Ramanand Malani, New Delhi V. Addl. CIT, Range- 36, New Delhi

ITA 5603/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2232 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 01-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Reasonable cause; Non compliance; Set aside
• Section: 273B; 131; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE MS SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.5602/DEL/2017 ASSESSMENT YEAR: 2014-15 MAMTA MALANI, C/O V.P. VIJH & CO., CA, KK TOWER, 1 ST & 2 ND FLOOR, OPP. CIRCUIT HOUSE, JALANDHAR, PUNJAB. PAN: ADGPM0644K VS ADDL. CIT, RANGE-36, NEW DELHI. ITA NO.5603/DEL/2017 ASSESSMENT YEAR: 2014-15 RAMANAND MALANI, C/O V.P. VIJH & CO., CA, KK TOWER, 1 ST & 2 ND FLOOR, OPP. CIRCUIT HOUSE, JALANDHAR, PUNJAB. PAN: ABBPM6542K VS. ADDL. CIT, RANGE-36, NEW DELHI. ITA NO.5604/DEL/2017 ASSESSMENT YEAR: 2014-15 PARMANAND MALANI, C/O V.P. VIJH & CO., CA, KK TOWER, 1 ST & 2 ND FLOOR, OPP. CIRCUIT HOUSE, JALANDHAR, PUNJAB. PAN: AAFPM2920E ADDL. CIT, RANGE-36, NEW DELHI. ITA NO.5605/DEL/2017 ASSESSMENT YEAR: 2014-15 ANJALI MALANI, C/O V.P. VIJH & CO., CA, KK TOWER, 1 ST & 2 ND FLOOR, OPP. CIRCUIT HOUSE, JALANDHAR, PUNJAB. PAN: AIZPM6343F VS. ADDL. CIT, RANGE-36, NEW DELHI ITA NOS.5602 TO 5606/DEL/2017 2 ITA NO.5606/DEL/2017 ASSESSMENT YEAR: 2014-15 VIJAY LAXMI MALANI, C/O V.P. VIJH & CO., CA, KK TOWER, 1 ST & 2 ND FLOOR, OPP. CIRCUIT HOUSE, JALANDHAR, PUNJAB. PAN: AAFPM2919M VS. ADDL. CIT, RANGE-36, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE (WRITTEN SUBMISSIONS) REVENUE BY : SHRI SURENDER PAL, SR. DR DATE OF HEARING : 28.11.2019 DATE OF PRONOUNCEMENT : 29.11.2019 ORDER PER R.K. PANDA, AM: THE ABOVE BATCH OF FIVE APPEALS FILED BY THE RESPEC TIVE ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 29 TH JUNE, 2017 OF THE CIT(A)-12, NEW DELHI, RELATING TO ASSESSMENT YEAR 2014-15. LEVY OF PENALT Y OF RS.10,000/- EACH U/S 272A(1)(C) OF THE IT ACT BY THE ADDL. CIT AND UPHEL D BY THE CIT(A) IS THE ONLY ISSUE RAISED BY THE ASSESSEES IN THEIR GROUNDS OF A PPEAL. 2. FOR THE SAKE OF CONVENIENCE, THESE WERE HEARD TO GETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVE R, WRITTEN SUBMISSIONS HAVE BEEN FILED AND IT HAS BEEN REQUESTED TO CONSID ER THE SAME. THEREFORE, ALL THESE ITA NOS.5602 TO 5606/DEL/2017 3 APPEALS WERE DECIDED ON THE BASIS OF THE WRITTEN SU BMISSIONS FILED AND AFTER HEARING THE LD. DR. 4. FIRST WE TAKE UP ITA NO.5604/DEL/2017 IN THE CAS E OF PARMANAND MALANI AS THE LEAD CASE. 5. FACTS OF THE CASE, IN BRIEF, ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE, SUMMONS U/ S 131 OF THE ACT WAS ISSUED BY THE ACIT, CIRCLE 36(1) ON 10.11.2016 FIXING THE CAS E OF HEARING ON 17 TH NOVEMBER, 2016. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSE SSEE NOR ANY WRITTEN REPLY FILED BEFORE THE ASSESSING OFFICER. HE, THEREFORE, REFERRED THE MATTER TO THE ADDL.CIT U/S 272A(3) OF THE ACT. THE ADDL.CIT ISSU ED A SHOW CAUSE NOTICE U/S 272A(1)(C) TO THE ASSESSEE ON 23.11.2016 TO EXPLAIN AS TO WHY PENALTY SHOULD NOT BE LEVIED FOR NON-COMPLIANCE TO THE SUMMONS U/S 131 OF THE ACT. THE ASSESSEE SUBMITTED BEFORE THE ADDL.CIT THAT HE WAS PREVENTED BY SUFFICIENT CAUSE FOR NON- APPEARANCE ON 17.11.2016 DUE TO THE DETERIORATING H EALTH OF HIS GRANDMOTHER. IT WAS SUBMITTED THAT THE COUNSEL HAD ASSURED HIM TO S EEK NECESSARY ADJOURNMENT. HOWEVER, HE WAS ALSO PERSONALLY PREVENTED TO ATTEND THE OFFICE OF THE ASSESSING OFFICER DUE TO THE DEATH OF A NEAR RELATION, BUT, H E HAD TELEPHONED THE ASSESSING OFFICER AND TOOK ADJOURNMENT FOR NEXT DATE I.E., 18 .11.2016 WHICH WAS DULY COMPLIED WITH. HOWEVER, THE ADDL. CIT WAS NOT SATI SFIED WITH THE SUBMISSIONS MADE BY THE ASSESSEE. ACCORDING TO HIM, THE ASSESS EE DID NOT COMPLY WITH THE SUMMONS ISSUED U/S 131 AND DID NOT GIVE ANY PRIOR I NTIMATION TO THE ASSESSING ITA NOS.5602 TO 5606/DEL/2017 4 OFFICER REGARDING HIS INABILITY TO ATTEND THE OFFIC E ON 17.11.2016 WHICH WAS THE DATE FIXED FOR RECORDING THE STATEMENTS. THE ASSES SEE INFORMED THE ASSESSING OFFICER TELEPHONICALLY ONLY AFTER THE GIVEN TIME AN D INSTEAD OF APPEARING ON 18.11.2016, THE ASSESSEE APPEARED ONLY ON 24.11.201 6. HE ALSO DISBELIEVED THE ILLNESS OF THE AGED GRANDMOTHER OF THE ASSESSEE ON THE GROUND THAT SHE WAS ADMITTED IN THE HOSPITAL ON 02.11.2016 WHICH IS ALM OST 15 DAYS BEFORE THE DATE OF HEARING AS PER THE SUMMONS ISSUED BY THE ASSESSEE A ND THAT SHE WAS DISCHARGED ON THE VERY SAME DAY. IN VIEW OF THE ABOVE, LD. ADDL. CIT LEVIED PENALTY OF RS.10,000/- FOR NON-COMPLIANCE OF THE STATUTORY NOT ICE U/S 131 OF THE ACT. 6. SIMILAR PENALTY HAS BEEN LEVIED BY THE ADDL.CIT IN OTHER CASES ALSO. 7. BEFORE THE CIT(A), THE ASSESSEE CHALLENGED THE L EVY OF PENALTY OF RS.10,000/-. IT WAS SUBMITTED THAT THE ASSESSEE ALO NG WITH HIS FATHER SHRI KAILASH CHAND MALANI ATTENDED THE OFFICE OF THE ASSESSING O FFICER ON 18.11.2016 WHO INFORMED HIM THAT HE SHOULD APPEAR ON 24.11.2016. E VIDENCE OF HIS VISIT IN THE SHAPE OF VISITORS SLIP WAS ALSO ENCLOSED. THE ASSE SSEE, ALONG WITH HIS COUNSEL AGAIN APPEARED ON 24.11.2016 AND WAS DIRECTED TO VI SIT ON 29.11.2016. ON 29.11.2016 WHEN HE ATTENDED HIS STATEMENT WAS RECOR DED. IT WAS ACCORDINGLY ARGUED THAT THE LELVY OF PENALTY IS NOT JUSTIFIED. IT WAS FURTHER SUBMITTED THAT WHEN THE HEAD OF THE FAMILY WAS TAKEN TO A MAJOR HOSPITA L WHO SUBSEQUENTLY PASSED AWAY ON 13 TH FEBRUARY, 2017, IT IS NOT JUSTIFIED ON THE PART OF THE ADDL.CIT TO LEVY PENALTY. THE PROVISIONS OF SECTION 273B WAS ALSO B ROUGHT TO THE NOTICE OF THE ITA NOS.5602 TO 5606/DEL/2017 5 CIT(A). HOWEVER, THE LD.CIT(A) WAS NOT SATISFIED W ITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND UPHELD THE PENALTY LEVIED BY TH E ADDL.CIT BY OBSERVING AS UNDER:- 9. DECISION 9.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A SSESSING OFFICER HAS ISSUED SUMMONS FOR APPEARANCE ON 17.11.2016, HOWEVE R, NOBODY ATTENDED NEITHER ANY WRITTEN REPLY WAS FILED ON THAT DATE. A CCORDINGLY, ASSESSING OFFICER REFERRED THE MATTER TO THE OFFICE OF ADDL. CIT FOR ISSUE OF SHOW CAUSE NOTICE U/S 272A(L)(C). ADDL. CIT ON PERUSAL OF THE REPLY FILED BY THE ASSESSEE ADDL. CIT HELD THAT THE APPELLANT DID NOT COMPLY WI TH THE SUMMONS ISSUED U/S 131(1). SHE HELD THAT THE APPELLANT WAS VERY CA USAL IN RESPONSE TO THE NOTICES ISSUED BY ASSESSING OFFICER AND HE COULD NO T JUSTIFY THE NON COMPLIANCE OF SUMMONS ISSUED BY ASSESSING OFFICER. ACCORDINGLY, SHE IMPOSED A PENALTY OF RS. 10,000/- FOR NON COMPLIANC E TO THE STATUTORY NOTICE U/S 131(1). APPELLANT DURING APPEAL HAS STATED THAT HE COULD NOT ATTEND DUE TO THE ILLNESS OF HIS GRANDMOTHER AND THE COUNSEL COUL D NOT APPEAR BECAUSE OF THE DEATH OF HIS RELATIVE AND, THEREFORE, THE PENALTY U /S 272A(L)(C) MAY BE DELETED AS HE HAS REASONABLE CAUSE FOR NON COMPLIANCE. 9.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AND SUBMISSIONS OF THE APPELLANT. IT IS SEEN THAT ASSES SING OFFICER HAD ISSUED SUMMONS TO 6 FAMILY MEMBERS OF APPELLANT FAMILY INC LUDING THE APPELLANT AND DIFFERENT TIMING WERE GIVEN FOR COMPLIANCE. HOW EVER, IT IS SEEN THAT APPELLANT DID NOT APPEAR ON 17.11.2016 AT THE GIVEN TIME. THE COUNSEL OF THE APPELLANT INFORMED THE ASSESSING OFFICER ON 17.11.2 016 THAT DUE TO SOME URGENCY, THE ASSESSEE CANNOT APPEAR, IN COMPLIANCE TO SUMMONS AND HE INTIMATED THAT HE WILL APPEAR ON 18.11.2016. FINALL Y, IT IS SEEN THAT ON 24.11.2016 APPELLANT ALONG WITH HIS COUNSEL APPEARE D AND REQUESTED FOR EXEMPTION ON THE GROUND THAT AN AGED FAMILY MEMBERS OF THE FAMILY WAS CRITICALLY ILL. ON 29.11.2016 THE APPELLANT ATTENDE D AND HIS STATEMENT WAS RECORDED ON OATH. 9.3 FROM THE PERUSAL OF THE DOCUMENT SUBMITTED IT I S SEEN THAT APPELLANTS RELATIVE LATE MRS. GEETA DEVI WAS ADMITTED ON 02.11 .2016 AND SHE WAS DISCHARGED ON THE SAME DAY. IT IS APPARENT THAT THI S CLAIM OF THE APPELLANT THAT HE COULD NOT APPEAR BECAUSE OF SICK FAMILY MEMBER I S NOT SUBSTANTIATED AS SHE WAS ADMITTED FOR TREATMENT ON 02.11.2016 AND ON THE SAME DAY, SHE WAS DISCHARGED FROM HOSPITAL. FURTHER, IT IS SEEN THAT APPELLANT'S IS A BIG FAMILY AND THEY ARE RESIDING AT THE SAME ADDRESS IN THE SA ME RESIDENCE AND THEREFORE, OTHER FAMILY MEMBERS WERE ALSO AVAILABLE FOR TAKING CARE OF THE SICK PERSON WHO EXPIRED LATER. IT IS ALSO NOT THE CLAIM OF APPE LLANT THAT HE WAS THE ONLY FAMILY MEMBER TO LOOK AFTER AND AS SUCH, HE WAS NOT IN A POSITION TO APPEAR FOR ITA NOS.5602 TO 5606/DEL/2017 6 DEPOSITION BEFORE THE ASSESSING OFFICER. THEREFORE. APPELLANTS CLAIM LACKS SUBSTANCE. APPELLANT HAS ALSO NOT GIVEN ANY DOCUMEN T IN SUPPORT OF HIS CLAIM THAT HIS COUNSEL COULD NOT APPEAR DUE TO DEATH OF H IS RELATIVE. THE STATEMENT OF APPELLANT HAS BEEN FINALLY RECORDED ON 29.11.2016, HOWEVER, IT IS APPARENT THAT APPELLANT WAS AVOIDING TO APPEAR IN COMPLIANCE TO THE SUMMONS FOR RECORDING HIS STATEMENT. THIS IS ALSO APPARENT FROM THE FACT THAT HE HAS POSTED THE LETTER ON 18.11.2016 STATING THE REASONS FOR NO N APPEARANCE ON 17.11.2016 WHICH WAS RECEIVED BY ASSESSING OFFICER ON 22.11.20 16. THEREFORE, APPELLANT HAS BEEN CASUAL AND NON-SERIOUS IN ATTENDING TO THE SUMMONS ISSUED BY THE ASSESSING OFFICER AND HE HAS NOT BEEN ABLE TO JUSTI FY OR SUBSTANTIATE THE REASONS FOR HIS NON-COMPLIANCE ON 17.11.2016. I FIN D NO INFIRMITY IN THE ORDER OF ADDL. CIT. FACTS OF THE CASE RELIED ON BY APPELL ANT ARE DIFFERENT. THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PENALTY U/S 272A(L)(C) OF RS. 10,000/- IS SUSTAINED. 10. IN THE RESULT, THE APPEAL IS DISMISSED. 8. SIMILAR OBSERVATIONS HAVE BEEN GIVEN IN OTHER AP PEALS ALSO. 9. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 10. WE HAVE CONSIDERED THE WRITTEN SUBMISSIONS FILE D BY THE ASSESSEE AND HEARD THE LD. DR. IT IS AN ADMITTED FACT THAT THE ASSESS EE DID NOT APPEAR BEFORE THE ASSESSING OFFICER ON 17.11.2016 AT THE GIVEN TIME, BUT, IT IS ALSO AN ADMITTED FACT THAT AT 5.30 PM ON 17.11.2016, THE ASSESSING OFFICE R WAS TELEPHONICALLY INFORMED AND COMMUNICATED THAT HE WILL APPEAR ON THE VERY NE XT DAY I.E., 18.11.2016. A CHRONOLOGY OF EVENTS STATED BEFORE THE CIT(A) SHOWS THAT THE ASSESSEE WAS ASKED TO APPEAR ON 24.11.2016 WHO, IN FACT, HAS APPEARED AND WAS GIVEN TIME AGAIN ON 29.11.2016 AND HIS STATEMENT WAS RECORDED. WE FURT HER FIND FROM THE SUBMISSIONS BEFORE THE CIT(A) THAT THE GRANDMOTHER OF THE ASSES SEE WHO WAS ILL AND FOR WHICH THE ASSESSEE WAS UNABLE TO ATTEND THE OFFICE OF THE ACIT HAS EXPIRED ON 13 TH ITA NOS.5602 TO 5606/DEL/2017 7 FEBRUARY, 2017. IN THE INSTANT CASE, CIT(A) DISBEL IEVED THE CLAIM OF THE ASSESSEE THAT THE COUNSEL COULD NOT APPEAR DUE TO THE DEATH OF HIS RELATIVE IN ABSENCE OF ANY DOCUMENTARY EVIDENCE, BUT, IN OUR OPINION, IT IS VE RY DIFFICULT TO GET DOCUMENTARY EVIDENCE FOR THE DEATH OF A CLOSE RELATION FOR SUBM ITTING BEFORE THE CIT(A) TO SEEK ADJOURNMENT. THE LOWER AUTHORITIES SHOULD HAVE AT LEAST BELIEVED THE COUNSEL WHO IS MAKING A STATEMENT THAT THERE IS DEATH OF HIS RE LATION. AS PER THE PROVISIONS OF SECTION 273B, PENALTY U/S 272A(1)(C) SHALL NOT BE I MPOSABLE ON THE PERSON OR THE ASSESSEE AS THE CASE MAY BE FOR ANY FAILURE REFERRE D TO IN THE SAID PROVISION IF HE PROVES THAT THERE WAS A REASONABLE CAUSE FOR THE SA ID FAILURE. IN OUR OPINION, THE FACTS IN THE INSTANT CASE SHOW THAT THERE WAS A REA SONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NOT APPEARING ON THE APPOINTED DATE WH O HAS SUBSEQUENTLY APPEARED BEFORE THE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THA T IT IS NOT A FIT CASE FOR LEVY OF PENALTY OF RS.10,000/- U/S 272A(1)(C). WE, THEREFO RE, SET ASIDE THE ORDER OF THE CIT(A) AND THE PENALTY LEVIED BY THE ADDL.CIT IS DI RECTED TO BE DELETED. THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE IS ACCO RDINGLY ALLOWED. 11. IN THE OTHER CASES, ALTHOUGH THE PERSONS DID NO T APPEAR BEFORE THE ASSESSING OFFICER, HOWEVER, THEY ARE ALL FAMILY MEMBERS. THE REFORE, FOLLOWING OUR REASONINGS GIVEN ABOVE THAT THERE WAS A REASONABLE CAUSE FOR NON-APPEARANCE ON THE APPOINTED DAY, AS PER THE PROVISIONS OF SECTION 273B, WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND DIRECT THE ADDL.CIT TO CANCEL THE PENALTY. ITA NOS.5602 TO 5606/DEL/2017 8 12. IN THE RESULT, ALL THE FIVE APPEALS FILED BY THE RESPECTIVE ASSESSEE ARE ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 9.12.2019. SD/- SD/- (SUSHMA CHOWLA) (R.K. PANDA) JUDICIAL MEMBER ACCO UNTANT MEMBER DATED: 29 TH NOVEMBER, 2019 DK COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI DATE 1. DRAFT DICTATED ON 28.11.2019 2. DRAFT PLACED BEFORE THE AUTHOR 29.11.2019 3. DRAFT PLACED BEFORE THE OTHER MEMBER 4. APPROVED DRAFT COMES TO THE SR.PS/PS 5. ORDER UPLOADED ON 6. FILE SENT TO THE BENCH CLERK 7. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE OF DISPATCH OF ORDER.