Shri Vimal Ranchhodbhai Patel, Surat V. The ACIT, Circle-4, Surat

ITA 75/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9499 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-02-2016
• Assessment Year: 2013-2014
• Appeal Filed On: 11-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Keywords: Search and seizure; Principle of natural justice; Non compliance
• Section: 143(3); 153A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER IT(SS)A NOS. 17 TO 22/AHD/2016 & ITA NO. 75/AHD/2016 ASST. YEAR: 2007-08 TO 2013-14 VIMAL RANCHHODBHAI PATEL, SHIVANJALI BUNGLOW, CHIKUWADI, SOMNATH MAHADEV ROAD, SURAT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 4, AAYAKAR BHAVAN, MAJURAGATE, SURAT APPELLANT RESPONDENT PAN AMFPP6024P APPELLANT BY WRITTEN SUBMISSION RESPONDENT BY SHRI ALBINUS TIRKEY, SR.DR DATE OF HEARING: 24/02/2016 DATE OF PRONOUNCEMENT: 2 4/02/2016 O R D E R PER GEORGE GEORGE K, JUDICIAL MEMBER. THESE APPEALS AT THE INSTANCE OF ASSESSEE ARE DIREC TED AGAINST THE CONSOLIDATED ORDER OF CIT(A)-4, SURAT, DATED 20.11. 2015. THE RELEVANT ASSESSMENT YEARS ARE 2007-08 TO 2013-14. 2. IN ALL THE APPEALS COMMON AND IDENTICAL GROUNDS ARE RAISED, HENCE, A CONSOLIDATED ORDER IS PASSED. THE SOLITARY ISSUE TH AT ARISES FOR MY CONSIDERATION IS WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PENALTY IMPOSED U/S.271(1)(B) OF THE INCOME TAX ACT. IT(SS)A NOS. 17 TO 22/AHD/2016 & ITA NO.75/AHD/2016 ASST. YEARS 2007-08 TO 2013-14 2 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: ASSESSEE IS AN INDIVIDUAL. THERE WAS A SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT IN THE CASE OF ASSESSEE AND HIS FAMILY MEMBERS ON 28.12.2012. CONSEQUENT TO THE SEARCH, ASSESSMENTS WERE COMPLETED U/S.143(3) R.W.S. 153A FOR THE VARIOUS ASSESSMENT Y EARS. THEREAFTER, A.O. IMPOSED PENALTY U/S.271(1)(B) OF THE IT ACT AMOUNTI NG TO RS.10,000/- FOR EACH OF THE ASSESSMENT YEARS CONCERNED FOR ALLEGED NON COMPLIANCE OF NOTICE U/S.142(1) OF THE ACT (NOTICE DATED 13.02.2015 FOR COMPLIANCE BY 18.02.2015). 4. AGGRIEVED BY THE IMPOSITION OF PENALTY U/S.271(1 )(B) OF THE ACT, ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY. THE FIRST APPELLATE AUTHORITY, HOWEVER, CONFIRMED THE LEVY OF PENALTY AND DISMISSED THE APPEALS FILED BY THE ASSESSEE. 5. AGGRIEVED BY THE CONSOLIDATED ORDER OF CIT(A) CO NFIRMING THE LEVY OF PENALTY, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. NONE APPEARED ON BEHALF OF THE ASSESSEE, HOWEVER, A WRITTEN SUBMISSION WAS FILED BY THE C.A. REPRESENTING THE ASSESSEE. THE ASSESSEE HAS ALSO F ILED A PAPER BOOK ENCLOSING THE COPY OF NOTICE ISSUED U/S.142(1) OF T HE ACT AND ASSESSEES LETTER IN COMPLIANCE TO THE NOTICE ISSUED U/S.142(1 ) OF THE ACT. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDERS OF INCOME TA X AUTHORITIES. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. ADMITTEDLY, IN THIS CASE, PENALTY U/S.271(1)(B) OF THE ACT WAS LEVIED BY THE A.O. FOR NON COMPLIANCE OF NOTICE U/S.142(1) OF THE ACT (NOTICE DATED 13.02.2015). ON PERUSAL OF THE NOTICE ISSUED U/S.1 42(1) OF THE ACT (WHICH IS IT(SS)A NOS. 17 TO 22/AHD/2016 & ITA NO.75/AHD/2016 ASST. YEARS 2007-08 TO 2013-14 3 PLACED AT PAGE NO.22 OF THE PAPER BOOK FILED BY THE ASSESSEE), I NOTICE THAT IT CONTAINS 19 PAGES AND IT IS A CONSOLIDATED NOTICE F OR ALL THE ASSESSMENT YEARS, NAMELY, 2007-08 TO 2013-14. THE NOTICE U/S.142(1) OF THE ACT CONTAINS 19 PAGES WITH SEPARATE ANNEXURE A, B, C AND D. THE A. O. IN THE SAID NOTICE HAD CALLED FOR DETAILED SUBMISSION/EXPLANATION WITH EVIDENCES FOR VARIOUS LEGAL ISSUES AND THE SAME HAD TO BE COMPLIED ON OR BEFORE 18.02.2015 I.E. WITHIN FIVE DAYS FROM THE DATE OF ISSUANCE OF NOTIC E U/S.142(1) OF THE ACT. ACCORDING TO ME, THE A.O. HAS ALLOWED VERY LESS TIM E TO THE ASSESSEE TO MAKE COMPLIANCE IN TERMS OF THE LENGTHY QUESTIONNAI RES. IT IS THE CLAIM OF THE ASSESSEE THAT ASSESSEE HAS REQUESTED FOR REASON ABLE AND SUFFICIENT TIME BEFORE THE A.O. HOWEVER, NOTHING IS BORNE OUT OF R ECORD FOR SUCH A CLAIM. FROM THE RECORDS OF THE A.O., IT IS CLEAR THAT ASSE SSEE HAD DULY COMPLIANCE WITH ALL THE TERMS THE QUESTIONNAIRES / QUERIES CON TAINED IN THE NOTICE U/S.142(1) OF THE ACT DATED 13.02.2015 VIDE WRITTEN SUBMISSION FILED ON 06.03.2015. THE ASSESSEE HAVING DULY COMPLIED WITH ALL THE DETAILS CALLED FOR, THE A.O. HAD PASSED ORDER U/S.143(3) OF THE AC T AND NOT U/S.144 OF THE ACT. THE ORDER PASSED U/S.143(3) R.W.S. 153A OF TH E ACT IS WITHOUT ANY ESTIMATION OF INCOME. IT IS WELL ESTABLISHED POSIT ION OF LAW THAT WHEN ASSESSMENT ORDER IS PASSED U/S.143(3) OF THE ACT, C ONSIDERING ALL THE SUBMISSIONS/EXPLANATIONS, THERE IS NO REASON TO LEV YING PENALTY FOR NON COMPLIANCE OF NOTICE U/S.142(1) OF THE ACT. IN THI S CONTEXT, IT RELEVANT TO MENTION THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHMSHAK SANGH BHAWAN TRUST VS. AD IT REPORTED IN (2008) 115 TTJ 419 (DELHI), WHEREIN IT WAS HELD THA T: 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 COMPLIANCES IN THE ASSESSMENT PROCEEDINGS WAS CONSIDERED AS GOOD COMPL IANCE AND THE IT(SS)A NOS. 17 TO 22/AHD/2016 & ITA NO.75/AHD/2016 ASST. YEARS 2007-08 TO 2013-14 4 DEFAULTS COMMITTED EARLIER WERE IGNORED BY THE AO. THEREFORE, IN SUCH CIRCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO C OME THE CONCLUSION THAT THE DEFAULT WAS WILLFUL. 2.6 IN VIEW OF THE AFORESAID DISCUSSION, IT IS HEL D THAT THE LEARNED CIT (A) WAS NOT RIGHT IN UPHOLDING THE LEVY OF PENALTY. THUS, THE APPEAL IS ALLOWED. 6.1 THE ABOVE MENTIONED JUDGMENT OF HONBLE DELHI H IGH COURT WAS FOLLOWED BY THE AHMEDABAD BENCH OF TRIBUNAL IN CASE OF SWARNABEN M. KHANNA VS. DCIT, SURAT (2010) 37 SOT 25 (AHD.). TH E RELEVANT FINDINGS OF THE TRIBUNAL READS AS UNDER: IN ADDITION, ADEQUATE TIME SHOULD BE GIVEN TO THE ASSESSEE FOR MAKING COMPLIANCE. THE NOTICES WERE ISSUED ON 14-8-2007 IN SOME CASES AND COMPLIANCE WERE REQUIRED TO BE MADE BY 24-8-2007. THEREAFTER T HE ASSESSING OFFICER PROCEEDED TO INITIATE THE PENALTY PROCEEDINGS. IN O UR CONSIDERED VIEW, IT IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS NO REASO NABLE OPPORTUNITY IS GIVEN TO THEM FOR MAKING COMPLIANCE OF THE INFORMATION SOUGHT. FO R THE SAKE OF CONVENIENCE, WE REFER TO THE COMPLIANCE SOUGHT BY THE ASSESSING OFF ICER VIDE LETTER DATED 14-8- 2007 CONTAINING JIVE PAGES FROM SHRI KAUSHAL M. KHA NNA AS SIMILAR COMPLIANCE WAS SOUGHT BY HIM FROM OTHERS AS WELL. IF THE RE IS APPARENT IMPOSSIBILITY OF COMPLIANCE OR COMPLIANCE COULD TAKE NATURALLY LO NG TIME, THEN THE ASSESSING OFFICER IS EXPECTED TO GIVE ADEQUATE TIME TO THE AS SESSEES BEFORE HE INFERS THAT THEY ARE TENDING TO NON-COMPLIANCE AND AVOIDING TO FURNISH INFORMATION. THE STATUTORY PROVISION FOR LEVY OF PENALTY IS NOT FOR MERE TECHNICAL NON-COMPLIANCE BUT FOR ACTUAL OR HABITUAL DEFAULTERS. ON THE FACE OF PRESENT FACTS WHERE THE ASSESSING OFFICER HAS HASTILY PROCEEDED TO INITIATE PENALTY PROCEEDINGS IN ALL THE CASES, IT IS DIFFICULT TO INFER THAT THESE ASSESSEE S WERE INTENDING TO MAKE NON- COMPLIANCE, INFORMATION SOUGHT BY THE ASSESSING O FFICER IS VERY DETAILED AND REQUIRES ASSISTANCE FROM PROFESSIONALS LIKE ADVOCAT E OR CHARTERED ACCOUNTANT. AN AFFIDAVIT HAS BEEN FILED FROM SHRI KAUSHAL M. KHANN A BEFORE THE LD. CIT(A)-, I.E., ERSTWHILE CHARTERED ACCOUNTANT WHO WAS HAN DLING HIS TAX MATTERS, HAS LEFT ALL THESE ASSESSES AND THE FAMILY IS IN SEARCH OF N EW COUNSEL FOR MAKING COMPLIANCE MADE BY THE INCOME-TAX DEPARTMENT. IT SH OWS THAT THESE ASSESSEES HAD REALLY INTENDED TO COMPLY WITH THE NOTICES AND, THEREFORE, IT SHOULD NOT BE INFERRED THAT THERE WAS A DEFAULT WHICH COULD INVIT E PENALTY UNDER SECTION 271(1)(B). THE ITAT DELHI BENCH-G IN THE CASE OF AK HIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST (SUPRA) HAS HELD THAT I F ASSESSMENT ORDER IS PASSED UNDER SECTION 143(3), AND NOT UNDER SECTION 144 THE N NON-COMPLIANCE IS DEEMED TO HAVE BEEN WAIVED. IT(SS)A NOS. 17 TO 22/AHD/2016 & ITA NO.75/AHD/2016 ASST. YEARS 2007-08 TO 2013-14 5 6.2 IN VIEW OF THE AFORESAID REASONING AND THE JUDI CIAL PRONOUNCEMENTS, I HOLD THAT PENALTY LEVIED U/S.271(1)(B) OF THE ACT I S NOT WARRANTED IN FACTS AND CIRCUMSTANCES OF THE INSTANT CASE AND I THEREFORE D ELETE THE SAME. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT, THE APPEALS FILED BY ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY, 2016 SD/- (GEORGE GEORGE K) JUDICIAL MEMBER DATED : 24/02/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD