Sri Sushil Kumar, Kanpur V. Dy. Commissioner of Income Tax, Central Circle-1, Kanpur

ITA 566/LKW/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1139 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 06-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K SINGH
• Section: 144; 271(1)(b); 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 566/LKW/2017 ASSESSMENT YEAR: 2014 - 15 SRI SUSHIL KUMAR RAM LEELA GROUND PUKHRAYAN KANPUR DEHAT C/O 24/4, THE MALL, KANPUR V. DCIT CENTRAL CIRCLE 1 KANPUR T AN /PAN : ACMPK8257B (APP ELL A NT) (RESPONDENT) APP ELL ANT BY: SHRI ASHISH JAISWAL, ADVOCATE RESPONDENT BY: SHRI C. K. SINGH, D.R. DATE OF HEARING: 28 11 201 8 DATE OF PRONOUNCEME NT: 30 11 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF LD. CIT(A) - IV, KANPUR DATED 31/7/2017 CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)( B ) OF THE ACT. 2 . BRIEF FACTS OF THE CAS E ARE THAT THE ASSESSEE , IN THE STATUS OF INDIVIDUAL , HAS E - FILED HIS RETURN OF INCOME ON 07.02.2015 DISCLOSING TOTAL INCOME OF RS.6,93,380/ - ASSESSEE DERIVED INCOME FROM REMUNERATION AND INTEREST AS A PARTNER FROM THE FIRM, M/S KANHA DISTRIBUTORS; PROFIT FROM PROPRIETORSHIP BUSINESS OF M/S KRISHNA BRICK FIELD; SHARE OF PROFIT FROM KANHA DISTRIBUTORS AS PARTNER; INCOME FROM SALE OF AGRICULTURAL LAND AND ALSO INCOME FROM OTHER SOURCES. SUBSEQUENTLY, THE CASE WAS SELECTED FOR LIMITED SCRUTINY ON THE GROUND TH AT SALE CONSIDERATION OF THE ITA NO.566/L KW/2017 PAGE 2 OF 4 PROPERTY SHOWN IN THE RETURN OF INCOME IS LESS THAN SALE CONSIDERATION OF PROPERTY REPORTED IN AIR. NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 DATED 31.08.2015 WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. LATER ON, NOTICE U /S 142(1) READ WITH SECTION 129 DATED 27.09.2016 ALONG WI TH CERTAIN QUESTIONS , WAS ISSUED. IN RESPONSE TO THESE NOTICES , LD. A.R. OF THE ASSESSEE ATTENDED AND FURNISHED NECESSARY DOCUMENTS/EVIDENCES /WRITTEN SUBMISSIONS AS WERE REQUIRED. THE ASSESSING OF FICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ASSESSING THE INCOME OF THE ASSESSEE AT RS.6,93,380/ - . THEREAFTER PROCEEDINGS UNDER SECTION 271(1)( B ) OF THE ACT WERE INITIATED AND A PENALTY OF RS.10,000/ - WAS IMPOSED ON THE ASSESSEE, WHICH WAS CONFIRMED BY THE LD. CIT(A). 3 . AGGRIEVED WITH THE ORDER OF LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE US. LD. A.R. OF THE ASSESSEE SUBMITTED THAT IN THIS CASE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT BASED ON THE I NFORMATION AND DOCUMENTS FURNISHED BY THE ASSESSEE AND THE ASSESSMENT IS A NORMAL SCRUTINY ASSESSMENT AND NOT BEST JUDGEMENT ASSESSMENT, WHICH SHOWS THAT THE ASSESSING OFFICER WAS FULLY SATISFIED WITH THE COMPLIANCES MADE BY THE ASSESSEE, THEREFORE, IN SUC H CIRCUMSTANCES IMPOSITION OF PENALTY UNDER SECTION 271(1)(B) OF THE ACT IS NOT WARRANTED. LD. A.R. OF THE ASSESSEE HAS ALSO PLACED RELIANCE ON VARIOUS CASE LAWS FOR THE PROPOSITION THAT WHERE THE ASSESSMENT HAS BEEN COMPLETED UNDER SECTION 143(3) AND NOT UNDER SECTION 144 OF THE ACT, NO PENALTY UNDER SECTION 271(1)(B) OF THE ACT SHOULD BE LEVIED. 4 . THE LD. D.R., ON THE OTHER HAND, PLACED RELIANCE UPON THE ORDERS OF THE AUTHORITIES BELOW. 5 . WE HAVE PERUSED THE CASE RECORDS, HEARD THE RIVAL CONTENTIONS AND TH E MATERIAL PLACED ON RECORD. A PERUSAL OF PENALTY ORDER DATED ITA NO.566/L KW/2017 PAGE 3 OF 4 2/8/2016 PASSED BY THE DCIT, CENTRAL CIRCLE - 1, KANPUR SHOWS THAT ASSESSEE HAD FILED REPL IES TO VARIOUS NOTICE S ISSUED BY THE ASSESSING OFFICER EXCEPT NOTICE DATED 9/5/2016 ISSUED UNDER SECTION 142(1) OF THE ACT, AS ACCORDING TO THE ASSESSEE NO SUCH NOTICE WAS RECEIVED BY THE ASSESSEE. THE ASSESSING OFFICER INTENDED TO IMPOSE PENALTY UNDER SECTION 271(1)(B) ONLY FOR THE REASON THAT ASSESSEE HAS NOT RESPONDED TO NOTICE DATED 9/5/2016 ISSUED UNDER SECTION 142(1) OF THE ACT . IN OUR VIEW, NON - COMPLIANCE OF A PARTICULAR NOTICE CANNOT BE HELD TO BE REASON FOR IMPOSITION OF PENALTY. IT IS AN UNDISPUTED FACT THAT IN THIS CASE ASSESSMENT HAS BEEN COMPLETED UNDER SECTION 143(3) AND NOT UNDER SECTION 144 OF THE ACT, THEREFORE, ON THIS COUNT ALSO NO PENALTY UNDER SECTION 271(1)(B) OF THE ACT CAN BE LEVIED. THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA 83 ITR 26 HAS HELD AS UNDER: - ..AN ORDER IMPOSING PENALTY FOR FAIL URE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI - CRIMINAL PROCEEDINGS AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED. EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST OR A CTED IN CONSCIOUS, DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISE D JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. 6 . IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE JUDICIAL PRECEDENTS, NO PENALTY CAN BE LEVIED UNDER SECTION 271(1)(B) OF THE ACT. ACCORDINGLY, WE DELETE THE PENA LTY IMPOSED BY THE ITA NO.566/L KW/2017 PAGE 4 OF 4 ASSESSING OFFICER AND CONFIRMED BY LEARNED CIT(A) UNDER SECTION 271(1)(B) OF THE ACT. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30 / 11 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CH AUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH NOVEMBER , 201 8 JJ: 2811 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR BY ORDER ASSISTANT REGISTRAR 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING M EMBER OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S 6. DATE ON W HICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9. DATE OF DESPATCH OF THE ORDER