M/s. Manjusha Madan, New Delhi V. DCIT, New Delhi

ITA 4698/DEL/2013

• Counselvise Citation: 469820114 RSA 2013
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 06-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KEYUR PATEL SENIOR
• Assessee Lawyers: A K SRIVASTAVA
• Keywords: Bonafide belief
• Section: 144; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NOS.4698 TO 4703/DEL./2013 (ASSESSMENT YEARS : 2005-06, 2007-08, 2008-09, 2009-10, 2011-12 & 2010-11) MS. MANJUSHA MADAN, VS. DCIT, CENTRAL CIRCLE 21, A 8/6, VASANT VIHAR, NEW DELHI. NEW DELHI. (PAN : ALFPM9237R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K. SRIVASTAVA, CA REVENUE BY : SHRI KEYUR PATEL, SENIOR DR ORDER PER BENCH : THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT (APPEALS)-II, NEW DELHI FOR ASSESSMENT YEARS 20 05-06, 2007-08, 2008- 09, 2009-10, 2010-11 VIDE ORDER DATED 27.05.2013 AN D ASSESSMENT YEAR 2011- 12 VIDE ORDER DATED 28.05.2013. 2. THE COMMON ISSUE RAISED IS THAT LEARNED CIT(A) E RRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN IMPOSING THE PEN ALTY OF RS.10,000/- U/S 271(1)(B) OF THE INCOME TAX ACT FOR NON-COMPLIANCE OF NOTICE U/S 142(1) DATED 19.11.2012 FOR COMPLIANCE DUE ON 26.11.2012. ITA NOS.4698 TO 4703/DEL./2013 2 3. IN THIS CASE THE AO LEVIED THE PENALTY U/S. 271( 1)(B) HOLDING AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICE U/S 142(1) OF THE I. T. ACT, 1961, ALONG WITH QUESTIONNAIRE WE RE ISSUED ON 19.11.2012 FIXING THE CASE FOR 26.11.2012. ON 26.11 .2012 NEITHER ANYBODY ATTENDED NOR REQUISITE INFORMATION/ DETAILS WERE FILED. IN THIS CONNECTION, A SHOW CAUSE NOTICE FOR IMPOSING PENALTY U/S 271(1)(B) DATED 07/12/2012 HAS BEEN ISS UED TO YOUR. HOWEVER IN THE COMPLIANCE OF ABOVE SHOW CAUSE NOTIC E REPLY DATED 26/12/2012 IS RECEIVED AT THE DAK COUNTER VID E WHICH YOU EXPLAINED THE REASON AS YOUR ACCOUNTANT NOT FEELING WELL. THE REPLY HAS BEEN CONSIDERED AND NO FORCE IS FOUND. IN VIEW OF THE FACTS THE REPLY IS IN ROUTINE MANNER. IF YOUR ACCOU NTANT WAS NOT FEELING WELL, THE HEARING COULD HAVE ATTENDED BY YO U OR ANY AUTHORIZED REPRESENTATIVE. YOU HAVE NOT FILED ANY S UPPORTING EVIDENCE SUCH AS MEDICAL REPORT OF DOCTOR WHICH COU LD SHOW THE ILLNESS OF THE ACCOUNTANT. FURTHER IT WAS YOUR STAT UTORY DUTY TO COMPLY OF NOTICE ISSUED BY THIS OFFICE. EVEN TILL T ODAY COMPLIANCE OF ABOVE NOTICE U/S 142(1)/QUESTIONNAIRE REMAINS UN COMPLIED WITH. FROM THE ABOVE FACTS IT IS CONCLUSIVELY CLEAR THAT YOU HAVE INTENTIONALLY AVOIDED TO COMPLY WITH NOTICE. IT SHO WS THAT YOU HAVE ADOPTED NON COOPERATIVE ATTITUDE WITH THE DEPA RTMENT. IN VIEW OF THE ABOVE FACTS I AM SATISFIED THAT IT IS F IT CASE TO IMPOSE A PENALTY OF RS.10,000/- WITHIN THE MEANING OF SECT ION 271 (1)(B) READ WITH SECTION 274 OF THE I. T. ACT. THEREFORE A PENALTY OF RS.10,000/- IS LEVIED. 4. UPON ASSESSEES APPEAL, LD. CIT(A) HELD THAT IN HIS VIEW, INTEREST OF JUSTICE WILL MEET IF THE LEVY OF PENALTY IS CONFIRM ED FOR THE DEFAULT COMMITTED BY THE ASSESSEE. ACCORDINGLY, LD. CIT(A) CONFIRMED THE PENALTY FOR COMMITTING DEFAULT AMOUNTING TO RS.10,000/-. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPE AL BEFORE US. ITA NOS.4698 TO 4703/DEL./2013 3 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. AT THE OUTSET, LD. COUNSEL OF THE ASSESSEE POINTED OUT BEF ORE US THAT SHOW CAUSE NOTICE IN THIS REGARD WAS ISSUED BY THE AO ON 19.11 .2012. IN THE SAID NOTICE, AO NOTED THAT THE ASSESSEE HAS FAILED TO COMPLY WIT H THE NOTICE U/S. 142(1) OF THE I.T. ACT DATED 19.11.2012. REFERRING TO THIS N OTICE, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE PENALTY HAS NOT BEEN LE VIED FOR NON-COMPLIANCE OF NOTICE UNDER SECTION 142(1) DATED 19.11.2012. THUS, HE SUBMITTED THAT AO HAS NOT ASSUMED PROPER JURISDICTION AND HENCE, HE SUBMI TTED LEVY OF PENALTY IS NOT JUSTIFIED. HE FURTHER SUBMITTED THAT PENALTY HAS B EEN LEVIED FOR NON- COMPLIANCE OF A NOTICE WHEREBY AO MERELY GAVE A NOT ICE OF 7 DAYS AND HAD SOUGHT THE ASSESSEES RESPONSE. HENCE, HE SUBMITTED THAT THE AO HAS NOT PROVIDED PROPER OPPORTUNITY AND IN THIS VIEW ALSO H E SUBMITTED THAT PENALTY CANNOT BE LEVIED. LD. COUNSEL FURTHER REFERRED TO THE DECISION OF THIS TRIBUNAL IN AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ASSISTANT DIRECTOR OF INCOME TAX, (2008) 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 CONSIDERED AS GOOD COMPL IANCE AND THE DEFAULTS COMMITTED EARLIER WERE IGNORING BY THE AO. HENCE, T HE 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). ITA NOS.4698 TO 4703/DEL./2013 4 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 MENT ION ABOUT THE NON- COMPLIANCE OF NOTICE ON WHICH PENALTY HAS BEEN LEV IED. HENCE, ASSUMPTION OF JURISDICTION IS NOT PROPER. WE FURTHER FIND THAT IN THESE CASES THE AO HAS ASKED EXPLANATION OF QUESTIONS AND ASSESSEE WAS GIV EN ONLY 7 DAYS TIME. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY AND IN THE SAME SITUATION THIS T RIBUNAL IN ITA NO. 4239/DEL/2013 IN THE CASE OF SHIVAANSH ADVERTISING AND PUBLICATIONS (P) LTD. VIDE ITS ORDER DATED 3.1.2014 HAS DELETED THE SIMI LAR 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 8.11.2010 ALONGWITH THE DETAILED QUESTIONNAIRE WAS ISSUED FIXING THE C ASE FOR 18.11.2010. THESE DETAILS HAVE BEEN MENTIONED BY T HE ASSESSING OFFICER IN PARAGRAPH 2 PAGE 1 OF THE ASSE SSMENT ORDER. THUS, TOTAL TEN DAYS TIME WAS ALLOWED FROM THE DATE OF ISSUE OF THE NOTICE. IN THE ASSESSMENT ORDER, THE A SSESSING OFFICER HAS NOT MENTIONED THE DATE ON WHICH SUCH NO TICE WAS SERVED UPON THE ASSESSEE. THEREFORE, IN OUR OPINION , THE TIME 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 ASSESSEE AND , THEREFORE, FAILURE OF THE ASSESSEE TO COMPLY WITH SUCH NOTICE CANNOT BE SAID TO BE A DEFAULT WHICH MAY JUSTIFY THE LEVY OF PENALTY UNDER SECTION 271(1)((B) OF THE ACT. ACCORDINGLY, THE SA ME IS CANCELLED. ITA NOS.4698 TO 4703/DEL./2013 5 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 SUBSE QUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPL IANCE. THE DECISION RELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE AS A BOVE 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 LOR DSHIPS IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 H ELD THAT THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTO RY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACT ED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSE D MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FA ILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF T HE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVA NT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPET ENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WH EN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT, OR WHER E THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. ITA NOS.4698 TO 4703/DEL./2013 6 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND PRECEDENTS, WE SET ASIDE THE ORDERS OF THE LD. CIT(A) AND DELETE THE L EVY OF PENALTY. 10. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE STAND ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF JANUARY, 2014. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31 ST DAY OF JANUARY, 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.