Smt Santosh Devi Mundada, Hyderabad V. ACIT, Hyderabad

ITA 562/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3289 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-12-2010
• Assessment Year: 2007-2008
• Appeal Filed On: 20-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: AMBESWAR
• Keywords: Principle of natural justice; Non compliance
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO. 536/H/2010 ASSESSMENT YEAR 2007-08 SHRI PURUSHOTHAM MUNDADA (HUF), HYDERABAD (PAN AAHHP 0047 D) VS THE ACIT, CIRCLE 3, HYDERABAD APPELLANT RESPONDENT ITA NO. 537/H/2010 ASSESSMENT YEAR 2007-08 SHRI PURUSHOTHAM MUNDADA (HUF), HYDERABAD (PAN ABZPM 2963 L) VS THE ACIT, CIRCLE 3, HYDERABAD ITA NO. 538/H/2010 ASSESSMENT YEAR 2007-08 SHRI SATYANARAYANA MUNDADA, HYDERABAD (PAN ABZPM 2964 P) VS THE ACIT, CIRCLE 3, HYDERABAD ITA NO. 539/H/2010 ASSESSMENT YEAR 2007-08 VENUGOPALA MUNDADA, HYDERABAD (PAN ABZPM 2970 R) VS THE ACIT, CIRCLE 3, HYDERABAD ITA NO. 561/H/2010 ASSESSMENT YEAR 2007-08 SMT SUNITHA MUNDADA, HYDERABAD (PAN ABZPM 2965 N) VS THE ACIT, CIRCLE 3, HYDERABAD ITA NO. 562/H/2010 ASSESSMENT YEAR 2007-08 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD 2 SMT SANTOSH DEVI MUNDADA, HYDERABAD (PAN ACQPM 1106P) VS THE ACIT, CIRCLE 3, HYDERABAD ITA NO. 563/H/2010 ASSESSMENT YEAR 2007-08 M/S SATYANARAYANA VENUGOPAL, HYDERABAD (PAN AAGFS3151 E) VS THE ACIT, CIRCLE 3, HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI AMBESWAR RESPONDENT BY : SHRI B.V. PRASAD REDDY ORDER PER BENCH: ALL THESE APPEALS PREFERRED BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE DIFFERENT ORDERS PASSED BY THE CIT(A) I, HYDERABAD DATED 11.3.2010 AND P ERTAINS TO THE ASSESSMENT YEAR 2007-08, CONFIRMING THE LEVY OF PENALTY U/S 271 (1) (B) OF THE INCOME TAX ACT, 1961 . AS THE CIRCUMSTANCES LEADING TO LEVY OF PENALTY ARE THE SA ME, THE REASONING ADVANCED BY THE ASSESSING OFFICER FOR LEV Y OF PENALTY AND BY THE CIT(A) FOR CONFIRMING THE PENALT IES ARE THE SAME, WE ARE DISPOSED OFF THESE CASES TOGETHER FOR THE SAKE OF CONVENIENCE. 2. THE UNDISPUTED FACTS OF THE CASES ARE AS FOLL OWS. THE ASSESSEES ARE HEREIN FILED THE RETURN OF INCOME DECLARING INCOME AS DETAILED BELOW: ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD 3 S.N ITA NO NAME OF THE ASSESSEE DECLARED INCOME DATE OF FILING OF RETURN DATE OF 142 (1) ISSUE OF NOTICE SHOW CAUSE NOTICE DATE DATE OF FILING INFORMATION BY ASSESSEE DATE OF PASSING ASSESSMENT ORDER 1 536 S/S. P MUNDADA (HUF) 1,54,540 05.11.07 05.8.09 05.11.09 17.11.09 19.11.09 2 537 P. MUNDADA(IND.) 8,26,450 05.11.07 19.8.09 01.09.09 17.11.09 19.11.09 3 538 SATYANARAYANA M 2,92,960 05.11.07 19.8.09 01.09.09 17.11.09 19.11.09 4 539 VENUGOPALA M 2,06,830 23.10.07 19.8.09 01.09. 09 17.11.09 19.11.09 5 561 SMT.SUNITHA M 1,19,960 05.11.07 19.8.09 01.09 .09 17.11.09 19.11.09 6 562 SMT. SANTOSH DEVI M 1,18,530 05.11.09 19.8.09 01.09.09 17.11.09 19.11.09 7 563 M/S S.NARAYANA VENUGOPAL 88,363 23.10.07 13.8.09 01.09.09 17.11.09 19.11.09 3. ACCORDING TO THE LOWER AUTHORITIES, THE ASSESS EE HAS DELIBERATELY NOT COMPLIED WITH THE REQUIREMENTS OF THE NOTICE ISSUED U/S 142(1) OF THE IT ACT AND THE ASSE SSMENT WAS COMPLETED U/S 144 OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER HAS LEVIED PENALTY U/S 271(1)(B) OF THE ACT FOR NOT COMPLYING WITH THE REQUIREMENTS OF PROVISIO NS OF SECTION 142(1) OF THE ACT WITHOUT ANY REASONABLE CA USE AT RS.10,000/- IN EACH CASE. BEFORE THE LOWER AUTHORI TIES, NONE APPEARED ON BEHALF OF THE ASSESSEE AND THE CIT (A) HAS CONFIRMED THE PENALTY. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTEDLY, NOTICE U/S 142(1) WAS ISSUED TO ALL THE ASSESSEES AS ENUMERATE D IN EARLIER PARAS FOR THIS ASSESSMENT YEAR 2007-08. AF TER ISSUING OF THE NOTICE U/S 142(1) TO THE ABOVE ASSES SEES, FURTHER A SHOW CAUSE NOTICE TO ALL THE ASSESSEE WER E ISSUED BY THE ASSESSING OFFICER ASKING WHY THE PENALTY SHO ULD NOT BE LEVIED FOR NON COMPLIANCE OF THE NOTICE ISSUED U /S ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD 4 142(1). SUBSEQUENTLY, THE ASSESSING OFFICER HAS PR OCEEDED TO COMPLETE THE ASSESSMENT U/S 144 OF THE ACT AND H AS GIVEN ONE MORE OPPORTUNITY TO THE ASSESSEE TO APPEA R BEFORE HIM ON 17.11.2009. TO THIS NOTICE, THE ASS ESSEE HAS FILED THE INFORMATION ON 17.11.2009 THROUGH THEIR C OUNSEL M/S P. MURALI & CO., CHARTERED ACCOUNTANTS, HYDERAB AD, WHICH CONTAINS THE FOLLOWING DOCUMENTS IN EACH CASE : 1. POWER OF ATTORNEY 2. COPY OF RETURN OF ACKNOWLEDGEMENT 3. COPY OF COMPUTATION STATEMENT 4. STATEMENT OF CAPITAL ACCOUNT/BALANCE SHEET AND PROF IT AND LOSS A/C WITH SCHEDULES 5. COPY OF LIC RECEIPTS 6. COPIES OF BANK STATEMENTS 7. COPY OF FORM NO.3CD/AUDIT REPORT AS THE CASE MAY BE. 5. CONSEQUENT TO THIS, THE ASSESSING OFFICER IN A LL THESE CASES PASSED THE ASSESSMENT ORDER ON 19.11.20 09 AND THEREAFTER THE ASSESSING OFFICER HAS PASSED STE REO TYPED PENALTY ORDER U/S 271(1)(B) OF THE ACT ON 3.1 1.2009 IN ALL THESE CASES. IN OUR CONSIDERED OPINION, IT IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS NO REASONABLE OPPORTUNITY HAS BEEN GIVE TO THESE ASSESSEES FOR MAKING COMPLIA NCE OF THE INFORMATION SOUGHT. IF THE ASSESSING OFFICER W ANTED ANY FURTHER INFORMATION AFTER RECEIPT OF THE INFORMATIO N FURNISHED BY THE ASSESSEES ON 17.11.2009 THROUGH THEIR C.AS, THE ASSESSING OFFICER MUST HAVE GIVEN SOME MORE TIME TO THE ASSESSEES TO FURNISH FURTHER INFORMATION. THE ASSE SSING OFFICER HAS NOT ASKED FOR ANY INFORMATION AFTER THE RECEIPT OF THE INFORMATION FURNISHED BY THE ASSESSEES ON 17.11 .2009. HE HAS HURRIEDLY CONCLUDED THE ASSESSMENTS ON 19.11 .2009. ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD 5 IT MEANS THAT THE ASSESSING OFFICER HAS NOT REQUIRE D ANY FURTHER INFORMATION FROM THE ASSESSEES. IN OUR OPI NION, HAD THE ASSESSING OFFICER REQUIRED ANY FURTHER INFORMAT ION, HE IS EXPECTED TO GIVE ADEQUATE TIME TO THE ASSESSEE BEFO RE HE INFERS THAT THEY ARE TENDING NON COMPLIANCE OF THE NOTICE ISSUED U/S 142(1) OF THE ACT AND AVOIDING FURNISH INFORMATION AS REQUIRED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER IS NOT CORRECT IN OBSERVING THAT THE ASSESSEES ARE AVOIDING FURNISHING INFORMATION FOR T HE PURPOSE OF COMPLETION OF ASSESSMENT. HAD THIS IS T HE INTENTION, THE ASSESSEES WOULD NOT HAVE TAKEN THE S ERVICES OF THE CHARTERED ACCOUNTANT AND FILED THE INFORMATI ON CALLED FOR BY THE ASSESSING OFFICER. THE ACT AND CONDUCT OF THE ASSESSEES SHOWS THAT THE ASSESSEES ARE WILLING TO C OOPERATE WITH THE DEPARTMENT FOR COMPLETION OF THE ASSESSMEN T AND ACCORDINGLY, THEY HAVE FILED THE INFORMATION ON 17. 11.2009. THE ASSESSING OFFICER WITHOUT CALLING FOR ANY FURTH ER INFORMATION HAS COMPLETED THE ASSESSMENTS IN ALL TH ESE CASES ON 19.11.2009. IT IS A VERY HASTE DECISION O F THE ASSESSING OFFICER. ON THE FACE OF THE PRESENT FACT S WHERE THE ASSESSING OFFICER HASTILY PROCEEDED TO COMPLETE THE ASSESSMENT AND INITIATE PENALTY PROCEEDINGS IN ALL THE CASES, IT IS DIFFICULT TO INFER THAT THESE ASSESSEES ARE I NTEND TO MAKE NON COMPLIANCE OF NOTICE ISSUED U/S 142(1) OF THE A CT. THEREFORE, IT SHOULD NOT BE INFERRED THAT THERE WAS DEFAULT WHICH COULD INVITE LEVY OF PENALTY U/S 271 (1)(B) O F THE ACT. FURTHER, FILING OF THE INFORMATION ON BEHALF OF THE ASSESSEES BY M/S P. MURALI & CO., C.AS, HYDERABAD MEANS THAT THERE IS A COMPLIANCE OF THE NOTICE ISSUED BY THE ASSESSING OFFICER AND THE SUBSEQUENT COMPLIANCE IN THE ASSESSMENT ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 ITA NO.536 & 6 OTHERS OF 2010 SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD SHRI PURUSHOTTAM MUNDADA & OTHERS, HYDERABAD 6 PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULT COMMITTED EARLIER WERE TO BE IGNORED BY THE ASSESSING OFFICER. THEREFORE, IN THESE CIRCUMSTANC ES, WE FIND NO REASON TO COME TO THE CONCLUSION THAT THE D EFAULT WAS OF WILFUL NATURE. CONSIDERING ALL THE ABOVE FA CTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT NEITHER THE ASSESSING OFFICER NOR THE CIT(A) HAS MADE OUT A CAS E FOR SUSTAINING THE PENALTY IN THESE CASES. ACCORDINGLY , PENALTY IN ALL THESE CASES ARE DELETED. 8. IN THE RESULT, THE APPEALS OF THE ASSESSEES A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 .6.201 1 SD/- G.C. GUPTA SD/- CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED 3 RD JUNE, 2011 COPY FORWARDED TO: 1. M/S P. MURALI & CO., C.AS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYD. C/O S/SHRI SHRI P. MUNDADA (HUF & IND.), SATYANARAYANA MUNDADA, VENUGOPALA MUNDADA, SMT. SUNITA MUNDADA, SMT. SANTOSH DEVI MUNDADA & M/S SATYANARAYANA VENUGOPAL, 8-4-271, SRI KRISHNA COLONY,WARANGAL. 2. THE ACIT, CENTRAL CIRCLE 3, HYDERABAD 3. THE CIT(A) I, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP