SHRI J.S. WALIA, Bhopal V. THE DCIT-(CENTRAL)-I, Bhopal

ITA 722/IND/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4321 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 04-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: R N GUPTA
• Keywords: Loose papers; Document seized; Reasonable cause; Documents seized
• Section: 143(3); 142(1); 153A

Judgement Text

J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JM & SHRI O.P. MEENA, AM ITA NOS.717 TO 730/IND/2016 A.YS. 2007-08 TO 2013-14 SHRI J.S. WALIA BHOPAL PAN AAGPW 9630G ::: APPELLANT VS DCIT (CENTRAL)-I, BHOPAL ::: RESPONDENT ITA NOS.731 TO 744/IND/2016 A.YS. 2007-08 TO 2013-14 SMT. NANHI J. WALIA BHOPAL PAN AABPW 2476M ::: APPELLANT VS DCIT (CENTRAL)-I, BHOPAL ::: RESPONDENT ITA NOS.745 TO 751/IND/2016 A.YS. 2007-08 TO 2013-14 M/S KYMORE IRON ORES PVT. LTD BHOPAL PAN AACCK 8423E ::: APPELLANT VS DCIT (CENTRAL)-I, BHOPAL ::: RESPONDENT J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 2 APPELLANT BY SHRI R.N. GUPTA RESPONDENT BY SHRI MOHD. JAVED DATE OF HEARING 3.8.2016 DATE OF PRONOUNCEMENT 3.8.2016 O R D E R PER BENCH ALL THESE APPEALS HAVE BEEN PREFERRED BY THE ABOVE ASSESSEES AGAINST DIFFERENT ORDERS OF THE LEARNED CIT( A)-3, BHOPAL ALL DATED 23.3.2016. 2. THE SHORT FACTS EMERGING FROM THE PENALTY ORDERS PASSED IN THESE CASES ARE THAT IN CASES OF J.S. WALIA AND NANHI J. WALIA, ASSESSING OFFICER LEVIED PENALTIES U/S. 271(1)(B) OF THE ACT ON THE GROUND THAT BOTH THE ASSE SSEES HAVE NOT COMPLIED WITH THE NOTICES ISSUED U/S.142(1) OF THE ACT DATED 26.08.2014 AND 12.11.2014 AND FOR THE SAID REASON, PENALTIES HAD BEEN LEVIED VIDE ORDERS DATED 07.11.2014 & 17.12.2014 FOR ASSESSMENT YEARS 2007-08 TO 2013-14 AND IN THE CASE OF KYMORE IRON ORES PVT LTD. ALSO ON THE SAME GROUNDS PENALTIES HAD BEEN LEVIED VIDE ORD ERS J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 3 DATED 07.11.2014 & 17.12.2014 FOR ASSESSMENT YEARS 2007-08 TO 2013-14. 3. AS PER THE PENALTY ORDERS, SEARCH IN THE CASE OF THESE ASSESSEES TOOK PLACE ON 20.6.2012. AFTER THAT NOTICES WERE ISSUED U/S 153A OF THE ACT FOR THE ASSESSMENT YEARS 2007- 08 TO 2012-13 ON 3.6.2013. THE NOTICES WERE ALSO ISS UED U/S 142(1) OF THE ACT DATED 26.8.2014 AND DATED 12.11.2014 FIXING THE DATE OF HEARING FOR 21.11.2014. IT WAS SPECIFICALLY MENTIONED IN THE NOTICES THAT FAILURE TO COMPLY WITH THE NOTICES WOULD LEAD TO IMPOSITION OF PENALTY U/S 271(1)(B) OF THE ACT FOR RS.10,000/-. HOWEVER, NOBO DY ATTENDED ON THE DATE FIXED FOR HEARING ON 21.11.2014. NEITHER ANY APPLICATION FOR ADJOURNMENT WAS FILED NOR ANY SUBMISSION WAS GIVEN. THEREAFTER, ON 9.12.2014 A LETT ER WAS RECEIVED FROM THE ASSESSEE AND A REQUEST WAS MADE FOR SUPPLY OF LOOSE PAPERS AND THE DOCUMENTS. IT WAS SUBMITTED THAT THE SENIOR ACCOUNTANT, MR. MOTILAL JAIN H AD J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 4 LEFT THE ASSESSEE AFTER THE SEARCH AND THOUGH HE HAD COLLECTED THE COPIES OF DOCUMENTS FROM THE DEPARTMEN T BUT THE SPECIFIC LOOSE PAPERS/DOCUMENTS WERE NOT AVAILABLE WITH THE ASSESSEE. THE ASSESSEE WAS INFORMED ON 6.11.2 013 THAT SHRI MOTILAL JAIN HAS OBTAINED ALL THE DOCUMENTS. HOWEVER, IF THE ASSESSEE REQUIRES LOOSE PAPERS THEN HE CAN OBTAIN THE SAME FROM THE OFFICE ON 15.12.2014. HOWEVE R, ON THIS DATE NEITHER THE ASSESSEE APPEARED NOR ANY REPLY WAS FILED. THEREFORE, THE PENALTY WAS LEVIED BY THE ASSESSING OFFICER. 4. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LEARNED CIT(A) AND THE LEARNED CIT(A) IN THE CASES OF J.S. WALI A AND NANHI J. WALIA CONFIRMED THE PENALTIES LEVIED U/S.271( 1)(B) FOR A.Y. 2007-08 TO 2013-14. HOWEVER, IN THE CASE OF KYMORE IRON ORES PVT LTD, THE CIT(A) DELETED ONLY T HOSE PENALTIES WHICH WERE LEVIED VIDE ORDER DATED 07.11.20 14 FOR ASSESSMENT YEARS 2007-08 TO 2013-14 BUT CONFIRMED TH E J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 5 PENALTIES LEVIED VIDE ORDER DATED 17.12.2014 FOR THE ASSESSMENT YEARS 2007-08 TO 2013-14. THE ASSESSEES A RE NOW IN APPEAL BEFORE US AGAINST THE ORDERS OF THE LEARNE D CIT(A). 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE RE LIED UPON THE SUBMISSIONS WHICH WERE MADE BEFORE THE LEAR NED CIT(A). THE SAME ARE BEING REPRODUCED HEREUNDER :- 1. THE ABOVE APPEALS HAVE BEEN FILED AGAINST THE PENALTY ORDER PASSED U/S.271(1)(B) OF THE I.T. ACT ON 07.11.2014 & 17.12.2014. 2. THE A.O. HAS LEVIED THE PENALTIES TO THE ASSESS EE ON THE GROUND THAT HE HAS NOT COMPLIED WITH THE NOTICES ISSUED U/S.142(1) ON 26.08.2014 AND ON 12.11.2014. THE PENALTY HAS BEEN LEVIED RS. 10000 FOR EACH DEFAULT IN ALL ASSESSMENT YEARS. 3. THE SEQUENCE OF THE EVENTS ARE AS UNDER :- DATE PARTICULARS 03.06.2013 NOTICES ISSUED U/S.153A OF THE I.T. ACT ADDRESS GIV EN IN THE NOTICE AS KYMORE IRON ORES PVT LTD, 188, RIZWAN BAGH, BHOPAL. 26.08.2014 NOTICE U/S.142(1) ISSUED BUT SENT TO WRONG ADDRESS, E - 5/99, ARERA COLONY, BHOPAL. COMPLIANCE DATED 08.09.2014 27.10.2014 SHOW CAUSE NOTICE ISSUED TO COMPLY NOTICE U/S.142(1 ) DATED 26.08.2014 AND TO FILE REPLY BY 30.10.2014. THIS NOTICE WAS AL SO ISSUED ON WRONG ADDRESS. 07.11.2014 PENALTY ORDER PASSED U/S.271(1)(B) AND IN THIS PENA LTY ORDER ALSO THE WRONG ADDRESS WAS MENTIONED AND, THEREFORE, THIS WA S SERVED AT THE COUNSEL ON 12.11.2014 12.11.2014 SECOND NOTICE U/S.142(1) ISSUED AGAIN ON A WRONG AD DRESS DIRECTING TO MAKE COMPLIANCE BY 21.11.2014 IT IS SUBMITTED THAT ALL THE THREE NOTICES SINCE WE RE SENT TO A WRONG ADDRESS DID NOT REACH TO THE ASSESSEE AND SOMEBODY RESIDING AT THAT ADDRESS DELI VERED ALL NOTICES TO ASSESSEE AFTER TWO- THREE MONTHS AND, THEREFORE, THE SAID NOTICES WERE NOT COMPLIED WITH ON THE DATES MENTIONED THEREIN. 28.11.2014 AFTER THE RECEI PT OF NOTICES, THE REPLY WAS FURNISHED ON 28.11.201 4. J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 6 17.12.2014 PENALTY ORDER PASSED U/S.271(1)(B) AND IN THIS PENA LTY ORDER AS THE CORRECT ADDRESS WAS MENTIONED THEREFORE, THIS WAS SERVED UP ON THE ASSESSEE ON 20.12.2014 23.03.2015 ASSESSMENT MADE U/S.153A R.W.S.143(3) 4. THE ASSESSEE SUBMITS THAT AS THE NOTICES HAS A LWAYS BEEN SENT AT THE WRONG ADDRESS WHICH HAD NEVER BEEN ADDRESS OF THE ASSESSEE AND, THEREFO RE, THE ASSESSEE COULD NOT GET THE NOTICES IN TIME AS EXPLAINED ABOVE AND DUE TO THIS REASON, THE SUBMISSION IN COMPLIANCE TO THE NOTICES WAS FILED BELATEDLY ON 28.11.2014 AND, THEREFORE, THE A.O. IS NOT JUSTIFIED IN LEVYING THE PENALTY U/S.271(1)(B) OF THE I.T. ACT. 5. IT MAY BE SUBMITTED THAT AS THE ASSESSEE MADE THE COMPLIANCE OF NOTICES ISSUED TO HIM U/S.142(1) FROM TIME TO TIME, THOUGH BELATEDLY AND, THEREFORE, THE LEARNED A.O. MADE THE ASSESSMENT OF THE ASSESSEE U/S.143(3) R.W.S. 153A. IN THE FOLLOWING CASE, IT HAS BEEN HELD THAT ASSESSMENT HAVING MADE U/S.143(3) MEANS THAT SUBSEQ UENT COMPLIANCE IN ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPLIANCE AND T HE DEFAULT COMMITTED EARLIER WERE IGNORED BY THE A.O. HENCE PENALTY U/S.271(1)(B) COULD NOT B E LEVIED (I) SHANKERLAL SONI, INDORE VS. ACIT 13 ITJ 96 (IND) (II) AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ACIT 115 TTJ 419 (DEL). (III) PARMESHWARI TEXTILES VS. ITO 146 TAXMAN 38 (JD). (IV) SWARNABEN M. KHANNA VS,. DCIT 37 SOT 25 (AHD) 6. IN VIEW OF THE ABOVE, THE JUSTICE DEMANDS THA T THE ASSESSEE IS NOT LIABLE FOR THE PENALTY U/S.271(1)(B) OF THE ACT FOR ALL THE YEARS FOR A.Y. 2007-08 TO 2013-14 LEVIED BY ORDER DATED 07.11.2014 & 17.12.2014. 6. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE SIDES. WE FIND FROM THE ASSESSMENT ORDERS IN THIS GROUP OF APPEALS THAT ASSESSMENTS WERE MADE FOR SEVERAL ASSESSMENT YEARS U/S.153A OF THE ACT. THE ASSESSING OFFICER IN ALL TH ESE CASES HAS PASSED THE ORDERS U/S. 143(3)/153A OF THE A CT. J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 7 IN THE ASSESSMENT ORDER OF J.S. WALIA, IN PARA 2 THE ASSESSING OFFICER HAS MENTIONED THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED BY TIME TO TIME AND FURNISHED WRITTEN SUBMISSIONS WITH SUPPORTING DOCUM ENTS WHICH WERE PERUSED AND PLACED ON THE RECORD. SEIZED BOOKS OF ACCOUNTS, DOCUMENTS AND MATERIAL WERE DULY CONFR ONTED TO THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEED INGS. REGULAR BOOKS OF ACCOUNTS WERE PRODUCED AND CHECKED WITH THE SEIZED DOCUMENTS. THIS SHOWS THAT THE ASSESSEE HAS MADE FULL COMPLIANCE OF THE NOTICES ISSUED U/S. 142(1 ) THOUGH WITH SOME DELAY BUT THIS IS NOT THE CASE OF N ON- COMPLIANCE OF NOTICES. THE ITAT INDORE BENCH IN THE CASE OF SHANKERLAL SONI VS. ACIT 13 ITJ 96 (IND-TRIB) HELD THAT THE ASSESSEE APPEARED IN THE ASSESSMENT PROCEEDINGS TI ME TO TIME, THE ASSESSMENT ORDERS WERE PASSED U/S. 143(3 ) - THESE FACTS SHOW THAT SUBSEQUENT COMPLIANCE WAS TREATED AS GOOD COMPLIANCE AND DEFAULTS COMMITTED EARLIER WERE J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 8 IGNORED BY THE ASSESSING OFFICER AND, HENCE PENALTY CANNOT, THEREFORE, BE LEVIED. HON'BLE DELHI HIGH COU RT IN THE CASE OF CIT VS. RAM COMMERCIAL ENTERPRISES LTD.; 2 46 ITR 568 HAS HELD A BARE READING OF THE PROVISIONS OF SECTION 271 AND THE LAW LAID DOWN BY THE SUPREME COURT MAKES IT CLEAR THAT, IT IS THE ASSESSING AUTHORITY WHO HAS T O FORM HIS OWN OPINION AND RECORD HIS SATISFACTION BEFORE INITIATING THE PENALTY PROCEEDINGS. MERELY BECAUSE THE PENALTY PROCEEDINGS HAVE BEEN INITIATED, IT CANNOT BE ASSUMED THAT SUCH A SATISFACTION WAS ARRIVED AT. RELYING UPON THE ABOVE DECISION OF THE HON'BLE DELHI HIGH COURT, THE ITAT, DELHI BENCH OF THE TRIBUNAL IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ITO (2005) 115 TTJ 419 HAS HELD THAT IN THE ABSENCE OF RECORDING SATISFACTION, MERE INITIATION OF PENAL TY WILL NOT CONFER JURISDICTION ON THE ASSESSING OFFICER TO LEV Y THE PENALTY . IT WAS FURTHER HELD THAT ASSESSMENT HAVING MADE U/S 143(3) MEANS THAT SUBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 9 COMPLIANCE AND DEFAULTS COMMITTED EARLIER WERE CONDONED HENCE PENALTY CANNOT BE LEVIED U/S. 271(1)(B). ITAT JODHPUR BENCH IN THE CASE OF PARMENSHWARI TEXTILE VS. ITO (2005) 146 TAXMAN 38 WAS ALSO OF THE VIEW THAT SINCE ASSESSMENT MADE U/S. 143 (3), LEVY OF PENALTY U/ S. 271(1)(B) IS NOT JUSTIFIED. WE HAVE GONE THROUGH THE ORDERS OF THE LEARNED CIT(A) AND FIND THAT THE LEARNED CIT(A) HAS HELD THAT THOUGH THE NOTICE U/S 142 WAS NOT RECEIVED BY THE ASSESSEE BUT HE HAS PARTICIPATED IN THE PROCEEDINGS . THEREFORE, THE ASSESSEE HAS REASONABLE CAUSE FOR NON- COMPLIANCE AND AS SUCH THE PENALTY CANNOT BE LEVIED. MOREOVER, THE PENALTY HAS BEEN LEVIED WITHOUT ISSUING SHOW CAUSE NOTICE I.E. WITHOUT GIVING SPECIFIC OPPO RTUNITY AS CONTEMPLATED U/S 274 OF THE ACT. 8. CONSIDERING THE ABOVE FACTS AND THE CIRCUMSTANCES O F THE CASE, WE ARE OF THE VIEW THAT THE PENALTIES SUSTAINE D BY THE CIT(A) IN THE CASES OF THESE ASSESSEES ARE NOT JUS TIFIED, J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 10 HENCE ALL THE PENALTIES LEVIED U/S. 271(1)(B) OF THE ACT FOR ALL ASSESSMENT YEARS IN ALL THE THREE CASES ARE DELETED. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED. PRONOUNCED IN OPEN COURT ON 3 RD AUGUST, 2016 SD/- SD/- (O.P. MEENA) (D.T. G ARASIA) ACCOUNTANTMEMBER JUDICIAL MEMB ER 16 TH AUGUST, 2016 DN/- J.S.WALIA,NANHI J.WALIA & KYMORE IRON ITA NOS. 717 TO 729/IND/2016 & OTHERS 11