Vimal Chadha, New Delhi V. ACIT, New Delhi

ITA 4786/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86506 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 10-12-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 12-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Keywords: Search and seizure; Bonafide belief; Reasonable cause
• Section: 143(3); 142(1); 153A; 132; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI C.M.GARG, J.M. ITA NO S : 4 783 4784 4785 AND 4786 / DEL/20 13 AY : - 200 7 - 08 TO 201 0 - 11 SH. VIMAL CHADHA VS. ACIT, CC 11 H NO 1362, DR.MUKHERJEE NAGAR ARA CENTRE, JHANDEWALAN NEW DELHI EXTN., NEW DELHI PAAN: ABTPC 1565 C (APPELLANT) (RESPONDENT) APPELLANT BY : NONE. RESPONDENT BY : SH. JP CHANDRAKAR, SR. D.R. O R D E R PER BENCH ALL THESE APPEALS ARE FILED BY THE ASSESSEE DIRECTED AGAINST COMMON ORDER PASSED BY THE LD.CIT(A) - XXXI, NEW DELHI DATED 2 5.09. 2013 PERTAINING TO THE AY 2005 - 06 TO 201 0 - 11 , WHEREIN PENALTY LEVIED U/S 2 71(1)(B) OF THE ACT BY THE AO VIDE ORDER DT. 24.12.2012 WAS PARTLY CONFIRMED . 2. FACTS IN BRIEF : - THE ASSESSEE IS AN INDIVIDUAL. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED ON 6.1.2011. THE GROUP CASES A RE IN THE PROCESS OF BEING CENTRALIZED BY THE INCOME TAX DEPARTMENT. PENALTY U/S 271(1)(B) OF THE ACT WAS LEVIED ON THE ASSESSEE FOR NOT COMPLYING WITH THE NOTICES ISSUED U/S 142(1) OF THE ACT. THE ASSESSEE PLEADED THAT IT WAS ASSESSED TO TAX FOR MANY Y EARS AND THEY HAD FULLY COOPERATED WITH THE 2 DEPARTMENT. THAT ASSESSMENT ORDER PASSED U/S 153A OF THE ACT READ WITH S.143(3) OF THE ACT, WHICH MEANS THAT THE COMPLIANCE MADE BY THE ASSESSEE WAS CONSIDERED SUFFICIENT AND NO ORDER WAS PASSED U/S 144 OF THE A CT DUE TO CENTRALIZATION OF CASES WHICH ARE AROUND 120 IN NUMBER, AND THE NOTICES IN QUESTION WERE NOT SERVED ON THE ASSESSEE. 2.1 . BOTH THE AO AND THE LD.CIT(A) REJECTED THIS PLEA OF THE ASSESSEE. 2.2. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 3 . NO NE APPEARED ON BEHALF OF THE ASSESSEE. THERE IS NO PETITION FOR ADJOURNMENT EITHER. UNDER THE CIRCUMSTANCES WE DISPOSE OF THE CASE EX PARTE QUA THE ASSESSEE ON MERITS. 3.1 . HEARD THE LD.CIT, D.R. SHRI GUNJAN PRASAD ON BEHALF OF THE REVENUE. 3.2. ON A CAR EFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD AS FOLLOWS. 4. THE TRIBUNAL IN THE CASE OF M/S MANJOOSHA MADAN IN ITA NOS. 4698 TO 4703/DEL/13 AT PARA 8 HAD HELD AS FOLLOWS. 8. FURTHER MORE, WE ALSO NOTE THAT ASSESSMENT IN THIS CAS E WERE COMPELTED U/S 143(3) OF THE ACT, IT DOES MEAN THE SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE. THE DECISION RELIED UPON BY THE LD.COUNSEL OF THE ASSESSEE AS ABOVE ALSO COME TO THE RESCUE OF THE ASSESSEE. 8.1. FURTHER MORE, WE FIND THAT HON BLE 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 AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY 3 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 ACTED IN CONSCIOU S DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AN D ON A CONSIDERATION 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 TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT, OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 4.1 . FURTHER WE ALSO NOTE THAT THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE ACT, IT DOES MEAN THA T SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDING WAS CONSIDERED AS GOOD COMPLIANCE. 4.2 . THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ACIT (2008) 115 TTJ (DELHI) 419 LAID DOWN THE PROPOS ITION THAT THE ORDER IS PASSED U/S 143(3), IT CAN BE SAFELY CONCLUDED THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS ARE TO BE CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMMITTED EARLIER WERE IGNORED BY THE AO, AND THAT UNDER SUCH CIRCUMSTAN CES PENALTY U/S 271(1)(B) OF THE ACT CANNOT BE LEVIED. CONSISTENT WITH THE VIEW TAKEN THEREIN AND ALSO FOR THE REASON THAT THE ASSESSEE HAD DEMONSTRATED REASONABLE CAUSE, WE CANCEL THE PENALTIES TO THE EXTENT SUSTAINED BY THE FIRST APPELLATE AUTHORITY. 4 5. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 7 T H JANUARY, 2015 . S D / - S D / - ( C.M. GARG ) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 0 7 T H J ANUARY, 2015 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER 5 ASST. REGISTRAR