Sh. Roop Kishore Madan, New Delhi V. DCIT, New Delhi

ITA 4743/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5471 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 22 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: 2005-2006
• Appeal Filed On: 08-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K SRIVASTAVA
• Keywords: Bonafide belief
• Section: 143(3); 142(1); 144

Judgement Text

ITA NOS. 4743-4749/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. 4743, 4744, 4745, 4746, 4747, 4748 & 4749/DEL/2013 SH. ROOP KISHORE MADAN, A-9/4, VASANT VIHAR, NEW DELHI (PAN: ABWPM6914G) A.YRS. : 2005-06, 2006- 07, 2007-08, 2008-09, 2009-2010, 2010-11 & 2011-12 DCIT, CENTRAL CIRCLE-21, NEW DELHI VS. (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. A.K. SRIVASTAVA, 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 5-06 TO 2011-12 VIDE ORDER DATED 27.5.2013. 2. THE COMMON ISSUE RAISED IS THAT LD. CIT(A) HAS G ROSSLY ERRED IN CONFIRMING THE PENALTY U/S. 271(1)(B) OF THE INCOME TAX ACT IN SPITE OF THE FACT THAT NO REASONABLE OPPORTUNITY WAS GRA NTED TO THE ASSESSEE FOR BEING PRESENT ON THE DATE OF HEARING A ND ASSESSEE HAVING FULLY COOPERATED IN THE OVERALL ASSESSMENT P ROCEEDINGS. 3. IN THIS CASE THE AO LEVIED THE PENALTY U/S. 271( 1)(B) HOLDING THAT NOTICE U/S. 142(1) ALONGWITH QUESTIONNAIRE WAS ISSUED ON ITA NOS. 4743-4749/DEL/2013 2 19.11.2012 FIXING THE CASE FOR 26.11.2012 AND THE S AME WAS NOT COMPLIED WITH. 4. UPON ASSESSEES APPEAL LD. CIT(A) AFFIRMED THE PENALTY. 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. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT PENALTY HAS BEEN LEVIED FOR NON-COMPLIANCE OF A NOTICE WHEREBY AO MERELY GAVE A NOTICE OF 7 DAYS AND HAD SOUGHT THE ASSESSEES RESPONSE ON 36 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) 115 TTJ (DEL.) 419 (2008) 115 TTJ (DEL.) 419 (2008) 115 TTJ (DEL.) 419 (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 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 THAT IN THESE CASES THE AO H AS ASKED EXPLANATION OF 36 QUESTIONS AND ASSESSEE WAS GIVEN ONLY 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 IN THE CASE OF SHIVAANSH ITA NOS. 4743-4749/DEL/2013 3 ADVERTISING AND PUBLICATIONS (P) LTD. VIDE ITS ORDE R 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 THE LEVY OF PENALTY UNDER SECTION 271(1)((B) OF THE ACT. ACCORDINGLY, THE SAME IS CANCELLED. ITA NOS. 4743-4749/DEL/2013 4 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 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. ITA NOS. 4743-4749/DEL/2013 5 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 ITA NOS. 4743-4749/DEL/2013 6