Smt. Shefali Godha, Indore V. The ITO, Indore

ITA 550/IND/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6072 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-02-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 07-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: S N AGRAWAL
• Keywords: Period of limitation; Condonation of delay
• Section: 142(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE SMC BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.550/IND/2009 ASSESSMENT YEAR 2006-07 SMT. SHEFALI GODHA (PAN ACFPG 6706 L) C/O S.V. AGRAWAL & ASSOCIATES, DADI DHAM, 24, JOY BUILDERS COLONY, OLD PALASIA, INDORE .APPELLANT VS INCOME TAX OFFICER 1(3), RANGE-1, INDORE .RESPONDENT APPELLANT BY : SHRI S.N. AGRAWAL, CA RESPONDENT BY : SMT. APARNA KARAN, SR. DR O R D E R THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER O F THE LEARNED FIRST APPELLATE AUTHORITY, DATED 9.9.2009 ON THE GROUND T HAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMI SSIONER OF INCOME- TAX (APPEALS) ERRED IN MAINTAINING PENALTY OF RS.10 ,000/- IMPOSED U/S 271(1)(B) OF THE ACT. DURING THE HEARING OF THE APP EAL, I HAVE HEARD SHRI S.N. AGRAWAL, LD. COUNSEL FOR THE ASSESSEE AND SMT. APARNA KARAN, LD. SR. DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE NOTICES FROM THE DEPARTMENT WERE DULY RECEIVED BY THE ASSES SEE AND THE SAME WERE HANDED OVER TO THE CHARTERED ACCOUNTANT WHO IS DEALING WITH THE INCOME-TAX MATTERS OF THE ASSESSEE AND ALSO FILING INCOME-TAX RETURN. IT 2 WAS POINTED OUT THAT EVEN ON 1.10.2008, THE HUSBAND OF THE ASSESSEE ATTENDED THE PROCEEDINGS BEFORE THE ASSESSING OFFIC ER AND MADE A REQUEST FOR ADJOURNMENT WHICH WAS GRANTED TO 6.10.2 008, AND THE NEXT DATE WAS COMMUNICATED TO THE CHARTERED ACCOUNTANT. THE ASSESSEE WAS SHOCKED TO RECEIVE THE PENALTY ORDER. THE ASSESSEE ALSO FILED AN AFFIDAVIT STATING THE CLAIMED FACTS. IT WAS PLEADED THAT THER E IS NO FAULT OF THE ASSESSEE, THEREFORE, PENALTY MAY BE DELETED. 2. ON THE OTHER HAND, THE LD. SR. DR STRONGLY DEFEN DED THE PENALTY ORDER BY CONTENDING THAT IT WAS THE DUTY OF THE ASS ESSEE TO ATTEND THE PROCEEDINGS AND FILING OF AN AFFIDAVIT IS AN AFTERT HOUGHT. IMPOSITION OF PENALTY WAS ARGUED TO BE VALIDLY LEVIED. IT WAS PLE ADED THAT THE CASE OF THE ASSESSEE WAS ADJOURNED ON VARIOUS DATES FOR WHI CH MY ATTENTION WAS INVITED TO PAGE 2 OF THE IMPUGNED ORDER. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. R EPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON TH E FILE. THE ISSUANCE OF NOTICES AND REMARKS ARE SUMMARIZED HEREUNDER: DATE OF THE NOTICE DATE OF HEARING REMARKS NOTICE U/S 143(2) DATED 22.10.07 SERVED ON 5.11.07 23.11.2007 FIRST STATUTORY NOTICE ISSUED FOR SELECTING CASE UNDER AN SCRUTINY NOTICE U/S 143(2)/142(1) ISSUED ON 18.2.08 7.3.2008 REFERRED TO THE THEN CONSULTANT FOR ATTENDING NOTICE DAT ED 21.5.2008 2.7.2008 REFERRED TO THE THEN CONSULTANT FOR ATTENDING SHOW CAUSE NOTICE FOR PENALTY U/S 271(1)(B) 1.10.2008 DULY ATTENDED BY THE HUSBAND OF THE 3 ALONGWITH A NOTICE U/S 142(1) DATED 9.9.2008 ASSESSEE AND ON HIS REQUEST CASE WAS ADJOURNED TO 6.10.2008 6.10.2008 DATE WAS COMMUNICATED TO THE THEN CONSULTANT 4. IF THE AFORESAID CHART IS ANALYSED, ONE FACT IS CLEARLY OOZING OUT THAT THE NOTICES WERE DULY RECEIVED BY THE ASSESSEE AND EVEN ON ONE DATE, THE HUSBAND OF THE ASSESSEE DULY ATTENDED THE ASSESSMEN T PROCEEDINGS AND SOUGHT ADJOURNMENT. THE NEXT DATE WAS COMMUNICATED BY HIM TO THE CHARTERED ACCOUNTANT AND INSPITE OF THAT, THE LD. C HARTERED ACCOUNTANT DID NOT ATTEND THE PROCEEDINGS. IT CAN B E SAID THAT AT-LEAST THERE WAS A FAULT OF THE COUNSEL. THE ASSESSEE HAS ALSO FILED AFFIDAVIT STATING THE FACTS THEREIN WHICH ARE SELF-EXPLANATOR Y. NOW QUESTION ARISES WHETHER THE ASSESSEE CAN BE PANELIZED FOR THE FAULT OF THE COUNSEL. THE OBVIOUS REPLY IS NO BECAUSE NO PERSON SHOULD BE PEN ALIZED FOR THE FAULT OF THE OTHERS AND ESPECIALLY WHEN THE ASSESSEE/HUSBAND OF THE ASSESSEE DULY DELIVERED THE NOTICES TO HIS COUNSEL AND ALSO COMMU NICATED THE NEXT DATE. IF THE NOTICES RECEIVED BY THE ASSESSEE WOULD NOT HAVE BEEN DELIVERED TO HIS COUNSEL AND ALSO THE NEXT DATE OF HEARING THEN CERTAINLY IT WOULD HAVE BEEN A FIT CASE FOR IMPOSITION PENALT Y U/S 271(1)(B) OF THE ACT. SUB-CLAUSE (B) OF SEC. 271(1) PROVIDES FOR THE FAILURE ON THE PART OF THE ASSESSEE NOT TO COMPLY WITH THE DIRECTION AND A LSO THE SATISFACTION OF THE AUTHORITY. HOWEVER, IN THE PRESENT APPEAL, EVEN IN THE IMPUGNED 4 ORDER, IT IS MENTIONED THAT ON 1.10.2008, THE HUSBA ND OF THE ASSESSEE DULY ATTENDED THE PROCEEDINGS MEANING THEREBY IT CA N BE SAID THAT HE WAS VERY MUCH AWARE ABOUT HIS DUTY BUT HIS COUNSEL, REASONS BEST KNOWN TO HIM, DID NOT ATTEND THE PROCEEDINGS. IN SUCH A S ITUATION, IT CAN BE SAID THAT THE POOR ASSESSEE SHOULD NOT SUFFER FOR THE FA ULT OF HIS COUNSEL, WHICH WAS BEYOND HIS CONTROL. MY VIEW FINDS SUPPORT FROM THE DECISION FROM THE HONBLE P & H HIGH COURT IN THE CASE OF SM T. NIRMAL KHOSLA VS. UNION OF INDIA AND OTHERS (AIR 1976 P & H 22) WHERE IN THE HONBLE CHIEF JUSTICE WRITING THE ORDER FOR THE BENCH (IN PARA 4) CLEARLY HELD AS UNDER: AT THE HEARING OF THIS APPEAL, A PRELIMINARY OBJECTION HAS BEEN RAISED BY MR. H.S. BRAR, LEARNED SENIOR DEPUTY ADVOCATE GENERAL FOR THE STATE OF PUNJAB, TO THE EFFECT THAT THIS APPEAL IS BARRED BY TIME, AND THAT THE APPLICATION OF THE APPELLANT (C.M.2230 OF 1973) FOR CONDONATION OF DELAY AND EXTENSION OF TIME BY ONE DAY SHOULD BE DISMISSED. THE JUDGMENT OF THE LEARNED SINGLE JUDGE WAS PRONOUNCED ON JANUARY 27, 1972. THE LIMITATION FOR FILING AN APPEAL UNDER CLAUSE 10 OF THE LETTERS PATENT IS THIRTY DAYS. THE APPEAL IS FILED ON FEBRUARY 26, 1972, WOULD HAVE BEEN WITHIN TIME. THE APPELLANT IS ALSO ENTITLED TO EXCLUDE FROM THE ABOVE QUOTED STATUTORY PERIOD ALLOWED FOR PREFERRING THE APPEAL THE TIME IF ANY SPENT IN OBTAINING THE REQUISITE CERTIFIED COPY OF THE JUDGMENT OF THE LEARNED SINGLE JUDGE. THE TIME SPENT IN OBTAINING SUCH A COPY (IF SUCH A COPY WAS OBTAINED) HAS NOT BEEN DISCLOSED IN THE APPLICATION. ASSUMING THAT NO CERTIFIED COPY WAS OBTAINED BY THE APPELLANT, THIS APPEAL COULD HAVE BEEN FILED WITHIN LIMITATION BY FEBRUARY 26, 1972. FEBRUARY 27, 28 AND 29, 1972, WERE ADMITTEDLY HOLIDAYS, AND THE 5 COURT WAS CLOSED ON THOSE DAYS. THE APPEAL WAS ACTUALLY FILED ON 1.3.1972, BY MR. I.B. BHANDARI, ADVOCATE, WHO WAS AT THAT TIME A RANK JUNIOR IN THE PROFESSION. IT APPEARS FROM THE APPLICATION FILED BY HIM UNDER HIS OWN SIGNATURE THAT HE DID NOT DISTINGUISH BETWEEN A MONTH OF 31 DAYS AND A MONTH OF 30 DAYS IN CALCULATING THE PERIOD OF LIMITATION FOR FILING THE APPEAL, AND THINKING THAT ONE MONTH AND NOT THIRTY DAYS WAS THE PRESCRIBED PERIOD OF LIMITATION AND THE APPEAL COULD BE FILED ON FEBRUARY 27, 1972 (THE CLOSED DAY), ACTUALLY FILED IT ON THE REOPENING DAY OF THE COURT AFTER THE ABOVE- MENTIONED HOLIDAYS. THE ABOVE-MENTIONED FACTS STATED IN THE APPLICATION OF MR. I.B. BHANDARI (FILED BY HIM UNDER HIS OWN SIGNATURE) CLEARLY SHOW THAT ONE DAYS DELAY WAS CAUSED IN THE FILING OF THIS APPEAL DUE TO A BONA FIDE MISTAKEN IMPRESSION OF THE LAW BY MR. I.B. BHANDARI. IT IS SETTLED LAW THAT NO LITIGANT SHOULD ORDINARILY SUFFER FOR SUCH A MISTAKE OF HIS COUNSEL. IN THESE CIRCUMSTANCES WE ARE SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR ONE DAYS DELAY IN PREFERRING THE APPEAL. WE ACCORDINGLY ALLOW THE APPLICATION FOR CONDONATION OF DELAY AND TREAT THE APPEAL AS HAVING BEEN FILED WITHIN TIME. IDENTICAL RATIO WAS LAID DOWN IN THE CASE OF MANOJ AHUJA & ANOTHER VS. INSPECTING ACIT (150 ITR 696) (P & H) WHEREIN A T PAGE 697, IT WAS HELD AS UNDER: HELD, THAT NO LITIGANT SHOULD ORDINARILY SUFFER FOR THE MISTAKE OF HIS COUNSEL AND IT IS AXIOMATIC THAT THE COURT IS THE GUARDIAN OF MINORS AND IT IS THE DUTY OF THE COURT TO PROTECT THE INTEREST OF THE MINORS. HENCE, THE DELAY IN PRESENTING THE APPEAL IN THE INSTANT CASE HAD TO BE CONDONED. 6 5. RELIANCE CAN ALSO BE PLACED UPON THE DECISION FR OM THE HONBLE APEX COURT IN CST VS. MADANLAL DAS & SONS (1976) (3 8 STC 543) (SC), BHARAT RUBBER AND ALLIED INDUSTRIES VS. STATE OF PU NJAB (1980) (46 STC 367) (P & H) (FB) AND PYARELAL KHUSBAKHATA RAI VS. STATE OF PUNJAB (1971) (27 STC 398) (P & H). THE HONBLE COURT WHILE COMIN G TO A PARTICULAR CONCLUSION IN THE CASE OF MANOJ AHUJA & ANOTHER (SU PRA) DISSENTED FROM IAC VS. KEDARNATH JHUNJHUNWALA (1982) (133 ITR 746) (PAT). ADMITTEDLY, THE ASSESSING OFFICER IS VESTED WITH THE POWERS TO IMPOSE PENALTY BUT THE SAME HAS TO BE EXERCISED JUDICIOUSLY AND REASONABLY BECAUSE VESTING OF POWERS IS COUPLED WITH DUTY TO EXERCISE IT WHEN CON DITION FOR EXERCISE FOR SUCH POWERS IS SHOWN TO BE EXISTING. EVEN OTHERWISE , PENALTY IS NOT IMPOSABLE IF THERE IS NO CONSCIOUS BREACH OF LAW, F OR THIS PROPOSITION, THE ASSESSEE DRAWS SUPPORT FROM THE DECISION IN SANGAM PLASTIC CENTRE VS. CIT (226 ITR 260) (GUJ), HINDUSTAN STEEL LTD. VS. STATE OF ORRISA (83 ITR 26)(SC) AND K.C. BUILDERS VS. ACIT (265 ITR 562) (S C). IN VIEW OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS, I AM OF THE CONS IDERED OPINION THAT NORMALLY, NO PERSON SHOULD SUFFER FOR THE FAULT OF HIS COUNSEL/OTHERS, THEREFORE, THE PENALTY OF RS.10,000/-, IMPOSED U/S 271(1)(B), IS DELETED. THEREFORE, THIS APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.2.2010 . (JOGINDER SINGH) JUDICIAL MEMBER FEBRUARY 15 TH , 2010 !VYAS! COPY TO APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE