Sri Vikas Projects, Visakhapatnam V. THE ACIT, Visakhapatnam

ITA 90/VIZ/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6574 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• 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: M K SETHI
• Section: 143(3); 142(1); 153A; 132

Judgement Text

ITA NOS.86 TO 91/VIZAG/2016 SRI VIKAS PROJECTS, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.86 TO 91/VIZAG/2016 ( / ASSESSMENT YEARS: 2008-09 TO 2013-14) SRI VIKAS PROJECTS, VISAKHAPATNAM VS. ACIT, CENTRAL CIRCLE - 2, VISAKHAPATNAM [PAN: ABIFS 5781M ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI M.K. SETHI, DR / DATE OF HEARING : 09.01.2017 / DATE OF PRONOUNCEMENT : 12.01.2017 / O R D E R PER BENCH:- THESE ARE SIX APPEALS FILED BY THE ASSESSEE DIRECT ED AGAINST COMMON ORDER PASSED BY THE CIT(A)-3, VISAKHAPATNAM DATED 05.01.2016 FOR THE ASSESSMENT YEARS 2008-09 TO 2013 -14 PARTLY SUSTAINING LEVY OF PENALTY U/S 271(1)(B) R.W.S. 274 OF THE INCOME TAX ITA NOS.86 TO 91/VIZAG/2016 SRI VIKAS PROJECTS, VISAKHAPATNAM 2 ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT'). SINCE , THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THEY ARE CLUBBED, HEARD TOGE THER AND DISPOSED- OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CON VENIENCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THERE WAS A SEARCH & SEIZURE ACTION IN THE CASE OF M/S. GAYATRI CONSTRUCTIONS ON 20.12.2012. THE ASSESSEE SRI VIKAS PROJECTS WAS ALSO SUBJECTED TO S EARCH U/S 132 OF THE ACT. CONSEQUENT TO SEARCH OPERATIONS, THE ASSESSME NT PROCEEDINGS U/S 153A OF THE ACT WAS INITIATED. IN RESPONSE TO NOTI CES U/S 153A OF THE ACT, THE ASSESSEE HAS FILED HIS RETURNS OF INCOME F OR THE ASSESSMENT YEAR 2008-09 TO 2013-14. SUBSEQUENTLY, THE CASES HAVE B EEN SELECTED FOR SCRUTINY AND ACCORDINGLY, NOTICES U/S 142(1) & 143( 2) OF THE ACT WERE ISSUED CALLING FOR CERTAIN INFORMATION IN CONNECTIO N WITH THE ASSESSMENT PROCEEDINGS. THE ASSESSEE NEITHER APPEARED BEFORE THE A.O. NOR FURNISHED ANY INFORMATION AS REQUIRED, THEREFORE, T HE A.O. INITIATED PENALTY PROCEEDINGS U/S 271(1)(B) OF THE ACT, FOR F AILURE TO COMPLY WITH STATUTORY NOTICES ISSUED U/S 142(1) & 143(2) OF THE ACT. THE ASSESSEE, HOWEVER FILED HIS REPLY AND THE ASSESSMENT WAS COMP LETED U/S 143(3) R.W.S. 153A OF THE ACT FOR ALL THE ASSESSMENT YEARS 2008-09 TO 2013-14. 3. IN RESPONSE TO PENALTY NOTICE, THE ASSESSEE FILE D HIS REPLY ON 16.12.2014 EXPRESSING DIFFICULTIES IN GATHERING THE INFORMATION FOR 6 YEARS. THE ASSESSEE FURTHER SUBMITTED THAT NON-ATT ENDANCE FOR HEARING ITA NOS.86 TO 91/VIZAG/2016 SRI VIKAS PROJECTS, VISAKHAPATNAM 3 ON THE DATE FIXED FOR HEARING IS NOT INTENTIONAL, A S IT WAS BUSY IN COLLECTING INFORMATION SOUGHT BY THE A.O. IN CONNEC TION WITH THE ASSESSMENT PROCEEDINGS. THE A.O. HAS SOUGHT VOLUMI NOUS INFORMATION FOR A PERIOD OF 6 YEARS, AS SUCH IT COULD NOT ABLE TO GATHER ALL THE INFORMATION WITHIN A SHORT PERIOD OF 8 DAYS TO 21 D AYS GIVEN IN THE NOTICE. HOWEVER, THE FACT REMAINS THAT IT HAD COMP LIED WITH ALL THE INFORMATION SOUGHT BY THE A.O. AND THE ASSESSING OF FICER HAS COMPLETED ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT AND AC CORDINGLY, LEVY OF PENALTY FOR INITIAL FAILURE TO ATTEND FOR HEARING I S UNJUSTIFIED. 4. THE A.O. AFTER CONSIDERING THE EXPLANATIONS OF T HE ASSESSEE HELD THAT THE ASSESSEE FAILED TO APPEAR ON THE DATE OF H EARING AND ALSO FAILED TO SEEK ADJOURNMENT WITHOUT ANY VALID REASON. THE A.O. FURTHER OBSERVED THAT THOUGH OPPORTUNITIES OF HEARING ACCOR DED TO THE ASSESSEE BY WAY OF REMINDERS, THE ASSESSEE NEITHER APPEARED FOR HEARING NOR FURNISHED DETAILS, THEREFORE, OPINED THAT THE ASSES SEE HAS NOT COMPLIED WITH STATUTORY NOTICES ISSUED U/S 143(2) & 142(1) O F THE ACT AND HENCE, HE IS LIABLE TO PAY PENALTY U/S 271(1)(B) OF THE AC T FOR EACH SUCH FAILURE FOR THE ASSESSMENT YEARS 2008-09 TO ASSESSMENT YEAR 2013-14. ACCORDINGLY, LEVIED PENALTY OF ` 20,000/- EACH FOR ASSESSMENT YEAR 2008-09 TO ASSESSMENT YEAR 2012-13 AND ` 10,000/- FOR A.Y. 2013-14 ITA NOS.86 TO 91/VIZAG/2016 SRI VIKAS PROJECTS, VISAKHAPATNAM 4 U/S 271(1)(B) OF THE ACT, FOR EACH FAILURE TO COMPL Y WITH STATUTORY NOTICES ISSUED U/S 143(2) & 142(1) OF THE ACT. 5. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. THE ASSESSEE FURT HER SUBMITTED THAT THE A.O. WAS NOT CORRECT IN LEVYING PENALTY U/S 271 (1)(B) OF THE ACT, AS HE HAD COOPERATED WITH THE A.O. FOR COMPLETION OF A SSESSMENT, WHICH IS EVIDENT FROM THE FACT THAT THE ASSESSMENT ORDER IS PASSED U/S 143(3) R.W.S. 153A OF THE ACT. THE ASSESSEE FURTHER SUBMI TTED THAT THE A.O. HAS ISSUED ALL THE NOTICES WITH A SHORT PERIOD OF 8 DAYS TO 21 DAYS TO FURNISH HUGE INFORMATION FOR A PERIOD OF 6 YEARS. SINCE, THE INFORMATION CALLED FOR BY THE A.O. IS VOLUMINOUS, HE COULD NOT GATHER ALL THE INFORMATION WITHIN A SPAN OF SHORT PERIOD GIVEN IN THE NOTICE AND HENCE, COULD NOT APPEAR ON THE DATE FIXED FOR HEARING, THE REFORE, REQUESTED TO DELETE PENALTY U/S 271(1)(B) OF THE ACT. IN SUPPOR T OF HIS CONTENTION RELIED UPON THE FOLLOWING JUDGEMENTS: 1) SWARNABEN M. KHANNA & ORS VS. DCIT (2010) 132 TTJ 0 001(UO) AHD TRIB. 2) AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST VS. ADIT (2008) 115 TTJ 0419 AHD TRIB 3) KARNAVATI CIT(A), RAJAHMUNDRY AIR CONDITINERS (P) L TD VS. ITO (2012) 32 CCH AHD. TRIB. 4) POLE STAR SECURITIES LTD. VS. ACIT (2014) 40 CCH 03 74 DEL TRIB. ITA NOS.86 TO 91/VIZAG/2016 SRI VIKAS PROJECTS, VISAKHAPATNAM 5 6. THE CIT(A) AFTER CONSIDERING THE EXPLANATIONS OF FERED BY THE ASSESSEE, HELD THAT A MERE NON-COMPLIANCE OF INITIA L NOTICES WITHOUT A DIFFERENT RECOURSE TAKEN BY THE A.O. DOES NOT WARRA NT LEVY OF PENALTY U/S 271(1)(B) OF THE ACT. THE INTENTION FOR NON-COMPLI ANCE MUST PERSIST AND THAT ALONE CAN GIVE INFERENCE TO THE A.O. FOR LEVY OF PENALTY. IN THE PRESENT CASE, THOUGH THERE WAS AN INITIAL FAILURE O N THE PART OF THE ASSESSEE FOR COMPLIANCE OF NOTICES, THE PROCEEDINGS WERE COMPLETED U/S 143(3) OF THE ACT, AFTER SUPPLYING FULL INFORMATION TO THE SATISFACTION OF THE A.O., THEREFORE, THE NON-COMPLIANCE WILL BECOME TECHNICAL AND NON- SERIOUS IN SO FAR AS ASSESSMENT PROCEEDINGS. HOWEV ER, CONFIRMED PENALTY LEVIED BY THE A.O., BY HOLDING THAT THE A.O . HAS GIVEN REASONABLE PERIOD OF 21 DAYS TO FURNISH INFORMATION , BUT THE ASSESSEE FAILED TO OFFER ANY EXPLANATIONS FOR NOT APPEARING ON THE DATE FIXED FOR HEARING, INSPITE OF GIVING SUFFICIENT TIME AND HENC E, THE A.O. WAS RIGHT IN LEVY OF PENALTY U/S 271(1)(B) OF THE ACT, FOR FAILU RE TO COMPLY WITH STATUTORY NOTICES ISSUED U/S 143(2) & 142(1) OF THE ACT. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 7. AT THE TIME OF HEARING, THE LD. A.R. FOR THE ASS ESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THESE APPEALS IS SQUAREL Y COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT, VISAKHAPATNAM IN THE CASE OF ITA NOS.86 TO 91/VIZAG/2016 SRI VIKAS PROJECTS, VISAKHAPATNAM 6 PILLALA RAMAKRISHNA RAO IN ITA NO.81/VIZAG/2016, WH EREIN THE COORDINATE BENCH OF THIS TRIBUNAL, UNDER SIMILAR SE T OF FACTS HAS HELD THAT THE EXPLANATIONS OFFERED BY THE ASSESSEE THAT IT CO ULD NOT ATTEND AS ON THE DATE OF HEARING BECAUSE OF INSUFFICIENT TIME GI VEN BY THE A.O. TO COLLECT VOLUMINOUS INFORMATION APPEARS TO BE REASON ABLE AND BONAFIDE. THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE DECIDED BY THE COORDINATE BENCH, THEREFORE, THE PEN ALTY LEVIED BY THE A.O. MAY BE DELETED. 8. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORT ING THE ORDER OF CIT(A), SUBMITTED THAT THE A.O. HAS GIVEN SUFFICIEN T TIME FOR THE ASSESSEE TO APPEAR FOR HEARING. THE ASSESSEE NEITH ER APPEARED ON THE DATE FIXED FOR HEARING NOR SOUGHT ANY ADJOURNMENT, THEREFORE, THE A.O. WAS RIGHT IN LEVY OF PENALTY FOR NON-COMPLIANCE WIT H STATUTORY INVOICES ISSUED U/S 143(2) & 142(1) OF THE ACT AND THEREFORE , HIS ORDER SHOULD BE UPHELD. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. LEVIED PENALTY U/S 271(1)(B) OF THE ACT, FOR F AILURE TO COMPLY WITH STATUTORY NOTICES ISSUED U/S 142(1) & 143(2) OF THE ACT. THE A.O. WAS OF THE OPINION THAT ASSESSEE HAS FAILED TO OFFER PR OPER EXPLANATIONS FOR ITA NOS.86 TO 91/VIZAG/2016 SRI VIKAS PROJECTS, VISAKHAPATNAM 7 NON-ATTENDANCE AS ON THE DATE OF HEARING. IT IS TH E CONTENTION OF THE ASSESSEE THAT NON-ATTENDANCE AS ON THE DATE OF HEAR ING IS NOT INTENTIONAL, AS THE A.O. HAS CALLED FOR VOLUMINOUS INFORMATION FOR 6 ASSESSMENT YEARS WITHIN A SHORT PERIOD OF 8 DAYS TO 21 DAYS. THE INFORMATION CALLED FOR BY THE A.O. IS VOLUMINOUS AN D IT COULD NOT GATHER ALL THE INFORMATION WITHIN A SPAN OF SHORT PERIOD A ND ACCORDINGLY, NOT ABLE TO APPEAR BEFORE THE A.O. AS ON THE DATE OF HE ARING. BUT, THE FACT REMAINS THAT HE HAD FURNISHED ALL THE INFORMATION A ND THE A.O. HAS COMPLETED ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT AND ACCORDINGLY, THE A.O. WAS ERRED IN LEVY OF PENALTY FOR INITIAL FAILURE TO COMPLY WITH THE NOTICES. 10. HAVING HEARD BOTH THE SIDES, WE FIND THAT A SIM ILAR ISSUE HAS BEEN CONSIDERED BY THIS COORDINATE BENCH, IN THE CASE OF PILLALA RAMAKRISHNA RAO VS. ACIT (SUPRA), WHEREIN THE COORDINATE BENCH OF THIS TRIBUNAL, UNDER SIMILAR SET OF FACTS HAS HELD THAT THE EXPLAN ATIONS OFFERED BY THE ASSESSEE THAT IT COULD NOT ATTEND AS ON THE DATE OF HEARING BECAUSE OF INSUFFICIENT TIME GIVEN BY THE A.O. TO COLLECT VOLU MINOUS INFORMATION APPEARS TO BE REASONABLE AND BONAFIDE. THE RELEVAN T PORTION OF THE ORDER IS EXTRACTED BELOW: ITA NOS.86 TO 91/VIZAG/2016 SRI VIKAS PROJECTS, VISAKHAPATNAM 8 21. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE A.O. LEVIED PENALTY U/S 271(1)(B) OF THE ACT FOR FAILURE TO COMPLY WITH STATUTORY NOTICES ISSUED U/S 142(1) OF THE ACT. THE A.O. WAS OF THE OPINION THAT THE ASSESSEE HAS FAILED TO OFFER PROPER EXPLANATION FOR NON-ATTENDANCE AS ON THE DATE OF HEARING. IT IS THE CONTENTION OF THE AS SESSEE THAT NON- ATTENDANCE AS ON THE DATE OF HEARING IS NOT INTENTI ONAL, AS THE A.O. HAS CALLED FOR VOLUMINOUS INFORMATION FOR 7 ASSESSMENT YEARS WITHIN A SHORT PERIOD OF 7 TO 15 DAYS. THE INFORMATION CALLED FOR BY THE A.O. IS VOLUMINOUS AND HE COULD NOT GATHER ALL THE INFORMAT ION AND ACCORDINGLY, NOT ABLE TO APPEAR BEFORE THE A.O. AS ON THE DATE O F HEARING. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REAS ON THAT THE ASSESSEE HAS APPEARED ON ALL THE OCCASIONS AND FURNISHED NEC ESSARY INFORMATION FOR COMPLETION OF ASSESSMENT WHICH IS EVIDENT FROM THE FACT THAT THE A.O. HAS COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT. TH OUGH, ASSESSEE INITIALLY NOT APPEARED BEFORE THE A.O. IN ONE OR TW O OCCASIONS, THE REASON GIVEN BY THE ASSESSEE FOR NON-APPEARANCE APPEARS TO BE REASONABLE AND BONAFIDE. THEREFORE, WE ARE OF THE VIEW THAT THE A .O. WAS NOT CORRECT IN LEVYING PENALTY U/S 271(1)(B) OF THE ACT. THOUGH, THE CIT(A) APPRECIATED THE FACTS, FAILED TO CONSIDER THE EXPLANATION OFFER ED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2013-14, IN VIEW OF VOLUMINOUS INFORMATION CALLED FOR BY THE A.O. AND ALSO THE ASSESSMENT BEING A SEARCH ASSESSMENT. NORMALLY, SEARCH ASSESSMENTS ARE DONE FOR 7 YEARS, WHEREIN THE ASSESSEE IS REQUIRED TO FURNISH INFORMATION AT ONE STRETCH F OR ALL THE ASSESSMENT YEARS, FOR WHICH SUFFICIENT TIME IS REQUIRED. IN T HE PRESENT CASE ON HAND, THE A.O. HAS GIVEN 7 TO 15 DAYS TIME. IN OUR OPINIO N, IT IS DIFFICULT TO GATHER ALL THE REQUIRED INFORMATION WITHIN A SHORT PERIOD. THEREFORE, WE ARE OF THE VIEW THAT THE EXPLANATIONS OFFERED BY TH E ASSESSEE THAT HE COULD NOT ATTEND ON THE DATES OF HEARING BECAUSE OF INSUFFICIENT TIME TO COLLECT VOLUMINOUS INFORMATION APPEARS TO BE REASON ABLE AND BONAFIDE. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE PENAL TY LEVIED FOR THE ASSESSMENT YEAR 2013-14. 11. IN THIS VIEW OF THE MATTER AND ALSO FOLLOWING T HE COORDINATE BENCH DECISION, IN THE CASE OF PILLALA RAMAKRISHNA RAO VS . ACIT (SUPRA), WE ARE OF THE VIEW THAT THE REASONS GIVEN BY THE ASSESSEE FOR NON-APPEARANCE FOR HEARING AS ON THE DATE OF HEARING APPEARS TO BE REASONABLE AND BONAFIDE. THE A.O. HAS GIVEN SHORT PERIOD OF 8 DAY S TO 21 DAYS TO FURNISH VARIOUS INFORMATION IN CONNECTION WITH SEAR CH ASSESSMENT. THOUGH, THE ASSESSEE FAILED TO APPEAR ON INITIAL DA YS, IT HAD FURNISHED ALL ITA NOS.86 TO 91/VIZAG/2016 SRI VIKAS PROJECTS, VISAKHAPATNAM 9 THE INFORMATION AND THE A.O. HAS COMPLETED ASSESSME NT U/S 143(3) R.W.S. 153A OF THE ACT. THEREFORE, WE ARE OF THE V IEW THAT THE A.O. WAS ERRED IN LEVYING PENALTY FOR INITIAL FAILURE TO COM PLY WITH STATUTORY NOTICES U/S 143(2) & 142(1) OF THE ACT, DESPITE THE FACT TH AT THE ASSESSEE HAD FULLY COOPERATED FOR COMPLETION OF ASSESSMENT PROCE EDINGS. THEREFORE, WE DIRECT THE A.O. TO DELETE PENALTY LEVIED U/S 271 (1)(B) OF THE ACT, FOR THE ASSESSMENT YEARS 2008-09 TO 2013-14. 12. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12 TH JAN17. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 12.01.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SRI VIKAS PROJECTS, D.NO.10-5-11 /36, FLAT NO.201, SARADA TOWERS, FACOR LAYOUT, RAMNAGAR, VISAKHAPATNAM 2. / THE RESPONDENT THE ACIT, CENTRAL CIRCLE-2, VIS AKHAPATNAM 3. + / THE PRINCIPAL CIT(CENTRAL), VISAKHAPATNAM 4. + ( ) / THE CIT (A)-3, VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM