SHRI AMAR BHARTI, JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, WARD-1-3, JAIPUR

ITA 888/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0551 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 16-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J. C. KULHARI
• Assessee Lawyers: K.L. MOOLCHANDANI
• Keywords: Initiation of penalty proceedings
• Section: 142(1); 13

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 888/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2015-16 SHRI AMAR BHARTI, 21/691, MALVIYA NAGAR, JAIPUR. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, WARD-1(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAPPB 4234 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI K.L. MOOLCHANDANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17/09/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 18/09/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 27/06/2018 OF LD. CIT(A)-I, JAIPUR ARISING FROM THE PENALTY ORDER PASSED U/S 271(1)(B) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) FOR THE A.Y. 2015-16. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS O F APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. AUTHORITIES BELOW HAVE FACTUALLY AND LEGALLY ERRED IN IMPOSING AND CONFIRMING THE PENALTY OF RS. 10,000/- U/S 271(1)(B) OF THE AC T WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPEC TIVE. THUS, THE PENALTY SO IMPOSED IS BAD IN LAW AND DESERVES TO BE DELETED. 2. THE APPELLANT CRAVES TO ADD, AMEND OR WITHDRAW A NY OF THE GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING O F APPEAL. ITA 888/JP/2018_ AMAR BHARTI VS. ACIT 2 2. IN THIS CASE, THE ASSESSMENT WAS FRAMED U/S 143(3 ) OF THE ACT ON 21/12/2017. HOWEVER, THE ASSESSING OFFICER PRIOR TO COMPLETION OF THE ASSESSMENT HAS PASSED AN ORDER DATED 07/12/2017 U/S 271(1)(B) OF THE ACT WHEREBY A PENALTY OF RS. 10,000/- WAS IMPOSED O N ACCOUNT OF FAILURE OF THE ASSESSEE TO COMPLY WITH THE STATUTORY NOTICES ISSUED U/S 142(1) OF THE ACT ON VARIOUS DATES PRIOR TO THE DATE OF HEARI NG ON 28/09/2017. THUS, THE PENALTY IN QUESTION WAS IMPOSED BY THE ASSE SSING OFFICER FOR NON-COMPLIANCE OF NOTICES ISSUED U/S 142(1) OF THE ACT PRIOR TO 28/09/2017. 3. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY IN QUESTION WITHOUT INITIATIO N OF PROCEEDINGS U/S 271(1)(B) OF THE ACT OR WITHOUT ISSUING ANY SHOW CAUS E NOTICE. HE HAS POINTED OUT THAT THE ASSESSING OFFICER HAS MENTIONE D IN THE ASSESSMENT ORDER ONLY AT THE TIME OF PASSING THE ORDER THAT TH E SHOW CAUSE U/S 271(1)(B) OF THE ACT IS SEPARATELY ISSUED FOR NON-C OMPLIANCE OF THE STATUTORY NOTICES AND IN PURSUANT TO THE SAID SHOW C AUSE NOTICE ISSUED ON 21/12/2017, THE ASSESSING OFFICER HAS PASSED AN ANO THER ORDER DATED 12/08/2018 U/S 271(1)(B) OF THE ACT. THUS, THE LD AR HAS SUBMITTED THAT WHEN THE ASSESSING OFFICER HAS PASSED A SEPARATE ORD ER AFTER COMPLETION OF ASSESSMENT AND IMPOSING PENALTY U/S 271(1)(B) OF THE ACT THEN THE ITA 888/JP/2018_ AMAR BHARTI VS. ACIT 3 IMPUGNED ORDER DATED 07/12/2017 IS ILLEGAL AND WITHO UT ANY SHOW CASE NOTICE OR INITIATION OF PENALTY PROCEEDINGS. HE HAS ALSO RAISED VARIOUS CONTENTIONS ON THE POINT THAT NONE OF THE STATUTORY NOTICES ISSUED BY THE ASSESSING OFFICER U/S 142(1) OF THE ACT WERE SERVED ON THE ASSESSEE DUE TO THE REASON THAT THAT ASSESSEE HAD ALREADY SHIFTE D FROM THE ADDRESS WHERE THOSE NOTICES WERE SENT BY THE ASSESSING OFFICE R. THEREFORE, WHEN THE NOTICES WERE NOT SERVED ON THE ASSESSEE, THE QUE STION OF NON- COMPLIANCE DOES NOT ARISE. THE LD AR HAS THUS SUBMIT TED THAT THE IMPUGNED ORDER MAY BE QUASHED AS ILLEGAL AND INVALI D. 4. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY VIDE IMPUGNED ORDER FOR NON-COMPLIANCE OF THE NOTICES ISSUED U/S 142(1) OF THE ACT DATED 21/0 9/2017 FOR THE DATE OF HEARING ON 28/09/2017. THEREFORE, THERE IS NO BAR FO R INITIATION OF PENALTY PROCEEDINGS AND IMPOSING THE PENALTY FOR NON-COMPLI ANCE OF STATUTORY NOTICES EVEN PRIOR TO THE ASSESSMENT ORDER IS PASSE D BY THE ASSESSING OFFICER. HE HAS RELIED UPON THE ORDERS OF THE AUTHO RITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER PASSED THE IMPUGNED ORDER U/S 271(1)(B) OF THE ACT ON 07/12/2017 AS UNDER: PENALTY ORDER UNDER SECTION 271(1)(B) OF THE I T AC T, 1961 ITA 888/JP/2018_ AMAR BHARTI VS. ACIT 4 DURING THE ASSESSMENT PROCEEDING, ON ACCOUNT OF ASS ESSEES FAILURE TO COMPLY WITH THE STATUTORY NOTICE ISSUED U/S 142(1) ON VARIOUS DATES THE HEARING WAS FIXED FOR 28.09.2017. ON THE APPOINTED DATE, NEITHER ANYBODY ATTENDED NOR ANY WRITTEN REPLY WAS FURNISHED. ON TH E SAID DATE ALSO, THERE WAS NO RESPONSE FROM THE ASSESSEES SIDE. THIS GOES TO SHOW THAT THE ASSESSEE HAS NO EXPLANATION TO OFFER IN SUPPORT OF HIS DEFENCE. I AM, THEREFORE, SATISFIED THAT THE ASSESSEE HAS FAILED T O COMPLY WITH THE STATUTORY NOTICES ISSUED WITHOUT ANY REASONABLE COU RSE FOR SUCH FAILURE. I, THEREFORE, IMPOSE A PENALTY OF RS. 10,000/- UPON THE ASSESSEE. THUS, IT IS CLEAR THAT THE IMPUGNED ORDER WAS PASSED BY THE ASSESSING OFFICER PRIOR TO COMPLETION OF THE ASSESSMENT AND F OR NON-COMPLIANCE OF STATUTORY NOTICES ISSUED U/S 142(1) OF THE ACT. HOWE VER, WE FIND THAT THE ASSESSING OFFICER NEITHER IN THE ASSESSMENT ORDER H AS INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(B) OF THE ACT NOR ANY SHOW C AUSE NOTICE WAS ISSUED PRIOR TO THE IMPUGNED ORDER DATED 07/12/2017 WAS PASSED U/S 271(1)(B) OF THE ACT. THE ASSESSING OFFICER, THOUGH, MENTIONED IN THE ORDER THAT THERE ARE 13 NOTICES ISSUED BY THE ASSES SING OFFICER U/S 142(1) AS WELL AS 142(2) OF THE ACT ON VARIOUS DATES AND SO ME OF THE NOTICES WERE ISSUED AFTER 28/09/2017 AS ON 16/10/2017, 02/11 /2017 AND 24/11/2017. THEREFORE, AFTER THE NOTICE DATED 21/09 /2017, THE ASSESSING OFFICER FURTHER ISSUED THREE NOTICES U/S 142(1) AND 142(2) OF THE ACT. AT THE TIME OF PASSING OF ASSESSMENT ORDER DATED 21/12 /2017, THE ASSESSING OFFICER HAS FINALLY STATED AT THE END OF THE ASSESS MENT ORDER THAT THE ITA 888/JP/2018_ AMAR BHARTI VS. ACIT 5 SHOW CAUSE U/S 271(1)(B) OF THE ACT IS SEPARATELY IS SUED FOR NON- COMPLIANCE OF STATUTORY NOTICES. WE FURTHER NOTE TH AT THAT THE ASSESSING OFFICER HAS PASSED ANOTHER ORDER DATED 12/06/2018 U /S 271(1)(B) OF THE ACT FOR NON-COMPLIANCE OF NOTICE ISSUED U/S 142(1) OF THE ACT ON VARIOUS DATES AS MENTIONED IN THE SAID NOTICE AS UNDER: 1. NOTICE U/A 142(1) 21/09/2017 26/09/2017 NOT COMPLIED 2. NOTICE U/A 142(1) 13/02/2017 21/02/2017 NOT COMPLIANCE BUT COPY OF AUDIT REPORT FILE ON 27/02/2017 3. NOTICE U/A 142(1) 16/06/20 17 28/06/2017 NOT COMPLIED 4. NOTICE U/A 142(1) 29/06/2017 06/07/2017 NOT COMPLIED 5. NOTICE U/A 142(1) 07/07/2017 17/07/2017 NOT COMPLIED 6. NOTICE U/A 142(1) 18/07/2017 26/07/2017 NOT COMPLIED 7. NOTICE U/A 142(1) 27/07/2017 10/08/2017 NOT COMPLIED 8. NOTICE U/A 142(1) 04/09/2017 11/09/2017 ON 06/09/2017 PART REPLY RECEIVED 9. NOTICE U/A 142(1) 06/09/2017 19/09/2017 NOT COMPLIED 10. NOTICE U/A 142(1) 21/09/2017 28/09/2017 NOT COMPLIED 11. NOTICE U/A 142(1) 16/10/2017 23/10/2017 NOT COMPLIED 12. S HOW CAUSE NOTICE U/S 142(1) 02/11/2017 08/11/2017 NOT COMPLIED 13. NOTICE U/A 142(1) 24/11/2017 27/11/2017 NOT COMPLIED THUS A SECOND PENALTY ORDER U/S 271(1)(B) OF THE ACT WAS PASSED ON 12/06/2018 ON ACCOUNT OF NON-COMPLIANCE OF THE 13 N OTICES ISSUED U/S 142(1) INCLUDING THE NOTICE U/S 142(1) OF THE ACT D ATED 21/09/2017. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(B) OF THE ACT BY ISSUING NOTICE DATED 21/12/2017. THEREFORE, P RIOR TO NOTICE DATED 21/12/2017, THERE WAS NO SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 271(1)(B) OF THE ACT. FURTHER THE SECON D ORDER PASSED BY THE ITA 888/JP/2018_ AMAR BHARTI VS. ACIT 6 ASSESSING OFFICER U/S 271(1)(B) OF THE ACT DATED 12 /06/2018 WAS AGAINST THE CONSOLIDATED DEFAULT BY THE ASSESSEE FOR NON-CO MPLIANCE OF ALL THE STATUTORY NOTICES INCLUDING THE NOTICE U/S 142(1) D ATED 21/09/2017. HENCE, IT IS EVIDENT FROM THE RECORD THAT THE IMPUG NED ORDER DATED 07/12/2017 WAS PASSED BY THE ASSESSING OFFICER WITHOU T INITIATION OF PENALTY PROCEEDINGS AND WITHOUT ISSUING ANY SHOW CAUS E NOTICE U/S 271(1)(B) OF THE ACT. THE ONLY SHOW CAUSE NOTICE WAS I SSUED BY THE ASSESSING OFFICER WAS DATED 21/12/2017 WHICH WAS SUBS EQUENT TO THE IMPUGNED ORDER PASSED U/S 271(1)(B) OF THE ACT. FUR THER WHEN THE ASSESSING OFFICER HAS AGAIN PASSED A PENALTY ORDER FOR NON-COMPLIANCE OF THE NOTICES INCLUDING THE NOTICE DATED 21/09/2017 T HEN THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER WITHOUT INITIA TION OF PENALTY PROCEEDINGS IS ILLEGAL AND VOID AB-INITIO. ACCORDIN GLY, WE QUASH THE IMPUGNED ORDER DATED 07/12/2017 PASSED U/S 271(1)(B ) OF THE ACT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/09/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18 TH SEPTEMBER, 2018 ITA 888/JP/2018_ AMAR BHARTI VS. ACIT 7 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI AMAR BHARTI, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, WARD-1(3), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 888/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR