GANESH B POKHRIYAL, MUMBAI V. ACIT CIRCLE-3, KALYAN

ITA 5291/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3804 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 12-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: DINESH POKHRIYAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 143(3); 142(1); 143(1); 274; 143(2); 27

Judgement Text

GANESH B. POKHRIYAL VS. ACI T A.Y 2014 - 15 ITA NO. 5291/MUM/2018 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.5291/MUM/2018 (ASSESSMENT YEAR: 2014 - 15) GANESH B POKHRIYAL FLAT NO. 306 3 RD FLOOR, CYPRESS BUILDING, VASANT VALLEY, WAYLE NAGAR, KHADAKPADA, KALYAN, THANE 421 301. VS. ASST. CIT, CIRCLE 3, KALYAN, 2 ND FLOOR, RANI MANSION, MURNAD ROAD, KALYAN 421 301. PAN ABBPP0254F (APPELLANT) (RESPONDENT) APPELLANT BY: SH. DINESH POKHRIYAL, A.R RESPONDENT BY: V. VINOD KUMAR, D.R DATE OF HEARING: 28.11.2019 DA TE OF PRONOUNCEMENT: 29 .11.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 3, NASIK (CAMP OFFICE : THANE), DATED 29.06.2018, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 271(1)(B) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 24.1 0.2016 FOR A.Y 2014 - 15. THE ASSESSE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISSIONER INCOME - TAX (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE PENALTY ORDER PASSED IS ARBITRARY AND IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISSIONER INCOME - TAX (APPEALS) ERRED IN CONFIRMING T H E PENALTY ORDER BY KEEPING SILENT ON THE ISSUE O F VIOLATION O PRINCIPLES OF NATURAL JUSTICE. GANESH B. POKHRIYAL VS. ACI T A.Y 2014 - 15 ITA NO. 5291/MUM/2018 2 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISSIONER INCOME - TAX (APPEALS) ERRED IN INTERPRETING THE BINDING JUDICIAL ORDERS O F HIGH COURT AND TRIBUNAL ON PENALTY ORDERS. TE APPELLAN T CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY ANY OF THE GROUNDS OF APPEAL. 2. BRIEFLY STATED, THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR A.Y 2014 - 15 ON 30.06.2015 , DECLARING A TOTAL INCOME OF RS. 19,46,220/ - . RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. 3. AS IS DISCERNIBLE FROM THE ORDERS OF THE LOWER AUTHORIT IES, THE A.O IN THE COURSE OF THE ASSESSMENT PROCEEDINGS HAD ISSUED A NOTICE UNDER SEC. 142(1) , DATED 08.08.2016, WHICH IS STATED TO HAVE NOT BEEN COMPLIED WITH BY THE ASSESSEE. ALSO, IT IS STATED BY THE A.O, THAT THE NOTICES UNDER SEC. 142(1) ALONGWITH QU ESTIONNAIRE WHICH WERE SUBSEQUENTLY ISSUED TO THE ASSESSEE ON VARIOUS DATES HAD ALSO REMAINED UNATTENDED. ACCORDINGLY, THE A.O ISSUED A SHOW CAUSE NOTICE (FOR SHORT SCN) UNDER SEC. 274 R.W.S 271(1)(B), DATED 05.10.2016 TO THE ASSESSEE, AS PER WHICH HE WAS CALLED UPON TO EXPLAIN ON OR BEFORE 18.10.2016 , AS TO WHY PENALTY UNDER SEC. 271(1)(B) MAY NOT BE IMPOSED UPON HIM FOR HIS FAILURE TO COMPLY WITH THE NOTICE UNDER SEC. 142(1), DATED 08.08.2016. AS PER T H E ORDER PASSED BY THE A.O , THE ASSESSEE HAD FAILE D TO COMPLY WITH THE SCN THAT WAS ISSUED TO HIM UNDER SEC. 274 R.W.S 271(1)(B), AND HAD NEITHER APPEARED BEFORE HIM NOR FURNISHED ANY WRITTEN SUBMISSIONS. OBSERVING, THAT THE ASSESSEE HAD SCANT REGARD FOR LAW AND HAD NO EXPLANATION FOR HIS NON - COMPLIANCE OF THE NOTICE THAT WAS ISSUED TO HIM UNDER SEC. 142(1), THE A.O IMPOSED A PENALTY OF RS. 10,000/ - ON HIM , VIDE HIS ORDER UNDER SEC. 271(1)(B) , DATED 24.10.2016 . 4. AGGRIEVED, THE ASSESSEE ASSAILED THE ORDER PASSED BY THE A.O IMPOSING PENALTY UNDER SEC. 2 71(1)(B) BEFORE THE CIT(A). IT WAS OBSERVED BY THE CIT(A), THAT AS THE NOTICE ISSUED TO THE ASSESSEE UNDER SEC. 142(1), DATED 08.08.2016 WAS NOT COMPLIED BY THE ASSESSE E UPTO 05.10.2016, THEREFORE, A NOTICE ON THE SAID DATE WAS ISSUED TO HIM UNDER SEC. 271(1)(B) . A S NOTICED BY THE CIT(A), IN RESPONSE TO THE AFORESAID SCN, DATED 05.10.2016, AN ADJOURNMENT WAS SOUGHT BY A CHARTERED ACCOUNTANT, WHICH IN THE ABSENCE OF ANY AUTHORIZATION WAS DECLINED BY THE A.O . ALSO, IT WAS OBSERVED BY THE CIT(A), THAT DES PITE THE FACT THAT THE A.O DUE TO THE NON - COMPLIANCE ON THE PART OF THE ASSESSEE HAD INITIATED THE AFORESAID PENALTY PROCEEDINGS, HOWEVER, THE ASSESSEE HAD EVEN THEREAFTER F AILED TO FURNISH PROPER INFORMATION AS WAS CALLED GANESH B. POKHRIYAL VS. ACI T A.Y 2014 - 15 ITA NO. 5291/MUM/2018 3 FOR IN THE COURSE OF THE ASSESSME NT PROCEEDINGS. IT WAS NOTICE D BY THE CIT(A), THAT AS THE ASSESSEE HAD FAILED TO FURNISH SUFFICIENT DETAILS, THEREFORE, THE A.O VIDE HIS ORDER PASSED UNDER SEC. 143(3), DATED 02.12.2016 HAD MADE AN ADDITION OF RS.26,64,699/ - . OBSERVING, THAT AS THE ASSESSE E BY ADOPTING A NON - COOPERATIVE ATTITUDE HAD FAILED TO COMPLY WITH THE NOTICE U/S 142(1), DATED 08.08.2016, AND ALSO NOT FURNISHED THE COMPLETE DETAILS BEFORE THE A.O DESPITE REPEATED NOTICES, INCLUDING NOTICE U/S 144, THE CIT(A) UPHELD THE PENALTY OF RS. 10,000/ - IMPOSED BY THE A.O UNDER SEC. 271(1)(B). 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. IT WAS AVERRED BY THE LD. A.R, THAT THOUGH THE ASSESSEE IN COMPLIANCE TO THE NOTICE ISSUED BY THE A.O UNDER SEC. 274 R.W.S 271(1)(B) AND NOTICE U/S 142(1), HAD VIDE HIS LETTER DATED 17.10.2016 SOUGHT AN ADJOURNMENT, FOR THE REASON, THAT HIS CHARTERED ACCOUNTAN T AT THE RELEVANT POINT OF TIME WAS BUSY WITH THE FILING OF THE RETURNS OF INCOME, AND HAD REQUES TED THAT THE MATTER BE TAKEN UP AFTER 07.11.2016, HOWEVER, THE SAID REQUEST OF THE ASSESSEE WAS NEVER CONSIDERED BY THE A.O. IT WAS SUBMITTED BY THE LD. A.R, THAT EVEN IN THE ORDER PASSED BY THE A.O UNDER SEC. 271(1)(B) THERE WAS NO REFERENCE OF THE SAID R EQUEST FOR ADJOURNMENT THAT WAS FILED BY THE ASSESSEE. ON A PERUSAL OF A LETTER DATED 24.10.2016 OF THE A.O, WE FIND, THAT THE A.O HAD STATED THAT THE REQUEST FOR ADJOURNMENT MADE BY THE ASSESSEE VIDE HIS LETTER DATED 17.10.2016 (RECEIVED ON 19.10.2016) IN RESPONSE TO NOTICE ISSUED UNDER SEC. 142(1), DATED 05.10.2016 WAS REJECTED . AS IS DISCERNIBLE FROM A PERUSAL OF THE AFORESAID LETTER DATED 17.10.2016, WE FIND , THAT THE ASSESSEE HAD SPECIFICALLY SOUGHT AN ADJOURNMENT BOTH IN RESPECT OF THE PENALTY PROCEED INGS U/S 274 R.W.S 271(1)(B) AND ALSO THE NOTICE ISSUED U/S 142(1). AS REGARDS THE REQUEST OF THE ASSESSEE FOR ADJOURNING OF THE PROCEEDINGS U/S 274 R.W.S 271(1)(B), VIDE HIS LETTER DATED 17.10.2016 (RECEIVED BY THE A.O ON 19.10.2016), WE FIND , THAT THERE IS NO WHISPER ABOUT THE SAME AT ALL IN THE AFORESAID LETTER DATED 24.10.2016 OF THE A.O. APART THEREFROM, WE ALSO DO NOT FIND ANY REFERENCE ABOUT SEEKING OF ADJOURNMENT BY THE ASSESSEE VIDE HIS LETTER DATED 17.10.2016 (RECEIVED BY THE A.O ON 19 .10.2016), IN HIS ORDER PASSED UNDER SEC. 271(1)(B). IN TOTALITY OF THE FACTS OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE WAS NEVER INTIMATED ABOUT THE FATE OF HIS LETTER DATED 17.10.2016 (RECEIVED BY THE A.O ON 19.10.2016), INSOFAR HIS RE QUEST FOR ADJOURNING THE PENALTY PROCEEDINGS UNDER SEC. 274 R.W.S 271(1)(B) WAS CONCERNED. IN FACT, IT CAN SAFELY BE HELD THAT THE ASSESSEE HAD REMAINED DIVESTED OF A SUFFICIENT OPPORTUNITY OF BEING HEARD BEFORE BEING SADDLED WITH THE PENALTY UNDER GANESH B. POKHRIYAL VS. ACI T A.Y 2014 - 15 ITA NO. 5291/MUM/2018 4 SEC. 27 1(1)(B). APART THEREFROM, WE FIND THAT SUBSEQUENTLY THE A.O HAD PASSED THE ASSESSMENT ORDER U/S 143(3) AND NOT UNDER SEC. 144. ACCORDINGLY, IT CAN SAFELY BE CONCLUDED THAT THE SUBSEQUENT COMPLIANCES/FURNISHING OF INFORMATION BY THE ASSESSEE WERE HELD BY TH E A.O TO BE GOOD COMPLIANCES AND THE DEFAULTS COMMITTED EARLIER WERE IGNORED BY HIM. AS OBSERVED BY THE ITAT, DELHI IN THE CASE OF (I). AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ACIT [5 DTR 429 ](DELHI) AND (II). GLOBUS INFOCO LIMITED VS. A CIT [ITA NO. 738/DEL/2014; DATED 29.06.2016], THE FRAMING OF ASSESSMENT UNDER SEC. 143(3), THOUGH NOT CONCLUSIVELY, BUT TO SOME EXTENT WOULD RULE OUT THE CIRCUMSTANCES JUSTIFYING IMPOSITION OF ANY PENALTY UNDER SEC. 271(1)(B). ACCORDINGLY , IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, WE ARE UNABLE TO SUBSCRIBE TO THE IMPOSITION OF PENALTY OF RS. 10,000/ - UNDER SEC. 271(1)(B) BY THE A.O , AND FINDING THE SAME TO BE UNJUSTIFIED, QUASH THE SAME. 6. RESULTANTLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE APP EAL OF THE ASSESSEE IS ALLOWED. SD/ - SD/ - ( S.RIFAUR RAHMAN) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 29 .11.2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . GANESH B. POKHRIYAL VS. ACI T A.Y 2014 - 15 ITA NO. 5291/MUM/2018 5