M/s TNG Shiv Geo Services Ltd., New Delhi V. ACIT, New Delhi

ITA 4821/DEL/2013

• Counselvise Citation: 482120114 RSA 2013
• 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: 2009-2010
• Appeal Filed On: 12-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GUNJAN P RASAD
• Keywords: Search and seizure; Opportunity of being heard; Bonafide belief; Reasonable cause
• Section: 143(3); 142(1); 153A; 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 : 4819 - 4820 - 4821 - 4822 AND 4823/ DEL/20 13 AY : - 200 7 - 08 TO 2011 - 12 M/S TNG SHIV GEO SERVICES LTD. VS. ACIT, CC 11 NBCC PLAZA, PUSHP VIHAR, SAKET NEW DELHI NEW DELHI PAN: AACCT 5584 F (APPELLANT) (RESPONDENT) APPELLANT BY : NONE . RESPONDENT BY : SH. GUNJAN PRASAD, CIT, 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 29.05.2013 PERTAINING TO THE AY 2005 - 06 TO 2011 - 12, WHEREIN HE CONFIRMED THE ORDER OF PENALTY PASSED BY THE AO U/S 271(1)(B) OF THE ACT FOR ALL THE ASSESSMENT YEARS. 2. FACTS IN BRIEF : - THE ASSESSEE BELONGS TO SHIVANI GROUP, WHEREIN A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AND ALL THE CASES CENTRALIZED. IN REP LY TO NOTICE U/S 142(1) OF THE ACT THE ASSESSEE SUBMITTED THAT IT IS WILLING TO COMPLY WITH THE NOTICES SERVED, BUT REQUIRE CERTAIN TIME TO DO SO AS THE COUNSELS WERE NOT AVAILABLE IN 2 THE MONTH OF DECEMBER. FURTHER , NOTICES WERE ALSO REPLIED BY THE ASSE SSEE. THE AO ALLEGED THAT THE NOTICE U/S 271(1)(B) OF THE ACT WAS NOT REPLIED. THE ASSESSEE SUBMITS THAT IT WAS ASSESSED TO TAX FOR MANY YEARS AND THEY HAD FULLY COOPERATED WITH THE 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 ACT DUE TO CENTRALIZATION OF CASES WHICH ARE AROUND 120 IN NUMBER, AND THE NOTICES IN QUESTION WERE NOT SERVED ON TH E 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 . NONE 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 CAREFUL 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 4 7 03/DEL/1 3 AT PARA 8 HAD HELD AS FOLLOWS. 3 8. FURTHER MORE, WE ALSO NOTE THAT ASSESSMENT IN THIS CASE 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 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 W AS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PE NALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY CO MPETENT 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 PR ESCRIBED 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 THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDING WAS CONSIDERED AS GOOD COMPLIAN C E. 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 PROPOSITION THAT THE ORDER IS PASSED U/S 143(3), IT CAN BE SAFELY CONCLUDED THAT SUBSEQUENT 4 COMPLIA NCE 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 CIRCUMSTANCES PENALTY U/S 271(1)(B) OF THE ACT CANNOT BE LEVIED. CONSISTENT WITH THE VIEW TAKEN THEREI N 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. 5. IN THE RESULT, ALL THE A PPEALS 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) JUD ICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 0 7 T H J ANUARY, 2015 *MANGA 5 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR 6 ITA 1817 AND 2818 THESE ARE CROSS APEPALS DIRECTED AGAINST THE ORDER OF NONE APPEARED ON BEHALF OF THE ASSESSEE. A LETTER WAS FILED ON BEHALF OF THE ASSESSEE STATING THAT IN THE QUANTUM PROCEEDINGS, THE TRIBUNAL IN ITA 836/DEL/2011 ORDER DT. 6.9.2013 REMANDED THE MATTER JBACK TO THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AND THUS THE PENALTY LEVIED, BASED ON WHICH THE ADDITION MADE IN THE AS SESSMENT ORDER, NO LONGER SURVIVES THE LD.SR.D.R. FILED A COPY OF THE ORDER OF THE TRIBUNAL IN ITA 836/DEL/2011. AFTER HEARING THE LD.DR, WE FIND THAT THE TRIBUNAL HAS RES TORED THE ISSUE TO THE FILE OF THE AO TO DECIDE THE ISSUE DENOVO, AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD. THUS THE ASSESSMENT ORDER BASED ON WHICH TH34E PENALTY HAS BEEN LEVIED DOES NOT SURVIVE. HENCE THE PENALTY LEVIED U/S 271(1)(C ) OF THE ACT BASED ON THIS ASSESSMENT ORDER ALSO DOES NOT SURVIVE. HENCE WE ALLOW THE APPEAL OF THE ASSESSEE AND DISMISS THE APPEAL OF THE REVENUE. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH NOVEMBER ,2014. 7 SD/ - SD/ - ( H.S.SIDHU ) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 11 TH NOVEMBER , ,2014 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR