JAYWANT SUKUR VAITHY, MUMBAI V. ITO WARD 2 (1), THANE

ITA 7549/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1756 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 09-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Set aside
• Section: 273B; 142(1); 264; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F , MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER ITA NO. 7549 /MUM/2019 ASSESSMENT Y EAR: 2009 - 10 JAYWANT SUKUR VAITHY, A - 102, INDER DARSHAN CHSL, NE XT TO JAIN TEMPLE, JAMBLI GULLY, BORIVALI (W), MUMBAI - 92 PAN: AABPV4157A VS. INCOME TAX OFFICER, WARD 2 (1), ROOM NO. 29, A - WING, 6 TH FLOOR, ASHAR I.T. PARK, R. NO. 16 - Z, WAGLE INDUSTRIAL ESTATE, THANE - 400604 (APPELLANT) (RESPONDENT) ASSESS EE BY : NONE REVENUE BY : MS. USHA GAIKWAD ( D R ) DATE OF HEARING: 17 /05 /20 21 DATE OF PRONOUNCEMENT: 04 / 06 /202 1 O R D E R PER SAKTIJIT DEY , JM IN THIS APPEAL, THE ASSESSEE HAS ASSAILED ORDER DATED 02 .11.2018 OF L EARNED COMMISS IONER OF INCOME TAX (APPEALS) 1 , THANE CONFIRMING THE PENALTY IMPOSED OF RS. 40,000/ - U/S 271(1) (B ) OF THE INCOME TAX ACT , 1961 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NONE APPEARED ON B EHAL F OF THE ASSESSEE. CONSIDERING THE NATURE OF DISPUTE, WE PROCEED TO DISPOSE OF THE APPEAL EX - PARTE QUA TH E ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSING THE MATERIALS ON RECORD. 2 ITA NO. 7549 / MUM/2019 ASSESSMENT YEAR: 2009 - 1 0 3 . WE HAVE HEARD THE LEARNED DEPARTMENTAL REPR ESEN TATIVE AND ANALYSED THE FACTS ON RECORD. AS COULD BE SEEN , THE ASSESSEE IS AN INDIVIDUAL AND IS A DEALER IN LPG GAS CYLINDER THROUGH HIS PROPRIETARY CONCERN M/S TIRUPATI GAS SERVICES HAVING HIS OFFICE AT B - 2, VASUNDHARA BUILDING, BHAYANDER. FOR THE ASS ESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 3,24,130/ - . ASSESSMENT IN CASE OF THE ASSESS EE WAS ORIGINALLY COMPLETED UNDER SECTION 144 OF THE ACT VIDE ORDER DATED 20.12.2011 . W HILE COMPLETING THE ASS ESSMENT AS AFORESAID , THE ASSESSING OFFICER (AO) ALLEGED THA T THE ASSESSEE DID NOT COMPLY WITH THE NOTICE ISSUED UNDER SECTION 142(1) AND 143 (2) OF THE ACT. THEREFORE, HE INITIATED PROCEEDI NG FOR IMPOSITION OF PENALTY UNDER SECTION 271(1) (B) OF THE ACT AND ULTIMATELY PASSED AN ORDER ON 27.06.2012 IMPO SING PENALTY OF RS. 40,000/ - UNDER THE SAID PROVISION. AGAINST THE PENALTY ORDER SO PASSED, THE ASSESSEE PREFERRED APPEAL BEFORE LEARNED COMMISSIONER (APPEALS). DURING THE PENDENCY OF THE SAID APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE REVISION APPLICATION FILED BY THE ASSESSEE UNDER SECTION 264 OF THE ACT CHALLENGING THE ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT WAS TAKEN UP FOR HEARING BY THE LEARNED COMMISSIONER OF INCOME TAX (CIT). B EING SAT ISFIED WITH THE PLEADING OF THE ASSESSEE THAT NON - COMPLIANCE IN COURSE OF ASSESSMENT PROCEEDINGS WAS DUE TO ILLNESS AND FURTHER , NOTICING THAT AS PER THE CONFIRMATION RECEIVED FROM M/S BHAGINI NIVEDITA SAHKARI BANK LTD. TA LEGAON, SET ASIDE THE ASSESSMENT O RDER PASSED UNDER SECTION 144 OF THE ACT WITH A DIRECTION TO THE AO TO PASS A FRESH ASSESSMENT ORDER AFTER MAKING PROPER ENQUIRIES AND PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. IN PURSUANCE TO THE AFORESAID DIRECTIONS OF LEARNED CIT, T HE AO INITIATED ASSESSMENT PROCEEDINGS AFRESH AND ULTIMA TELY PASSED ASSESSMENT ORDER UNDER SECTION 143 (3) OF THE ACT ON 13.12.2013 ACCEPTING ASSESSEES CLAIM THAT HE DID NOT HAVE ANY ACCOUNT WITH THE CONCERNED BANKS AS REFERRED TO IN THE ORIGINAL ASSESSMEN T ORDER. THEREFORE, THE AO COMPLETED THE ASSESSMENT MORE OR LESS ACCEPTING THE INCOME RETURN E D BY THE ASSESSEE , EXCEPT , FOR A SMALL DISALLOWANCE 3 ITA NO. 7549 / MUM/2019 ASSESSMENT YEAR: 2009 - 1 0 OF EXPENDITURE ON PURELY AD - HOC BASIS. THUS, FROM THE AFORESAID FACTS, IT IS VERY MUCH CLEAR THAT N ON - COMPLIANC E BY THE ASSESSEE WITH VARIOUS STATU TORY NOTICES ISSUED BY THE AO I N COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS WAS NOT DELIBERATE, BUT DUE TO REASONABLE CAUSE. APPRECIATING DIFFICULTIES FACED BY THE ASSESSEE IN COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, LE ARNED CIT , THEREFORE , HAS SET ASIDE THE ASSESSMENT ORDER PASSED UNDER SECTION 144 OF T HE ACT. THAT BEING THE CASE, NON - COMPLIANCE WITH THE STATUTORY NOTICES ISSUED UNDER SECTION 142(1) AND 143 (2) OF THE ACT IN COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS CONS TITUTE S REASONABLE CAUSE UNDER SECTION 273B OF THE ACT. THER EFORE, IMPOSITION OF PENALTY UNDER SECTION 271(1) (B) OF THE ACT IS UNSUSTAINABLE. 5. PERTIN ENTLY, THE IMPUGNED ORDER OF LEARNED COMMISSIONER (APPEALS) CONFIRMING THE PENALTY IMPOSED UNDER SEC T ION 271(1) (B) OF THE ACT WAS PASSED ON 02.11.2018. UNDOUBTE DLY, THE PENALTY PROCEEDINGS UNDER SECTION 271(1) (B) OF THE ACT WAS INITIATED FOR NON - COMPLIANCE WITH THE STATUTORY NOTICES ISSUED IN COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. IT IS A MATT ER OF RECOR D THAT THE ORIG INAL ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT , IN THE MEANWHI LE , HAS BEEN SET ASIDE BY THE LEARNED CIT TO AO WITH A DIRECTION TO PASS A FRESH ASSESSMENT ORDER. THUS, IT IS A FACT ON RECORD THAT BY THE TIME LEARNED COMMISSIONER (A PPEALS) PASSED THE IMPUGNED ORDER CO NFIRMING THE PENALTY IMPOSED UNDER SECTION 271(1) (B) OF THE ACT, THE ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT FORMING TH E BASIS OF THE PENALTY ORDER HAD LOST ITS EXISTENCE. THEREFO RE, THE PENALTY ORDER PASSED UNDER SECTION 271(1) (B) OF THE ACT CANNOT SURVIVE. OF COURSE, IT MAY BE A FACT THAT LEARNED COMMISSIONER (APPEALS) HAS PASSED THE IMPUGNED ORDER BEING O BLIVIOUS OF THE ORDER PASSED UNDER SECTION 264 OF THE ACT BY LEARNED CIT . HOWEVER, THIS IS OF LITTLE CO NSEQUENCE , AS , THE FACT OF THE MATTER IS , IN PU RSUANCE TO THE DIRECTIONS OF LEARNED CIT THE AO HAS PASSED THE FRESH ASSESSMENT ORDER UNDER SECTION 143 (3) OF THE ACT , MEANING THEREBY , THE A SSESSEE HAS NOT ONLY COMPLIED WITH THE NOTICE S ISSUED UNDER SECTION 142(1) AND 143 (2) OF THE ACT BUT HAS ALSO PARTICIPATED IN THE ASSESSMENT PROCEEDINGS. IN VIEW OF THE AFORESAID, WE HAVE 4 ITA NO. 7549 / MUM/2019 ASSESSMENT YEAR: 2009 - 1 0 NO HESITATION IN DELETING THE PENALTY IMPOSED UNDER SECTION 271(1) (B) OF THE ACT. GROUNDS ARE ALLOWED. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH JUNE , 2021 . SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) ACCOUNTANT MEMBER ( SAKTIJIT DEY ) JUDICIAL MEMBER MUMBAI ; DATED: 04 / 06 /202 1 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT( A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI