Brij Mohan Seth, New Delhi V. ACIT, Central Circle-26, New Delhi

ITA 4978/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3108 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N J SINGH
• Assessee Lawyers: VIJAY KHATANA ADV PROXY
• Keywords: Non compliance
• Section: 142(1); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO. 4978/DEL/2017, ITA 4979/DEL/2017, ITA 4980/ DEL /2017, ITA 4981/D/2017, ITA 4982/D/2017, ITA NO. 4983/ DEL /2017 & ITA 4984/D/17 ASSESSMENT YEARS: 2009-10, 2010-11, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 SHRI BRIJ MOHAN SETH, C-1/203, 1 ST FLOOR, JANAKPURI, NEW DELHI-110058 VS ASSTT. COMMISSIONER OF I NCOME TAX, CENTRAL CIRCLE-26, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY KHATANA, ADV. (PROXY COUNSEL) RESPONDENT BY : SHRI N.J. SINGH, SR. DR DATE OF HEARING : 06.12.2017 DATE OF PRONOUNCEMENT: 08. 12.2017 ORDER PER DIVA SINGH, J.M. THESE SEVEN APPEALS FILED BY THE ASSESSEE ARE BEIN G DECIDED BY A COMMON ORDER AS THE SOLE ISSUE AGITATED IS UPHOLDIN G OF THE PENALTY IMPOSED U/S 271(1)(B) BY THE CIT(A)-29, NEW DELHI VIDE HIS CONSOLIDATED ORDER DATED 26.05.2017 IN THE RESPECTIVE ASSESSMENT YEARS. 2. IN THE PRESENT APPEALS ALSO, AS IN ITA NO.4987/D EL/2017 & OTHERS, AN ADJOURNMENT APPLICATION HAD BEEN MOVED ON BEHALF OF THE ASSESSEE ON 4.12.2017 ON WHICH DATE IT WAS ADJOURNED TO 6 TH DECEMBER, 2017. AGAIN, ON THE SAID DATE, ADJOURNMENT APPLICATION WAS MOVED ST ATING THAT THERE ARE SOME OTHER APPEALS WHICH NEED TO BE CONSOLIDATED. HOWEVER, SINCE THE PRESENT APPEALS COULD BE DECIDED ON THE BASIS OF MA TERIAL AVAILABLE ON ITA NO.4978/DEL/2017 TO 4984/D/17 ASSESSMENT YEARS: 2009-10 TO 2015-16 2 RECORD, IT WAS DEEMED APPROPRIATE TO REJECT THE ADJ OURNMENT APPLICATION AFTER TAKING NOTE OF THE PRESENCE OF THE PROXY COUN SEL MR. VIJAY KHATANA ON BEHALF OF THE LD. AR. LD. SR. DR WAS HEARD. 3. THE FACTS OF THE PRESENT CASE ARE MORE OR LESS IDENTICAL TO THE FACTS AS CONSIDERED IN ITA NO.4987/DEL/2017 & OTHERS. A SEA RCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT 1961 WAS CARRIED OU T IN THE CASE OF M/S G.D. FOODS & MANUFACTURING PVT. LTD. & OTHERS AND THE CA SE OF THE ASSESSEE WAS ALSO COVERED IN THE SAID SEARCH. BY NOTICE U/S 153 A, THE ASSESSEE WAS REQUIRED TO FILE ITS RETURN. NOTICE U/S 143(2)/142 (1) ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE ON 13.5.20 16 FIXING THE DATE OF HEARING AS 22 ND JUNE 2016. ON THE SAID DATE, ADJOURNMENT APPLICAT ION WAS FILED. THEREAFTER, FURTHER NOTICES U/S 142(1) WER E ISSUED LEADING TO THE NOTICE FOR PENALTY U/S 271(1)(B). SINCE THE ASSESS EE FILED NO REPLY, PENALTY U/S 271(1)(B) WAS IMPOSED ON ACCOUNT OF THE FOLLOWI NG DEFAULTS:- 4. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFO RE THE FIRST APPELLATE AUTHORITY. IN THE FACTS OF THE PRESENT CASE ALSO , THE ASSESSEE IS FOUND TO HAVE EXPLAINED THAT ON TWO OCCASIONS AN ADJOURNMENT WAS SOUGHT AND ON ONE OF THOSE OCCASIONS, PART SUBMISSIONS WERE ALSO FILED. ON THE REMAINING DATES, AS IN THE CASE OF SMT. CHAND SETH, IT WAS AR GUED THAT THE ASSESSEE WAS REPRESENTED THROUGH HIS AR AND THE ASSESSING OF FICER REMAINED SL. NO. NOTICE ISSUED U/S DATE OF ISSUE DATE OF HEARING REMARKS , 1. 142(1) 23.08.2016 01.09.2016 ADJOURNMENT APPLICATION FILED 2. 142(1) 14.10.2016 25.10.2016 NO ONE APPEARED 3 142(1) 17.10.2016 27.10.2016 NO ONE APPEARED 4. 142(1) 03.11.2016 10.11.2016 ON 11.11.2016, PART SUBMISSION FILED 5 271 (1 )(B) 11.11.2016 16.11.2016 NO ONE APPEARED ITA NO.4978/DEL/2017 TO 4984/D/17 ASSESSMENT YEARS: 2009-10 TO 2015-16 3 FOCUSSED ON CONCLUDING THE ISSUES IN THE CASES OF M /S G.D. FOODS MANUFACTURING INDIA P. LTD. AND BEING OF THE VIEW T HAT THOSE CASES WOULD THROW UP ISSUES WHICH WOULD IMPACT THE PRESENT ASSE SSEES CASE ALSO DID NOT GO AHEAD WITH THE HEARING. ON ACCOUNT OF THIS FACT, NO HEARING TOOK PLACE. AFFAIDAVIT OF MR. AJAI KUMAR GUPTA WAS RELI ED UPON IN SUPPORT OF THE SAID ASSERTION WHO AFFIRMED THAT HE HAD BEEN ENTRUS TED TO REPRESENT AND APPEAR IN M/S G.D. FOODS MANUFACTURING INDIA P. LTD . GROUP CASES INCLUDING THE CASE OF THE PRESENT ASSESSEE ALSO AND THUS, IN THESE PECULIAR FACTS AND CIRCUMSTANCES, THE OCCASION FOR THE ASSES SEE TO REMAIN UNREPRESENTED DID NOT ARISE. FOR READY REFERENCE, RELEVANT EXTRACTS FROM THE SUBMISSIONS AT PAGE 3 AND 4 OF THE IMPUGNED ORDER O N FACTS ARE EXTRACTED HEREINUNDER:- 3. AT THE VERY OUTSET IT IS SUBMITTED THAT, ON HE ARING DATED 01.09.2016, IN RESPONSE TO NOTICE U/S 142(1) ADMITT EDLY, THE AR OF THE ASSESSEE APPEARED AND FILED AN ADJOURNMENT WHIC H THE LD. ASSESSING OFFICER HAS RECORDED. FILING OF AN ADJOURNMENT APPLICATION AND THE SAME HAVING BEEN ACCEPTED BY TH E AO TANTAMOUNTS TO COMPLIANCE AND NO PENALTY CAN BE LEV IED. UNFORTUNATELY THE ID. AO HAS LEVIED PENALTY EVEN WH EN AN ADJOURNMENT APPLICATION HAS BEEN FILED WHICH WAS DU LY EXPLAINED AND ACCEPTED. THE PENALTY FOR THIS ALLEGED NON COMP LIANCE DESERVES TO BE DELETED. 4. IN RESPECT OF ITEM NO. 5 IN THE PENALTY ORDER, THE ID. AO ISSUED NOTICE U S 271(L)(B) OF THE ACT FIXING THE HEARING ON 16.11.2016 WHEN PURPORTEDLY NO ONE APPEARED AND SHE LEVIED PENALTY FOR NON COMPLIANCE OF NOTICE U/S 271(L)(B) OF THE ACT AS WE LL. FOR EASE OF REFERENCE, SECTION 271(L)(B) OF THE ACT IS REPRODUCED HEREINUNDER: '271. (1) IF THE ASSESSING OFFICER OR THE COMMISSIO NER (APPEALS) OR THE PRINCIPAL COMMISSIONER OR COMMISSIONER IN THE COURS E OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY P ERSON (A) [***] ITA NO.4978/DEL/2017 TO 4984/D/17 ASSESSMENT YEARS: 2009-10 TO 2015-16 4 (B) HAS FAILED TO COMPLY WITH A NOTICE UNDER SUB-SECTI ON (2) OF SECTION 115WD OR UNDER SUB-SECTION (2) OF SECTION 1 15WE OR UNDER SUB-SECTION (1) OF SECTION 142 OR SUB-SECTION (2) O F SECTION 143 OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER SUB-SECTION (2A) OF SECTION 142, OR' FROM THE AFORESAID SECTION, IT IS AMPLY DEAR THAT S ECTION 271(L)(B) OF THE ACT TALKS OF LEVY OF PENALTY FOR NON COMPLIANCE OF NOTICES U/S 143(2),142(1),ETC. NO PENALTY U/S 271(L)(B) CAN BE LEVIED FOR NON COMPLIANCE OF NOTICE U/S 271(L)(B) OF THE ACT. 5. AS FAR AS THE OTHER TWO NOTICES ARE CONCERNED I.E. DATED 14.10.2016 AND 17.10.2016 IT IS SUBMITTED THAT SH. AJAI KUMAR GUPTA, AR APPEARED AND WAS TOLD THAT SINCE G. D. FOOD MANUFACTURING (I) PVT. LTD. BEING THE LEAD COM PANY HAD THE MAXIMUM NUMBER OF ISSUES AND THE FOCUS SHOULD B E ON COMPLETING THAT ASSESSMENT. THE ID. AO FURTHER STATED THAT THE HEARING OF G. D. FOODS MANUFACTURING (I) PVT. LTD. IS FIXED ON SUBSEQUENT DATE AND ON THAT DATE THE ASSESSEE SHOULD COMPLY AND ATTEND. AC CORDINGLY SH. AJAI KUMAR GUPTA, AR ATTENDED ON THE NEXT DATE AND THE CASE OF G. D. FOODS WAS DISCUSSED EXTENSIVELY AND N UMEROUS DETAILS WERE FILED. AT THE END OF THE DAY, THE ID. AO ORALLY STATED THA T SHE WOULD TAKE UP SH. BRIJ MOHAN SETH'S CASE AFTER THE ISSUES RELATED TO G.D. FOODS MANUFACTURING (I) PVT. LTD. HAVE BEEN EX AMINED BECAUSE SHE EXPECTED THAT SOME INPUTS WOULD COME FR OM THE ASSESSMENT OF G.D. FOODS WHICH COULD HAVE A BEARING OF THE ASSESSMENT OF SH. B.M. SETH'S CASES. THESE FACTS HAVE BEEN STATED BY WAY OF AN AFFIDAVIT BY SH. AJAI KUMAR GUPTA WHO ATTENDED THE PROCEEDINGS AND T HE SAME IS ENCLOSED HEREWITH AS ANNEXURE-LL. 6. YOUR HONOUR WILL APPRECIATE THAT, THE ASSESSEE HAD ATTENDED TO MORE THAN 30 HEARINGS OF G. D. FOODS MANUFACTURING (I) PVT. LTD. AND THERE IS NO ALLEGAT ION AS FAR AS COMPLIANCE IS CONCERNED. WHEN THE ASSESSEE APPEARED FOR MORE THAN 30 HEARINGS FOR THE ASSESSMENT OF G. D. F OODS, ONE FAILS TO UNDERSTAND WHY HE WOULD NOT ATTEND TO THE HEARING OF SH. B.M. SETH BEFORE THE SAME AO. AS ALREADY STATED, THE CIRCUMSTANTIAL EVIDENCE COUP LED WITH THE AFFIDAVIT OF SH. AJAI KUMAR GUPTA IT IS ABUNDANTLY CLEAR THAT SH. AJAI KUMAR GUPTA ATTENDED AND WAS ORALLY ASKED TO FIRST GET ASSESSMENT ITA NO.4978/DEL/2017 TO 4984/D/17 ASSESSMENT YEARS: 2009-10 TO 2015-16 5 OF G. D. FOODS COMPLETED AND THEREFORE THE ISSUE OF NON COMPLIANCE CANNOT BE RAISED AGAINST THE ASSESSEE. (EMPHASIS SUPPLIED) 4.1 IN THE AFOREMENTIONED PECULIAR FACTS AND CIRC UMSTANCES, FOLLOWING THE ORDERS IN ITA NO. 4987/DEL/2017 & OTHERS, THE PENAL TY ORDERS ARE QUASHED IN THE RESPECTIVE APPEALS. THE RELEVANT EXTRACT OF THE ORDER FOLLOWED IS REPRODUCED HEREUNDER FOR READY REFERENCE:- 5. A PERUSAL OF THE EXPLANATION EXTRACTED IN THE IMPUGNED ORDER SHOWS THAT THE ASSESSEE SUBMITTED THAT ADMITTEDLY A S PER RECORD, ON TWO OCCASIONS, ADJOURNMENT APPLICATIONS WERE FILED AND ON ONE OF THESE DATES, PART SUBMISSIONS WERE ALSO FILED. ACC ORDINGLY, ON THESE TWO DATES, ASSESSEE CANNOT BE SAID TO BE NOT REPRES ENTED. ON THE REMAINING DATES, IT HAD BEEN ARGUED, THE ASSESSING OFFICER REMAINED FOCUSSED ON CONCLUDING THE ISSUES IN M/S G.D. FOODS MANUFACTURING INDIA P. LTD. AS THE OFFICER WAS OF THE VIEW THAT T HE ISSUES WHICH WOULD BE THROWN UP FROM THE SAID CASE WOULD HAVE A N IMPACT ON THE CASE OF THE ASSESSEE ALSO. AN AFFIDAVIT OF MR. AJ AI KUMAR WAS RELIED UPON. MR. AJAI KUMAR AFFIRMED THAT AS THE ASSESSEE S COUNSEL REMAINED PRESENT ON THAT DATE, AND HE AFFIRMED THAT HE HAD BEEN ENTRUSTED WITH THE JOB OF ASSISTING THE ASSESSMENT PROCEEDINGS IN THE CASE OF M/S G.D. FOODS MANUFACTURING INDIA P. LTD. INCLUDING THE CASE OF THE ASSESSEE AND HE WAS PRESENT ON EACH OF THESE DATES. IN THESE PECULIAR FACTS AND CIRCUMSTANCES, I AM OF THE VIEW THAT AS FAR AS THE PENALTY IMPOSED U/S 271(1)(B) IS CONCERNED, THE DEF AULT STANDS EXPLAINED. IN THE FACTS OF THE PRESENT CASE, IT IS SEEN THAT ONCE ON A SPECIFIC DATE, AN ADJOURNMENT APPLICATION IS MOVED, IT CAN, BY NO STRETCH OF IMAGINATION, BE SAID TO BE A CASE OF NON -COMPLIANCE. SIMILARLY, WHERE PART INFORMATION IS PLACED ON RECO RD AND TIME IS SOUGHT, IT AGAIN CANNOT BE SAID TO BE A CASE OF ABS ENTING ONESELF WITHOUT AN EXPLANATION. ON THE REMAINING DATES, TH E ASSESSEE HAS CONSISTENTLY ARGUED THAT HIS COUNSEL REMAINED PRESE NT. HOWEVER, THE FOCUS OF THE ASSESSING OFFICER REMAINED UPON THE MA IN APPEALS IN THE CASE OF M/S G.D. FOODS GROUP IN WHICH BACKGROUND, I T HAS BEEN STATED THAT THE OCCASION FOR THE ASSESSEE TO REMAIN NOT PR ESENT THROUGH HIS COUNSEL DID NOT ARISE. I FIND THAT THE COMMISSIONE R OF INCOME TAX(A) THOUGH HAS TAKEN NOTE OF THESE ARGUMENTS, FACTS, SU BMISSIONS AND AFFIDAVIT, HOWEVER, HAS REFUSED TO ACCEPT THE EXPLA NATION IN THE ABSENCE OF ANY JUSTIFIABLE REASON FOR REJECTION OF ASSESSEES EXPLANATION. CONSIDERING THE SUBMISSIONS OF THE LD . SR. DR AND THE SUBMISSIONS OF THE ASSESSEE AS RECORDED IN THE IMPU GNED ORDER, I FIND THAT IN THE ABSENCE OF ANY GOOD REASON TO THE CONTR ARY, PENALTY ORDER IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE DE SERVES TO BE QUASHED. ORDERED ACCORDINGLY. ITA NO.4978/DEL/2017 TO 4984/D/17 ASSESSMENT YEARS: 2009-10 TO 2015-16 6 5. IN THE RESULT, ALL APPEALS OF THE ASSESSEE ARE ALLOWED. THE SAID ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08 DECEMBER, 2017. SD/- ( DIVA SINGH) JUDICIAL MEMBER DATED: 08 DECEMBER, 2017 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSISTANT REGI STRAR DRAFT DICTATED ON 06.12.2017 DRAFT PLACED BEFORE AUTHOR 06.12.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON 08.12.2017 FILE SENT TO THE BENCH CLERK 08.12.2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.