Sh. Dhruv Madan, New Delhi V. DCIT, New Delhi

ITA 4678/DEL/2013

• Counselvise Citation: 467820114 RSA 2013
• Duration Of Justice: 44 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2014
• Appeal Filed By: Assessee
• Assessment Year: misc
• Appeal Filed On: 01-01-1970
• Court: TRIBUNAL
• Department Lawyers: SUDHA KUMARI; PARVINDER KAUR SENIOR
• Assessee Lawyers: A K SRIVASTAVA
• Keywords: Bonafide belief
• Section: 143(3); 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NOS.4678 TO 4683/DEL./2013 (ASSESSMENT YEARS : 2005-06 TO 2010-11) ITA NO.4755/DEL./2013 (ASSESSMENT YEAR : 2011-12) SHRI DHRUV MADAN, VS. DCIT, CENTRAL CIRCLE 21, A 8/6, VASANT VIHAR, NEW DELHI. NEW DELHI. (PAN : AJKPM2220K) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K. SRIVASTAVA, CA REVENUE BY : SMT. SUDHA KUMARI, CIT DR AND SMT. PARVINDER KAUR, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : ALL THESE APPEALS FILED BY THE ASSESSEE EMANATE FRO M THE ORDER OF CIT (APPEALS)-II, NEW DELHI DATED 27.05.2013 FOR THE AS SESSMENT YEARS 2005-06 TO 2010-11 AND DATED 28.05.2013 FOR THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961 WAS CARRIED OUT ON THE PREMISES OF THE ASSESSEE ON 17.09.2010. CONSEQUENT THEREUPON, ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT WAS IN PROGRESS. THE ASSESSING OFFICER ISSUED NOTICE U/S ITA NOS.4678 TO 4683/DEL./2013 ITA NO.4755/DEL/2013 2 142(1) OF THE ACT DATED 19.11.2012 ALONG WITH QUEST IONNAIRE TO BE COMPLIED WITH ON 26.11.2012. THE ASSESSEE COULD NOT ATTEND THE HEARING AND ALSO NOT FILED THE NECESSARY DOCUMENTS. THE ASSESSING OFFIC ER ISSUED SHOW CAUSE NOTICE FOR LEVYING PENALTY U/S 271(1)(B) OF THE ACT AND FINALLY, LEVIED THE PENALTY OF RS.10,000/- EACH IN ALL THE ASSESSMENT Y EARS. THE CIT (A) CONFIRMED THE LEVY OF PENALTY. AGAINST WHICH, THE ASSESSEE IS IN APPEAL BY TAKING THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT LD. CIT (A) HAS GROSSLY ERRED IN CONFIRMIN G THE PENALTY U/S 271(1)(B) OF THE ACT IN-SPITE OF THE FA T THAT NO REASONABLE OPPORTUNITY WAS GRANTED TO THE ASSESSEE FOR BEING PRESENT ON THE DATE OF HEARING AND ASSESSEE HAVING FULLY CO- OPERATED IN THE OVERALL ASSESSMENT PROCEEDINGS. 2. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, D ELETE OR ALTER ANY ONE OR MORE OF THE AFORESAID GROUNDS OF A PPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3. AT THE OUTSET OF THE HEARING, THE LD. AR SUBMITT ED THAT SIMILAR PENALTY LEVIED BY THE ASSESSING OFFICER ON THE SAME GROUND AND CONFIRMED BY THE CIT (A), NEW DELHI HAS BEEN DELETED BY VARIOUS BENCHES OF ITAT AND HE SUBMITTED COPY OF ORDERS OF VARIOUS ITAT BENCHES. 4. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. IN T HE CASE OF KAMLA MADAN VS. DCIT, CENTRAL CIRCLE 21, NEW DELHI, THE ITAT, D ELHI BENCH D, NEW DELHI IN ITS ORDER DATED 31.01.2014 HAS DELETED THE PENALTY AND THE RELEVANT PARAS OF THE ORDER READ AS UNDER :- ITA NOS.4678 TO 4683/DEL./2013 ITA NO.4755/DEL/2013 3 6. HAVING HEARD THE PARTIES IN THE LIGHT OF THE MA TERIAL PLACED ON RECORD, WE FIND THAT FIRSTLY, EVEN AS PER THE PE NALTY ORDERS, IT HAS BEEN OBSERVED THAT THE NOTICES U/S 142 (1) OF T HE ACT WERE ISSUED ON 19.11.2012, FOR 26.11.2012, GIVING A VERY SHORT TIME OF ONLY SIX DAYS. MOREOVER, AS TO WHEN THESE NOTIC ES WERE SERVED, RATHER AS TO WHETHER SUCH NOTICES WERE SERV ED AT ALL, DOES NOT FIND MENTION IN THE PENALTY ORDERS. THUS, THE A SSESSEE WAS NOT PROVIDED SUFFICIENT TIME TO RESPOND TO THE NOTI CE. 7. FURTHER, A PERUSAL OF THE ASSESSMENT ORDERS SHOW S THAT THERE IS NO MENTION THEREIN, OF ANY NON-COOPERATION BY THE ASSESSEE WITH THE ASSESSING OFFICER DURING THE ASSE SSMENT PROCEEDINGS. THEREFORE, WE DO NOT FIND THESE CASES TO BE FIT FOR IMPOSITION OF PENALTY U/S 271(1)(B) OF THE ACT. SU CH PENALTIES ARE, THEREFORE, DELETED IN ALL THE CASES, THE FACTS , MUTATIS MUTANDIS, BEING EXACTLY SIMILAR IN ALL OF THEM. 8. IN THE RESULT, ALL THE APPEALS OF BOTH THE ASSES SEES ARE ALLOWED. SIMILARLY, PENALTY HAS BEEN DELETED BY ITAT, DELHI BENCH E, NEW DELHI IN THE CASE OF MS. MANJUSHA MADAN VS. DCIT, CENTRAL CI RCLE 21, NEW DELHI WHILE DECIDING ITA NOS.4698 TO 4703/DEL/2013 IN ITS ORDER DATED 31.01.2014. THE RELEVANT PARAS OF THE ORDER ARE REPRODUCED AS U NDER :- 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 DOES NOT MENTION ABOUT THE NON-COMPLIANCE OF NOTICE ON WHICH PENALTY HAS BEEN LEVIED. HENCE, ASSUMPTION OF JURIS DICTION IS NOT PROPER. WE FURTHER FIND THAT IN THESE CASES THE AO HAS ASKED EXPLANATION OF QUESTIONS AND ASSESSEE WAS GIVEN ONL Y 7 DAYS TIME. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OP INION, THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY AND IN TH E SAME SITUATION THIS TRIBUNAL IN ITA NO. 4239/DEL/2013 I N THE CASE OF SHIVAANSH ADVERTISING AND PUBLICATIONS (P) LTD. VID E ITS ORDER DATED 3.1.2014 HAS DELETED THE SIMILAR PENALTY HOL DING AS UNDER:- ITA NOS.4678 TO 4683/DEL./2013 ITA NO.4755/DEL/2013 4 WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATER IAL PLACED BEFORE US. THE PENALTY HAD BEEN LEVIED BY THE ASSES SING OFFICER FOR NON-COMPLIANCE OF THE NOTICE DATED 8.11.2010. F ROM THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE NOTICE UND ER SECTION 142(1)/143(2) DATED 8.11.2010 ALONGWITH THE DETAILE D QUESTIONNAIRE WAS ISSUED FIXING THE CASE FOR 18.11 .2010. THESE DETAILS HAVE BEEN MENTIONED BY THE ASSESSING OFFICE R IN PARAGRAPH 2 PAGE 1 OF THE ASSESSMENT ORDER. THUS, T OTAL TEN DAYS TIME WAS ALLOWED FROM THE DATE OF ISSUE OF TH E NOTICE. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT MENTIONED THE DATE ON WHICH SUCH NOTICE WAS SERVED UPON THE A SSESSEE. THEREFORE, IN OUR OPINION, THE TIME OF LESS THAN TE N DAYS ALLOWED BY THE ASSESSING OFFICER FOR COMPLYING WITH THE D ETAILED QUESTIONNAIRE CANNOT BE SAID TO BE A SUFFICIENT TIM E BEING ALLOWED TO THE ASSESSEE AND, THEREFORE, FAILURE OF THE ASSESSEE TO COMPLY WITH SUCH NOTICE CANNOT BE SAID TO BE A DEFA ULT WHICH MAY JUSTIFY 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 CONSIDERED AS GOOD COMPLIANCE. THE DECISION RELIE D UPON BY THE LD. COUNSEL OF THE ASSESSEE AS ABOVE ALSO COME TO THE RESCUE OF THE ASSESSEE. 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 O F A QUASI- CRIMINAL PROCEEDINGS, AND PENALTY WILL NOT ORDINARI LY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIB ERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIO US OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS O BLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILU RE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF A LL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCR IBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE J USTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNIC AL OR VENIAL ITA NOS.4678 TO 4683/DEL./2013 ITA NO.4755/DEL/2013 5 BREACH OF THE PROVISIONS OF THE ACT, OR WHERE THE B REACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIA BLE 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 DELETE THE LEVY OF PENALTY. 10. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE STAND ALLOWED. SIMILARLY, IN THE CASES OF ROOP KISHORE MADAN VS. D CIT, CENTRAL CIRCLE 21, NEW DELHI IN ITA NOS.4743 TO 4749/DEL/2013 DATED 30 .01.2014 AND ITAT, DELHI BENCH G, NEW DELHI IN THE CASE OF SANYA HOS PITAL & DIAGNOSTIC VS. DCIT, CENTRAL CIRCLE 21, NEW DELHI & ANR. IN ITA NO S.4661 TO 4664/DEL/2013 DATED 14.02.2014, THE ITAT HAS DELETE D THE PENALTY. FACTS REMAIN THE SAME, THEREFORE, THE PENALTIES IN THE PR ESENT APPEALS DESERVE TO BE DELETED. WE ORDER ACCORDINGLY. 5. IN THE RESULT, ALL THE SEVEN APPEALS FILED BY TH E ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF JUNE, 2014. SD/- SD/- (I.C. SUDHIR) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 24 TH DAY OF JUNE, 2014/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-II, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.