Ankaa Realtors, Hyderabad V. Asst. Commissioner of Income Tax, Central Circle-3(4), Hyderabad

ITA 586/Hyd/2019

• Counselvise Citation: [2020] 108 COUNSELVISE.COM (IT) 1625 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2014-2015
• Appeal Filed On: 23-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Search and seizure; Reasonable cause
• Section: 143(3); 142(1); 153A; 201; 143(2); 132

Judgement Text

ITA NOS 583 TO 589 OF 2019 ANKA REALTORS HYDERABAD PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NOS. 583 TO 589/HYD/2019 ASSESSMENT YEARS: 2011-12 TO 2017-18 ANKAA REALTORS HYDERABAD PAN:ABFFA0287M VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(4) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI P. MURALI MOHAN RAO REVENUE BY : SRI SOLGY JOSE T. KOTTARAM, DR DATE OF HEARING: 28/09/2020 DATE OF PRONOUNCEMENT: 30/09/2020 ORDER PER BENCH: ALL THESE ARE ASSESSEES APPEALS FOR THE RESPECTIVE A.YS AGAINST THE COMMON AND CONSOLIDATED ORDERS OF THE C IT (A)-11, HYDERABAD FOR THE A.YS 2011-12 TO 2017-18 CONFIRMIN G THE PENALTY LEVIED BY THE AO U/S 271(1)(B) OF THE ACT. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT DURING THE ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT, THE ASSESSEE HAS COMPLIED WITH ALL THE DIRECTIONS OF TH E AO AND THE ASSESSMENT ORDER HAS BEEN PASSED U/S 143(3) OF THE ACT ON 5.12.2018 AND THE ASSESSMENT ORDER CONSISTS OF 111 PAGES. THEREFORE, ACCORDING TO HIM, THE ASSESSEE HAS COMPL IED WITH ALL THE DIRECTIONS OF THE AO AND HAS COOPERATED FOR THE COMPLETION OF THE ASSESSMENT PROCEEDINGS IN HIS CASE FOR ALL THE RELEVANT A.YS, ITA NOS 583 TO 589 OF 2019 ANKA REALTORS HYDERABAD PAGE 2 OF 6 BUT, THE PENALTY U/S 271(1)(B) HAS BEEN LEVIED FOR NON-APPEARANCE AND FOR NON-COMPLIANCE OF THE NOTICE U/S 142(1) OF THE ACT ON ONE SINGLE OCCASION I.E. ON 20.09.2018 AND SUBMITTED TH AT THE AO IN THE NOTICE U/S 142(1) HAS REQUIRED SEVERAL DETAILS WHICH COULD NOT BE FURNISHED ON 20.09.2018, THEREFORE, THE ASSESSEE HAD SOUGHT TIME AND IT WAS NOT A CASE OF NON-COMPLIANCE AND SI NCE THE ASSESSEE HAS COOPERATED WITH THE AO, THE PENALTY LE VIED U/S 271(1)(B) SHOULD BE DELETED. 3. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE HAS NOT EXPLAINED THE REASONABLE CAUSE FOR NON-APPE ARANCE BEFORE THE AO ON 20.09.2018 EITHER BEFORE THE AO OR BEFORE THE CIT (A) AND THEREFORE, THE PENALTY LEVIED U/S 271(1)(B) IS CLEARLY ATTRACTED AND THE PENALTY LEVIED BY THE AO SHOULD BE CONFIRME D. HE SUBMITTED THAT IN THE APPEAL BEFORE THE CIT(A) AGAI NST THE PENALTY ORDER, THE ASSESSEE DID NOT APPEAR AND DID NOT EXPL AIN THE REASONABLE CAUSE FOR NON-APPEARANCE BEFORE THE AO. THUS, ACCORDING TO HIM, THE PENALTY ORDER SHOULD BE CONFI RMED ON THIS GROUNDS ALSO. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD AS WELL AS THE ASSESSMENT ORDER DATED 05. 12.2018, WE FIND THAT THERE WAS A SEARCH U/S 132 OF THE ACT IN THE CASE OF THE ASSESSEE ON 20.03.2017 AND IN PARA 3 OF THE ASSESSM ENT ORDER, THE AO HAS RECORDED THE NOTICES ISSUED TO THE ASSES SEE AND THE COMPLIANCE BY THE ASSESSEE. PARA 3 IS REPRODUCED HE REUNDER FOR READY REFERENCE: ITA NOS 583 TO 589 OF 2019 ANKA REALTORS HYDERABAD PAGE 3 OF 6 3.0 DURING THE POST SEARCH PROCEEDINGS, SHRI AMIT BANSAL, MANAGING PARTNER OF THE ASSESSEE FIRM WAS SUMMONED TO EXPLAI N THE CASH DEPOSITS IN THE BANK ACCOUNT. IN THE ABSENCE OF ANY EXPLANAT ION OF SOURCES OF CASH DEPOSITS BY ASSESSEE FIRM AND ITS PARTNERS, THE CAS H WAS SEIZED ON 28.03.2017. CONSEQUENT TO THIS SEARCH, THE ASSESSEE FIRM IS CENTRALISED TO CENTRAL CIRCLE 3(4) AS PER THE ORDER U/S 127 OF INCOME TAX ACT, 1961, OF PR. COMMISSIONER OF INCOME TAX(CENTRAL), HYDERABAD IN F.NO.PR.CIT(C)/ HYD/CENTRALISATION/127/2018-19 DATED 13.08.2018 R.W .S. 127 ORDER IN F.NO.PR.CIT-7/HYD./ORDER U/S 127/2017-18 DATED 13.0 9.2017. ACCORDINGLY NOTICES U/S 153A DATED 20.02.2018 WERE ISSUED TO THE FIRM AS APPLICABLE FOR THE AYS 2011-12 TO 2016-17. IN RE SPONSE TO THE NOTICE ISSUED U/S 153A, THE ASSESSEE FIRM HAS FILED A LETT ER DATED 28.08.2018 ON 29.08.2018 ENCLOSING THE BELATED RETURNS OF INCO ME AS FILED FOR A.Y.2011-12 ON 16.08.2018, AY 2012-13 ON 07.08.2018 , AY 2013-14 ON 31.07.2018, AY 2014-15 ON 31.07.2018, AY 2015-16 ON 31.07.2018 AND AY 2016-17 ON 31.07.2018 AS RETURNS OF INCOME, IN R ESPONSE TO NOTICE U/S 153A ISSUED FOR THESE SIX ASSESSMENT YEARS 2011 -12 TO 2016-17. SIMILARLY NOTICE U/S 143(2) IS ISSUED FOR AY 2017-1 8 AS APPLICABLE ON 14.08.2018 AND ASSESSEE FIRM FILED ITS RETURN OF IN COME FOR A.Y. 2017-18 ON 31.03.2018 WITH NIL INCOME. FURTHER, AT PG.25 OF THE ASSESSMENT ORDER, WE FIND THAT THE AO HAS REPRODUCED A COPY OF THE FINAL SHOW CAUSE LETTE R DT.09.11.2018 WHICH IS AS UNDER: OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE - 3(4}, 8TH FLOOR, AAYAKAR BHAVAN, HYOERA8AD DATE: 9/11/2018 TO THE PRINCIPAL OFFICER M/S ANKA REAITORS, D.NO 12,5-351A1B, FLAT NO.S-5. UPKAR APARTMENTS, BALLAD ESTATES,TARNAKA, HYDERABAD. SIR, SUB: INCOME TAX ASESSMENT PROCEEDINGS PENDING IN THE CASE OF ANKA REALTORS. PAN: A8FFA028 7M FOR AY.2011-12 TO A.Y2017-18 - FINAL SHOW CAUSE LET TER - REGARDING ITA NOS 583 TO 589 OF 2019 ANKA REALTORS HYDERABAD PAGE 4 OF 6 REF: (1) THIS OFFICE NOTICE U/S 143(2) DATECL14.03. 2018 FOR THE A.Y 2017-18. (2) THIS OFFICE NOTICES U/S 143(2) DATED 05,092018 FOR THE AYS FROM 201 H2 TO 2016-17 (3) THIS OFFICE NOTICES U/S 142(1) DATED 0509.2018 FOR THE AYS FROM 201112 TO 2017-18 (4) YOUR LETTER DATED 20.09.2018 RECEIVED IN THIS O FFICE ON 18.09.2018 REQUESTING FOR A TIME PERIOD OF 10 DAYS. (5) THIS OFFICE LETTER IN F,NO,A.C1T-CC3(4)/MISC/20 18-19 DATED, 25 09.20'18 CONSIDERING YOUR REQUEST. (6) THIS OFFICE LETTER IN F.NO ACIT-CC3(4) SHOW CAU SE /2018-19 DATED 23.10.2018 TO OFFER YOUR EXPLANATION IF ANY ON OR BEFORE 30.10.2018. (7) THIS OFFICE LETTER IN FNO.ACIT-CC3(4)/SHOW CAUSE/2018-19, DATED 31.10.2018 TO OFFER YOUR EXPLANATION IF ANY ON OR BEFORE 09.11.2018. A SEARCH AND SEIZURE OPERATION VIAS CONDUCTED IN YO UR CASE ON 20F03/2017 INVOLVING CASH DEPOSITS IN THE F IRM'S BANK ACCOUNT. WHICH NEEDS TO BE FROM THE CONTENTS OF THE ABOVE LETTER OF THE AO DT. 09.11.2018, IT IS SEEN THAT THE ASSESSEE VIDE LETTER DT.20.09.2018 (REF.NO.4) HAD REQUESTED FOR 10 DAYS TIME TO FILE THE DETAILS CALL ED FOR IN THE NOTICE U/S.142(1) OF THE ACT DT.05.09.2018 AND IT A PPEARS THAT THE SAID REQUEST WAS CONSIDERED VIDE OFFICE LETTER DT.2 5.09.2018. THUS, IT IS CLEAR THAT ON 20.09.2018, THERE WAS A R EQUEST FOR TIME WHICH WAS NOT REJECTED OR REFUSED BY THE AO AND HEN CE CANNOT BE CONSIDERED AS WANTON OR WILFUL NON-COMPLIANCE BY TH E ASSESSEE. IT IS FURTHER NOTICED THAT THE NEXT NOTICE TO THE A SSESSEE WAS ONLY ON 23.10.2018 WHICH IS THE DATE OF PENALTY ORDER. THEREFORE, THE ARGUMENT OF THE LEARNED DR THAT THERE WAS NO CO-OPE RATION FROM THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS DUE TO WHICH THE DEPARTMENT WAS CONSTRAINED TO LEVY THE PENALTY U/S 271(1)(B) OF THE ACT DOES NOT HOLD WATER. FURTHER, EXCEPT STATIN G THAT THE PENALTY IS BEING LEVIED FOR NON-COMPLIANCE OF THE S TATUTORY NOTICE DATED 5.9.2018 FOR FURNISHING OF DETAILS/INFORMATIO N AS MENTIONED ITA NOS 583 TO 589 OF 2019 ANKA REALTORS HYDERABAD PAGE 5 OF 6 THEREIN BY 20.09.2018, THERE ARE NO OTHER FINDINGS BY THE AO IN HIS ORDER DT.23.10.2018 ABOUT THE NON-CO-OPERATION FROM THE ASSESSEE ON ANY OTHER DATES. 4.1. SINCE THE ASSESSEE HAS NOT APPEARED BEFORE THE CIT (A), THE PROPER COURSE OF ACTION WOULD BE TO REMAND THE ISSUES TO THE CIT(A) WITH A DIRECTION TO THE ASSESSEE TO APPE AR BEFORE THE CIT (A) AND EXPLAIN THE REASONABLE CAUSE FOR NON-AP PEARANCE ON 20.09.2018. HOWEVER, SINCE THE PENALTY LEVIED FOR EACH OF THE A.Y IS ONLY RS.10,000/-, DUE TO THE SMALLNESS OF THE AM OUNT, AND ALSO THE FACT THAT THE ASSESSEE HAD REQUESTED FOR TIME O N 20.09.2018 BY WAY OF LETTER WHICH IS MENTIONED IN THE LETTER O F THE AO DT.09.11.2018, AND IS A MATTER OF RECORD, WE DO NOT THINK IT NECESSARY TO REMAND THE ISSUE BACK TO THE FILE OF T HE CIT (A) AT THIS STAGE. THEREFORE, WE ARE OF THE OPINION THAT THE PENALTY U/S 271(1)(B) LEVIED BY THE AO IS NOT JUSTIFIED AND IS ACCORDINGLY DELETED FOR ALL THE A.YS. 5. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2020. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 30 TH SEPTEMBER, 2020. VINODAN/SPS ITA NOS 583 TO 589 OF 2019 ANKA REALTORS HYDERABAD PAGE 6 OF 6 COPY TO: 1 ANKAA REALTORS, C/O P. MURALI & CO. C.AS, 6-3-655 /2/3 SOMAJIGUDA, HYDERABAD 500082 2 ASSTT. CIT, CENTRAL CIRCLE 3(4) HYDERABAD 3 CIT (A)-11, HYDERABAD 4 PR. CIT CENTRAL, HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER