Sh. Suresh M. Bajaj, New Delhi V. ITO, New Delhi

ITA 782/DEL/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0095 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 11-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Assessee Lawyers: S C MALHOTRA
• Keywords: Reasonable cause; Assessment record
• Section: 142(1); 144

Judgement Text

1 ITA NO. 782/DEL/14 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI S. V. MEHROTRA, ACCOUNTANT MEMBER I.T.A .NO.-782/DEL/2014 (ASSESSMENT YEAR-2005-06) SURESH M. BAJAJ R-289C, GREATER KAILASH-1 NEW DELHI AADPB7622G (APPELLANT) VS ITO WARD-33(4) NEW DELHI (RESPONDENT) APPELLANT BY SH. S.C. MALHOTRA, CA RESPONDENT BY SH. ROBIN RAWAL, JCIT ORDER PER S. V. MEHROTRA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) XIX, NEW DELHI DATED 31/10/2013 IN APPEAL NO. 249/2013-14 FO R ASSESSMENT YEAR 2005-06. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT WA S COMPLETED U/S 144 AT AN INCOME OF RS. 5,47,470/- AS AGAINST RETURN INCOME O F RS. NIL. THE ASSESSING OFFICER LEVIED PENALTY U/S 271 (1) (B) OF RS. 40,00 0/- OBSERVING AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDING NOTIC E U/S 143(2) WAS ISSUED AND SERVED UPON THE ASSESSES. IN RESPONSE TO WHICH THE ASSESS/THE A.,R OF THE ASSESSES HAS NOT ATTENDED THE OFFICE. A FRESH NOTICE U/S 143(2) AND NOTICE U/S 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED ON 2 2/4/2009 FIXING FOR 4/5/2009 SERVED UPON THE ASSESSEE. NONE ATTENDED O N 4/5/2009. AGAIN A FRESH NOTICE U/S 142(1) WAS ISSUED ON 24/6/2009. N OR ANY REPLY FILED BY THE ASSESSEEE. AGAIN NOTICE U/S 142(1) WAS ISSUED ON 6 /10/2009 FIXING THE CASE OF 14/10/2009 AGAIN NON ATTENDED ON 14/10/2009 OR A NY REPLY FILED BY THE ASSESSEE. FINAL NOTICE U/S 143(2) WAS AGAIN ISSUED ON 20/11/2009 FOR DATE OF HEARING 23.06.2015 DATE OF PRONOUNCEMENT 29.06.2015 2 ITA NO. 782/DEL/14 26/11/2009 AGAIN NONE ATTENDED ON 26/11/2009 OR ANY REPLIED FILED BY THE ASSESSEE. SINCE THE ASSESSE HAS NOT COMPLIED WITH THE STATUTORY NOTICE ISSUED ON DIFFERENT DATES AND FAILED TO ATTEND THE OFFICE ON THE DATES AS PER NOTICE ISSUED FROM TIME TO TIME. IT WAS HELD THAT THE ASS ESSEE HAS COMMITTED THE DEFAULT AS PER PROVISION OF SECTION 271 (1) (B) OF THE I.T. ACT AND PENALTY PROCEEDING WERE INITIATED VIDE NOTICE DATED 18/12/2 009 FOR FIXING THE CASE OF 16/1/2010. 3. LD. CIT(A) AFTER CONSIDERING THE ASSESSEES EXPL ANATION DELETED THE PENALTY WITH REFERENCE TO NON-COMPLIANCE OF NOTICE DATED 6 TH OCTOBER 200. HOWEVER, CONFIRMED THE PENALTY APROPOS THREE OTHER NOTICES WHICH WERE NOT COMPLIED BY THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE FILED BEFOR E ME WRITTEN SUBMISSIONS IN REGARD TO PROCEEDINGS ON THE ISSUE WHICH ARE REPROD UCED HERE UNDER:- SHRI SURESH M. BAJAJ CHART OF PROCEEDINGS DATE OF NOTICE DATE OF HEARING ASSESSMENT ORDER PENALTY ORDER ORDER SHEET REMARKS 22/4/2009 4/5/2009 NON ATTENDED NOTICE ISSUED ON 22/4/2009 FIXING THE HEARING 4/5/2009 NON ATTENDED. ON 22/4/2009ENTRRY HAS BEEN MADE IN THE ORDER SHEET THAT NON ATTENDED WHICH IS THE DATE OF ISSUE OF NOTICE. HOWEVER, NO ENTRY HAS BEEN MADE ON DATE OF HEARING I.E 4/5/2009 THAT NON ATTENDED. THE HEARING WAS ATTENDED AND IT WAS INFORMED THAT THE CASE WILL BE TAKEN UP LATER ON. NO ENTRY IN THE ORDER SHEET WAS MADE FOR DATE OF HEARING I.E. 4/5/2009. CIT(A) HAS NOT ACCEPTED THE ABOVE AS ORDER SHEET DOES NOT CONTAIN ENTRY8. AS THE APPELLANT HAS NOT ATTENDED HEARINGS ON DIFFERENT DATES, HENCE PENALTY IMPOSED IS IN ORDER. THE FACT IS THAT USUALLY HEARINGS ARE NOT TAKEN IN APRIL & MAY. 24/6/2009 7/7/2009 NON ATTENDED NOTICE ISSUED ON 24/6/2009. NO REPLY FILED BY ASSESSEE ON 24/6/2009 ENTRY HAS BEEN MADE IN THE ORDER SHEET THAT NON ATTENDED WHICH IS DATE OF ISSUE OF NOTICE. HOWEVER, NO ENTRY ON DATE OF HEARING I.E. 7/7/2009 HAS BEEN MADE NON-ATTENDED. LETTER DATED 7/7/2009 WAS FILED WITH A REQUEST FOR ADJOURNMENT OF HEARING. LETTER IS IN THE PAPER BOOK NO. MENTION OF THE SAME HAS BEN MADE IN THE ORDER SHEET. CIT(A) HAS HELD THAT AS AO HAS MENTIONED THAT NO 3 ITA NO. 782/DEL/14 REPLY WAS FILED THEREFORE, THE PENALTY IMPOSED IS CONFIRMED. 6/10/2009 14/10/2009 SHRI S. C. MALHOTRA, CA ATTENDED NOTICE ISSUED ON 6/10/2009 FIXING THE CASE ON 14/10/2009 NON ATTENDED. PRESENT SHRI S AC MALHOTRA, CA IN THE ASSESSMENT ORDER SHEET IT IS MENTIONED THAT SHRI S C MALHOTRA , CA ATTENDED WHEREAS IN PENALTY ORDER IT IS WRITTEN NON ATTENDED. 20/11/2 009 26/11/2009 SHOW CAUSE NOTICE REMAINED UN-COMPLIED NOTICE DATED 20/11/2009 FOR 26/11/2009 ISSUED NON ATTENDED. ON 20/11/2009 ENTRY HAS BEEN MADE IN THE ORDER SHEET THAT NON ATTENDED WHICH IS THE DATE OF ISSUE OF NOTICE. HOWEVER, NO ENTRY HAS BEEN MADE ON DATE OF HEARING I.E ;26/11/2009 THAT NON ATTENDED. ON INSPECTION NO SERVICE OF NOTICE WAS FOUND IN ASSESSMENT RECORDS. VIDE LETTER DATED 17/11/2010 REQUEST WAS MADE TO SUPPLY THE SERVICE OF THE NOTICE. CERTIFIED COPY OF THE LETTER HAS BEEN SUPPLIED, IHOWEVER, SERVICE OF THE SAME HAS NOT BEEN SUPPLIED. FURTHER 21-22/11/2009 WERE SATURDAY & SUNDAY AND ONLY 3 DAYS WERE LEFT FOR SERVICE AS WELL AS FOR ATTENDANCE. FURTHER THERE IS NO MENTION OF NON ATTENDANCE IN THE ORDER SHEET. CIT(A) HAS CONFIRMED PENALTY ON THE GROUND THAT SUFFICIENT OPPORTUNITIES WERE GIVEN HENCE PENALTY FOR NON ATTENDANCE IS CONFIRMED. 4. HE FURTHER REFERRED TO THE ORDER-SHEET CONTAINED AT PAGE 5 TO 6 OF PAPER BOOK AND POINTED OUT AS UNDER:- (I) ON THE DATE ON WHICH NOTICE HAS BEEN ISSUED I T IS MENTIONED NON ATTENDED. (II) THERE IS NO ENTRY IN THE ORDER SHEET AS TO THE PROCEEDINGS ON THE DATES FIXED FOR HEARING. (III) THERE IS NO MENTION OF ISSUE OF SHOW CAUSE NO TICE FOR IMPOSING PENALTY U/S 271 (1) (B) OF THE INCOME-TAX ACT, 1961 . (IV) THERE IS NO ENTRY AS TO THE IMPOSITION OF PENA LTY U/S 271 (1) (B) OF THE INCOME-TAX ACT, 1961. 4 ITA NO. 782/DEL/14 5. HE RELIED ON THE DECISION OF DELHI ITAT IN THE C ASE OF DCIT VS. MAYAWATI (2010) 42 SOT 15 DELHI WHEREIN IT HAS BEEN HELD THA T ASSESSING OFFICER WILL RECORD PROPER ENTRIES ABOUT MINUTES OF PROCEEDINGS INCLUDING INVOKING OF ANY JURISDICTION, EXERCISE OF ANY STATUTORY POWER, ISSU ING NOTICE, FIXING DATE OF HEARING, OUTCOME OF DATE OF HEARING AND ATTENDANCE. HE FURT HER SUBMITTED THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271 (1) (B) BECAUSE A O HAS NOT RECORDED THE PROCEEDINGS IN RESPECT OF THE DATE FIXED FOR HEARIN G. 6. LD. DR RELIED ON THE ORDER OF LD. CIT(A) AND SUB MITTED THAT ASSESSING OFFICER HAS RECORDED THE ORDER-SHEET ON THE DATE OF ISSUANCE OF NOTICE. 7. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE RECORD OF THE CASE. I FIND CONSIDERABLE FORCE IN TH E SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE THAT IN THE ORDER-SHEET NOTING THERE I S NO ENTRY IN RESPECT OF THE DATE FOR WHICH THE NOTICE HAD BEEN ISSUED. THE RELEVANT NOT INGS IN THE ORDER SHEET ARE AS UNDER:- 22/4/2009 NONE ATTENDED ISSUE ANOTHER NOTICE. 24/6/2009 NONE ATTENDED ISSUE ANOTHER NOTICE. 6/10/2009 NONE ATTENDED ISSUE FINAL NOTICE. 19/10/2009 PRESENT SHRI S. C. MALHOTRA CA AND SO UGHT ADJ. CASE ADJ TO 28/10/2009 20/11/2009 NONE ATTENDED ISSUE SHOW CAUSE NOTICE. 8. AS REGARDS, THE DEFAULT IN REGARD TO NOTICE DAT ED 22 ND APRIL 2009 FIXING 4 TH MAY 2009 AS THE DATE OF HEARING, LD. COUNSEL HAS S TATED THAT THE HEARING WAS ATTENDED BUT NO ENTRY IN THE ORDER SHEET WAS MADE O N 4 TH MAY 2009. LD. COUNSEL SUBMITS THAT HE PERSONALLY ATTENDED AND WAS INFORME D THAT THE CASES WILL BE TAKEN LATER ON, I FIND THAT THE ASSESSING OFFICER HAS NOT MADE THE RELEVANT ENTRIES ON 4/5/2009 FIXED FOR HEARING. THEREFORE, NO ADVERSE I NFERENCE CAN BE DRAWN AGAINST THE ASSESSEES SUBMISSIONS. 5 ITA NO. 782/DEL/14 9. ON 24 TH JUNE 2009, THE AO HAD ISSUED NOTICE FIXING THE 7 TH JULY 2009 AS THE DATE OF HEARING. HOWEVER, THERE IS NO ORDER SHEET NOTING ON 7/7/2009. IT IS NOT CLEAR AS TO HOW ASSESSING OFFICER RECORDED ON 24 TH JUNE 2009 ITSELF REGARDING NON- ATTENDANCE OF A/AR ON 7 TH JULY. FURTHER, THE ASSESSEE HAS POINTED OUT THAT LETTER DATED 7 TH JULY 2009 WAS FILED WITH THE REQUEST FOR ADJOURNME NT OF HEARING. SINCE, IN THE ORDER-SHEET, THERE IS NO ENTRY ON 7 TH JULY 2009, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEES PLEA OF FILING THE AD JOURNMENT APPLICATION. 10. AS REGARDS, THE NOTICE ISSUED ON 20 TH NOVEMBER 2009 FIXING 26 TH NOVEMBER 2009 AS THE DATE OF HEARING, THE POSITION IS SAME A S REGARD TO ORDER SHEET NOTING AS ON EARLIER DATES. FURTHER, ASSESSEES REPRESENTATI VE HAS POINTED OUT THAT ON INSPECTION NO SERVICE OF NOTICE WAS FOUND IN THE AS SESSMENT RECORD; ONLY CERTIFIED COPY OF THE LETTER HAS BEEN SUPPLIED TO THE ASSESSE E. FROM THE SUBMISSIONS, NOTED ABOVE IT IS EVIDENT THAT NON-COMPLIANCE ON 24 TH NOVEMBER 2009 WASON ACCOUNT OF NON-SERVICE OF NOTICE AND NOT DELIBERATE. 11. IT IS PERTINENT TO NOTE THAT BEFORE LEVYING PENALTY U/S 271 (1) (B), THE ASSESSING OFFICER SHOULD BE SATISFIED THAT FAILURE TO COMPLY WITH THE NOTICE WAS WITHOUT REASONABLE CAUSE. UNLESS THE ASSESSING OFF ICER HAS RECORDED BASIC ENTRIES ON THE DATE FIX FOR HEARING, IT CANNOT BE INFERRED THAT THE ASSESSING OFFICER HAD ACQUIRED THE REQUISITE SATISFACTION AS CONTEMPLATED U/S 271 (1) (B). THE PENALTY IS NOT AUTOMATIC WHICH IS EVIDENT FROM THE TERM MAY USED IN THE SECTION. I, THEREFORE, CANCEL THE PENALTY OF RS. 30,000/- SUSTA INED BY LD. CIT(A). 9. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29 TH OF JUNE 2015. SD/- (S. V. ME HROTRA) ACCOUNTANT MEMBER DATED:- 29 /06/2013 6 ITA NO. 782/DEL/14 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT A SSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 23.06.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 24.06.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS .06.2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK .06.2015 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 7 ITA NO. 782/DEL/14