A) HELD THAT IN HIS VIEW INTEREST OF JUSTICE WILL MEET IF THE LEVY OF PENALT Y IS CONFIRMED FOR THE DEFAULT COMMITTED BY THE ASSESSEE ON 31.10.2011 AND RELIEF IS ALLOWED TO THE ASSESSEE FOR THE NON COMPLIANCE ON 2 4.10.2011. ACCORDINGLY, LD. CIT(A) CONFIRMED THE PENALTY FOR C OMMITTING DEFAULT AMOUNTING TO RS. 10,000/-. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPE AL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. AT THE OUTSET, LD. COUNSEL OF THE ASSESSEE POINTED OUT BEFORE US THAT SHOW CAUSE NOTICE IN THIS REGARD WAS ISSUED BY THE AO ON 1.11.2011 WHICH IS ENCLOSED IN PAPER BOOK AT PAGE NO. 8. IN THE SAID NOTICE, AO NOTED THAT THE ASSESSEE HAS FAILED TO COMPLY WITH T HE NOTICE U/S. 142(1) OF THE I.T. ACT DATED 9/9/2011. REFERRING T O THIS NOTICE, LD. ITA NOS. 4620-4625/DEL/2013 3 COUNSEL OF THE ASSESSEE SUBMITTED THAT THE PENALTY HAS NOT BEEN LEVIED FOR NON-COMPLIANCE OF NOTICE UNDER SECTION 142(1) DATED 9.9.2011. THUS, HE SUBMITTED THAT AO HAS NOT ASSUME D PROPER JURISDICTION AND HENCE, HE SUBMITTED LEVY OF PENALT Y IS NOT JUSTIFIED. HE FURTHER SUBMITTED THAT PENALTY HAS BEEN LEVIED F OR NON- COMPLIANCE OF A NOTICE WHEREBY AO MERELY GAVE A NOT ICE OF 8-10 DAYS AND HAD SOUGHT THE ASSESSEES RESPONSE ON 30 I SSUES. HENCE, HE SUBMITTED THAT THE AO HAS NOT PROVIDED PROPER OP PORTUNITY AND IN THIS VIEW ALSO HE SUBMITTED THAT PENALTY CANNOT BE LEVIED. LD. COUNSEL FURTHER REFERRED TO THE DECISION OF THIS TR IBUNAL IN AKHIL AKHIL AKHIL AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. A SSISTANT BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. A SSISTANT BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. A SSISTANT BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. A SSISTANT DIRECTOR OF INCOME TAX, DIRECTOR OF INCOME TAX, DIRECTOR OF INCOME TAX, DIRECTOR OF INCOME TAX, (2008 (2008 (2008 (2008) 115 TTJ (DEL.) 419 ) 115 TTJ (DEL.) 419 ) 115 TTJ (DEL.) 419 ) 115 TTJ (DEL.) 419. . . . IN THIS CASE IT WAS HELD THAT ASSESSMENT HAVE BEEN MADE UNDER SECTION 1 43(3) AND NOT UNDER SECTION 144 OF THE IT ACT. IT MEANS THAT SUBS EQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSID ERED AS GOOD COMPLIANCE AND THE DEFAULTS COMMITTED EARLIER WERE IGNORING BY THE AO. HENCE, THE PENALTY U/S. 271(1)(B) COULD NOT BE LEVIED. 6.1 LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE LD. CIT(A). 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AN D PERUSED THE RECORDS. WE FIND CONSIDERABLE COGENCY IN THE LD. COUNSEL OF THE ASSESSEES SUBMISSION THAT THE SHOW CAUSE NOTICE DO ES NOT MENTION ABOUT THE NON-COMPLIANCE OF NOTICE ON WHICH PENALT Y HAS BEEN LEVIED. HENCE, ASSUMPTION OF JURISDICTION IS NOT PR OPER. WE FURTHER FIND THAT IN THESE CASES THE AO HAS ASKED EXPLANATI ON OF 30 QUESTIONS AND ASSESSEE WAS GIVEN ONLY 10 DAYS TIME. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE ASSES SEE WAS NOT ITA NOS. 4620-4625/DEL/2013 4 GIVEN PROPER OPPORTUNITY AND IN THE SAME SITUATION THIS TRIBUNAL IN ITA NO. 4239/DEL/2013 IN THE CASE OF SHIVAANSH ADV ERTISING AND PUBLICATIONS (P) LTD. VIDE ITS ORDER DATED 3.1.2014 HAS DELETED 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 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 ITA NOS. 4620-4625/DEL/2013 5 THE LEVY OF PENALTY UNDER SECTION 271(1)((B) OF THE ACT. ACCORDINGLY, THE SAME IS CANCELLED. 8. FURTHERMORE, WE ALSO NOTE THAT ASSESSMENT IN TH IS CASE WERE COMPLETED U/S. 143(3) OF THE I.T. ACT, IT DOES MEAN THE SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSID ERED AS GOOD COMPLIANCE. THE DECISION RELIED UPON BY THE LD. C OUNSEL OF THE ASSESSEE AS ABOVE ALSO COME TO THE RESCUE OF THE AS SESSEE. 8.1 FURTHERMORE, WE FIND THAT HONBLE APEX COURT IN A DECISION RENDERED BY A LARGER BENCH COMPRISING OF THREE OF THEIR LORDSHIPS IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 HELD THAT THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEE DINGS, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBL IGED EITHER 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, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNIC AL OR VENIAL ITA NOS. 4620-4625/DEL/2013 6 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. 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND PRECEDENTS, WE SET ASIDE THE ORDERS OF THE LD. CIT(A) AND DELET E THE LEVY OF PENALTY. 10. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/1/2014. SD/- SD/- [ [[ [U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI] ]] ] [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 30/1/2014 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