LATE TULSIDAS S. VED THROUGH NATURAL HEIR KIRTIDA VED (DAUGHTER) (3), MUMBAI V. ITO WD 16(3)(3), MUMBAI

ITA 6008/MUM/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 5296 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 12-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SONGATE
• Assessee Lawyers: KULIN V MUNIM
• Keywords: Opportunity of being heard; Reasonable cause; Non compliance
• Section: 142(1); 27; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, E, MUMBAI BEFORE SHRI S V MEHROTRA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 6008/MUM/MUM/2009 (ASSESSMENT YEAR: 2006-07) LATE TULSIDAS S VED THROUGH NATURAL HEIR KIRTIDA VED (DAUGHTER)(3) KIRTIDA VED, 1/14, DHARMASINGH HALL BLDG, 1 ST FL, 429-E, S V ROAD, PRATHANA SAMAJ MUMBAI-400004 PAN: ADEPV243OQ APPELLANT VS INCOME TAX OFFICER, WARD 16(3)(3), MATRU MANDIR TARDEO ROAD, MUMBAI-400007. RESPONDENT ASSESSEE BY : MS.KULIN V MUNIM REVENUE BY : SHRI D SONGATE O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 18.05.2009 OF CIT(A) ARISING FROM TH E PENALTY ORDER PASSED UNDER SECTION 271 (1) (B) OF THE INCO ME TAX ACT, FOR THE ASSESSMENT YEAR 2006-07 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER, ON THE FACTS AN DIN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE CIT(A) WAS JUSTIFIED IN RETAINING PENALTY RS.10,000/- LEVI ED ITA NO. 6008/MUM/MUM/2009 2 UNDER SECTION 271(1)(B) OF THE IT ACT, 1961 BY THE INCOME TAX OFFICER; 2. THE APPELLANT PRAYS THAT THE PENALTY OF RS.10,000/- BE DELETED/- 3. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEAR NED DR AND CONSIDERED THE RELEVANT RECORD. 4. THE ASSESSEE FILED HIS RETURN OF INCOME ON 31.07 .2006 WHICH WAS PROCESSED UNDER SECTION 143(1). IN THE M EAN TIME THE ASSESSEE EXPIRED ON 23.11.2006. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS I SSUED ON 20.06.2007. THE AO THEREAFTER ISSUED NOTICE UNDE R SECTION 143(3)/ 142(1) ALONG WITH QUESTIONNAIRES DATED 20.8 .2008. IN RESPONSE TO THE SAID NOTICE, THE DAUGHTER OF THE ASSESSEE APPEARED BEFORE THE AO ON 14.08.2008 AND APPRAISE D THE AO THAT THE ASSESSEE DIED ON 23.11.2006. FINALLY T HE ASSESSMENT WAS FRAMED VIDE ORDER DATED 24.12.2008 . THE AO HAS RECORDED IN THE ASSESSMENT ORDER THAT THE DA UGHTER OF THE ASSESSEE WAS PRESENT FROM TIME TO TIME AND FIL ED NECESSARY DETAILS AND WRITTEN SUBMISSIONS AND THE C ASE WAS ALSO DISCUSSED AND THE RETURN HAS BEEN EXPLAINED. DISSATISFIED WITH THE SUBMISSION OF THE DAUGHTER OF THE ASSESSEE, THE AO IMPOSED THE PENALTY OF RS.30,000/ -UNDER SECTION 271(1)(B) BEING RS.10000/- FOR EACH DEFAULT OF THE NOTICE. DATED 20.06.2007, 17.09.2008 AND 14.10.2008 VIDE PENALTY ORDER DATED 12.12.2008. ITA NO. 6008/MUM/MUM/2009 3 5. ON APPEAL, THE CIT(A) DELETED THE PENALTY WITH RESPECT TO THE NOTICE DATED 17.09.2008 AND 14.10.2008 ON TH E GROUND THAT THE ILLNESS OF THE WIFE OF THE ASSESSEE CONST ITUTES A REASONABLE CAUSE AND SUFFICIENT DETAILS WERE FILED BY HE DAUGHTER OF THE ASSESSEE ON 20.07.2008. THEREFORE, THE PENALTY NEED NOT BE LEVIED F OR LATTER TWO INSTANC ES FOR NON- COMPLIANCE OF THE NOTICES. HOWEVER, THE CIT(A) CON FIRMED THE PENALTY OF RS.10000/- IN RESPECT OF NON-COMPLIANCE OF NOTICE DATED 11.07.2007. 6. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEAR NED DR AND CONSIDERED THE RELEVANT RECORD. IT IS THE CASE OF THE ASSESSEES LEGAL HEIR THAT THE ASSESSEE WHO DIED AF TER FILING THE RETURN, THEREFORE, THE CASE WAS REPRESENTED BY THE LEGAL HEIRS AND RESPONDED TO THE NOTICE ISSUED BY HE AO HAS TO BE CONSIDERED IN THE LIGHT OF THE CIRCUMSTANCES AND PA RTICULARLY WHEN THE ASSESSEE WAS NO MORE. THE CIT(A) HAS DELE TED THE PENALTY IN RESPECT OF THE TWO NOTICES ON THE GROUND S THAT THE ILLNESS OF THE WIFE OF THE ASSESSEE CONSTITUTES A R EASONABLE CAUSE FOR NON COMPLIANCE OF THE NOTICE AND THE DETA ILS WERE ALSO FILED BY THE ASSESSEES DAUGHTER WHO WAS APPEA RED BEFORE THE AO. WHEN THE SUBSEQUENT DEFAULTS WERE FOUND DUE TO REASONABLE CAUSE THEN THE NON APPEARANCE OF THE ASSESSEE ON FIRST OCCASION CANNOT BE HELD AS DELIB ERATE AND ITA NO. 6008/MUM/MUM/2009 4 INTENTIONAL DEFAULT ON THE PART OF THE ASSESSEE/ LE GAL HEIRS OF THE ASSESSEE . MOREOVER, THE PENALTY WAS LEVIED V IDE ORDER DATED 12.12.2008 WITHOUT AFFORDING ANY OPPORTUNITY TO THE LEGAL HEIRS OF THE ASSESSEE OF BEING HEARD. THE AO HAS N OT EVEN ISSUED A SHOW CAUSE NOTICE OF INITIATION OF PENALT Y PROCEEDINGS AND LEVIED THE PENALTY. IN THE REMIND ER NOTICE THOUGH HE MENTIONED THE PROVISIONS OF PENALTY ON F AILURE TO COMPLY WITH THE NOTICE BUT THE SAME DOES NOT CONS TITUTE SHOW CAUSE NOTICE FOR LEVY OF PENALTY OR INITIATION OF P ENALTY PROCEEDING. THE PROVISIONS UNDER SEC. 274 MANDATE REASONABLE OPPORTUNITY OF BEING HEARD TO BE GIVEN T O THE ASSESSEE BEFORE IMPOSING THE PENALTY UNDER CHAPTER XXI. SUB-SECTION (1) OF SECTION 274 IS REPRODUCED BELOW : 274. (1) NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE MADE UNLESS THE ASSESSEE HAS BEEN HEARD, OR HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. 7. THUS, IT IS CLEAR THAT THE PENALTY ORDER PASSED BY THE AO IS IN CONTRAVENTION OF THE PROVISIONS OF SECTION 27 4 AND ACCORDINGLY NOT SUSTAINABLE IN LAW. MOREOVER, WE ARE OF THE VIEW THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, IT IS APPARENT THAT THERE WAS A REASONABLE CAUSE FOR NON ATTENDING OR NON COMPLIANCE WITH THE NOTICE DATED 11.07.2007. HENCE, WE DELETE THE PENALTY CONFIRMED BY THE LEARNED CIT( A). ITA NO. 6008/MUM/MUM/2009 5 8.. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON 06-08-2010 SD SD (S V MEHROTRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 6 TH AUG 2010 SRL:23710 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A)XXXII 5. DR E BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI ` DATE INITIALS 1. DRAFT DICTATED ON 15.7.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 23.7.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER VP 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM 5. APPROVED DRAFT COMES TO THE SR. PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER