Sh. Manish Periwal, Kolkata V. DCIT, New Delhi

ITA 5156/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4183 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 18-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure; Salary income; Double taxation relief; Principle of natural justice; Reasonable cause; Non compliance
• Section: 143(3); 142(1); 133A; 153A; 32; 131; 132

Judgement Text

ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 5156/DEL /2014 ASSESSMENT YEAR: 2006-07 SHRI MANISH PERIWAL, 9, EZRE STREET, KOLKATA-700001 (PAN: AFWPP8883K) VS DCIT , CIRCLE-19(2), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : MS SHWETA BANSAL, CA RESPONDENT BY: SHRI ATIQ AHMAD, SR. DR DATE OF HEARING : 05.09.2017 DATE OF PRONOUNCEMENT: 04.10.2017 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 16.07.2014 PASSED BY THE LD . CIT(A)-I, NEW DELHI WHEREIN VIDE ORDER DATED 16.7.2 014 FOR ASSESSMENT YEAR 2006-07, THE LD. CIT(A) HAS CONFIRMED IMPOSITION OF PENALTY AMOUNTING TO RS. 30,000/- U/S 271(1)(B) OF THE INCOME TAX ACT, 1961. ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 2 2. AT THE OUTSET, THE LD. AR SOUGHT AN ADJOURNMENT WHICH WE DEEM APPROPRIATE TO REFUSE AND WE PROCEED TO HEAR BOTH THE SIDES ON MERITS. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DIRECTOR IN M/S PIONEER URBAN LAND & INFRASTRUCTURE LTD. SEARCH U/S 132 WAS CONDUCTED ON 13.1.2012 IN THE CASE OF THE ASSESSEE AND THE PIONEER GROUP. THE ASSESSMENT WAS BEING FRAMED U/S 153A R.W.S. 143(3) ON THE ASSESSEE CONSEQUENT TO INFORMATION ABOUT UNDISCLOSE D HSBC BANK ACCOUNT IN SWITZERLAND. DURING THE COURSE THER EOF, NOTICES U/S 142(1) ALONG WITH QUESTIONNAIRE WERE SERVED ON THE ASSESSEE. THE ASSESSEE DID NOT COMPLY; THEREAFTER FURTHER REM INDERS FOR HEARINGS WERE ISSUED. PENALTY PROCEEDINGS U/S 271(1 )(B) WERE INITIATED VIDE NOTICE DATED 5.8.13 FOR NON- COMPLIANCE OF NOTICE DATED 11/07/2013 U/S 142(1) FI XING THE DATE FOR COMPLIANCE ON 2.8.2013. HOWEVER SUBSEQUENTLY, PENALTY OF RS. 10,000/- EACH WAS LEVI ED FOR DEFAULT IN COMPLIANCE OF NOTICES ISSUED ON 2.5.2013 , 12.6.2013 AND 11.7.2013. BEFORE THE LD. CIT (A), I T WAS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSING O FFICER HAD ISSUED THE NOTICE FOR LEVY OF PENALTY ONLY FOR ONE ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 3 DEFAULT BUT HAD FINALLY LEVIED THE PENALTY FOR THRE E DEFAULTS WHEREAS IT WAS JUDICIALLY SETTLED THAT A S EPARATE NOTICE HAD TO BE GIVEN FOR EACH DEFAULT AND PENALTY HAD TO BE LEVIED SEPARATELY FOR EACH DEFAULT. HOWEVER, THE LD. CIT (A) DID NOT ACCEPT THE CONTENTIONS OF THE ASSES SEE AND CONFIRMED THE IMPOSITION OF PENALTY OF RS. 30,0 00/- AND NOW, THE ASSESSEE IS IN APPEAL BEFORE US AND HA S RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLATE ORDER CONFIRMING THE PENALTY U/S 271(L)(B ) OF THE IT ACT, 1961 IS ILLEGAL BEING AGAINST THE PRINC IPLES OF NATURAL JUSTICE AND AGAINST THE PROVISIONS OF THE A CT. 2. THE LD. C1T(A) HAS GROSSLY ERRED ON FACTS AS WE LL AS IN LAW IN CONFIRMING THE PENALTY ON THE ALLEGED DEF AULT FOR COMPLIANCE OF NOTICES U/S 142(1) ISSUED ON 2/5/ 2013 AND 12/6/2013 WITHOUT ISSUING ANY NOTICE FOR INITIA TION OF PENALTY U/S 142(1) W.R.T. THESE ALLEGED DEFAULTS . 3. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AS WE LL AS IN LAW IN CONFIRMING THE PENALTY ON THE ALLEGED DEF AULTS FOR COMPLIANCE OF NOTICES U/S 142(1) ISSUED ON 2/5/ 2013 AND 12/6/2013 THOUGH THE PENALTY WAS INITIATED ON 5/8/2013 ONLY FOR DEFAULT OF NON COMPLIANCE ON 2/8/2013 IN RESPECT OF NOTICE U/S 142(1) DATED 11/07/2013. 4. THE LD. CIT (A) HAS GROSSLY ERRED ON FACTS AS W ELL AS IN LAW IN CONFIRMING THE SINGLE PENALTY ORDER FOR A LLEGED THREE DEFAULTS. 5. THE LD. AO HAS GROSSLY ERRED ON FACTS AS WELL A S IN LAW IN CONFIRMING THE PENALTY FOR NOT EXECUTING THE CONSENT LETTER INSPITE OF THE FACT THAT SECTION 142 (1) DOES NOT AUTHORIZE THE REVENUE AUTHORITIES TO SUPPLY ANY LETTER TO THE ASSESSEE AND FORCING HIM TO SIGN THE SAME. ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 4 6. THE LD. AO HAS GROSSLY ERRED ON FACTS AS WELL A S IN LAW IN CONFIRMING THE PENALTY OF RS. 30,000/- THOUG H THE SHOW CAUSE NOTICE WAS ISSUED FOR RS. 10,000/- ONLY. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIF Y AND WITHDRAW ANY GROUND OF APPEAL BEFORE OR DURING THE APPELLATE PROCEEDINGS. 4. LD. AR FILED WRITTEN SUBMISSIONS WHICH ARE REPRODUCED AS UNDER:- THE APPELLANT DERIVES INCOME FROM SALARY AS DIRECTOR IN M/S PIONEER URBAN LAND AND INFRASTRUCTURE LIMITED AND INTEREST. SEARCH U/S 132 WAS CONDUCTED ON 13/1/2012 IN THE CASE OF THE ASSESSEE AND HIS GROUP. PENALTY U/S 271(L)(B) WAS INITIATED VIDE NOTICE DATED 5/8/2013 FOR NON COMPLIANCE ON 2/8/2013 IN RESPONSE TO NOTICE U/S 142(1) DATED 11/07/2013. THE PENALTY HAS BEEN LEVIED FOR THE ALLEGED DEFAULT FOR COMPLIANCE OF NOTICES U/S 142(1) ISSUED ON 2/5/2013 (DATE OF HEARING 15- 05-2013), 12/06/2013(DATE OF HEARING 28-06- 2013) AND 11/07/2013 (DATE OF HEARING 18-07- 2013) WITHOUT ISSUING ANY NOTICE FOR INITIATION OF PENALTY W.R.T. THESE ALLEGED DEFAULTS. SINCE PENALTY U/S 271(L)(B) CANNOT BE LEVIED WITHOUT ISSUING THE NOTICE FOR INITIATING THE SAME, THE PENALTY ORDER IS BAD IN LAW. THOUGH THE PENALTY WAS INITIATED ON 5/8/2013 ONLY FOR DEFAULT OF NON COMPLIANCE ON 2/8/2013 YET THE FACT REMAINS THAT THE IMPUGNED ORDER IS NOT FOR THIS DEFAULT AS THE SAME HAS BEEN DULY EXPLAINED VIDE LETTERS DATED 12/8/2013. SINCE THE AO WAS SATISFIED WITH THE REPLY, HE DID NOT LEVY ANY PENALTY FOR THIS DEFAULT ON 2/8/2013 BUT LEVIED THE PENALTY FOR EARLIER ALLEGED DEFAULTS. SINCE, PENALTY ORDER IS FOR CERTAIN ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 5 DEFAULTS AND THE NOTICE FOR INITIATING THE PENALTY IS FOR OTHER DEFAULTS, THE SAME IS BAD IN LAW. SHOW CAUSE NOTICE U/S 271(L)(B) DATED 05/08/2013 REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY OF RS. 10,000/- SHOULD NOT BE LEVIED. BUT THE LD. AO LEVIED THE PENALTY AT RS. 30,000/-. THEREFORE, PENALTY ORDER IS BAD IN LAW BECAUSE PENALTY WAS LEVIED AT RS. 30,000/- THOUGH THE NOTICE WAS FOR RS. 10,000/- ONLY. WITHOUT PREJUDICE TO THE ABOVE, THE LD. AO HAS ISSUED ONLY ONE PENALTY ORDER FOR ALLEGED THREE DEFAULTS AND HAS LEVIED A TOTAL PENALTY OF RS. 30,000/- @ RS. 10,000/- FOR EACH DEFAULT. BY NOW IT IS JUDICIALLY SETTLED THAT A SEPARATE NOTICE HAS TO BE GIVEN FOR EACH DEFAULT AND PENALTY HAS TO BE LEVIED SEPARATELY FOR EACH DEFAULT. THE NON APPEARANCE ON 15/05/2013 AND 28/06/2013 IN RESPONSE TO NOTICE DATED 2/5/2013 AND 12/06/2013 WERE CONDONED BY THE LD. AO BY ISSUING FRESH NOTICES U/S 142(1) ON 11/7/2013 AND BY NOT ISSUING ANY NOTICE U/S 271 (L)(B) W.R.T. NON APPEARANCE ON 15-05-2013 AND 18-06-2013. IN RESPONSE TO THE NOTICE DATED 11/7/2013 FIXING THE HEARING ON 18/7/2013, ADJOURNMENT WAS SOUGHT WHICH WAS ALLOWED FOR 2/08/2013. PENALTY NOTICE DATED 5/8/2013 WAS ISSUED ONLY FOR NON-COMPLIANCE ON 2/8/2013 AND NOT 18-07- 2013, ONCE THE PENALTY NOTICE WAS ISSUED FOR ONE DEFAULT TO SHOW CAUSE AS TO WHY PENALTY OF RS. 10,000/- SHOULD NOT BE LEVIED, PENALTY LEVIED AT RS. 30,000/- FOR 3 DEFAULTS IS ILLEGAL. RELIANCE IS PLACED ON THE FOLLOWING: - BABU LAL VS. DCIT, (2004) 91 TTJ (JD) 368 '9.WE HAVE CIRCUMSPECTIOUSLY PERUSED THE ABOVE CHART AS FRAMED BY THE AO. SO FAR AS THE NOTICES, ETC. ISSUED BY THE ASSTT. CIT, BIKANER, ARE CONCERNED, THEY SEEM TO BE COMPLIED WITH BY THE ASSESSEE. OTHERWISE, THE AO WOULD HAVE TAKEN ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 6 THE PROCEEDINGS UNDER S. 271(L)(B) THEN AND THERE........ SO FOR EACH SUCH DEFAULT, SHOW-CAUSE NOTICE HAS TO BE ISSUED SEPARATELY AND PENALTY HAS TO BE LEVIED SEPARATELY. 10. THE AO HAS NOT LEVIED THE PENALTY FOR A SPECIFIC INSTANCE AS WE HAVE MENTIONED ABOVE BECAUSE THE AO IS BOUND TO ISSUE SHOW-CAUSE NOTICE AND LEVY PENALTY IN CASE OF EACH AND EVERY SUCH DEFAULT. SO, THE OFFICER HAS GENERALISED THE PATTERN OF PROCEEDINGS BY TAKING EXTRACTS FROM THE ORDER-SHEET AND ON THE BASIS OF THAT HAS TRIED TO COME TO A CONCLUSION THAT THE ASSESSEE WILFULLY EVADED THE COMPLIANCE OF NOTICE OR DIRECTIONS. THUS, IN SUCH A WAY, THE AO HAS NOT FOLLOWED THE PROPER PROCEDURE FOR LEVY OF PENALTY. HE HAS NOT EVEN POINTED OUT ANY SPECIFIC AMOUNT AGAINST WHICH HE WAS LEVYING PENALTY. IN SUCH A SITUATION, WE ARE LEFT WITH NO OPTION BUT TO COME TO A FINDING THAT GENERAL PENALTY AS HAS BEEN LEVIED IN THIS CASE, CANNOT BE SUSTAINED IN THE EYES OF LAW WHEN THE ASSESSEE OR HIS REPRESENTATIVE APPEARED BEFORE THE AUTHORITY FOR COMPLIANCE OF NOTICES/DIRECTIONS. WITHOUT PREJUDICE TO THE ABOVE, NOTICE U/S 142(1) WAS ISSUED ON 2/5/2013 CALLING FOR CERTAIN INFORMATION IN RESPECT OF ALLEGED FOREIGN BANK ACCOUNTS FIXING THE HEARING ON 15/5/2013. ON THIS DATE, ADJOURNMENT WAS SOUGHT VIDE LETTER DT. 15/05/2013 ON THE GROUND THAT THE ASSESSEE WAS TRAVELLING ABROAD. A FRESH NOTICE U/S 142(1) WAS ISSUED ON 12/06/2013 FIXING THE HEARING ON 28/06/2013 AT 11:30 A.M. HOWEVER, THIS NOTICE WAS RECEIVED BY THE ASSESSEE ON 28/06/2013 ITSELF AT 4:00 P.M. I.E., AFTER THE TIME FIXED FOR HEARING. AGAIN NOTICE U/S 142(1) WAS ISSUED ON 11/7/2013 FIXING THE HEARING ON 18/07/2013. AN ADJOURNMENT WAS SOUGHT ON 18/07/2013 AS THE ASSESSEE WAS ABROAD. ACCORDINGLY, ADJOURNMENT WAS ALLOWED FOR 02/08/2013. SINCE THE ADJOURNMENTS WERE GIVEN BY THE LD. AO AFTER CONSIDERING THE GENUINENESS OF THE ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 7 CIRCUMSTANCES, THE DEFAULT, IF ANY, FOR THE EARLIER PERIODS GETS CONDONED. HAD HE NOT BEEN SATISFIED, HE COULD NOT HAVE GIVEN ANY ADJOURNMENT AT ALL AND RATHER WOULD HAVE ISSUED NOTICES U/S 271(L)(B). SINCE, ADJOURNMENTS WERE GIVEN AND NOTICES U/S 271(L)(B) WERE NOT ISSUED, IT CONCLUSIVELY PROVES THAT THE LD. AO WAS SATISFIED WITH THE REASONS FOR ADJOURNMENT AND HENCE THE QUESTION OF NON COMPLIANCE / DEFAULT U/S 271(L)(B) DOES NOT ARISE. PENALTY U/S 271(L)(B) WAS INITIATED VIDE NOTICE DATED 5/8/2013 FOR NON COMPLIANCE ON 2/8/2013. THE ASSESSEE WAS REQUIRED TO SHOW CAUSE AS TO WHY A PENALTY OF RS.10,000/- SHOULD NOT BE IMPOSED U/S 271(L)(B). REPLY WAS FILED VIDE LETTER DATED 12/8/2013 EXPLAINING THAT THE ASSESSEE COULD NOT APPEAR ON 2/8/2013 AS HE WAS NOT WELL AND ON EARLIER OCCASIONS ADJOURNMENT WAS SOUGHT AS THE ASSESSEE WAS TRAVELLING ABROAD DUE TO PRE-LINED UP APPOINTMENTS. MEDICAL CERTIFICATE DATED 1/8/2013 WAS ALSO FILED BEFORE THE LD. AO. ACCORDINGLY THE CIRCUMSTANCES WERE BEYOND THE CONTROL OF THE ASSESSEE DUE TO WHICH COMPLIANCE COULD NOT BE MADE ON 2/8/2013. SINCE THE LD. AO WAS TRANSFERRED AND THE NEW AO TOOK OVER, HE ISSUED A FRESH SHOW CAUSE NOTICE U/S 271(L)(B) DATED 20/9/2013 FOR NON COMPLIANCE ON 2/8/2013. BUT THIS NOTICE WAS ISSUED ONLY FOR A.Y. 2012-13 AND NOT FOR THE IMPUGNED A.Y. REPLY WA S AGAIN FILED ON 1/10/2013 IN THE FORENOON AND ANOTHE R REPLY AGAIN IN THE AFTERNOON. HOWEVER, THE PENALTY AMOUNTING TO RS. 30,000/- HAS BEEN LEVIED FOR THE ALLEGED DEFAULT ON OTHER DATES FOR WHICH PENALTY WA S NEVER INITIATED. IN FACT, THE LD. AO, VIDE NOTICE U/S 142(1), REQUIR ED THE ASSESSEE TO FILE INFORMATION ABOUT HIS FOREIGN BANK ACCOUNTS. THE INFORMATION COULD NOT BE FILED AS THE ASSESSEE DID NOT POSSESS, TO THE BEST OF HIS KNOWLE DGE, ANY SUCH BANK ACCOUNTS. MOREOVER, THE DEPARTMENT, DURING THE COURSE OF SEARCH, SHOWED SOME FOREIGN BA NK ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 8 ACCOUNTS TO THE ASSESSEE WHEREIN HE SURRENDERED THE AMOUNT INVOLVED IN THOSE ACCOUNTS SUBJECT TO CERTAI N CONDITIONS. HE WAS NOT PROVIDED EVEN A COPY OF THOS E DOCUMENTS. THE SOURCE AND AUTHENTICITY OF THE IMPUGNED DOCUMENTS IN POSSESSION OF THE DEPARTMENT WAS NEVER INFORMED TO THE ASSESSEE. THEREFORE, THE DEPARTMENT WAS ASKING THE ASSESSEE FOR THE INFORMATION WHICH WAS ALREADY WITH THE DEPARTMENT AND NOT WITH THE ASSESSEE AS NO SUCH DOCUMENT RELAT ING TO ANY FOREIGN BANK ACCOUNT WAS FOUND DURING THE COURSE OF SEARCH. HOWEVER, LETTER DT. 14/03/2014 WA S FILED BEFORE LD. AO PROVIDING THE NECESSARY INFORMA TION U/S 142(1). SINCE, THE LD. AO WAS NOT SATISFIED, HE MADE THE ADDITION OF RS. 3,99,72,014 IN THE ASSESSMENT. WITHOUT PREJUDICE TO THE ABOVE, THE LD. AO ASKED FO R CONSENT FORM U/S 142(1) VIDE NOTICE DATED 11/7/2013 WHICH IS AGAINST THE AUTHORITY GIVEN TO HIM BY THE STATUTE. A PERUSAL OF SECTION 142(1) SHOWS THAT THE LD. AO IS AUTHORIZED TO TAKE THE FOLLOWING ACTION UNDER THIS SECTION: - TO CALL FOR RETURN OF INCOME TO CALL FOR STATEMENT OF ASSETS AND LIABILITIES TO REQUIRE TO PRODUCE, OR CAUSE TO BE PRODUCED, SU CH ACCOUNTS OR DOCUMENTS AS HE MAY REQUIRE ACCORDINGLY, U/S 142(1), THE LD. AO IS NOT AUTHORIZ ED TO SUPPLY ANY LETTER / DOCUMENT TO THE ASSESSEE AND AS K HIM TO SIGN AND GET NOTARIZED THE SAME. THEREFORE, THE NOTICE U/S 142(1) ITSELF IS BAD IN LAW BEING OUTSID E THE PURVIEW OF SECTION 142(1) AND HENCE THE PENALTY ORD ER IS ILLEGAL ON THIS COUNT ALSO. THE LD. CIT(A) HAS RELIED ON THE CASE LAW OF DHAKES WARI COTTON MILLS LTD., 27 ITR 126 (SC). THIS CASE LAW PERTAINS TO ASSESSMENT PROCEEDINGS AND NOT PENALTY PROCEEDINGS. MOREOVER, THIS CASE LAW PERTAINS TO RU LES OF EVIDENCE WHILE IN THE CASE OF THE APPELLANT, IT IS THE QUESTION OF LEVYING PENALTY WITHOUT INITIATING THE SAME AND LEVYING THE PENALTY AT RS. 30,000/- WHILE SHOW CAUSE NOTICE WAS FOR RS. 10,000/- ONLY. THE LD. CIT (A) ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 9 HAS ALSO RELIED ON THE CASE LAW OF RANGALAL JAJODIA VS CIT, 79 ITR 505 (SC). IN THIS CASE THE ISSUE WAS TH AT NOTICE FOR ASSESSMENT WAS GIVEN TO ONE LEGAL REPRESENTATIVE AND NOT TO THE OTHER. THIS IS NOT TH E CASE WHERE PENALTY WAS NOT INITIATED. IN THE CASE OF THE APPELLANT PENALTY WAS NOT INITIATED AT ALL FOR THE DEFAULTS FOR WHICH PENALTY HAS BEEN LEVIED. THE LD. CIT (A) HAS FURTHER RELIED ON THE CASE LAW OF ISHA BEEB I, 101 ITR 449 (SC). THE ISSUE INVOLVED IN THIS CASE WAS REFERENCE TO WRONG SECTION AND NOT NON ISSUE OF PEN ALTY NOTICE. THEREFORE, IN ALL THE THREE CASE LAWS, THE ISSUES ARE ENTIRELY DIFFERENT AND HENCE THESE CASE LAWS AR E NOT APPLICABLE TO THE APPELLANT. 5. THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE GONE THROUGH THE RECORD AS WELL AS THE W RITTEN SUBMISSIONS FILED BY THE LD. AR AND ALSO THE IMPUGN ED ORDERS. THE LD. CIT (A) HAS DISCUSSED THE ISSUE IN GREAT LE NGTH BEFORE CONFIRMING THE PENALTY. THE RELEVANT DISCUSSION AND FINDINGS OF THE LD. CIT (A) ARE IN PARA 6.1 TO 7.5 OF THE IMPUG NED ORDER WHICH ARE BEING REPRODUCED HERE-IN-UNDER FOR A READY REFE RENCE 6.1 I HAVE CONSIDERED THE PENALTY ORDER AND THE SU BMISSIONS MADE. THE OBJECTIONS RAISED BY THE APPELLANT ARE TH REE-FOLD - (I) THAT PENALTY WAS IMPOSED WITHOUT NOTICE / ADEQU ATE NOTICE, (II) PENALTY COULD NOT BE LEVIED FOR THE IN FORMATION / DOCUMENTS SOUGHT AS PROCEEDINGS U/S 142 DO NOT REQU IRE FURNISHING OF SUCH DOCUMENTS, AND (III) NO SPECIFIC DEFAULT OR AMOUNT OF TAX HAS BEEN REFERRED TO IN THE PENALTY O RDER. 6.2 SO FAR AS THE FIRST OBJECTION IS CONCERNED, IT IS NOTED THAT APPELLANT HAD BEEN SEARCHED U/S 132 AND WAS WELL AW ARE OF THE TAX PROCEEDINGS AGAINST HIM. THE APPELLANT WAS SPECIFICALLY ASKED IN THE NOTICES DATED 02.05.2013 AND 12.06.2013 ABOUT THE DETAILS OF FOREIGN BANK ACCOUN TS ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 10 OPENED AND MAINTAINED BY THE APPELLANT AND HIS RELA TIVES. A THIRD NOTICE WAS ISSUED TO HIM ON 11.07.2013, IN WH ICH THE INFORMATION SOUGHT EARLIER WAS AGAIN SOUGHT AND IN ADDITION THE APPELLANT WAS REQUIRED TO EXECUTE THE ENCLOSED CONSENT DOCUMENT TO GET THE AFORESAID INFORMATION. NO REPLY WAS FILED BY THE APPELLANT TO ANY OF THESE NOTICES EXCEPT SEE KING ADJOURNMENT ON ONE OR THE OTHER PRETEXT. SEEKING ADJOURNMENT IS NOT COMPLIANCE TO THE LAW. SHOW- CAU SE NOTICES WERE DULY ISSUED ON 05.08.2013 AND 20.09.20 13 BY THE REVENUE ASKING THE APPELLANT TO EXPLAIN THE REA SONS FOR NOT FURNISHING THE INFORMATION CALLED FOR AND AS TO WHY PENALTY SHOULD NOT BE IMPOSED FOR SUCH FAILURE U/S 271(L)(B). ONE OF THE OBJECTIONS RAISED BY THE APPELLANT IS TH AT THE SHOW-CAUSE NOTICE WAS ONLY IN REGARD TO THE NOTICE DATED 11.07.2013 AND NOT IN REGARD TO THE EARLIER NOTICES DATED 02.05.2013 AND 12.06.2013. AS THE DEFAULTS OF THE A PPELLANT WERE CONTINUING DEFAULTS, THE APPELLANT WAS GIVEN O NE MORE OPPORTUNITY DURING THIS APPEAL ALSO, AND A SHOW-CAU SE NOTICE WAS ISSUED TO HIM ON 24.06.2014 TO EXPLAIN AS TO WH Y PENALTY SHOULD NOT BE LEVIED FOR FAILURE TO SUBMIT THE INFORMATION SOUGHT VIDE THE THREE NOTICES ISSUED BY THE REVENUE. TILL DATE, THE APPELLANT HAS NOT FURNISHED THE INFORMATION SOUGHT IN THE SAID THREE NOTICES NOR FI LED THE CONSENT DOCUMENTS. THUS, THERE IS NO BASIS TO CONCL UDE THAT THE PENALTY WAS IMPOSED WITHOUT NOTICE OR ADEQUATE NOTICE. 6.3 SO FAR AS THE SECOND OBJECTION IS CONCERNED, IN THE BACKGROUND OF THE MATTER AS REPRODUCED IN PARA- 4 ABOVE, AND IN VIEW OF THE FACT THAT APPELLANT HAD PAID THE TAX WITH INTEREST ON THE AMOUNT OF DEPOSIT IN A FOREIGN BANK ACCOUNT BROUGHT TO HIS NOTICE BY THE DEPARTMENT DURING THE SEARCH AND SEIZURE, THE INFORMATION CALLED FOR WAS NECESSA RY FOR THE CORRECT ASSESSMENT OF THE INCOME OF THE APPELLANT C HARGEABLE TO TAX UNDER THE ACT AS THE APPELLANT IS A TAX RESI DENT OF INDIA, IT CANNOT BE CONCLUDED THAT THE INFORMATION / DOCUMENT SOUGHT WAS NOT REQUIRED U/S 142(1). THE APPELLANT, HAVING ADMITTED THE AMOUNT OF DEPOSIT IN THE SAID BANK ACC OUNT, CONTINUES TO PLEAD IGNORANCE ABOUT THE EXISTENCE OF THE SAID ACCOUNT AND DETAILS THEREOF. IN SUCH AN EVENT, HE I S BOUND TO EXECUTE THE CONSENT DOCUMENTS WHICH WILL ENABLE THE DEPARTMENT TO GET THE REQUISITE INFORMATION FROM TH E BANK. HAVING FAILED TO EXECUTE THIS DOCUMENT ALSO, THE AP PELLANT IS ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 11 IN CONTINUOUS DEFAULT OF NONCOOPERATION WITH THE ON GOING INVESTIGATIONS AND NON-COMPLIANCE TO THESE STATUTOR Y NOTICES. 6.4 SO FAR AS THE THIRD OBJECTION IS CONCERNED, PEN ALTY IS LEVIABLE U/S 271(1 )(B) FOR EACH FAILURE TO COMPLY WITH A NOTICE U/S 142(1). THERE IS NO REQUIREMENT UNDER THE LAW F OR ESCAPEMENT OF TAX OR ANY REFERENCE TO ANY TAX QUANT UM. THUS, THIS OBJECTION RAISED BY THE APPELLANT HAS NO LEGAL BASIS.' 7.1 BACKGROUND OF THE MATTER IS THAT IN APRIL / MAY . 2011 INDIA RECEIVED INFORMATION FROM A FOREIGN GOVERNMEN T UNDER THE RELEVANT DOUBLE TAXATION AVOIDANCE AGREEMENT (D TAA) THAT CERTAIN INDIAN PASSPORT HOLDERS HAD OPENED AND MAINTAINED BANK ACCOUNTS WITH HONGKONG & SHANGHAI BANKING CORPORATION (HSBC) IN SWITZERLAND, ETC. THE INFORMATION RECEIVED WAS COVERED UNDER THE CONFIDEN TIALITY CLAUSE OF THE DTAA, AND ITS CONTENTS COULD NOT BE D ISCLOSED BY THE INCOME TAX DEPARTMENT (1TD) WITHOUT EXPRESS CON SENT OF THE COUNTRY WHICH HAD SHARED THE INFORMATION. BASED ON THE INFORMATION RECEIVED, INVESTIGATIONS WERE INITIATED BY THE ITD IN JULY, 2011. WHEN THE INVESTIGATIONS WERE ON, SOM E PERSONS APPEARED SUO MOTU BEFORE THE TAX AUTHORITIES AND AD MITTED HAVING OPENED BANK ACCOUNT WITH HSBC, AND ALSO PAID THE DUE TAX ON THE MAXIMUM AMOUNT DEPOSITED / OUTSTANDI NG IN THE ACCOUNT. IN SEVERAL CASES, SEARCHES CONDUCTED B Y ITD LED TO ADMISSION BY THE PERSONS SEARCHED THAT THEY HAD OPENED ACCOUNTS OVERSEAS AND NOT DISCLOSED IT FOR TAX PURP OSES IN INDIA. SOME PERSONS, WHEN SUMMONED U/S 131 BY THE I TD, ADMITTED HAVING OPENED THE ACCOUNTS AND TRANSACTED THEREIN BUT CLAIMED THAT THESE ACCOUNTS WERE OPENED WHEN TH EY WERE EMPLOYED OVERSEAS OR MAINTAINED FOR LEGITIMATE BUSI NESS WITH DUE PERMISSION UNDER THE LAW. HOWEVER, DURING THE INVESTIGATIONS, SEVERAL PERSONS HAVE DENIED OUTRIGH T HAVING OPENED ANY SUCH BANK ACCOUNTS OVERSEAS, WHILE SOME PERSONS HAVE ADMITTED OPENING THE ACCOUNT BUT DENIE D HAVING ANY TRANSACTION. BASED ON THE INVESTIGATIONS, FURTH ER INFORMATION HAS BEEN SOUGHT FROM THE RESPECTIVE COU NTRIES. IN SEVERAL CASES, WHERE DETAILS OF THE TRANSACTIONS IN THE ACCOUNTS ARE NOT AVAILABLE WITH THE ITD, OR WHERE P ERSONS HAVE DENIED ANY ACCOUNT OR ANY TRANSACTION IN THE A CCOUNT, REFERENCE HAS BEEN MADE TO HSBC BY WAY OF A CONSENT LETTER ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 12 SIGNED BY THE ALLEGED ACCOUNT HOLDER AND DULY NOTAR IZED, TO ENABLE HSBC TO FURNISH THE REQUISITE DETAILS SUCH A S ACCOUNT OPENING FORM OTHER DOCUMENTS, NAMES OF BENEFICIARIE S, DETAILS OF TRANSACTIONS, ETC., TO THE ACCOUNT-BOLDER. IN SO ME SUCH EASES, ACCOUNT HOLDERS HAVE ALREADY RECEIVED INFORM ATION / DOCUMENTS FROM HSBC AND ARE COOPERATING WITH THE IT D IN ITS INVESTIGATIONS. THE INCOME TAX ACT, 1961 HAS ALSO B EEN AMENDED TO PROVIDE FOR REOPENING OF TAX ASSESSMENTS FOR A PERIOD OF 16 YEARS IN CASES WHERE THE INCOME A TAXP AYER IN RELATION TO ANY ASSET, INCLUDING FINANCIAL INTEREST IN ANY ENTITY, LOCATED OUTSIDE INDIA AND CHARGEABLE TO TAX HAS ESC APED ASSESSMENT. IT IS ONLY IN SUCH CASES WHERE SUCH PER SONS HAVE REFUSED TO DELIVER THE SIGNED AND NOTARIZED CONSENT LETTERS THAT PENALTY HAS BEEN INITIATED AND IMPOSED U/S 271 (1 KB). THE APPELLANT HEREIN IS ALSO GUILTY OF FAILURE TO F URNISH THE INFORMATION SOUGHT AND THE CONSENT DOCUMENTS REQUIR ED TO OBTAIN THE SAID INFORMATION. 7.2 THESE CASES ARE NOT OF SIMPLE TAX EVASION, BUT OF SUSPECTED TAX EVASION BY TRANSFERRING OR KEEPING FU NDS OVERSEAS IN AN ILLICIT MANNER. THESE PERSONS SUSPEC TED OF HAVING OPENED AND MAINTAINED UNDISCLOSED BANK ACCOU NT OVERSEAS, WERE REQUIRED TO SIGN AND EXECUTE / NOTAR IZE THE CONSENT LETTER TO VERIFY THE TRUTH OF THE ALLEGATIO N AGAINST THEM. IT IS THE DUTY OF EVERY CITIZEN OF INDIA TO C OOPERATE WITH AND JOIN THE INVESTIGATION TO ASCERTAIN THE TRUTH R EGARDING CASES WITH SUCH SERIOUS ALLEGATION. THE PURPOSE OF THE PENAL PROVISION CONTAINED IN SECTION 271(1)(B) IS TO ENSU RE COMPLIANCE TO TAX ENQUIRY / INVESTIGATION. THIS PEN ALTY IS ATTRACTED WHERE THERE IS FAILURE TO COMPLY WITH NOT ICES U/S 142(1) OR U/S 143(2). IN CRIMINAL LAW, SIMILAR PROV ISIONS ARE CONTAINED IN SECTIONS 160 AND 161 IN THE CODE OF CR IMINAL PROCEDURE, 1973 AND THE PUNISHMENT FOR THE SAME IS PRESCRIBED IN SECTION 174 OF THE INDIAN PENAL CODE, 1860. UNDER THE CIVIL LAW, THE RELEVANT PROVISIONS ARE CO NTAINED IN SECTIONS 31 & 32 AND ORDER XVI (SCHEDULE-!) OF THE CODE OF CIVIL PROCEDURE, 1908. UNDER THE INCOME TAX ACT, 19 61 THE ENFORCEMENT PROVISIONS ARE CONTAINED IN SECTIONS 13 1, 132, 133, 133A 142 AND143. THE PENAL PROVISIONS CONTAINE D IN CHAPTER XXI RELEVANT TO ENFORCEMENT OF SECTIONS 142 / 143 ARE SECTIONS 271 AND 272A. ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 13 7.3 IT IS NOTED THAT THE DOCUMENTS RECEIVED WERE C OVERED UNDER THE CONFIDENTIALITY CLAUSE OF THE DTAA AND CO ULD NOT BE PROVIDED AS SUCH. THE APPELLANT WAS MADE AWARE OF THE INFORMATION RECEIVED, WHICH HE ADMITTED DURING THE SEARCH AND SUBSEQUENT ENQUIRY, PARTICULARLY BY PAYING THE TAX AND INTEREST ON THE MAXIMUM AMOUNT OF DEPOSIT IN THE SA ID BANK ACCOUNT. THEREFORE, EXECUTING THE CONSENT LETTER W OULD NOT HAVE CAUSED ANY INJURY OR JEOPARDY TO THE DENIAL OF HAVING OPENED THE BANK ACCOUNT HIMSELF IS CORRECT; HE HAS NOTHING TO WORRY. BUT REFUSAL TO EXECUTE THE CONSENT DOCUMENTS TANTAMOUNT TO REFUSAL TO JOIN THE INVESTIGATION. TH E APPELLANT, HAVING FAILED TO SIGN THE CONSENT LETTER, AND HAVIN G NO REASONABLE CAUSE TO DO SO HAS VIOLATED THE SAID PRO VISION. AT THIS STAGE, IT IS IMMATERIAL WHETHER HE HAS OPENED ANY BANK ACCOUNT AND INDULGED IN UNDISCLOSED TRANSACTIONS. T HAT IS A FACT TO BE VERIFIED AND ASCERTAINED IN THE INVESTIG ATION. BUT REFUSAL OF THE APPELLANT TO EXECUTE THE CONSENT DOC UMENT IS DELIBERATE REFUSAL TO JOIN THE INVESTIGATION FOR WH ICH LIABILITY TO PENAL CONSEQUENCE ARISES AT THIS STAGE ITSELF. I H OLD ACCORDINGLY. THE APPELLANT HAS ALSO AVAILED OF FURT HER OPPORTUNITY TO EXPLAIN HIS REFUSAL DURING THIS APPE AL PROCEEDING AND HE HAS NOT BROUGHT ANY NEW EXPLANATI ON OR ANY FURTHER EVIDENCE, AND CONTINUES TO BE IN DEFAUL T. 7.4 IN DHAKESWARI COTTON MILLS LTD. V. C1T [1955] 27 ITR 126 (SC) IT WAS HELD THAT TECHNICAL RULES OF EVIDENCE C ANNOT APPLY TO TAX PROCEEDINGS. THE 1TO IS NOT FETTERED BY TECH NICAL RULES OF EVIDENCE AND PLEADINGS, AND HE IS ENTITLED TO AC T MATERIAL WHICH MAY NOT BE ACCEPTED AS EVIDENCE IN A COURT OF LAW. IN ESTATE OF LATE RANGALAL JAJODIA V. CIT [1971] 79 IT R 505 (SC) IT WAS HELD THAT WANT OF NOT, A MINOR MISTAKES WILL NO, VITIATE TAX PROCEEDINGS. AN ASSESSMENT PROCEEDING DOES NOT CEASE TO BE A PROCEEDING UNDER THE ACT MERELY BY REASON OF W ANT OF NOTICE WILL BE A PROCEEDING LIABLE TO BE CHALLENGED AND CORRECTED. SIMILARLY, IF THERE IS A MISTAKE AS TO N AME OR THERE IS A MISDESCRIPTION OF THE NAME, THE PROCEEDING WILL B E LIABLE TO BE CHALLENGED AND CORRECTED BY GIVING NOTICE TO THE ASSESSEE SUBJECT TO SUCH JUST EXCEPTIONS AS AN ASSESSEE CAN TAKE UNDER LAW. IN ISHA BEEVI VS TRO (1975) 101 ITR 449 (SC) I T WAS HELD THAT REFERENCE TO WRONG PROVISIONS W, NO VITIATE AC TIONS TAKEN. ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 14 WHERE THE POWER TO PROCEED IS ACTUALLY THERE, THE M ERE IS NOT ENOUGH IF A WRONG SECTION OR PROVISION OF LAW IS CI TED IN A NOTICE OR ORDER IF THE POWER TO PROCEED IS ACTUALLY THERE UNDER ANOTHER PROVISION. THUS, TAX PROCEEDINGS ARE A MATT ER BETWEEN THE TAXPAYER AND THE TAX DEPARTMENT FOR THE DETERMI NATION OF THE CORRECT TAX PAYABLE BY THE TAXPAYER AND SUCH PR OCEEDINGS CANNOT BE PUT TO STRICT RULES OF GENERAL LAW. 7.5 IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION IN THE MATTER, THE PENALTIES IMPOSED U/S 271(L)(B) FOR REFUSAL, WITHOUT REASONABLE CAUSE, TO FURNISH THE INFORMATION SOUGHT AND TO EXECUTE THE CONSENT LETTER VIDE THE THREE NOTICES I SSUED BY THE REVENUE, IS UPHELD. THESE ORDERS SHALL BE READ AS T HREE SEPARATE ORDERS. I ALSO FIND THAT FOR REFUSAL TO SI GN / EXECUTE A DOCUMENT, PENALTY IS IMPOSABLE U/S 271 AS WELL AS U /S 272A. ACCORDINGLY, THE PROVISION SHALL BE READ AS SECTION 271(L)(B) AND ALTERNATELY AS SECTION 272A. 7. WE ALSO FIND THAT A CO-ORDINATE BENCH OF ITAT DE LHI HAS UPHELD THE CONFIRMATION OF SIMILAR PENALTIES IMPOSE D ON THE ASSESSEE FOR ASSESSMENT YEARS 2007-08, 2008-09, 200 9-10, 2010-11, 2011-12 AND 2012-13 IN ITA NOS. 5157 5162/DEL/2014 VIDE A COMMON ORDER DATED 8 TH JUNE, 2017. THE RELEVANT PARAGRAPHS OF THE AFORESAID ORDER OF THE I TAT ARE REPRODUCED UNDER 9. WE HAVE HEARD LD. DR AND PERUSED THE MATERIAL A VAILABLE ON RECORD. IN OUR CONSIDERED VIEW THE ASSESSEE WAS SUBJECTED TO SUCH ASSESSMENTS U/S 153A IN RESPECT TO ALLEGED MAINTENANCE OF UN-DISCLOSED HSBC, SWITZERLAND BANK ACCOUNT. 10. THE FACTS ABOUT THE BANK ACCOUNTS AND OTHER CIRCUMSTANCES ARE IN THE EXCLUSIVE KNOWLEDGE OF THE ASSESSEE AND NON CO-OPERATION LEADS TO DERAILMENT OF INVESTI GATION. IT IS THE DUTY OF EVERY ASSESSEE TO DULY RESPOND TO STATU TORY NOTICES FAILING WHICH THE LAW PROVIDES IMPOSITION O F PENALTY U/S 271(1)(B) OF RS. 10,000/- EACH DEFAULT. IN THIS CASE, ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 15 ASSESSE'S NON- COMPLIANCE OF STATUTORY NOTICE IS FO R MORE THAN 3 TIMES IN EACH A. Y. 11. THE LD. CIT (A) HAS PROPERLY TAKEN NOTE OF ALL THESE RELEVANT FACTS, LEGALITY OF NOTICES, NATURE OF NON- COMPLIANCE AND ITS ADVERSE IMPACT ON INVESTIGATIONS RELATED TO ALLEGED UNDISCLOSED HSBC BANK ACCOUNT. WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT (A) CONFIRMING THE IMPOSITION OF P ENALTY OF RS. 30,000/- EACH IN ABOVE ASSESSMENT YEARS AS DEFAULTS ARE MORE THAN 3 TIMES. IT HAS BEEN RIGHTLY HELD THAT TH ERE IS NO LAW THAT FOR EACH DEFAULT SEPARATE NOTICE U/S 27(1) (B) SHOULD BE ISSUED ON DEFAULTING ASSESSEE. THE ORDERS OF LD. CIT (A) BEING JUSTIFIED ON PROPER APPRECIATION OF FACTS AND LAW AND BASED ON RELEVANT SUPREME COURT JUDGMENTS ARE UPHEL D. THE APPEALS OF ASSESSEE ARE DISMISSED. 8. THUS, UNDER SIMILAR CIRCUMSTANCES AND IDENTICAL FACTS AND IN THE CASE OF THE SAME ASSESSEE, WE FIND NO REASON TO DIFFER WITH THE CONCLUSION REACHED BY THE CO-ORDINATE BENCH OF THE ITAT. RESPECTFULLY FOLLOWING THE SAME, WE DISMISS THE APP EAL OF THE ASSESSEE. 9. IN THE RESULT, THE ASSESSEES APPEAL STANDS DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 4 TH OCTOBER, 2017. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) PRESIDENT JUDICIAL MEMBER DATED: 4 TH OCTOBER, 2017 GS ITA 5156/D/2014 ASSESSMENT YEAR 2006-07 16 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGI STRAR