Sri .K.P.Musthafa, Kannur V. The ACIT, Kannur

ITA 622/COCH/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7458 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-01-2020
• Assessment Year: 2007-2008
• Appeal Filed On: 06-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRITUNJAYA SHARMA
• Keywords: Reasonable cause
• Section: 273B; 143(3); 133A; 274; 271B; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E SHRI GEORGE GEORGE K., JUDICIAL MEMBER I.T.A. NO. 62 2 /COCH/201 9 ASSESSMENT YEAR : 2007 - 08 SHRI K.P. MUSTHAFA, M/S. FATHIMA HOSPITAL, SOUTH BAZAR, KANNUR. [PAN: A EHPM 9306C] VS. THE ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE - 1, KANNUR RANGE , KANNUR. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRI ARUN R AJ S., ADV. REVENUE BY SHRI MRITUNJAYA SHARMA, SR. DR DATE OF HEARING 22 / 0 1 / 20 20 DATE OF PRONOUNCEMENT 28 TH / 0 1 /20 20 O R D E R PER GEORGE GEORGE K.,JUDICIAL MEMBER: TH I S APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) DATED 22.08.2019. THE RELEVANT ASSESSMENT YEAR IS 2007 - 08 . 2 . THE SOLITARY ISSUE RAISED IN TH IS APPEAL IS WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PENALTY IMPO SED U/S. 271F OF THE I.T. ACT AMOUNTING TO RS. 5000 F OR THE ASSESSMENT YEAR 2007 - 08 . I.T.A. NO S . 62 2 / COCH/201 9 2 3 . BRIEFLY STATED, THE FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS THE PROPRIETOR OF M/S. F A THIMA HOSPITAL , KANNUR. FOR THE ASSESSMENT YEAR 2007 - 08 , THE RET URN OF INCOME WAS FILED BELATEDLY ON 31 - 03 - 2009 . SUBSEQUENTLY, THERE WAS SURVEY U/S. 133A OF THE I.T. ACT ON 15.02.2010 . CONSEQUENT TO THE SURVEY, T HE ASSESSMENT WAS COMPLETED U/S. 143(3) R.W.S. 147 OF THE I.T. ACT AT RS.16,64,392/ - AS AGAINST THE RETURN ED INCOME OF RS. 8,89,390/ - . SINCE THE RETURN OF INCOME WAS NOT FILED WITHIN THE DUE DATE SPECIFIED, THE ASSESSING OFFICER ISSUED NOTICE U/S. 274 R.W.S. 271F OF THE I.T. ACT. THE ASSESSING OFFICER NOTED THAT THERE WAS A DELAY OF 17 MONTHS FROM THE DUE D ATE OF FILING OF RETURN OF INCOME AND 12 MONTHS FROM THE END OF THE ASSESSMENT YEAR . THEREFORE, IT WAS HELD BY THE ASSESSING OFFICER THAT PENALTY U/S. 271F OF THE I.T. ACT IS TO BE IMPOSED AND ACCORDINGLY, PENALTY OF RS.5000/ - WAS IMPOSED VIDE ORDER DATED 31/05/2012. 4. AGGRIEVED BY THE PENALTY ORDER PASSED U/S. 271F OF THE I.T. ACT, THE ASSESSEE PREFERRED THE APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE CIT(A) CONFIRMED THE IMPOSITION OF PENALTY U/S. 271F OF THE I.T. ACT BY HOLDING THAT THE DELAY WAS CAUSED WITHOUT GIV ING VALID REASONS. THE RELEVANT FINDING OF THE CIT(A) READS AS FOLLOWS: 6. I HAVE CONSIDERED THE SUBMISSION . THE DECISON CITED BY THE APPELLANT IS ONLY APPLICABLE IN REGARD TO PENALTY U/S. 271B AND NOT APPLICABLE TO 271F. EVEN OTHE RWISE, IN THE SAID DECISION THE FACTS ARE ENTIRELY DIFFERENT AND THEORY OF REASONABLE CAUSE IS ACCEPTED BY HONBLE ITAT ON THE FACTS SUPPORTED BY EVIDENCE. IN THE PRESENT CASE THE APPELLANT IS NOT ABLE TO FURNISH ANY EXPLANATION OR I.T.A. NO S . 62 2 / COCH/201 9 3 EVIDENCE TO SUPPORT THA T THERE WAS REASONABLE CAUSE FOR FAILURE TO FILE RETURN OF INCOME WITHIN THE DUE DATE OR AT THE END OF RELEVANT ASST. YEAR. THE APPELLANT IS A PRACTITIONER OF LONG STANDING IN MEDICAL PROFESSION AND IS PRESUMED TO BE WELL AWARE OF THE PROVISIONS OF THE IN COME TAX ACT. THE APPELLANT IS A HABITUAL DEFAULTER AS EVIDENCED BY FACT THAT NO RETURN OF INCOME WAS FILED WITHIN THE DUE DATE OR END OF ASSESSMENT YEAR FOR ASST. YEAR 2009 - 10 ALSO. 7. IN ONE OF THE GROUNDS, THE APPELLANT PLEADS THAT NOTICE OF HEARING WAS SERVED ONLY ON 30.05.2012 ON APPELLANT AND ORDER WAS PASSED ON 31.05.2012 BY A.O.. THIS CONTENTION IS NOT CORRECT AS A.O. HAS NOTED IN HIS ORDERS THAT CASE WAS POSTED ON 25.05.2012 FOR WHICH APPELLANT HAD FILED AN ADJOURNMENT PETITION. THUS PLEA OF APPELLANT IS DISMISSED. IN THESE CIRCUMSTANCES, I FIND NO REASON TO ACCEPT THE EXPLANATION OF REASONABLE CAUSE FURNISHED BY THE APPELLANT AND THEREFORE PENALTY ORDER U/S. 271F OF IT ACT FOR ASST. YEARS 2007 - 08 IS SUSTAINED. 5 . AGGRIEVED BY THE ORDE R OF THE CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. AR SUBMITTED THAT FOR THE ASSESSMENT YEAR 2007 - 08, THE RETURN OF INCOME ALONGWITH THE AUDIT REPORT WAS FILED MUCH BEFORE THE SURVEY CONDUCTED U/S. 133A OF THE I.T. ACT AN D THE SAME WAS FILED BEFORE THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 OF THE I.T. ACT WAS PASSED. IT WAS SUBMITTED THAT THE DELAY IN FILING THE RETURN OF INCOME A LONGWITH THE AUDIT REPORT W AS ON ACCOUNT OF GENUINE, BONA FIDE REASONS. IT WAS SUBMITTED TH AT THE DELAY IN FILING THE RETURN OF INCOME HAD OCCURRED ONLY DUE TO THE FACT THAT THE ASSESSEES A CCOUNTANT WHO WAS FAMILIAR WITH THE ASSESSEES ACCOUNTS HAD ABRUPTLY LEFT THE SERVICES OF THE ASSESSEE AS HE GOT EMPLOYMENT IN KERALA GOVERNMENT SERVICE AND IT TOOK TIME FOR THE ASSESSEE TO FIND A SUITABLE ALTERNATIVE WHICH HAD RESULTED IN DELAY . IT WAS SUBMITTED THAT SINCE THE RETURN OF I.T.A. NO S . 62 2 / COCH/201 9 4 INCOME WAS F URNISHED BEFORE THE ASSESSMENT U/S.143(3) R.W.S. 147 OF THE I.T. ACT WAS COMPLETED, THE DELAY CAN ONLY BE TREA TED AS A TECHNICAL BREACH WHICH HAS NOT RESULTED IN ANY LOSS TO THE EXCHEQUER. FURTHER, THE LD. AR RELIED ON THE DECISION OF THE ITAT, COCHIN BENCH IN THE CASE OF ATTINKARA ELECTRONICS VS. ITO IN ITA NO. 601/COCH/2018 (ORDER DATED 01.03.2019) . T HE LD. DR ON THE OTHER HAND STRONGLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AS WELL AS OF THE CIT(A). 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, FOR ASSESSMENT YEAR 2007 - 08, THE RETURN OF INCOME ALONGWITH THE AUDI T REPORT WAS FILED MUCH BEFORE THE DATE OF SURVEY AND THE SAME WAS AVAILABLE WITH THE ASSESSING OFFICER PRIOR TO COMPLETION OF ASSESSMENT U/S. 143(3) R.W.S. 147 OF THE I.T. ACT . THEREFORE, IT IS ONLY A TECHNICAL BREACH WHICH HAS NOT RESULTED IN ANY L OSS TO THE EXCHEQUER. THE DELAY IN FILING THE RETURN OF INCOME ALONG WITH AUDIT REPORT WAS ON ACCOUNT OF THE ASSESSEES ACCOUNTANT LEAVING THE SERVICES OF THE ASSESSEE AND THE ASSESSEE REQUIRED TIME TO FIND A SUITABLE PERSON. IN THESE CIRCUMSTANCES, I AM OF THE VIEW THAT THERE IS REASONABLE CAUSE AS MANDATED U/S. 273B OF THE I.T. ACT. IN THIS CONTEXT, I RELY ON THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF P. SENTHIL KUMAR VS. PR. CIT (2019) 416 ITR 336 AND THE ORDER OF THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF A TTINKARA ELECTRONICS VS. ITO (SUPRA). A CCORDINGLY, I I.T.A. NO S . 62 2 / COCH/201 9 5 DELETE THE PENALTY OR RS. 5000/ - IMPOSED BY THE ASSESSING OFFICER . IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF TH E ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 TH - 01 - 20 20 . SD/ - (GEORGE GEORGE K.) JUDICIAL MEMBER PLACE: KOCHI DATED: 28 TH JANUARY, 20 20 GJ COPY TO: 1 . SHRI K.P. MUSTHAFA, M/S. FATHIMA HOSPITAL, SOUTH BAZAR, KANNUR. 2. THE ASSISTANT COMMISSIONER OF INCOME - TAX, CI RCLE - 1 , KANNUR RANGE, KANNUR. 3. THE COMMISSIONER OF INCOME - TAX (AP P EALS) , KOZHIKODE. 4. THE PR. COMMISSIONER OF INCOME - TAX, KOZHIKODE. 5. D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN