M/s. Witness Developers & Promoters Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 4626/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4566 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• 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 I TA NO S . 4626 TO 4629/DEL/2015 . (ASSESSMENT YEAR: 2005 - 06 TO 2008 - 09 ) WITNESS DEVELOPERS & PROMOTERS PVT. LTD, FLAT NO. 4 - RR, APARTMENT, 3 - 4, MANGLAPURI, MEHRAULI, NEW DELHI, NEW DELHI PAN:AAACW5454W VS. DCIT, CENTRAL CIRCLE - 14, NEW DELHI (APPELLANT) (RESPONDENT) I TA NO S . 4630 TO 4633/DEL/2015. (ASSESSMENT YEAR: 2005 - 06 TO 2008 - 09 ) WITNESS CONSTRUCTION PVT. LTD, FLAT NO. 4 - RR, APARTMENT, 3 - 4, MANGLAPURI, MEHRAULI, NEW DELHI, NEW DELHI PAN:AAECM0199B VS. DCIT, CENTRAL CIRCLE - 14, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PIYUSH KUMAR KAMAL, ADV MS. NEHA GUPTA, CA REVENUE BY: SHRI ANSHU PRAKASH, SR. DR DATE OF HEARING 05/09 / 2017 DATE OF PRONOUNCEMENT 06 / 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 08.05.2015 FOR THE AY 2005 - 06 TO 2008 - 09 IN CASE OF M/S. WITNESS DEVELOPERS AND PROMOTERS PVT. LTD AND DATED 07.05.2015 FOR AY 2005 - 06 TO 2008 - 09 IN CASE OF WITNESS CONSTRUCTION PVT LTD. CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER VIDE ORDER DATED 30.05.2014 AND 26.05.2014 RESPECTIVELY OF RS. 20000/ - EACH. THEREFORE, THOUGH ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEAL BUT THE SOLITARY OBJECTION IS WITH RES PECT 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 DELETED BY THE COORDINATE BENCH. HE REFERRED TO 43 ORDERS OF THE CO ORDINATE 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 PENALTIES 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 TH EREFORE, 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 ALSO PERUSED THE ORDERS PASSED BY THE COORDINATE BENCHES WHEREIN, IT H AS 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 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 SP ECIFIC 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 ITSEL F. 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 AUTHORIZED P ERSONS 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 AVAILABLE 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 PROCEE DED 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 ASSESSMENT 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 B EEN 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 CIRCUMSTA NCES 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 GOP AL 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 EA RLY 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 BELATEDLY. THESE FACTS HAVE NOT BEEN CONTROVERTED BY THE AO OR CIT (APPEA LS). 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 W AS 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 AND LEARNED CIT(APPEALS) IN THE IMPUGNED PENALTY PROCEEDINGS AND HENC E 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 SU BSTANTIVE 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 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(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. S INCE 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 PENALTY 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 CONTROVERTED 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 UNSUSTAINABLE AND LD ASSESSING OFFICER IS DIRECTED TO DELETE THE SAM E IN ALL THESE APPEALS. 6. IN THE RESULT ALL THE ABOVE STATED APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 6 / 0 9 / 2017 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 6 / 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