M/s. Globus Infocom Limited, New Delhi V. DCIT, New Delhi

ITA 738/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7047 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 10-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 738/DEL/2014 AY: 20 10-11 GLOBUS INFOCOM LIMITED, VS DCIT, C-1/2, SAFDARJUNG DEVELOPMENT AREA, CIRCLE-12(1) , NEW DELHI-110016 NEW DELHI. (PAN: AABCG3985C) (APPELLANT) (RESPONDENT) APPELLANT BY : MR. PRATAP GUPTA, CA RESPONDENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING: 13.04.2016 DATE OF PRONOUNCEMENT: 29.06.2016 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE IMPUGNED ORDER DATED 6.12.2013 PASSED BY THE LD. CI T(A)-XV, NEW DELHI, CONFIRMING THE IMPOSITION OF PENALTY OF RS. 10,000/- U/S 271(1)(B) OF THE INCOME TAX ACT, 1961. 2. BRIEF FACTS OF THE CASE ARE AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ISSUED STATUTORY NOTICES UNDER SECTION 143(2) AND 1 42(1) ON VARIOUS DATES INCLUDING ON 12.04.2012 CALLING FOR C OMPLIANCE ON 19.04 2012; ON 23.08.2012 FOR COMPLIANCE ON 05.09.2 012; ON I.T.A. NO. 738/DEL/2014 ASSESSMENT YEAR 2010-11 2 06.09.2012 FOR COMPLIANCE ON 13.09.2012; AND ON 17. 09.2012 CALLING FOR COMPLIANCE ON 25.09.2012. HOWEVER, ON N ONE OF THE ABOVE DATES, THE ASSESSEE REPRESENTED BEFORE THE AO THROUGH AN AUTHORISED REPRESENTATIVE OR FILED ANY LETTER FOR A DJOURNMENT. THE AO THEREAFTER, ISSUED NOTICE DATED 11.10.2012 A SKING THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER SECTION 271(L)(B) SHOULD NOT BE IMPOSED. ON THE SCHEDULED DATE ON 19. 10.2012, THE ASSESSEE PREFERRED NOT TO COMPLY AND, ACCORDING LY, THE AO LEVIED PENALTY OF RS.10,000/- ON ONE INSTANCE OF DE FAULT IN RESPECT OF NOTICE DATED 17.09.2012. 3. THE LD. AR ASSAILING THE IMPOSITION OF PENALTY S UBMITTED THAT THE AO HAD IMPOSED PENALTY IN AN ARBITRARY MANNER A ND SUBMITTED THAT ON VARIOUS DATES OF HEARING, THE AR HAD VISITED THE OFFICE OF THE AO WHO WAS EXTREMELY BUSY AND THEREFO RE, NEITHER ANY HEARINGS WERE CONDUCTED NOR WAS ANY ATTENDANCE RECORDED. THE LD. AR ALSO DREW OUR ATTENTION TO THE FIRST PAR A OF THE ASSESSMENT ORDER DATED 28.03.2013 AND SUBMITTED THA T IN THE SAID PARA, THE AO HIMSELF ADMITS THAT 'SH. PRATAP GUPTA, CA/AR APPEARED FROM TIME TO TIME AND SUBMITTED REQUISITE DETAILS WHICH ARE PLACED ON RECORD'. IN VIEW OF THIS, IT WAS PLEADED THAT THERE WAS NO WISDOM IN THE ASSESSMENT ORDER IN RESPECT OF THE ALLEGED I.T.A. NO. 738/DEL/2014 ASSESSMENT YEAR 2010-11 3 NON-COMPLIANCE. THE LD. AR ALSO DREW OUR ATTENTION TO THE DECISION OF THE CO-ORDINATE BENCH OF THE ITAT IN TH E CASE OF AKHIL BHARATIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS ACIT {2008} 5 DTR (DEL) (TRIB) 429, IN WHICH IT WAS HELD THAT WHERE AN ORDER UNDER SECTION 143(3) HAS BEEN ISSUED AND NOT UNDER SECTION 144 OF THE ACT, THE SAME IMPLIES THAT THE S UBSEQUENT COMPLIANCE IN THE ASSESSMENT PROCEEDINGS IS CONSIDE RED AS GOOD COMPLIANCE AND DEFAULTS EARLIER COMMITTED WERE IGNO RED BY THE AO. 4. THE LD. DR SUBMITTED THAT THE LD. CIT (A) HAS CA REFULLY CONSIDERED THE FACTS OF THE CASE AND THE APPLICABLE CASE LAWS IN THE MATTER. AS PER SECTION 271(L)(B), PENALTY FOR E ACH INSTANCE OF DEFAULT MAY BE LEVIED @RS. 10,000/- IF THE CONCERN ED AUTHORITY, DURING THE COURSE OF PROCEEDINGS, IS SATISFIED THAT THE PERSON HAS FAILED TO COMPLY WITH THE STATUTORY NOTICE OR THE D IRECTION. THE PROVISIONS OF SECTION 271(L)(B) PROVIDE THAT NO PEN ALTY IS TO BE IMPOSED IF THE PERSON PROVES THAT THERE WAS A REASO NABLE CAUSE FOR THE FAILURE TO COMPLY WITH THE STATUTORY NOTICE . IT WAS SUBMITTED THAT ON CAREFUL CONSIDERATION OF THE FACT S OF THE CASE, THE LD. CIT (A) FOUND THAT THE ASSESSEE HAD FAILED TO APPEAR BEFORE THE AO ON AT LEAST FIVE OCCASIONS. IN FACT, THE AO HAD INITIATED THE I.T.A. NO. 738/DEL/2014 ASSESSMENT YEAR 2010-11 4 PENALTY UNDER SECTION 271(L)(B) AND HAD SOUGHT THE REPLY FROM THE ASSESSEE ON 19.10.2012, HOWEVER, ON THAT DATE ALSO, NEITHER THE AR OF THE ASSESSEE APPEARED NOR ANY LETTER IN REPLY TO THE SAID NOTICE WAS FILED. IN RESPECT OF THE OTHER DATES OF HEARING ALSO, NO LETTER SEEKING ADJOURNMENT WAS FILED. THE ASSESSEE CLAIM THAT ITS AR HAD APPEARED BEFORE THE AO BUT COULD NOT RECORD THE ATTENDANCE IS COMPLETELY UNSUBSTANTIATED. THE ALLEG ATION THAT THE AO WAS BUSY WITH THE TIME-BARRING ASSESSMENT COULD BE VALID IN THE FAG END OF THE YEAR, HOWEVER, ALL FIVE DATES ON WHICH DEFAULT WAS MADE WERE FROM APRIL, 2012 TO OCTOBER, 2012, DU RING WHICH GENERALLY THERE IS NO GREAT PRESSURE OF TIME-BARRIN G ASSESSMENTS. UNDER THE CIRCUMSTANCES, HE DID NOT FIND ANY REASON ABLE CAUSE ON THE PART OF THE ASSESSEE OF NOT MAKING COMPLIANC E BEFORE THE AO. THERE IS NO REASONABLE EXPLANATION AS TO WHY TH E ASSESSEE DID NOT FILE EVEN A LETTER FOR ADJOURNMENT IN THE M ATTER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE INSTANT APPEAL IS SQUA RELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF ITAT DELHI IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS ACIT 5 DTR 429 (DELHI TRIBUNAL) WHEREIN THE COORDINATE BEN CH IN PARAS 2.4 AND 2.5 HAS HELD AS UNDER:- I.T.A. NO. 738/DEL/2014 ASSESSMENT YEAR 2010-11 5 2.4 COMING TO THE ISSUE OF RECORDING OF SATISFACT ION, IT MAY BE MENTIONED THAT MERE INITIATION OF PENALTY DOES N OT AMOUNT TO SATISFACTION AS HELD BY HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAM COMMERCIAL ENTERPRISES LTD. (20 01) 167 CTR (DEL) 321 : (2000) 246 ITR 568 (DEL). IN ABSENC E OF RECORDING OF THE SATISFACTION IN THE ASSESSMENT ORD ER, MERE INITIATION OF PENALTY WILL NOT CONFER JURISDICTION ON THE AO TO LEVY THE PENALTY. 2.5 WE ALSO FIND THAT FINALLY THE ORDER WAS PASSED UNDER 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 AO. THEREFORE, IN SUCH CIRCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO C OME TO THE CONCLUSION THAT THE DEFAULT WAS WILLFUL. 6. AS THE FACTS OF THIS CASE ARE IDENTICAL, WE HOLD THAT THE IMPOSITION OF PENALTY U/S 271(1)(B) OF THE ACT WAS PATENTLY WRONG, SPECIALLY IN VIEW OF THE FACT THAT THE IMPUGNED ASS ESSMENT ORDER HAS BEEN PASSED U/S 143(3). WHILE SETTING ASIDE TH E IMPUGNED ORDER, WE DIRECT THE ASSESSING OFFICER TO DELETE TH E PENALTY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2016. SD/- SD/- (PRASHANT MAHARISHI) (SUDHANSHU SRIVAST AVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 29 TH OF JUNE 2016 GS I.T.A. NO. 738/DEL/2014 ASSESSMENT YEAR 2010-11 6 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSTT. REGISTRAR