SIDDHARTH SIRIGERI, MUMBAI V. ITO 21(3)(2), MUMBAI

ITA 7703/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83707 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Reasonable cause
• Section: 143(3)

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI .., ! , ' , # BEFORE SHRI I.P.BANSAL, JM AND SHRI RAJENDRA, AM ITA NO7703 /MUM/2012 (A.Y. 2009-10) SHRI SIDDHARTH SIRIGERI, C/O.D.C.BOTHRA & CO. CHARTERED ACCOUNTANTS, 297, TARDEO ROAD, WILLIE MANSION NANACHOWK, 1 ST FLOOR, OPP. BANK OF INDIA, MUMBAI 400007 PAN:AYCPS0368P THE ITO 21 (3)(2), R.NO.508, 5 TH FLOOR, C-11, PRATYAKSHA KAR BHAVAN, BKC, MUMBAI 400051 ( $% / // / APPELLANT) ' ' ' ' / VS. ( ()$%/ RESPONDENT) $% * + * + * + * + /APPELLANT BY : SHRI RAJ KUMAR SINGH ()$% * + * + * + * + /RESPONDENT BY : SHRI NEIL PHILIP ' * ,-' / / / / DATE OF HEARING : 18.09.2014 ./0 * ,-' / DATE OF PRONOUNCEMENT : 18.09.2014 1 1 1 1 / / / / O R D E R PER I.P.BANSAL (JM) : THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST ORDER PASSED BY LD. CIT(A)-32, MUMBAI DATED 03/09/2012 FOR ASSES SMENT YEAR 2009-10. GROUNDS OF APPEAL READ AS UNDER: 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO IN LAW THE LD. CIT(APPEALS) HAS ERRED IN CONFIRMING THE PENALTY IMPOSED BY LD. A.O U/S. 271(1)(B) AT RS.10,000/- WITHOUT APPRECIATING THE ENTIRE. 2. THE APPELLANT CRAVES THE LEAVE TO AMEND, ALTER SUBSTITUTE AND OR TO RAISE NEW OR ADDITIONAL GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. PENALTY OF RS.10,000/- HAS BEEN IMPOSED ON ACCO UNT OF FAILURE OF THE ASSESSEE TO ATTEND ASSESSMENT PROCEEDINGS ON 12/7/2 011 AND 25/07/2011. IN RESPONSE TO SHOW CAUSE NOTICE ISSUED BY THE AO FOR LEVY OF PENALTY THE ASSESSEE FILED REPLY DATED 1/8/2011 IN WHICH LD. AR STATED T HAT DUE TO HEAVY PRESSURE OF PREPARATION AND FILING OF INCOME-TAX RETURN FOR AS SESSMENT YEAR 2011-12 IN THE CASE OF NON-CORPORATE ASSESSEES, WHICH WERE DUE TO BE FILED ON OR BEFORE 31/7/2011, THE ASSESSEE COULD NOT COMPLY WITH THE N OTICES AND IT WAS SUBMITTED ITA NO7703 /MUM/2012 (A.Y. 2009-10 ) 2 THAT THE INFORMATION SOUGHT WOULD BE SUBMITTED WITH IN 10 DAYS. HOWEVER, AO HAS REJECTED SUCH CONTENTION OF THE ASSESSEE ON THE GROUND THAT AUTHORIZED REPRESENTATIVES BUSYNESS IN HIS PERSONAL PROFESSI ON AS TAX CONSULTANT DOES NOT GIVE HIM ABSOLUTE RIGHT TO DISOBEY THE STATUTORY NO TICES ISSUED BY THE AO. THE ASSESSEE COULD NOT FILE ADJOURNMENT APPLICATION AND IN ABSENCE OF NON- ATTENDANCE AND MAKING BONAFIDE EFFORTS FOR FILING ADJOURNMENT APPLICATION THE PENALTY WAS LEVIABLE. ACCORDINGLY, OF RS.10,000/- WAS LEVIED. 3. AN APPEAL WAS FILED BEFORE LD. CIT(A) AND BEFORE HIM THE SUBMISSIONS MADE BEFORE AO WERE REITERATED. HOWEVER, LD. CIT(A) HAS ALSO CONFIRMED THE PENALTY. THE ASSESSEE IS AGGRIEVED, HENCE, HAS FILED AFOREME NTIONED GROUNDS OF APPEAL. 4. BEFORE US ALSO SUBMISSIONS MADE BEFORE AO AND LD . CIT(A) WERE REITERATED AND IT WAS SUBMITTED THAT THE ASSESSEE HAS FULLY CO -OPERATED DURING THE COURSE OF ASSESSMENT PROCEEDINGS EXCEPT DEFAULT ON THE AFOREM ENTIONED DATES AND THE ASSESSMENT WAS COMPLETED BY THE AO ON 30/11/2011 B Y ACCEPTING THE RETURNED INCOME AND NO ADDITION AT ALL WAS MADE TO THE RETUR NED INCOME. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY A.O AND LD. CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. IT IS NOT DISPUTED BY THE REVENUE THAT THE LAST DAY OF FILING OF RETURN OF NON-CORPORATE ASSESSEES WAS 31/7/2011. IT WAS THE SUBMISSION OF LD. AR THAT HE WAS BUSY IN FILING THOSE RETURNS, THEREFORE , COULD NOT ATTEND ON THE DATES FOR WHICH THE PENALTY HAS BEEN IMPOSED. IT IS ALSO A FACT THAT ASSESSMENT HAS BEEN COMPLETED AT THE RETURNED INCOME UNDER THE PRO VISIONS OF SECTION 143(3) OF THE ACT AND COPY OF ORDER HAS ALSO BEEN PLACED ON RECORD. THEREFORE, ACCORDING TO THE FACTS IT CAN BE SAID THAT FAILURE OF THE ASSES SEE TO ATTEND ON THE SAID DATES DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS ON ACCOUNT OF REASONABLE AND SUFFICIENT CAUSE WHICH WAS UNINTENTIONAL. IN SUCH FACTS OF THE CASE, THE CASE OF THE ASSESSEE WOULD BE COVERED BY THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA , 83 ITR 26(SC). IT MAY BE MENTIONED HERE THAT THE ASSESSEE HAD PLACED RELIANC E ON THIS DECISION BEFORE LD. CIT(A). ACCORDING TO THE SAID DECISION, THE ORDER IMPOSING PENALTY FOR FAILURE TO ITA NO7703 /MUM/2012 (A.Y. 2009-10 ) 3 CARRY OUT A STATUTORY OBLIGATION IS A RESULT OF QUA SI-CRIMINAL PROCEEDING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CO NDUCT CONTUMACIOUS OR HONEST OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. IT WAS FURTHER HELD THAT PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWF UL TO DO SO AND THE QUESTION THAT WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHOR ITY TO BE EXERCISED JUDICIALLY ON A CONSIDERATION OF ALL RELEVANT CIRCUMSTANCES. IT WA S ALSO HELD THAT EVEN IF MINIMUM PENALTY IS PRESCRIBED, AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNE R PRESCRIBED BY THE STATUTE. IF THE PRINCIPLES OF LAW RELATING TO LEVY OF PENALTY A S LAID DOWN IN THE AFOREMENTIONED DECISION ARE APPLIED TO THE FACTS OF THE PRESENT C ASE THEN IT CAN BE SEEN THAT ASSESSEE HAS NOT ACTED DELIBERATELY IN DEFIANCE OF LAW AND IS ALSO NOT GUILTY OF CONDUCT, CONTUMACIOUS OR DISHONEST AND ASSESSEE ALS O DID NOT ACT IN CONSCIOUS DISREGARD OF ITS OBLIGATION AS THE FAILURE OF THE ASSESSEE WAS ON ACCOUNT OF REASONABLE CAUSE AS THE LD. AR OF THE ASSESSEE WAS BUSY IN FILING THE INCOME TAX RETURNS OF NON-CORPORATE ASSESSEES. THE LEVY OF PE NALTY IS NOT AUTOMATIC AND THE QUESTION THAT WHETHER IT IS A FIT CASE FOR LEVY OF PENALTY HAS TO BE DECIDED BY TAKING INTO ACCOUNT ALL RELEVANT CIRCUMSTANCES AND HAS TO BE DECIDED JUDICIALLY. THEREFORE, KEEPING IN VIEW THE FACTS OF THE CASE, W E ARE OF THE OPINION THAT IT IS NOT A FIT CASE WHERE LEVY OF PENALTY CAN BE HELD TO BE JUSTIFIED. WE DELETE THE PENALTY AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18.09. 2 014. 1 * ./0 2'3 18.09.2014 / * : SD/- SD/- (RAJENDRA) (I.P.BANSAL) ' ' ' ' / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 2' DATED : 18 TH SEPT. 2014. VM. ITA NO7703 /MUM/2012 (A.Y. 2009-10 ) 4 1 * (,; < ;0, 1 * (,; < ;0, 1 * (,; < ;0, 1 * (,; < ;0,/ COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. ()$% / THE RESPONDENT. 3. =() / THE CIT, MUMBAI. 4. = / CIT(A)-13, MUMBAI 5. ;@: (,' , , / DR, ITAT, MUMBAI 6. :A B / GUARD FILE. 1' 1' 1' 1' / BY ORDER, );, (, //TRUE COPY// C CC C/ // /D D D D (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI