Mogalla Nagendra Rao, Visakhapatnam V. THE ACIT, Visakhapatnam

ITA 80/VIZ/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6801 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 26-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J P ANAND
• Keywords: Search and seizure
• Section: 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON'BLE JUDICIAL MEMBER ITA NO. 8 0 / VIZ /201 6 (ASST. YEAR : 20 1 3 - 1 4 ) MOGALLA NAGENDRA RAO, D.NO. 50 - 21 - 5, T.P.T. COLONY, SEETHAMMADHARA, VISAKHAPATNAM. VS. A CIT, CENTRAL CIRCLE - 2, VISAKHAPATNAM. PAN NO. AGLPM 0831 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI D.J.P. ANAND - SR. DR DATE OF HEARING : 08 / 0 8 /201 7 . DATE OF PRONOUNCEMENT : 30 / 0 8 /201 7 . O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3 , VISAKHAPATNAM , DATED 21 / 12 /201 5 FOR THE ASSESSMENT YEAR 2013 - 14 . 2. FACTS ARE IN BRIEF THAT THERE WAS A SEARCH AND SEIZURE OPERATION IN THE CASE OF M/S. GAYATRI CONSTRUCTIONS ON 20/12/2012 . THE ASSESSEE WAS ALSO SUBJECTED TO SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT'). THUS, ASSESSMENT PROCEEDINGS UNDER SECTION 153 A WERE INITIATED BY ISSUING NOTICE ON 14/11/2013 FOR THE ASSESSMENT YEARS STARTING FROM 2007 - 08 TO 2013 - 14 . IN RESPONSE TO THE NOTICE UNDER SECTION 153C , THE ASSESSEE 2 ITA NO. 80/VIZ/2016 (MOGALLA NAGENDRA RAO) FILED E - RETURN FOR THE ASSESSMENT YEAR 2013 - 14 ON 15/03/2014. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, A NOTICE UNDER SECTION 142(1) WAS ISSUED ON 14/11/2013 , WHICH WAS DULY SERVED ON THE ASSESSEE ON 23/11/2013 REQUESTING THE ASSESSEE TO SUBMIT INFORMATION ON 06/12/2013 . THE ASSESSING OFFICER HAS ISSUED NOTICE ON 0 9/12/2014 BY CALLING EXPLANATION FROM THE ASSESSEE AS TO WHY PENALTY SHOULD NOT BE INITIATED FOR NON - COMPLIANCE WITH THE NOTICE ISSUED UNDER SECTION 143(1) DATED 14/11/2013. FOR THAT, THE ASSESSEE HAS REPLIED VIDE LETTER DATED 16/12/2014 AS UNDER: - I HAV E ALREADY FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013 - 14 IN RESPONSE TO NOTICE UNDER SECTION 153A DECLARING THE INCOME AGREED, IF ANY, DURING THE COURSE OF SEARCH & SEIZURE OPERATION CONDUCTED AT MY PREMISES THE CORRESPONDING TAXES WERE ALSO P AID AS PER THE INCOME DECL A RED. I FURTHER WISH TO SUBMIT THAT I AM IN THE PROCESS OF GATHERING THE INFORMATION REQUIRED TO BE SUBMITTED FOR THE SCRUTINY PROCEEDINGS. I AM ALWAYS COOPERATING WITH THE DEPARTMENT FOR THE SMOOTH COMPLETION OF THE PROCEEDINGS INITIATED FOR THE ASSESSMENT YEAR 2013 - 14 . I DO NOT HAVE ANY INTENTION TO AVOID THE PROCEEDINGS. AS HUGE INFORMATION IS REQUIRED TO BE SUBMITTED FOR THE PERIOD OF 7 YEARS WE COULD NOT ATTEND THE PROCEEDINGS POSTED FOR THE HEARING ON 27/11/2014 . HENCE, WE REQUEST YOUR HONOUR TO KINGLY CONSIDER THE FACTS OF THE CASE AND DROP THE PROCEEDINGS UNDER SECTION 271(1)(B) OF THE ACT, 1961 AND OBLIGE. THE ASSESSING OFFICER AFTER CONSIDERING THE ABOVE REPL Y FILED BY THE ASSESSEE, HE IS OF THE OPINION THAT IT IS A FIT CASE TO IMPOSE PENALTY. ACCORDINGLY, PENALTY WAS IMPOSED UNDER SECTION 271(1)(B) OF THE ACT FOR FAILURE TO COMPLY WITH THE NOTICE ISSUE UNDER SECTION 14 2(1) OF THE ACT DATED 14/11/2013. 3 ITA NO. 80/VIZ/2016 (MOGALLA NAGENDRA RAO) 3. ON APPEAL, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING THAT ASSESSING OFFICER HAS GIVEN A REASONABLE TIME TO FILE A REPLY, HOWEVER, THE ASSESSEE HAS NOT CHOSEN TO FILE REPLY AND NOT SUBMITTED THE DETAILED AS CALLED FOR . 4 . BEFORE US, IT IS SUBMITTED THAT ASSESSEE HAS FILED A RETURN AS PER NOTICE ISSUE D UNDER SECTION 153C OF THE ACT. THE ASSESSEE IS IN THE PROCESS OF GATHERING INFORMATION AND THE ASSESSEE IS FULLY COOPERATED WITH THE COMPLETION OF ASSESSMENT. THEREFORE, THE ASSESS EE IS NOT ABLE TO APPEAR ON THE DATE OF HEARING AND NOT ABLE TO PRODUCE THE DETAILS AS CALLED FOR. THEREFORE, PENALTY UNDER SECTION 271(1)(B) MAY BE DROPPED. 5 . ON THE OTHER HAND, L EARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS PASSED BY THE AUTH ORITIES BELOW. 6 . I HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 7 . IN THIS CASE, A NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE , CALLING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013 - 14 DATED 14/11/2013 AND THE SAME IS SERVED ON THE ASSESSEE ON 23/11/2013. THE ASSESSEE IS NOT COMPLIED WITH THE NOTICE ISSUED BY THE ASSESSING OFFICER, THEREFORE, ASSESSING OFFICER HAS INITIATED T HE PENALTY PROCEEDINGS UNDER SECTION 271(1)(B) OF THE ACT BY ISSUING NOTICE ON 0 9/12/2014. THE ASSESSEE HAS SUBMITTED THAT HE IS IN THE PROCESS OF GATHERING INFORMATION, THEREFORE, HE IS NOT ABLE TO FILE THE RETURN AND REQUESTED THAT PENALTY PROCEEDINGS I NITIATED UNDER SECTION 271(1)(B) 4 ITA NO. 80/VIZ/2016 (MOGALLA NAGENDRA RAO) MAY BE WITHDRAWN. HOWEVER, THE ASSESSING OFFICER IS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND PENALTY WAS IMPOSED FOR NON - COMPLIANCE OF THE NOTICE ISSUED UNDER SECTION 142(1) DATED 14/11/2013. I FIND T HAT THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE HAS TO COLLECT A HUGE INFORMATION FOR THE PERIOD OF 07 YEARS, THEREFORE, HE COULD NOT ATTEND THE PROCEEDINGS POSTED ON 16/12/2013 AND PRAYED FOR DROPPING THE PENALTY PROCEE D INGS UNDER SECT ION 271(1)(B) OF THE ACT. THE ASSESSING OFFICER SIMPLY REJECTED THE EXPLANATION GIVEN BY THE ASSESSEE AND IMPOSED PENALTY UNDER SECTION 271(1)(B), WHICH IS CONFIRMED BY THE LD. CIT(A). I FIND THAT ASSESSEE HAS GIVEN DETAILED EXPLANATION/REA S ONS FOR NON - APPEARANCE ON THE DATE OF HEARING AND ALSO EXPLAINED THAT HE HAS TO GATHER A LOT OF INFORMATION. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , I AM OF THE VIEW THAT IT IS NOT A FIT CASE TO IMPOSE PENALTY UNDER SECTION 271(1)(B) OF THE ACT. ACCORDI NGLY, I SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 3 0 T H DAY OF AUGUST , 201 7 . S D / - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 3 0 T H AUGUST , 201 7 . VR/ - 5 ITA NO. 80/VIZ/2016 (MOGALLA NAGENDRA RAO) COPY TO: 1. THE ASSESSEE - MOGALLA NAGENDRA RAO, D.NO. 50 - 21 - 5, T.P.T. COLONY, SEETHAMMADHARA, VISAKHAPATNAM. 2. THE REVENUE ACIT, CENTRAL CIRCLE - 2, VISAKHAPATNAM. 3. THE P CIT (CENTRAL), VISAKHAPATNAM. 4. THE CIT(A) - 3, VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SENIOR PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.