SHRI MRIDUL SHAH SISODIA, JAIPUR V. INCOME TAX OFFICER, WARD-7-1, JAIPUR

ITA 996/JPR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4810 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 29-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI JCIT DHK
• Keywords: Capital asset; Reasonable cause
• Section: 142(1); 234B; 148

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. 996/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2008-09 MRIDUL SHAH SISODIA, D-10, ANAND VIHAR, RAILWAY COLONY, JAGATPURA, JAIPUR. CUKE VS. INCOME TAX OFFICER WARD 7(1), JAIPUR. TAN/PAN NO.: AJYPS 7121 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI AMIT KUMAR JAIN (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17/10/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 23/10/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 16/07/2018 OF LD. CIT (A)-3, 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. 2008-09. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS O F APPEAL: 1. THE LEARNED ASSESSING OFFICER HAD ERRED UNDER T HE FACTS AND CIRCUMSTANCES OF THE CASE IN UNDERSTANDING THAT THE ASSESSEE DELIBERATELY AND CONSCIOUSLY TRIED TO MAKE NON COMP LIANCE OF THE NOTICES RECEIVED. BUT IN FACT THE PROCEEDINGS HAVE BEEN DULY ATTENDED BY US TIME TO TIME. EXCEPT FOR THE HEARING ON 13/10/2015 & 3/12/2015 WHERE WE HAVE DULY FILED ADJOURNMENT AS WE COULD NOT GATHER THE BANK STATEMENTS FROM THE BANK DUE TO SOM E TECHNICAL ITA 996/JP/2018_ MRIDUL SHAH SISODIA VS ITO 2 ISSUE AS THEY BELONG TO F.Y. 2007-08 AS REQUIRED BY THE LEARNED AO. HENCE THERE WAS NO WILLFUL ACT ON THE PART OF THE A SSESSEE FOR NOT ATTENDING THE ASSESSMENT PROCEEDING IN PURSUANCE TO THE NOTICE ISSUED. 2. REGARDING THE NOTICE ISSUED AS ON 30.05.2018; WH ICH WAS ADJOURNED ON 13.07.2018, WE WANT TO STATE THAT DUE TO HEAVY W ORK LOAD IN THE MONTH OF JULY FOR INCOME TAX RETURN FILING WE WERE UNABLE TO ATTEND THE CASE. HOWEVER ALL THE EXPLANATIONS HAD ALREADY BEEN GIVEN. THEREFORE PENALTY UNDER SECTION 271 (1) (B) SHOULD NOT BE LEVIED. 3. YOUR APPELLANT RESERVES THE RIGHT TO ADD, ALTER OR AMEND ANY GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING OF APPEAL. 2. THE ASSESSING OFFICER REOPENED THE ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED REGARDING PURCHASE OF CAPITAL ASSET ON 05/7/2007 VIDE NOTICE ISSUED U/S 148 OF THE ACT ON 30/3/2015. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ISSUE D NOTICES U/S 142(1) OF THE ACT AND SOUGHT CERTAIN INFORMATION ABOUT THE TRANSACTIONS, HOWEVER, THE ASSESSING OFFICER WAS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE ON THE ISSUE OF PURCHASE OF CAPITAL ASSET AND FINALLY ASSESSMENT WAS COMPLETED ACCEPTING THE RETURNED INCOME VIDE ORD ER DATED 27/2/2016. SUBSEQUENTLY, THE ASSESSING OFFICER INIT IATED THE PROCEEDINGS U/S 271(1)(B) OF THE ACT FOR NON-COMPLIANCE OF THE NOTICES ISSUED U/S 142(1) OF THE ACT. A SHOW CAUSE U/S 274 READ WITH SEC TION 271(1)(B) OF THE ACT WAS ISSUED ON 01/8/2016. IN RESPONSE, THE AS SESSEE EXPLAINED THAT THE TRANSACTION OF PURCHASE OF PROPERTY DID NO T PERTAIN TO THE ASSESSEE BUT IT WAS THE TRANSACTION OF M/S SATISFACT ION FOODS CORNERS PVT. ITA 996/JP/2018_ MRIDUL SHAH SISODIA VS ITO 3 LTD. THROUGH THE ASSESSEE IN THE CAPACITY OF DIRECT OR. FURTHER AN INFORMATION SOUGHT BY THE ASSESSING OFFICER REGARDI NG THE BANK STATEMENT OF THE ASSESSEE COULD NOT BE FURNISHED BECAUSE OF T HE REASON THAT THE ASSESSEES BANK WAS MERGED WITH THE ANOTHER BANK AND THE INFORMATION SOUGHT BY THE ASSESSING OFFICER WAS NOT READILY AVAI LABLE DESPITE THE BEST EFFORTS OF THE ASSESSEE. THE ASSESSING OFFICER PASSE D BY THE IMPUGNED ORDER U/S 271(1)(B) OF THE ACT AND LEVIED THE PENAL TY OF RS. 30,000/- ON ACCOUNT OF DEFAULT OF NON-COMPLIANCE OF NOTICE ISSU ED U/S 142(1) OF THE ACT. 3. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSI NG OFFICER BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. 4. BEFORE US, THE LD AR OF THE ASSESSEE HAS REITERA TED THE CONTENTION THAT IT WAS BEYOND THE CONTROL OF THE ASSESSEE TO FU RNISH THE REQUISITE INFORMATION DUE TO MERGER OF THE BANK. THE ASSESSEE WAS NOT PROVIDED THE STATEMENT BY THE BANK, THEREFORE, THE ASSESSEE WAS NOT ABLE TO GIVE THE SAME TO THE ASSESSING OFFICER. THE LD. AR HAS RE LIED UPON THE VARIOUS DECISIONS ON THE POINT THAT WHEN NON-COMPLIANCE OF N OTICE U/S 142(1) OF THE ACT IS DUE TO BONAFIDE REASON THEN THE PENALTY U/S 271(1)(B) OF THE ACT CANNOT BE LEVIED AS THE ASSESSEE WAS ABLE TO PRO VE THAT THERE WAS A REASONABLE CAUSE FOR THE FAILURE. ITA 996/JP/2018_ MRIDUL SHAH SISODIA VS ITO 4 5. ON THE OTHER HAND, THE LD DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSING O FFICER HAS GIVEN SPECIFIC INSTANCES OF NON-COMPLIANCE BY THE ASSESSE E OF THE NOTICE ISSUED U/S 142(1) OF THE ACT AND THE ASSESSEE HAS NOT DISP UTED THE NON- COMPLIANCE OF THE STATUTORY NOTICES. FURTHER EVEN I F THE ASSESSEE WAS NOT ABLE TO GATHER THE INFORMATION ASKED BY THE ASSESSI NG OFFICER, THE ASSESSEE WAS SUPPOSED TO APPEAR BEFORE THE ASSESSING OFFICER AND EXPLAIN THE SAME. IN ABSENCE OF COMPLIANCE OF NOTIC E U/S 142(1) OF THE ACT, THE PENALTY LEVIED U/S 271(1)(B) OF THE ACT IS JUSTIFIED. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL A S RELEVANT MATERIAL ON RECORD WE NOTE THAT THE ASSESSING OFFICER HAS REO PENED THE ASSESSMENT TO ASSESS THE INVESTMENT MADE BY THE ASS ESSEE IN PURCHASE OF CAPITAL ASSET ON 05/7/2007 FOR A CONSIDERATION O F RS. 46,61,262/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE RELEVANT INFORMATION AND ISSUED NOTICES U/S 142(1) OF THE ACT. THUS, THE ASSESSING OFFICER PROPOSED TO ASSESS THE INCOME ON ACCOUNT OF UNEXPLA INED INVESTMENT IN THE CAPITAL ASSET. THE ASSESSEE APPEARED BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER ACCEPTED THE FACT THAT THE AS SET IN QUESTION WAS NOT PURCHASED BY THE ASSESSEE BUT IT WAS PURCHASED BY TH E COMPANY NAMELY M/S SATISFACTION FOODS CORNERS PVT. LTD. AND THE AS SESSEE HAS SIGNED THE ITA 996/JP/2018_ MRIDUL SHAH SISODIA VS ITO 5 SALE DEED IN THE CAPACITY OF THE DIRECTOR OF THE SA ID COMPANY. THE RELEVANT PART OF THE ASSESSMENT ORDER IS AS UNDER: SUBSEQUENTLY, NOTICE U/S 142(1), 143(2) ALONGWITH QUERY LETTER WAS ISSUED TO THE ASSESSEE ON 20/08/2015 FIXING THE CASE FOR HEAR ING ON 02/09/2015. IN RESPONSE TO THE ABOVE NOTICE AND ON FURTHER DATES O F HEARING, MISS SHILBI JAIN, SHRI AMIT KUMAR JAIN CA/AR OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TIME AND FURNISHED DOCUMEN T WHICH WERE EXAMINED ON TEXT CHECK BASIS AND THE CASE WAS DISCUSSED WITH HIM. AFTER GOING THROUGH THE PURCHASED DEED, DETAILS AND EXPLANATION FILED BY THE ASSESSEE AND VERIFYING THE AFFAIRS OF THE ASSESSEE THE RETURNED INCOME OF RS. 2,59,490/- IS ACCEPTED, ISSUED PENALTY NOTICE U/S 2 71(1)(B) OF THE INCOME TAX ACT, 1961. DEMAND NOTICE AND CHALLAN ISSUED. INTERE ST U/S 234A, 234B AND 234C OF THE INCOME TAX ACT, 1961 CHARGED ACCORDINGLY. THUS, THE ASSESSING OFFICER WAS SATISFIED DURING THE ASSESSMENT PROCEEDINGS THAT IN FACT SAID CAPITAL ASSET WAS PURC HASED BY THE COMPANY AND NOT BY THE ASSESSEE AND THE ASSESSEE WAS SIGNATO RY OF THE SALE DEED ONLY IN THE CAPACITY OF THE DIRECTOR. THEREFORE, WE F IND THAT THE ASSESSEE HAS APPEARED BEFORE THE ASSESSING OFFICER AND ALSO FURNISHED THE DOCUMENTS AND EXPLAINED THE CASE. THOUGH IN RESPONSE TO THE SOME OF THE NOTICES ISSUED U/S 142(1) OF THE ACT, THE ASSES SEE COULD NOT FURNISH THE RELEVANT INFORMATION, HOWEVER, WHEN THE SAID INFO RMATION WAS NOT EVEN REQUIRED IF BASIC DOCUMENT IN RESPECT OF THE T RANSACTION OF PURCHASE OF THE CAPITAL ASSET WAS TAKEN INTO CONSIDERATION TH EN IN OUR CONSIDERED ITA 996/JP/2018_ MRIDUL SHAH SISODIA VS ITO 6 VIEW, THE EXPLANATION OF THE ASSESSEE THAT HE COULD NOT GATHER THE BANK STATEMENT FROM THE BANK AS THE BANK HAS NOT PROVIDE D THE SAME DESPITE BEST EFFORTS OF THE ASSESSEE WOULD BE REGARDED AS RE ASONABLE AND BONAFIDE EXPLANATION FOR NON-COMPLIANCE OF THE NOTI CE IF ANY. ACCORDINGLY, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DELE TE THE PENALTY LEVIED U/S 271(1)(B) OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/10/2018. 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:- 23 RD OCTOBER, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI MRIDUL SHAH SISODIA, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO WARD 7(1), 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. 996/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR