Varna Display System Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 5222/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81658 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 25-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 18-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA DATES OF HEARIN
• Keywords: Reasonable cause; Non compliance
• Section: 153A

Judgement Text

I.T.A. NO.: 5220, 5221 AND 5222/DEL/2013 ASSESSMENT YEAR S: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI H BENCH, NEW DELHI [CORAM : IC SUDHIR JM AND PRAMOD KUMAR AM ] I.T.A. NO.: 5220, 5221 AND 5222/DEL/2013 ASSESSMENT YEARS: 2005 - 06, 06 - 07 AND 07 - 08 VARNA DISPLAY SYSTEMS PVT LTD .APPELLANT E 15, KA RAM PURA, NEW DELHI 110 015 [PAN: AAACB2894G ] VS. ASSISTANT COMMI SSIONER OF INCOME TAX CENTRAL CIRCLE I , NEW DEL HI RESPONDENT APPEARANCES BY: NONE , FOR THE APPELLANT SAMEER SHARMA , FOR THE RESPONDENT DATES OF HEARING OF APPEALS : AUGUS T 25, 2014 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 05 , 2014 O R D E R PER PRAMOD KUMAR: 1. THESE THREE APPEALS CALL INTO QUESTION CORRECTNESS OF A CONSOLIDATED ORDER DATED 7 TH JUNE 2013 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF PENALTIES UNDER SE CTION 271(1)(B) OF THE INCOME TAX ACT, 1961, FOR SEVERAL ASSESSMENT YEARS, INCLUDING THE ASSESSMENT YEARS 2005 - 06,06 - 07 AND 2007 - 08. THESE APPEALS INVOLVE A COMMON ISSUE , PERTAIN TO THE SAME ASSESSEE AND WERE HEARD TOGETHER . AS A MATTER OF CONVENIENCE, THE REFORE, ALL THE THREE APPEALS ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. 2. TO ADJUDICATE ON THESE APPEALS, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THERE IS NO DISPUTE THAT THE ASSESSEE DID NOT COMPY WITH I.T.A. NO.: 5220, 5221 AND 5222/DEL/2013 ASSESSMENT YEAR S: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 2 OF 4 VARIOUS NOTICES ISSUED T O THE ASSESSEE UNDER SECTION 153A AND 142(1), AND EVEN THE NOTICES REQUIRING THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY UNDER SECTION 271(1)(B) FOR SUCH NON COMPLIANCES BE IMPOSED ON THE ASSESSEE. HOWEVER, WHEN THE MATTER TRAVELLED IN APPEAL BEFORE THE L EARNED CIT(A), HE HELD AS FOLLOWS: 5. DETERMINATION 5.1 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR AND THE PENALTY ORDER. DURING THE APPEAL PROCEEDINGS THE AR STATED THAT THE NOTICES COULD NOT BE COMPLIED WITH AS ONE OF THE DIRECTORS OF THE COMPANY WA S INJURED AND ON A COMPLETE BED REST FROM 29.11.2012 TO 14.12.2012 AND THE DIRECTOR WAS OUT OF TOWN. FURTHER IT IS STATED THAT DAUGHTER IN LAW OF SH. RAM KRIPAL SINGH EXPIRED ON 29.09.2012 AT AN EARLY AGE OF 36 WHICH SHATTERED THE WHOLE FAMILY. THIS OFFICE HAS FULL SYMPATHY TOWARDS THE APPELLANT FOR THE LOSS OF DEAR ONE. HOWEVER, THERE IS A STATUTORY DUTY TO BE COMPLIED WITH AS THESE ARE TIME - BARRING MATTERS. CONSIDERING THE ENTIRE FACTUAL MATRIX, I DO NOT THINK THAT THE APPELLANT COULD NOT EVEN HAVE SENT T HEIR COUNSEL FOR SEEKING ADJOURNMENT. MOREOVER, IT IS THE CASE OF A COMPANY, WHOSE AFFAIRS WERE CARRIED OUT BY THE EMPLOYEES. IT CANNOT BE SAID THAT ITS ENTIRE AFFAIRS CAME TO STAND STILL. 5.2 HOWEVER, LEVYING PENALTY FOR ALL THE 7 YEARS MAY BE A BIT TOO HARSH. HENCE PENALTY IS CONFIRMED FOR 3 OUT OF 7 YEARS. 3. THE ASSESSEE IS NOT SATISFIED WITH THE STAND SO TAKEN BY THE LEARNED CITI(A), SO FAR AS CONFIRMATION OF PENALTY FOR THE THREE ASSESSMENT YEARS BEFORE US I.E. 2005 - 06, 2006 - 07 AND 2007 - 08 IS CONCER NED, AND IS IN APPEAL BEFORE US. I.T.A. NO.: 5220, 5221 AND 5222/DEL/2013 ASSESSMENT YEAR S: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 3 OF 4 4 . NONE APPEARED FOR THE ASSESSEE, BUT WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 5. WE HAVE NOTED THAT THE LEARNED CIT(A) DOES NOT DISPUTE BONAFIDES OF THE EXPLANATION OF THE ASSESSEE AND ALL HE SAYS AGAINST THE ASSESSEE IS THAT THE ASSESSEE COULD HAVE AT LEAST DEPUTED HIS COUNSEL FOR SEEKING ADJOURNMENT. THIS OBSERVATION IS, HOWEVER, NOT REALLY RELEVANT BECAUSE WHILE EXAMINING EXPLANATION OF THE ASSESSEE, ONE NEED NOT REALLY BE CONCERNED WITH WHAT OUGHT TO HAVE HAPPENED IN IDEAL CIRCUMSTANCES. THE ASSESSEE HAS GIVEN AN EXPLANATION AND THE LEARNED CIT(A) DOES NOT FIND IT AN UNACCEPTABLE EXPLANATI ON, AND RIGHTLY SO, BECAUSE DEATH OF CLOSE FAMILY MEMBERS , PARTICULARLY AT SUCH A YOUNG AGE AS MID - THIRTIES, COULD INDEED BE S O SHATTERING AN EXPERIENCE THAT SUCH LAPSES, AS NON - APPEARANCE BEFORE THE TAX AUTHORITIES, DO OCCUR. LEARNED CIT(A)S VERY HUMANE WORDS OF SYMPATHY IN SUCH A SITUATION WILL, HOWEVER, BE REDUCED TO RITUALISTIC COMMISERATIONS IF HE IS NOT TO FOLLOW NATURAL COROLLARIES OF HIS ACCEPTING THE EXPLANATION OF THE ASSESSEE. AS A COROLLARY OF HIS ACCEPTING THE EXPLANATION, AS HE HAS ACCEPTED I N THIS CASE, INSTEAD OF BOTHERING ABOUT WHAT OUGHT TO HAVE HAPPENED IN AN IDEAL SITUATION, HE SHOULD HAVE HELD THAT SECTION 273 B COMES INTO PLAY IN THIS CASE AS THERE WAS A REASONABLE CAUSE FOR ASSESSEES FAILURE TO COMPLY WITH THE NOTICES , AND, ACCORDING LY, IT WAS NOT A FIT CASE FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(B). AS A MATTER OF FACT THAT, ON THESE VERY FACTS, LEARNED CIT(A) HAS HIMSELF DELETED THE IDENTICAL PENALTIES FOR THE FOUR ASSESSMENT YEARS BEFORE HIM AND THE REVENUE, AS WE ARE INFO RMED, IS NOT IN APPEAL AGAINST THE SAME. IN ANY EVENT, IT IS NOT THE LAPSE SIMPLICTOR IN COMPLIANCE TO THE NOTICES, BUT ONLY A LAPSE WITHOUT A REASONABLE CAUSE, WHICH IS TO BE VISITED WITH PENALTY UNDER SECTION 271(1)(B) R.W.S. 273 B. THAT IS NOT THE SIT UATION BEFORE US. IN VIEW OF THESE DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEES EXPLANATION WAS A REASONABLE EXPLANATION, FOR ALL THE ASSESSMENT YEARS BEFORE THE CIT(A), AND HE OUGHT TO HAVE DELETED PENALTIES FOR ALL THE ASSESSMENT YEARS. I.T.A. NO.: 5220, 5221 AND 5222/DEL/2013 ASSESSMENT YEAR S: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 4 OF 4 6. FOR THE REASONS SET OUT ABOVE, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTIES. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7. IN THE RESULT, ALL THE THREE APPEALS ARE ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 05 TH DAY OF SEPTEMBER , 2014. SD/ - SD/ - I C SUDHIR PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NEW DELHI, THE 05 TH DAY OF SEPTEMBER , 2014 COP IES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC DEPUTY/ ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI