GLASSWORKS TRADING P.LTD, MUMBAI V. DCIT CC 44, MUMBAI

ITA 6502/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3689 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 07-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 22-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 143(3); 142(1); 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G B ENCH, MUMBAI BEFORE SHRI D.KARUNAKARA RA0, ACCOUNTANT MEMBER A ND SHRI C.N. PRASAD, JUDICIAL MEMBER, / I .TA NOS. 6502 & 6503/MUM/2014 ( / ASSESSMENT YEARS: 2010-11 & 2011-12 M/S. GLASSWORKS TRADING PVT. LTD., 16, GUNDECHA CHAMBERS, N.M. ROAD, FORT, MUMBAI-400 023 / VS. THE DCIT, CENTRAL CIRCLE - 44, AAYAKAR BHAVAN, MUMBAI-400 020 ./ ./ PAN/GIR NO. AADCG 6227H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI NEELKANTH KHANDELWAL SHRI RAJIV KHANDELWAL / RESPONDENT BY: SHRI AIRIJU JAIKARAN / DATE OF HEARING : 16.06.2016 ! / DATE OF PRONOUNCEMENT : 12.08.2016 / O R D E R PER C.N. PRASAD, JM: THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAIN ST THE COMMON ORDERS OF THE LD. CIT(A)-38, MUMBAI DATED 05 .09.2014 PERTAINING TO ASSESSMENT YEARS 2010-11 & 2011-12 IN SUSTAINING THE PENALTY LEVIED U/S. 271(1)(B) OF THE ACT .BOTH THES E APPEALS WERE HEARD TOGETHER AND THEY ARE DISPOSED OF BY THIS COM MON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 6502 & 6503/M/2014 2 2. BRIEF FACTS ARE THAT IN THESE CASES NOTICES U/S. 142(1) AND 143(2) WERE ISSUED ON 10.8.2012 AND THE ASSESSEE D ID NOT RESPOND TO THE SAID NOTICES ISSUED BY THE ASSESSING OFFICER AND THEREFORE PENALTY U/S. 271(1)(B) WAS LEVIED. IT IS SEEN THAT ON 10.8.2012 NOTICE U/S. 143(2) WAS ISSUED AND IT WAS SERVED FIXING THE DATE OF COMPLIANCE ON 21.8.2012. SIMILARLY NOTICE U/S. 142 (1) WAS ISSUED ON 4.12.2012, SERVED ON THE ASSESSEE FIXING THE DATE O F COMPLIANCE ON 10.12.2012. HOWEVER ASSESSEE DID NOT COMPLY WITH TH E NOTICE ON THE SCHEDULED DATE. THEREFORE, EXPLANATION WAS CALLED FOR AS TO WHY PENALTY SHOULD NOT BE LEVIED U/S. 271(1)(B). IN RE SPONSE TO THE SAID NOTICE, THE ASSESSEE FILED A LETTER DATED 13.5.2013 AND SUBMITTED THAT THERE WERE 8 ASSESSEES IN THE GROUP AND TOTAL 55 SE ARCH ASSESSMENTS WERE IN PROGRESS HENCE THERE WAS MINOR DELAY IN SUB MISSION OF THE DETAILS. THE ASSESSEE PLACING RELIANCE ON THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN (83 ITR 26) SUBMITTED THAT PENALTY IS NOT LEVIABLE FOR TECHNICAL AND VENIAL BR EACH AND THERE IS NO WILLFULL ATTEMPT TO NOT COMPLY WITH THE NOTICES. . 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT TH E ASSESSING OFFICER REJECTING THE EXPLANATION OF THE ASSESSEE A ND BY OBSERVING THAT THE ASSESSEE MISERABLY FAILED TO COMPLY WITH T HE NOTICES ISSUED FROM TIME TO TIME AND PLACING RELIANCE ON THE DECIS ION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS M/S. DHARMENDR A TEXTILE PROCESSORS (306 ITR 277) HELD THAT LEVY OF PENALTY IS A CIVIL LIABILITY AND WILLFUL CONCEALMENT IS NOT ESSENTIAL INGREDIENT FOR ATTRACTING A CIVIL LIABILITY, PENALTY U/S. 271(1)(B) WAS LEVIED FOR THE FAILURE OF THE ASSESSEE IN COMPLYING WITH NOTICES ISSUED ON TWO OC CASIONS I.E. 143(2) DATED 10.8.2012 AND 142(1) DATED 4.12.2012 A T RS. 10,000/- EACH. SIMILAR PENALTY WAS LEVIED FOR ASSESSMENT YE AR 2010-11 ALSO ITA NOS. 6502 & 6503/M/2014 3 FOR NOT COMPLYING WITH THE NOTICES ISSUED U/S. 143( 2) AND 142(1) DATED 10.8.2012 AND 4.12.2012 RESPECTIVELY. 4. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT IT IS THE FINDING OF THE ASSESSING OFFICER THAT THE ASSESSEE S AUTHORIZED REPRESENTATIVE RESPONDED TO THE NOTICE ISSUED U/S. 143(2) DATED 10.8.2012 AND FILED THE DETAILS AND INFORMATION AND THE ASSESSMENT WAS COMPLETED AFTER THE DISCUSSIONS. HE SUBMITS TH AT WHEN THE ASSESSMENT WAS COMPLETED U/S. 143(3) AND NOT U/S. 1 44, PENALTY U/S. 271(1)(B) IS NOT JUSTIFIED SINCE THE ASSESSEE HAS C O-OPERATED IN THE ASSESSMENT PROCEEDINGS AND NECESSARY DETAILS WERE F ILED, THEREFORE SUBSEQUENT COMPLIANCES ARE GOOD COMPLIANCE AND THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT. HE PLACES REL IANCE ON THE DECISIONS OF THE DELHI BENCH IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHMSHAK SANGH BHAWAN TRUST VS ADIT (115 TTJ 419) AN D ALSO THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF JI K INDUSTRIES LTD VS DCIT IN ITA NOS. 4759 TO 4765/MUM/2014 DATED 18.2.2 016 IN SUPPORT OF HIS CONTENTION THAT WHEN ASSESSMENT PROC EEDINGS WERE COMPLETED AND ASSESSMENT ORDER WAS PASSED U/S. 143( 3) AND NOT U/S. 144, IT IS UNFAIR AND UNJUSTIFIED IN LEVYING PENALT Y U/S. 271(1)(B) OF THE ACT. 5. THE LD. DEPARTMENTAL REPRESENTATIVE PLACING REL IANCE ON THE ORDER OF THE ASSESSING OFFICER SUBMITS THAT ASSESSE E WILLFULLY NOT RESPONDED TO THE NOTICE, THEREFORE PENALTY WAS RIGH TLY LEVIED. 6. HEARD BOTH SIDES AND PERUSED THE ORDERS OF THE A UTHORITIES BELOW AND THE CASE LAWS REFERRED TO ABOVE. WE HAVE ALSO PERUSED THE ASSESSMENT ORDER AND THE PENALTY ORDER. IN THE ASS ESSMENT ORDER, IT ITA NOS. 6502 & 6503/M/2014 4 IS THE FINDING OF THE ASSESSING OFFICER THAT IN RES PONSE TO NOTICE U/S. 143(2) AND 142(1) ISSUED ON 10.8.2012, THE AUTHORIZ ED REPRESENTATIVE OF THE ASSESSEE FILED DETAILS AND IN FORMATION AND THE CASE WAS DISCUSSED WITH HIM. THEREAFTER, THE ASSES SMENT WAS COMPLETED U/S. 143(3) ON 22.3.2013. IN THE PENALTY ORDER, THE ASSESSING OFFICER OBSERVED THAT PENALTY WAS LEVIED WITH REFERENCE TO NOTICE ISSUED U/S. 143(2) DATED 10.8.2012 AND NOTIC E ISSUED U/S. 142(1) DATED 4.12.2012. IT IS THE SUBMISSION OF TH E ASSESSEE THAT THERE WERE 8 ASSESSEES IN THE GROUP AND TOTAL 55 SE ARCH ASSESSMENTS WERE IN PROGRESS AND HENCE THERE WAS MINOR DELAY IN SUBMISSION OF DETAILS. WE ALSO FIND THAT IN RESPONSE TO THE NOTI CE U/S. 143(2) AND 142(1) DATED 10.8.2012, THE AUTHORIZED REPRESENTATI VE FILED THE DETAILS AND INFORMATION AND THE CASE WAS DISCUSSED WITH HIM AND FINALIZED THE ASSESSMENT U/S. 143(3) OF THE ACT. T HE FACT THAT THERE WERE 8 ASSESSEES IN THE GROUP AND 55 SEARCH ASSESSM ENTS WERE IN PROGRESS IS ALSO NOT DENIED BY THE ASSESSING OFFICE R. THEREFORE, WE ARE OF THE VIEW THAT THERE IS REASONABLE CAUSE IN F ILING THE DETAILS BY THE ASSESSEE WITH A LITTLE DELAY AND NOT RESPONDING ON THE SCHEDULED DATES MENTIONED IN THE NOTICES. 7. IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHMSHA K SANGH BHAWAN TRUST (SUPRA), THE DELHI BENCH HAS CONSIDER ED A SITUATION WHERE THE ASSESSMENT WAS COMPLETED U/S. 143(3) NOT U/S. 144 AND ASSESSEE HAS NOT COMPLIED WITH SOME OF THE NOTICES AND IN SUCH CIRCUMSTANCES IT WAS HELD THAT WHEN ONCE THE ASSESS MENT WAS COMPLETED U/S. 143(3) AND NOT U/S. 144, THE SUBSEQU ENT COMPLIANCE BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS WAS C ONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMMITTED EARLIER WERE TO BE ITA NOS. 6502 & 6503/M/2014 5 IGNORED AND PENALTY U/S. 271(1)(B) IS NOT ATTRACTE D. WHILE HOLDING SO, THE TRIBUNAL OBSERVED AS UNDER: 2.5. WE ALSO FIND THAT FINALLY THE ORDER WAS PASSE D U/S. 143(3) AND NOT UNDER S. 144 OF THE ACT. THIS MEANS THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMM ITTED EARLIER WERE IGNORED BY THE ASSESSING OFFICER. THE REFORE, IN SUCH CIRCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO COME TO THE CONCLUSION THAT THE DEFAULT WAS WILLFUL . 2.6. IN VIEW OF THE AFORESAID DISCUSSION, IT IS HEL D THAT THE LD. CIT(A) WAS NOT RIGHT IN UPHOLDING THE LEVY OF P ENALTY. THUS, THE APPEAL IS ALLOWED. 8. SIMILAR VIEW HAS BEEN TAKEN BY THE CO-ORDINATE B ENCH IN THE CASE OF JIK INDUSTRIES LTD (SUPRA) AFTER CONSIDERIN G THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. (SUPRA) AND THE DELHI BENCH IN THE CASE OF AKHIL BHARTIYA P RATHMIK SHMSHAK SANGH BHAWAN TRUST (SUPRA) BY OBSERVING AS UNDER: RATHER, IT IS NOTED THAT SUBSEQUENTLY DETAILS AND DOCUMENTS WERE FILED BY THE ASSESSEE TO THE AO ON THE BASIS OF WHICH ASS ESSMENT PROCEEDINGS WERE COMPLETED AND ASSESSMENT ORDER WAS PASSED U/S 143(3) AND NOT U/S 144. THUS, IT SHOWS THAT SUBSEQU ENTLY, COMPLIANCE HAS BEEN MADE BY THE ASSESSEE. UNDER SUCH CIRCUMSTA NCES, IN OUR CONSIDERED OPINION WITHOUT GIVING ADEQUATE TIME AND WITHOUT MAKING OUT A CASE OF 6 JIK INDUSTRIES LTD. SUBSTANTIVE NON -COMPLIANCE BY THE ASSESSEE, IT WAS UNFAIR AND UNJUSTIFIED ON THE PART OF THE AO IN LEVYING THE PENALTY U/S 271(1)(B). IN THE TOTALITY OF THE F ACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT LEVY OF PENALTY WAS NOT J USTIFIED. THE ACTION OF THE AO IS UNSUSTAINABLE IN THE EYES OF LAW, AND THE REFORE, WE DIRECT THE AO TO DELETE THE PENALTY. IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S. 271(1)(B) OF THE ACT. THUS, WE DELETE THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1) (B) OF THE ACT FOR BOTH THE ASSESSMENT YEARS 2010-11 AND 2011-12. ITA NOS. 6502 & 6503/M/2014 6 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST, 2016. SD/- SD/- ( D.KARUNAKARA RA0 ) (C.N. PRASAD ) ' / ACCOUNTANT MEMBER $ %' /JUDICIAL MEMBER MUMBAI; (' DATED 12 TH AUGUST, 2016 . % . ./ RJ , SR. PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ ,%%-. , -.! , / DR, ITAT, MUMBAI 6. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI