Mr. Bitek Electronics Ltd., Delhi V. ITO, New Delhi

ITA 467/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65952 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: K G SHARMA
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI SHAMIM YAHHA, ACCOUNTANT MEMBER ITA NO.467/DEL /2012 (ASSESSMENT YEAR : 2007-08) M/S BITEK ELECTRONICS LTD., VS. ITO, WARD 3(1), C-330, STREET NO.9, NEW DELHI. MAJLIS PARK, NEW DELHI. (PAN/GIR NO.AAACB3683K) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.G. SHARMA, CA REVENUE BY : SHRI BHIM SINGH, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A)-IV, NEW DELHI, DATED 29.11.2011, RELEVANT TO ASSESSMENT YEAR 2007-08, WHEREBY CONFIRMATION OF PENALTY OF RS.40,000/- U/S 271(1)(B ) OF THE I.T. ACT, 1961 IMPOSED BY THE ASSESSING OFFICER ON DEFAULT IN APPEARANCE AGAINST NOTICES ON FOUR OCCASIONS, HAS BEEN CHALLENGED. 2. AS PER IMPUGNED PENALTY ORDER, NOTICES U/S 142(1 ) AND 143(2) DATED 15.09.2008, 13.07.2009, 01.1 0.2009 AND 29.10.2009 WERE ISSUED BY THE AO IN THE COURSE OF THE ASSESSMENT PROCEEDING FIXING THE DATE OF HEARING ON 23.09.2008 . 04.08.2009. 01.10.2009 AND 09.11.2009 RESPECTIVELY. ON THE SAID DATES NOBODY APPEARED. NO R WAS ANY ADJOURNMENT PETITION OR REPLY WAS FILED. FURTHER, SHOW CAUSE NOTICES U/S 274 DATE D 30.12.2009 AND 20.05.2010 WERE ISSUED TO THE ASSESSEE AS TO WHY PENALTY U/S 271(1)(B) SHOULD NOT BE IMPOSED FOR THE ABOVE NON- I.T.A. NO.467/DEL./2012 (A.Y. : 2007-08) 2 COMPLIANCE. ON THE ABOVE DATES NOBODY APPEARED BUT LETTER WAS RECEIVED FROM K.G. SHARMA & CO. CAS, ONLY STATING THAT SINCE QUANTUM APPEAL WAS PENDING BEFORE THE CIT (A), THE PENALTY PROCEEDINGS SHOULD BE KEPT PENDING. THE AO HOWEVER REJECTED THE ABOVE PLEA AND PASSED THE IMPUGNED PENALTY ORDER LEVYING PENALTY OF RS. 10,000/- FOR EACH DAY OF NON-COMPLIANCE, TOTALING RS. 40,000/-. 3. ASSESSEE TOOK UP THE MATTER IN APPEAL BEFORE CIT (A), BUT WAS UNSUCCESSFUL. 4. STILL AGGRIEVED, ASSESSEE HAS COME UP IN FURTHER APPEAL AND WHILE REITERATING THE SUBMISSIONS AS MADE BEFORE THE LOWER AUTHORITIES, I T WAS FURTHER SUBMITTED THAT OUT OF THE THREE DIRECTORS OF THE APPELLANT COMPANY TWO DIRECTORS, V IZ. SHRI .V. BATRA AND SMT. H. BATRA SUFFERED FINANCIAL CRUNCH AND HYPERTENSION AND HENCE THE OFF ICE WAS CLOSED TEMPORARILY AND THE IMPUGNED NOTICES FROM THE AO WERE NOT RECEIVED BY T HEM. THE DETAILED SUBMISSION OF THE ID. AR IS AS UNDER: 'THE ABOVE ASSESSEE IS A CLOSELY HELD CO. AS OUT OF THREE DIRECTORS, TWO DIRECTORS ARE HUSBAND & WIFE NAMELY SH. PRAKASH VIR BATRA & SMT. HARSH BATRA AS WELL AS PROMOTERS OF THE COMPANY. MOREOVER, 99.9% SHARE CAPITAL OF RS. 10 LACS IS A/SO OWNED BY THE ABOVE PROMOTERS. THE COMPANY IS ENGAGE D IN THE BUSINESS OF MANUFACTURING OF ELECTRONICS ITEMS AND OTHER ITEMS. THE DIRECTORS HAVE SUFFERED FINANCIAL CRUNCH AND DUE TO SOME RUMOURS, THE COMPA NY HAS SUFFERED TOO MUCH & THEY WERE AT THE DOOR OF CLOSURE. THE DIRECTORS IN ORDER TO SAVE THE COMP ANY HAVE SUFFERED MENTAL TORCHER AND CLOSED THE COMPANY OFFI CE TEMPORARILY AND COULD NOT RECEIVE MAIL COMMUNICATION FROM OUTSIDE. WITH RESPECT TO MERIT OF THE CASE THE LD. ASSESSING AUTHORITY HAS IMPOSED PENALTY U/S 271(1)(B) OF INCOME TAX ACT, 1961 CONSIDERING FOLLOWING DATE OF COMPLIANCES: S.L. DATE OF NOTICE SECTION OF THE I.T. ACT, 1961 UNDER WHICH NOTICE WAS ISSUED DATE OF HEARING 1. 15/09/2008 143(2) 23/09/2008 2. 13/07/2009 143(2) & 142(1) 04/08/2009 3. 01/10/2009 142(1) 21/10/2009 4. 29/10/2009 142(1) 09/11/2009 I.T.A. NO.467/DEL./2012 (A.Y. : 2007-08) 3 SIR, WITH REFERENCE TO NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 DT. 15/09/2008, WE HAVE TO REQUEST THAT THIS NOTICE IS ISSUED IN ORDE R TO INFORM THE ASSESSEE, THAT YOUR CASE HAS BEEN SELECTED FOR SCRUTINY ASSESSMENT. TIME PERIOD FOR ISSUE OF NOTICE I.E. EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH RETURN IS FILED, SPEAK ABOUT THE SPIRIT OF THE SECTION. THAT IT IS A INTIMATION TO THE ASSESSEE THAT YOUR CASE HAS BEEN SELECTED FOR THE S CRUTINY IN THE GENERAL PRACTICE YOUR HONOR WILL ALSO APPRECIATE THAT N ASSESSING OFFICER TAKE ANY ASSESSMENT PROCEEDING ON THIS DATE. MOREOVER IT IS ALSO PRACTICE THAT NO ASSESSING OFFICER COMPLETE THE ASS ESSMENT IN THE SAME YEAR IN WHICH IT IS SELECTED FOR SCRUTI NY. WITH RESPECT TO OTHER ABOVE STATED NOTICES, WE HAVE TO F URTHER SUBMIT THAT DUE TO FINANCIAL CRUNCH ON THE ONE HAND AND FILING OF VARIOUS CIVIL OR CRIMINAL CASES, POLICE CASE AGAINST THE COMPANY. THE DIRECTORS HAVE SUFFERED HY PERTENSION AND COULD NOT RECEIVE THE NOTICES. 5. BY GIVING DETAILS OF CASES AND EVIDENCE IN REGAR D TO 5 SUCH CASES, IT WAS PLEADED FOR DELETION OF THE PENALTY IMPOSED AND CONFIRMED B Y THE CIT(A). 6. LD.DR HAS RELIED UPON THE ORDER OF AUTHORITIES B ELOW AND PLEADED FOR CONFIRMATION OF THE IMPUGNED ORDER. IT WAS ALSO SU BMITTED THAT SINCE THERE WAS DEFAULT IN APPEARANCE BY THE ASSESSEE DESPITE NOTICES, THEREFO RE, PENALTY WAS EXIGIBLE WHICH HAS ALREADY BEEN LEVIED BY THE ASSESSING OFFICER AND CO NFIRMED BY THE CIT(A). 7. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS RELEVANT PROVISIONS OF THE LAW. IT WAS SPECIFICALL Y MENTIONED THAT FIRST NOTICE ISSUED WAS WITH REGARD TO INFORMING THE ASSESSEE ABOUT SELECTI ON OF THE CASE FOR SCRUTINY ASSESSMENT AND WITH REGARD TO OTHER NOTICES IT HAS BEEN STATED THAT ASSESSEE AND ITS DIRECTOR DUE TO FINANCIAL CRUNCH ON ONE HAND AND FILING OF VARIOUS CIVIL OR CRIMINAL CASE, POLICE CASE AGAINST HE COMPANY, THE DIRECTORS HAVE SUFFERED HYP ERTENSION AND COULD NOT RECEIVE THE NOTICES AND THIS FACT HAS NOT BEEN DISPUTED BY THE DEPARTMENT. THEREFORE, CONSIDERING THE ENTIRETY OF FACTS, CIRCUMSTANCES AND MATERIAL ON RE CORD, WE FIND THAT THERE WAS NO DELIBERATE AVOIDANCE IN APPEARANCE AGAINST NOTICES ISSUED AND ASSESSEE HAS BEEN ABLE TO I.T.A. NO.467/DEL./2012 (A.Y. : 2007-08) 4 ESTABLISH ITS BONAFIDE. THEREFORE, IN OUR CONSIDER ED VIEW, IT IS NOT A FIT CASE FOR IMPOSITION OF PENALTY. SO, WHILE ACCEPTING THE APP EAL OF THE ASSESSEE, WE DIRECT TO DELETE THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND CO NFIRMED BY THE CIT(A). 3. AS A RESULT, THE APPEAL OF THE ASSESSEE GETS ACC EPTED. ORDER PRONOUNCED IN OPEN COURT ON 07.12.2012. SD/- SD/- (SHAMIM YAHYA) (U.B.S. BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : DEC. 07, 2012. SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-IV, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT