Rajdhani Cold Storage Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 5762/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74146 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 03-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 12-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEEHAR RANJAN
• Keywords: Reasonable cause; Non compliance
• Section: 143(3); 142(1); 144

Judgement Text

I.T.A .NOS.-5762 TO 5764/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.A .NOS.-5762 TO 5764/DEL/2012 (ASSESSMENT YEAR: 2007-08) RAJDHANI COLD STORAGE P. LTD. VS. DCIT, C-51, LAWRENCE ROAD, CENTRAL CIRCLE-25, NEW DELHI-110035 NEW DELHI. PAN: AACCR0293H (APPELLANT) (RESPONDENT) ASSESSEE BY:-NONE REVENUE BY:-SH. NEEHAR RANJAN PANDEY, ORDER PER DIVA SINGH, JM. THESE ARE THREE APPEALS FILED BY THE ASSESSEE AGAIN ST THE SEPARATE ORDERS DATED 9.8.2012 BY THE CIT (A)-I, PERTAINING TO 2007 -8, ASSESSMENT YEAR WHEREIN THE PENALTY IMPOSED BY THE AO U/S 271(B) ON ACCOUNT OF NON-REPRESENTATION ON THREE DIFFERENT OCCASIONS HAS BEEN UPHELD BY THE CI T(A) IN THESE ORDERS. ACCORDINGLY FOR THE SAKE OF CONVENIENCE ALL THE THR EE APPEALS ARE BEING DECIDED BY A COMMON ORDER. 2. IDENTICAL GROUND HAS BEEN RAISED BY THE ASSESSEE IN ALL THESE APPEALS. WE REPRODUCE THE GROUND FROM ITA NO. 5762/DEL/2012 WHI CH READS AS UNDER :- 1. LD. CIT (APPEAL) WITHOUT APPRECIATING THE CORRE CT FACTS OF THE CASE IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE PENALTY OF RS.10,000/- IMPOSED BY ASSESSING OFFICER UNDER SECTION 271(1)(B) OF THE IT ACT. 3. AT THE TIME OF HEARING AN ADJOURNMENT PETITION W AS MOVED ON BEHALF OF THE ASSESSEE BY AN OFFICE EMPLOYEE ON THE LETTER HEAD S IGNED BY SHRI SANJAY GOYAL, I.T.A .NOS.-5762 TO 5764/DEL/2012 2 (MANAGER ACCOUNTS AND ADMINISTRATION) STATING THAT THE ADVOCATE IS NOT WELL, AS SUCH TIME WAS SOUGHT. A PERUSAL OF THE RECORD SHOWS THAT NO POWER OF ATTORNEY IN FAVOUR OF ANY COUNSEL IS AVAILABLE ON RECORD. THE RECORD FURTHER SHOWS THAT THE APPLICANT ALSO DOES NOT CARE TO MENTION THE NAME OF ANY ADVOCATE. ACCORDINGLY AFTER CONSIDERING THE MATERIAL AVAILABLE ON RECORD, IT WAS CONSIDERED APPROPRIATE TO PROCEED WITH THE PRESENT APPEALS EX PARTE QUA TH E ASSESSEE APPELLANT ON MERIT AFTER HEARING THE LD. SR. DR. IN THE CIRCUMSTANCES AFTER HEARING THE DEPARTMENT, THE PETITION SEEKING TIME WAS REJECTED OBSERVING AS UNDER:- REJECTED, RESTORED TO AO. SD/- SD/- (AM) (JM) 4. THE REASONS FOR COMING TO THE SAID CONCLUSIONS A RE ELABORATELY HEREINAFTER:- 4.1. THE RELEVANT FACTS AS EVIDENCED FROM ITA NO.57 62/DEL/2012 SHOW THAT THE ASSESSEE E-FILED ITS RETURN ON 30 TH OCTOBER 2007. THE FACTS AS DISCUSSED IN THE PENALTY ORDER WHICH LED TO THE INITIATION OF PENALT Y PROCEEDINGS ARE EXTRACTED FROM THE PENALTY ORDER HEREUNDER:- FURTHER THE CASE WAS SELECTED FOR SCRUTINY AND NOT ICE U/S 143(2) WAS ISSUED ON 15.9.2008 FIXING THE CASE FOR 23.09.2008. NOTICE WAS SENT THROUGH SPEED POST. A NOTICE U/S 143(2) DT. 22.9.2008 FOR 3 0.9.2008 WAS SERVED BY PERSONAL MODE AND STAMPED BY THE ASSESSEE COMPANY A S ACKNOWLEDGEMENT. AGAIN NOTICES U/S 142(1) AND 143(2) ALONGWITH QUEST IONNAIRE WERE ISSUED TO THE ASSESSEE COMPANY ON 10.8.2009 FIXING THE CASE FOR 1 7.8.2009. NONE ATTENDED ON 17.8.2009. FURTHER ON REQUEST, NOTICE U/S 143(2) DT . 24.9.2009 ISSUED AND SERVED BY PERSONAL MODE FIXING THE CASE ON 1.10.09. NONE A TTENDED ON 1.10.09. LATER IN RESPONSE TO STATUTORY NOTICES AND QUESTION NAIRE SH. PRATAP GUPTA, CA APPEARED AND THE CASE WAS DISCUSSED WITH HIM. FINALLY, THE CASE WAS COMPLETED U/S 143(3) OF THE IT ACT ON 17.11.09 AT AN ASSESSED INCOME OF RS.1,57,130/- . (EMPHASIS BY THE BENCH) 4.2. IN RESPONSE THERETO DURING THE PENALTY PROCEED INGS THE ASSESSEE WAS REPRESENTED IN THE FOLLOWING MANNER:- THE PENALTY PROCEEDINGS U/S 271(1)(B) WERE INITIATE D FOR NON COMPLIANCE OF NOTICE U/S 143(2) ISSUED ON 10.8.2009 AND NOTICES U/S 143(2) ISSUED ON 24.9.2009 BY ISSUING NOTICE U/S 274 READ WITH 271 OF THE IT ACT ON I.T.A .NOS.-5762 TO 5764/DEL/2012 3 17.11.09 WHICH WAS SENT BY SPEED POST. NO COMPLIANC E OF THIS NOTICE WAS MADE BY THE ASSESSEE. THE ASSESSEE WAS GIVEN FINAL OPPOR TUNITIES OF BEING HEARD VIDE LETTER DT. 20.5.2010 FIXING THE CASE FOR 26.5.2010. IN COMPLIANCE TO THE SAME, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FILED REP LY ON 26.5.2010 STATING THAT UNFORTUNATELY THE UNDERSIGNED AUTHORIZED REPRESENT ATIVE OF THE ASSESSEE WAS NOT AVAILABLE IN TOWN ON BOTH THE DATES THEREFO RE NEITHER HEARING COULD BE MADE NOR ADJOURNMENT WAS SOUGHT FOR. THE UNDERSIGNE D SUO MOTO OF HIS OWN HAS APPEARED BEFORE YOU ON 23.10.2009 AND REQUISITE INFORMATION WAS FILED. THE MATTER OF NON COMPLIANCE WAS ALSO DISCUSSED WITH YO U DURING THE COURSE OF HEARING. THERE WAS NO MALAFIDE INTENTION OF THE ASS ESSEE COMPANY TO AVOID ANY STATUTORY NOTICE ISSUED. 4.3. A PERUSAL OF THE PENALTY ORDER ALSO SHOWS THAT IT WAS REQUESTED THAT THE PENALTY PROCEEDING MAY BE DROPPED RELYING UPON 5 D TR DEL TRIBUNAL 429. 4.4. THE RECORD FURTHER SHOWS THAT THE EXPLANATION OFFERED ON BEHALF OF THE ASSESSEE WAS NOT ACCEPTED. THE SPECIFIC REASONS AR E EXTRACTED HEREUNDER FROM THE PENALTY ORDER: - THE ASSESSEE WAS GIVEN THREE OPPORTUNITIES BY ISSUI NG TWO NOTICES U/S 143(2) & 142(1) DT. 10.8.2009 AND THIRD NOTICE U/S 143(2) DT. 24.9.2009 BUT THE ASSESSEE FAILED TO RESPOND TO ALL OPPORTUNITIES GIV EN IN THE ABOVE NOTICES. THE RESPONSIBILITY TO COMPLY THE NOTICES WAS OF THE ASS ESSEE AND NOT THAT OF THE AUTHORIZED REPRESENTATIVE. THE ASSESSEE SHOULD HAVE SENT A REQUEST LETTER FOR SEEKING ADJOURNMENT IN RESPONSE TO THE ABOVE SAID N OTICES BUT THE ASSESSEE FAILED TO DO SO. BY GIVING SUCH EXPLANATION ASSESSEE IS TRYING TO ES CAPE PENALTY BY SHIFTING THE BLAME. IF THE EXPLANATION OF ASSESSEE IS ACCEPTED T HEN NO PENALTY U/S 271 (1)(B) CAN BE LEVIED AS EVERY ASSESSEE WILL SAY THAT DEFAU LT WAS OF HIS AUTHORISED REPRESENTATIVE. IN SUCH A SITUATION THE OVERALL SUP ERVISION AND RESPONSIBILITY IS OF ASSESSEE. MOREOVER ASSESSEE HAS NOT FILED EVIDEN CE IN SUPPORT OF ITS EXPLANATION LIKE LETTER FROM THE CONCERNED CA/AR ET C. ADMITTING THE MISTAKE AND REASONS. THE SAME REASONS WAS GIVEN BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS TOO WHICH WAS NOT ACCEPTED BY THE AO AN D AS A RESULT PENALTY PROCEEDINGS WERE INITIATED. FURTHER, THE CASE RELIED UPON BY THE ASSESSEE IS DI FFERENT ON FACTS AND ALSO THE SAME IS NOT BINDING. IN THE CASE OF CIT VS. STANDAR D MERCANTILE CO. 52 CTR 415, IT WAS HELD THAT THE WORDS USED IN SECTION 271 (1)(B) ARE MAY DIRECT MAY IN THE CONTEXT IT IS USED IS MANDATORY. THERE FORE IT CAN NOT BE SAID THAT IMPOSITION OF PENALTY U/S 271(1)(C) IS A MATTER OF DISCRETION. MOREOVER THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THERE WAS REASONABLE CAUSE FOR THE DEFAULT. NON AVAILABILITY OF THE AUTH ORIZED REPRESENTATIVE IS NO EXCUSE. IN THESE CIRCUMSTANCES ASSESSEE COULD HAVE TAKEN ADJOURNMENT WHICH WAS NOT DONE. THE FACT OF DEFAULT COMMUTED BY THE A SSESSEE WAS NOT IGNORED BY I.T.A .NOS.-5762 TO 5764/DEL/2012 4 THE ASSESSING OFFICER RATHER THE FACT OF INITIATION OF PENALTY IS MENTIONED IN THE ASSESSMENT ORDER ITSELF. 5. AGGRIEVED BY THIS THE ASSESSEE CAME IN APPEAL BE FORE THE LD. CIT (A). THE EXPLANATION OFFERED ON BEHALF OF THE ASSESSEE IS SE T OUT IN THE IMPUGNED ORDER AT PARA 5. THE SAME IS REPRODUCED HEREUNDER FOR READY REFERENCE:- 5. AT THE APPELLANT STAGE THE ASSESSEE HAS STATED T HAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS EXPLAINED TO ASSESSIN G OFFICER THAT ON THE BOTH THE DATES OF HEARING THE UNDERSIGNED WAS NOT AVAILA BLE IN TOWN AND THEREFORE NEITHER HEARING ON THE DATES COULD BE NOR ANY ADJOU RNMENT APPLICATION COULD BE FILED BEFORE ASSESSING OFFICER. BUT LD. ASSESSING O FFICER HAS FAILED TO APPRECIATE THE FACTS THAT AR OF THE APPELLANT SUO MOTO WITHOUT WAITING FOR ANY FURTHER NOTICE AFTER COLLECTING THE INFORMATION FROM APPELL ANT COMPANY HAD APPEARED BEFORE ASSESSING OFFICER AND ALL THE REQUISITE INFO RMATION AS CALLED FOR WAS FILED BEFORE ASSESSING OFFICER FOR COMPLETING THE ASSESSM ENT AND IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) AND NOT U/S 144 O F THE IT ACT AND IN THE ASSESSMENT ORDER THERE WAS NO ALLEGATION THAT INFOR MATION CALLED FOR HAD NOT BEEN FURNISHED BY THE APPELLANT. IN REPLY OF PENALT Y SHOW CAUSE NOTICE ALL THESE FACTS WERE AGAIN BROUGHT TO THE NOTICE OF ASSESSING OFFICER APART FROM THE RELIANCE PLACED ON THE DECISION IN CASE OF AKHIL BH ARTIYA SANGH BHAWAN VS. ACIT (2008) 5 DTR (DEL) (TRIB) 429. 5.1. CONSIDERING THE SAME LD. CIT (A) CONFIRMED THE PENALTY ORDER HOLDING THAT NO EVIDENCE HAS BEEN PLACED BY THE ASSESSEE TO SHOW THAT THE LD. AR WAS OUT OF STATION ON THE SAID DATES. HE ALSO HELD THAT THE A SSESSEE HAS FAILED TO EXPLAIN WHY THE LD. AR OR HIS EMPLOYEES OR FOR THAT MATTER THE ASSESSEE HIMSELF COULD NOT ASK FOR ADJOURNMENT. THE EXPLANATION OF THE ASSESSEE T HAT ULTIMATELY THE ASSESSMENT ORDER WAS PASSED U/S 143(3) AND NOT U/S 144 WAS ALS O HELD TO BE OF NO HELP. 6. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFO RE THE TRIBUNAL. THE LD. SR. DR PLACES RELIANCE UPON THE IMPUGNED ORDER AND THE PENALTY ORDER. 7. WE HAVE GONE THROUGH THE MATERIAL AVAILABLE ON R ECORD. IT IS SEEN THAT ON BEHALF OF THE ASSESSEE IT HAS BEEN CONTENDED BY THE LD. AR IN THE PENALTY PROCEEDINGS THAT ON THE TWO DATES I.E 17.08.2009 AN D 01.10.2009 HE WAS OUT OF TOWN AS SUCH COULD NOT BE PRESENT IN RESPONSE TO NO TICES U/S 143(2) AND 142(1) DATED 10.8.2009 AND THE THIRD NOTICE U/S 143(2) DAT ED 24.09.2009. THE SAID I.T.A .NOS.-5762 TO 5764/DEL/2012 5 EXPLANATION OFFERED HAS NOT BEEN ACCEPTED BY THE AU THORITIES ON THE REASONING THAT IT IS THE DUTY OF THE ASSESSEE TO ENSURE COMPLIANCE AND IN THE EVENTUALITY HE WAS NOT IN A POSITION TO ENSURE COMPLIANCE THROUGH HIS AUTHORIZED REPRESENTATIVE THEN NOTHING STOPPED HIM FROM MOVING AN ADJOURNMENT. TH E SAID REASONING OF THE AUTHORITIES CANNOT BE FAULTED WITH. HOWEVER FOR DO ING SO THE EXISTENCE OF THE MATERIAL FACT THAT THE ASSESSEE WAS DULY INFORMED B Y HIS AR HAS TO BE AVAILABLE ON RECORD. THE ASSESSEE CANNOT BE FASTENED WITH PE NAL CONSEQUENCES ON THE PRESUMPTION THAT THE AUTHORIZED REPRESENTATIVE NECE SSARILY INFORMED THE ASSESSEE THAT FIRSTLY HE WOULD BE GOING OUT OF STATION AND A S SUCH WAS NOT AVAILABLE TO REPRESENT THE ASSESSEE ON SPECIFIC DATES; AND SECON DLY HE IS DOING SO WITHOUT MOVING AN ADJOURNMENT BEFORE THE AO. IN SUCH AN EV ENTUALITY THE ASSESSEE COULD BE HELD TO TASK FOR NOT KEEPING THE AO INFORMED. H OWEVER, THERE IS NOTHING ON RECORD TO SUGGEST THAT SUCH WAS THE POSITION. THER E IS NO DOUBT ON THE LEGAL POSITION THAT IT IS THE DUTY OF THE ASSESSEE TO ENS URE THAT HIS FULL REPRESENTATION ALONGWITH REQUISITE INFORMATION IS MADE BEFORE THE AO ON THE ASSIGNED DATE. IN THE EVENTUALITY IF FOR ANY REASONABLE CAUSE REPRESE NTATION CANNOT BE MADE ON A SPECIFIC DATE IT CANNOT BE OVER-EMPHASIZED THAT IN SUCH AN EVENTUALITY AN APPROPRIATE ADJOURNMENT PETITION OUGHT TO BE MOVED. THERE CAN BE NO TWO OPINIONS ON THE LEGAL POSITION THAT THE POWER OF TH E ASSESSING OFFICER TO CALL FOR INFORMATION; A PERSONAL HEARING ETC. WITH REQUISITE RECORDS ETC. CANNOT BE TREATED LIGHTLY AND TRIFFLED WITH. FOR THIS SPECIFIC PURPO SE THE STATUTE ARMS THE ASSESSING OFFICER THE POWER TO IMPOSE PENALTY ON JUSTIFIED AC TS OF IGNORING THE NOTICES RECEIVED REQUIRING COMPLIANCE. THE STATUTE CASTS A DUTY UPON THE ASSESSEE AND OR THE RECIPIENT OF THE NOTICE TO PUT IN A PRESENCE WI TH REQUISITE INFORMATION IN RESPONSE TO THE RECEIPT OF A VALID NOTICE AND ANY O NE WHO CHOOSES TO IGNORE THE SAME DOES SO AT HIS OWN PERIL. IN THE FACTS OF THE PRESENT CASE WE NOTE THAT THERE IS NOTHING ON RECORD TO SUGGEST THAT THE AR OF THE ASSESSEE INFORMED THE ASSESSEE I.T.A .NOS.-5762 TO 5764/DEL/2012 6 OF REMAINING ABSENT ON THE SPECIFIC DATES. FULL F ACTS NEED TO BE AVAILABLE IN ORDER TO ADJUDICATE UPON THE ISSUE. A PERUSAL OF THE AS SESSMENT ORDER U/S 143(3) FOR THE YEAR UNDER CONSIDERATION SHOWS THAT THE ASSESSE E WAS REPRESENTED THROUGH SHRI PRATAP KAPOOR, CHARTERED ACCOUNTANT. THE AO M AKES THE FOLLOWING NOTING IN THIS REGARD IN THE ASSESSMENT ORDER. THE SAME I S EXTRACTED HEREUNDER: LATER IN RESPONSE TO STATUTORY NOTICES AND QUESTIO NNAIRE SH. PRATAP GUPTA, CHARTERED ACCOUNTANT APPEARED, FILED THE DETAILS. T HE CASE WAS DISCUSSED WITH HIM. 7.1. IN PRINCIPLE AN ASSESSEE HAVING APPOINTED AN A UTHORIZED REPRESENTATIVE TO REPRESENT HIM BEFORE THE AO CAN BE SAID TO HAVE SHO WN DUE DILIGENCE TO DISCHARGE HIS OVERALL RESPONSIBILITY TO ENSURE THAT THE NOTICES SENT DO NOT REMAIN UNCOMPLIED WITH. IN OUR CONSIDERED VIEW AS OBSERVE D, THE RESPONSIBILITY OF THE ASSESSEE TO MOVE AN ADJOURNMENT WOULD ARISE, ONLY I F, THE ASSESSEE IS INFORMED BY HIS AR THAT ON THE SAID DATE, HE WOULD BE OUT OF ST ATION. IT IS THE DUTY OF THE ASSESSEE TO ENSURE HIS OWN PRESENCE OR THE PRESENCE OF AN AUTHORIZED PERSON IN RESPONSE TO THE NOTICES RECEIVED. WHEN A NOTICE U/ S 142(1) AND 143(2) AS IN THE PRESENT CASE IS ISSUED TO THE ASSESSEE IT IS INCUMB ENT ON THE ASSESSEE TO EITHER BE PRESENT OR ENSURE HIS REPRESENTATION THROUGH HIS AU THORIZED PERSON ALONGWITH INFORMATION SOUGHT OR TO A REQUEST FOR TIME TO FURN ISH THE SAME WITHIN REASONABLE TIME. TO ENSURE THAT THE POWER SO VESTED WITH THE AO TO CONCLUDE THE ASSESSMENT IS NOT TREATED LIGHTLY THE STATUTE HAS THOUGHT FIT TO EMPOWER THE AO TO IMPOSE PENALTY FOR DELIBERATE DEFIANCE COMMITTED BY THE PA RTY. THE PARTY SO RECEIVING THE NOTICE IS NOT EXPECTED TO BE CARELESS AND NEGLI GENT IN RESPONSE TO THE NOTICE AND IF IT DOES SO IT ACTS AT ITS OWN RISK ATTRACTIN G THE PENAL ACTION CONTEMPLATED UNDER THE STATUTE. THE GROSS AND OR WILLFUL NEGLEC T IN RESPONDING TO THE NOTICES CANNOT BE TREATED LIGHTLY. HOWEVER, IN THE FACTS OF THE PRESENT CASE WHETHER THERE WAS ANY INTIMATION BY THE AR TO THE ASSESSEE THAT H E WAS GOING OUT OF STATION I.T.A .NOS.-5762 TO 5764/DEL/2012 7 WOULD BE A MATERIAL FACT WHICH NEEDS TO BE ADDRESSE D. IT IS SEEN THAT QUA THE SAID FACT THERE IS NOTHING ON RECORD. THE PRESUMPTION T HAT THE RESPONSIBILITY FOR SEEKING ADJOURNMENT RESTED WITH THE ASSESSEE CAN BE BASED ON THE FACT THAT THE AR INFORMED THE ASSESSEE ABOUT HIS PROGRAM OF REMAININ G OUT OF STATION ON THE STIPULATED DATES AND THAT TOO WITHOUT MOVING ADJOUR NMENT PETITION ETC. IN THE ABSENCE OF MATERIAL FACTS WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE BACK TO THE AO WITH THE DIRECTION TO DECIDE THE SAME AFRESH AFT ER GIVING THE ASSESSEE A REASONABLE TIME OF BEING HEARD. THE ASSESSEE SHALL PLACE AN AFFIDAVIT ON RECORD EXPLAINING THE REASONS FOR NON-REPRESENTATION ON TH E TWO SPECIFIC DATES QUA THE THREE NOTICES OF THE AO. THE AO SHALL ENTERTAIN TH E AFFIDAVIT AND PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER HEARING THE ASSE SSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES AS PER THE PRONOUNCEMENT MADE IN THE OPEN COURT ON THE DATE OF HEARING ITSELF. SD/- SD/- (T. S. KAPOOR) (DIVA SI NGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31/01/2014 *AK VERMA / AMIT KUMAR & R.NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR NEW DELHI