Prakash B.Dhebar, Baroda V. The Income tax Officer,Ward-1(3), Baroda

ITA 612/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85570 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 27-01-2015
• Assessment Year: 1994-1995
• Appeal Filed On: 28-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Reasonable cause; Non compliance
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFOR E SHRI MUKUL KR. SHRAWAT, J.M. & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO. 612 / AHD/ 20 1 1 (A SSESSMENT YEAR: 1994 - 95) PRAKASH B. DHEBAR 802/803, ANGAN TOWERS, MAKARPURA, VADODARA. V/S INCOME TAX OFFICER WARD 1(3), BARODA (APPELLANT) (RES PONDENT) PAN: ABQPD 6028A APPELLANT BY : SHRI MANISH J. SHAH, A.R. RESPONDENT BY : SHRI B.L. YADAV, SR. D.R. ( )/ ORDER DATE OF HEARING : 30 - 01 - 2015 DATE OF PRONOUNCEMENT : 06 - 02 - 2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) - I V , BARODA DATED 16.12.2010 FOR A.Y. 1994 - 95. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVING INCOME FROM CONSULTANCY AND OTHER SOURCES. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 94 - 95 ON 30.11.1996 DECLARING TOTAL INCOME OF RS. 64,960/ - . THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTI ON 143(3) VIDE ITA NO 612/AHD/2011 . A.Y. 1994 - 95 2 ORDER DATED 28.03.1997 AND THE TOTAL INCOME WAS DETERMINED AT RS. 1,40,00,000/ - . AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DATED 14.08.1997 SET ASIDE THE ORDER OF A.O AND DIRECTED THE A.O TO RE FRAME THE ASSESSMENT . WHILE FRAMING THE ASSESSMENT I N THE SET ASIDE PROCEEDINGS, A.O NOTED THAT THE VARIOUS NOTICES U/S. 143(2) & 142(1) WERE ISSUED TO THE ASSESSEE TO ATTEND THE HEARING BUT DUE TO NON COMPLIANCE BY ASSESSEE, A.O WAS FORCED TO PASS AN EX - PARTE ORDER AND ACCORDINGLY IN THE SET ASIDE PROCEEDINGS THE A SSESSMENT WAS FRAMED U/S. 144 R.W.S. 250 ON 01.03.2000 AND THE TOTAL INCOME WAS DETERMINED AT RS. 1,37,25,180 . A.O ALSO CONCLUDED THAT ASSESSEE HAD WITHOUT REASONABLE CAUSE FAILED TO COMPLY WI TH THE NOTICES U/S. 142(1) & 143(2) AND THEREFORE HE LEVIED PENALTY U/S. 271(1)(B ) OF THE ACT OF RS. 10,000/ - FOR EACH AND EVERY DEF A ULT FOR NON COMPLIANCE AND LEVIED AGGREGATE PENALTY OF RS. 80,0 00/ - U/S. 271(1)(C) OF THE ACT . AGGRIEVED BY THE ORDER OF A .O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DATED 16.12.2010 UPHELD THE ORDER OF A.O. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 4. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE LD. CIT(A) AND FURT HER SUBMITTED THAT WHEN THE ASSESSMENT PROCEEDING S FOR THE YEAR WERE IN PROGRESS, T HE ASSESSEE WAS PASSING THROUGH SEVERE CASH CRUNCH DUE TO WHICH THE ASSESSEE COULD NOT EVEN MAKE THE PAYMENT OF SALARY TO ITS EMPLOYEES WHICH RESULTED IN THE EMPLOYEES OF TH E ASSESSEE LEAVING THE EM PLOYMENT AND THEREFORE THE ASSESSEE WAS P RACTICALLY LEFT WITH NO STAFF. IN THE ABSENCE OF THE REQUIRED STAFF AND SINCE T HE ASSESSEE BEING NOT A PERSON OF ACCOUNT OR TAXATION , COULD NOT GET ALL THE INFORMATION REQUIRED BY THE A.O. IT WAS FURTHER SUBMITTED THAT AT THE RELEVANT TIME DUE TO THE FINANCIAL CRUNCH FACED BY THE ITA NO 612/AHD/2011 . A.Y. 1994 - 95 3 ASSESSEE VARIOUS COURT CASES U/S. 138 OF THE NEGOTIABLE INSTRUMENT ACT WE RE ALSO FILED AGAINST ASSESSEE AND THE ASSESSEE WAS HELD UP IN THE HEARINGS OF THOSE CASES WHICH RESULTED IN NON COMPLIANCE OF THE NOTICES ISSUED BY A.O . HE THEREFORE SUBMITTED THAT THERE WAS NO INTENTION ON THE PART OF ASSESSEE OF NON COOPERATION BUT DUE TO THE CIRCUMSTANCES BEYOND HIS CONTROL, HE COULD NOT APPEAR BEFORE A.O AND THUS THE NON AP PEARANCE WAS ON ACCOUNT OF REASONABLE CAUSE AND THEREFORE THE PENALTY LEV IED U/S. 271(1)(B) BE DELETED. IN THE ALTERNATIVE HE SUBMITTED THAT THE PENALTY OF RS. 80,000/ - LEVIED WAS TO O HA RSH AND THEREFORE PRAYED THAT CONSIDERING THE FACTORS FOR NON APPEAR ANCE A REASONABL E AMOUNT OF PENALTY BE LEVIED . HE ALSO PLACED RELIANCE ON THE DECISION OF JODHPUR BENCH IN THE CASE OF BABULAL VS. DCIT 2004 91 TTJ (JD) 368. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS A ND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT A.O HAD ISSUED NOTICES U/S. 143(2) & 142(1) TO THE ASSESSEE AND THE NOTICES REMAINED UN COMPLIED BY ASSESSEE. BEFORE US, LD. A.R. HAS STATED THE REASONS FOR NON COMPLIANCE OF THE NOTICES ISS UED BY A.O INTERALIA BEING THE NON AVAILABILITY OF STAFF TO COLLECT THE NECESSARY DETAILS, BEING HELD UP IN THE COURT CASES FILED UNDER THE NEGOTIABLE INSTRUMENTS ACT . THE AFORESAID SUBMISSIONS OF THE ASSESSEE HAVE NOT BEEN CONTROVERTED BY REVENUE AND THER EFORE IN THE ABSENCE OF ANY CONTRARY MATERIAL BROUGHT ON RECORD BY THE REVENUE , WE ARE OF THE VIEW THAT PRIMA FACIE THE REASONS FOR NON APPEARANCE ON THE PART OF ASSESSEE BEFORE A.O TO BE ON ACCOUNT OF REASONABLE CAUSE. CONSIDERING THE TOTALITY OF THE FACT S, WE ARE OF THE VIEW THAT THE PENALTY OF RS. 80,000/ - IMPOSED ON THE A SSESSEE IS ON A HIGHER SIDE AND IN SUCH CIRCUMSTANCES THE ENDS OF JUSTICE SHALL BE MET IF THE TOTAL PENALTY ITA NO 612/AHD/2011 . A.Y. 1994 - 95 4 LEVIED U/S. 271(1)(B) IS RESTRICTED TO RS. 10,000/ - . WE THUS DIRECT ACCORDIN GLY. THUS THE GROUND OF ASSESSEE IS PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 06 - 02 - 201 5 . SD/ - SD/ - (MUKUL KR. SHRAWAT ) (ANIL CHATURVEDI) JUDICIAL M EMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDAB AD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD