Shri Tarachand S.Kasat,HUF, Ahmedabad V. The Dy.CIT.,Cent.Circle-1(3), Ahmedabad

ITSSA 196/AHD/2011

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8024 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-10-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 25-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA; DR JAYANT JHAVERI
• Assessee Lawyers: G C PIPARA
• Keywords: Unexplained cash credit; Principle of natural justice; Period of limitation; Reasonable cause; Time period of passing order
• Section: 143(3); 142(1); 153A; 132; 144

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE S/SHRI G.D. AGRAWAL, VP AND D.K.TYAGI, JM 1. TARACHAND S. KASAT HUF, 126, SUNRISE PARK, DRIVE-IN- ROAD, AHMEDABAD. VS. DY. CIT, CENTRAL CIRCLE 1(3), AHMEDABAD. (APPELLANT) .. (RESPONDENT) 2. DINESH TARACHAND KASAT HUF, 126, SUNRISE PARK, DRIVE-IN-ROAD, AHMEDABAD. VS. DY. CIT, CENTRAL CIRCLE 1(3), AHMEDABAD. (APPELLANT) .. (RESPONDENT) IT(SS)A NO. ASST. YEAR 1.196/AHD/2011 2001-02 2.197/AHD/2011 2002-03 3.198/AHD/2011 2003-04 4. 199/AHD/2011 2004-05 5.200/AHD/2011 2005-06 6.201/AHD/2011 2006-07 7.202/AHD/2011 2007-08 8.228/AHD/2011 2004-05 IT(SS)A NO. ASST. YEAR 1.203/AHD/2011 2001-02 2.204/AHD/2011 2002-03 3.205/AHD/2011 2003-04 4. 206/AHD/2011 2004-05 5.207/AHD/2011 2005-06 6.208/AHD/2011 2006-07 7.209/AHD/2011 2007-08 IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 2 1. RAJESH TARACHAND KASAT HUF, 126, SUNRISE PARK, DRIVE-IN-ROAD, AHMEDABAD. VS. DY. CIT, CENTRAL CIRCLE 1(3), AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI G. C. PIPARA, AR RESPONDENT BY:- SHRI S. K. GUPTA, CIT,DR & DR.JAYANT JHAVERI, SR.DR DATE OF HEARING : 7/10/2011 DATE OF PRONOUNCEMENT :31.10.2011. O R D E R PER BENCH OUT OF THESE 21 APPEALS FILED BY THREE ASSESSEES O F THE SAME GROUP FOR ASST. YEARS 2001-02 TO 2007-08 19 APPEALS RELAT ING TO PENALTY PROCEEDINGS U/S 271(1)(B) OF THE ACT ARE AGAINST SE PARATE ORDERS OF LD. CIT(A) DATED 28/12/2010 AND 2 APPEALS I.E. IT(SS) N O.226/AHD/2011 AND ITA NO.228/AHD/2011 ARE AGAINST TWO SEPARATE ORDERS DATED 13.01.2011. SINCE THE ASSESSEES ARE OF THE SAME GROUP AND THE I SSUE RAISED IN THESE APPEALS ARE COMMON, THESE WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE :- IT(SS)A NO. ASST. YEAR 1.210/AHD/2011 2003-04 2.211/AHD/2011 2004-05 3.212/AHD/2011 2005-06 4. 213/AHD/2011 2006-07 5.214/AHD/2011 2007-08 6.226/AHD/2011 2004-05 IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 3 2. FIRST WE WILL TAKE UP ITA NO.226 & 228/AHD/2011 FOR ASST. YEAR 2004-05. COMMON GROUNDS RAISED IN THESE APPEALS ARE AS UNDER :- ITA NO.226/AHD/2011 ASST. YEAR 2004-05 THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPE AL :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPH OLDING ACTION OF AO TO PROCEED U/S 144 WITHOUT GRANTING ADEQUATE OPPORTUNITIES FOR FURNISHING REQUIRED DETAILS. IN V IEW OF THE FACTS OF THE CASE, THE IMPUGNED ORDER REQUIRES TO BE QUAS HED AS BAD IN LAW AND VOID AB INITIO ON THIS GROUND ITSELF, THE S AME BEING PASSED IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUS TAINING ADDITION OF RS.25,000/- OUT OF TOTAL ADDITION OF RS .50,000/- MADE BY THE AO ON ACCOUNT OF ESTIMATION OF INCOME FROM B USINESS MERELY ON SURMISES AND CONJECTURES AND WITHOUT PROP ER APPRECIATION OF THE FACTS OF THE CASE. IN VIEW OF T HE FACTS OF THE CASE, THE ENTIRE ADDITION OF RS.50,000/- NEEDS TO B E DELETED. ITA NO.228/AHD/2011 ASST. YEAR 2004-05 THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPE AL :- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPH OLDING ACTION OF AO TO PROCEED U/S 144 WITHOUT GRANTING AD EQUATE OPPORTUNITIES FOR FURNISHING REQUIRED DETAILS. IN V IEW OF THE FACTS OF THE CASE, THE IMPUGNED ORDER REQUIRES TO B E QUASHED AS BAD IN LAW AND VOID AB INITIO ON THIS GROUND ITS ELF, THE SAME BEING PASSED IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. (2) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUS TAINING ADDITION OF RS.17,500/- MADE BY THE AO ON ACCOUNT O F UNEXPLAINED CASH CREDIT MERELY ON SURMISES AND CONJ ECTURES AND WITHOUT PROPER APPRECIATION OF THE FACTS OF THE CASE. IN VIEW OF THE FACTS OF THE CASE, THE ENTIRE ADDITION OF RS.17,500/- NEEDS TO BE DELETED. IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 4 3. THE LD. COUNSEL OF THE ASSESSEE DID NOT PRESS GR OUND NO.1 OF BOTH THE APPEALS. HENCE THE SAME ARE DISMISSED AS NOT PR ESSED. 4. AS REGARDS GROUND NO.2 OF ASSESSEES APPEAL IN I TA NO.226/AHD/2011, THE AO OBSERVED THAT THE ASSESSEE IS CARRYING ON THE BUSINESS IN THE NAME AND STYLE OF M/S TS ENTERPRISE AND HAS SHOWN PROFIT OF RS.59,486/-. THE AO ASKED THE ASSESSEE TO PRODUC E THE BOOKS OF ACCOUNTS FOR VERIFICATION. HOWEVER, THE ASSESSEE VI DE HIS SUBMISSIONS DATED 6/12/2008 STATED THAT THE BOOKS OF ACCOUNTS W ERE NOT MAINTAINED BY THE ASSESSEE AS THE SAME BEING NOT MANDATORY. IN TH E ABSENCE OF ANY DOCUMENTARY EVIDENCE, THE AO MADE ADDITION OF RS.50 ,000/- IN THE TOTAL INCOME OF THE ASSESSEE. 5. THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APP ELLATE AUTHORITY WHEREIN THE SUBMISSION OF THE ASSESSEE WAS THAT THE ASSESSEE HAD BEEN MAINTAINING THE BOOKS OF ACCOUNT. BEFORE THE AO THE ASSESSEE HAD WRONGLY MENTIONED THAT NO BOOKS OF ACCOUNTS WERE MA INTAINED BY HIM. IT WAS STATED THAT THE ASSESSEE HAD CARRIED OUT SIMILA R BUSINESS ACTIVITIES IN EARLIER YEAR ALSO. THE AO WHILE PASSING ASSESSMENT ORDER HAD NOT RAISED ANY QUERY ABOUT THE BUSINESS CARRIED OUT AND HAD NO T RAISED ANY DOUBTS ABOUT THE INCOME EARNED. FURTHER THE AO HAD NOT BRO UGHT ON RECORD ANY MATERIAL IN SUPPORT OF HIS CONCLUSION THAT THE INCO ME SHOWN IS ON LOWER SIDE. IN FACT, THE BOOKS OF ACCOUNTS WERE REGULARLY MAINTAINED BY THE ASSESSEE. THE LD. CIT(A) PARTLY ALLOWED THE APPEAL BY OBSERVING AS UNDER: 7. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT. SINCE NO BOOKS OF ACCOUNTS HAVE BEEN PRODUCED BEFORE THE AO, IN MY OPINION, IT WOULD BE FAIR TO ESTIMATE AN ADDITION OF RS.25,000/- AS A GAINST RS.50,000/- MADE BY THE AO. IN OTHER WORDS, THE ADDITION OF RS.50,00 0/- IS REDUCED TO RS.25,000/- ONLY. IN SHORT, THE APPEAL FOR ASST. YE AR 2004-05 IS PARTLY ALLOWED. 6, BEFORE US THE LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT THE ADDITION BEING OF SMALL AMOUNT IS NOT SERIOUSLY PRESSED. THE LD. DR RELYING ON THE ORDER SUBMITTED THAT THE GROUND MAY BE DECIDED ACCO RDINGLY. 7. AFTER CONSIDERING THE FACTS OF THE CASE AND RIVA L SUBMISSIONS, WE ARE OF THE OPINION THAT NO INTERFERENCE IS REQUIRED IN THE ORDER OF LD. CIT(A) AND ACCORDINGLY THE SAME IS CONFIRMED. IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 5 8. IN ALL OTHER APPEALS FOLLOWING COMMON GROUND HAS BEEN RAISED :- IT(SS)A NO. 196/AHD/2011 ASST. YEAR 2001-02 THE GROUND RAISED IN THIS APPEAL IS AS UNDER :- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPH OLDING ACTION OF AO TO LEVY PENALTY U/S 271(1)(B) OF THE ACT WITH OUT PROPER APPRECIATION OF FACTS. THE CIT(A) AS WELL AS THE AO DID NOT APPRECIATE THE FACT THAT THE KARTA OF THE APPELLANT HUF RESPONDED TO THE IMPUGNED NOTICES BY APPEARING FOR ALL THE CASES OF HIS GROUP WHICH WERE PROCEEDED U/S 153A IN PURSUANCE OF A SEARCH. FURTHER ONE OF THE NOTICES REFER TO TH E PENALTY PROCEEDINGS IN WHICH SECTION 271(1)(B) DOES NOT APP LY AT ALL. IN VIEW OF THE FACTS OF THE CASE, THE IMPUGNED ORDER R EQUIRES TO BE QUASHED AS BAD IN LAW AND PENALTY IMPOSED OF RS.50, 000/- BE DELETED IN TOTO. 9. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 OF THE INCOME-TAX ACT WAS CARRIED OUT IN THE CASE OF THE A SSESSEE GROUP ON 1/11/2006. PROCEEDINGS U/S 153 A OF THE INCOME-TAX ACT WAS INITIATED BY THE AO ON 8/1/2008 FOR ASSESSMENT YEARS 2001-02 TO 2007-08 BY ISSUING COMBINED NOTICES FOR ALL THESE YEARS. THE ASSESSEE COMPLIED WITH VARIOUS NOTICES ISSUED BY THE AO U/S 143(2) AND U/S 142(1) OF THE INCOME-TAX ACT, HOWEVER, NO COMPLIANCE WAS MADE IN RESPECT OF THE F OLLOWING NOTICES ISSUED BY THE AO UNDER SECTION 143(2) OF THE INCOME -TAX ACT. DATE OF NOTICE DATE OF SERVICE ON THE ASSESSEE 24/10/2008 BY SPEED POST 4/11/2008 5/11/2008 14/11/2008 17/11/2008 24/11/2008 24/11/2008 ACCORDING TO THE AO IN RESPONSE TO THE ABOVE NOTICE S, NO BODY ATTENDED NOR ANY REPLY NOR INFORMATION WAS FILED. ANOTHER LE TTER WAS ISSUED TO THE IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 6 ASSESSEE ON 28/11/2008 REQUESTING HIM TO FILE THE D ETAILS. FINALLY A SHOW CAUSE NOTICE ALONG WITH NOTICES U/S 143(2) DATED 11 /12/2008 WAS ISSUED AND SERVED UPON THE ASSESSEE ON 11/12/2008. ACCORDI NG TO THE AO, THE ASSESSEE HAD FAILED TO COMPLY WITH THE ABOVE NOTICE S. THE ASSESSMENT WAS FINALIZED U/S 144 READ WITH SECTION 153A OF THE INC OME-TAX ACT ON 17/12/2008. PENALTY PROCEEDINGS U/S 271(1)(B) OF TH E INCOME-TAX ACT WERE INITIATED FOR COMPLIANCE OF THE NOTICES. BEFOR E LEVYING PENALTY UNDER SECTION 271(1)(B) OF THE INCOME-TAX ACT THE AO ISSU ED A SHOW CAUSE NOTICE ON 3/6/2009. HOWEVER, THERE WAS NO COMPLIANC E TO THIS NOTICE ALSO. IN THE ABSENCE OF ANY REPLY, THE AO LEVIED PENALTY OF RS.10,000/- EACH FOR EACH FAILURE TO COMPLY WITH THE NOTICES ISSUED ON 2 4/10/2008, 4/11/2008, 14/11/2008, 24/11/2008 & 11/12/2008. ACCORDINGLY TO TAL PENALTY OF RS.50,000/- U/S 271(1)(B) OF THE INCOME-TAX ACT WAS LEVIED BY THE AO IN RESPECT OF EACH OF THE SEVEN ASSESSMENT YEARS. 10. THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST AP PELLATE AUTHORITY WHEREIN THE DETAILED SUBMISSIONS WERE MADE AND THE LD. CIT(A) SUMMARIZED THE SUBMISSIONS AS UNDER :- 1. THE AO ISSUED COMBINED NOTICES FOR ALL THE YEARS FO R ASST. YEAR 2001-02 TO 2007-08 IN CASE OF ALL THE ASSESSEE. 2. THE ASSESSMENT PROCEEDINGS OF ALL THE ASSESSEES OF THE GROUP WERE TAKEN UP TOGETHER AND SIMULTANEOUSLY. 3. THE FIRST COMBINE NOTICE WAS ISSUED U/S 143(2) AND 142(1) DATED 25/9/2008 FOR ASST. YEAR 2001-02 TO 2007-08 ALONG W ITH QUESTIONNAIRE REQUIRING VERY BASIC DETAILS AND EXPL ANATIONS. IN OTHER WORDS THE ASSESSMENT WAS SET INTO MOTION MERE LY 2.5 MONTHS PRIOR TO THE LIMITATION PERIOD AND WAS CONCL UDED WITHIN TWO MONTHS OF THE SAID NOTICE. 4. THE LD. AR OF THE ASSESSEE HAD ATTENDED BEFORE THE AO ON 17/10/2008 IN RESPONSE TO THE NOTICE DATED 26/9/200 8 AND THEREAFTER THE ASSESSEE HIMSELF ATTENDED ON 28/11/2 008 IN IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 7 RESPONSE TO NOTICE DATED 24/11/2008. THE ASSESSEE A LSO FILED REPLY DATED 16/12/2008 IN RESPONSE TO NOTICE DATED 11/2/2008. 5. THE VERY FACT THAT THE ASSESSMENT HAS BEEN COMPLETE D ON THE BASIS OF THE BASIC DETAILS FURNISHED BY THE ASSESSE E VIDE HIS REPLY DATED 6/12/2008 ITSELF IS AN INDICATION OF THE FACT THAT THE AO DID NOT REQUIRE ANY FURTHER DETAILS AND EXPLANATION S. IT WAS POINTED OUT THAT OUT OF SEVEN ASSESSMENT YEARS, NO ADDITION HAS BEEN MADE IN RESPECT OF FOUR ASSESSMENT YEARS AND F OR THOSE YEARS THE RETURNED INCOME HAS BEEN ACCEPTED BY THE AO. 6. THE PENALTY FOR NON-ATTENDANCE HAS BEEN LEVIED ONLY IN CASE OF THE THREE HUFS OF THE GROUP WHILE INTERESTINGLY NO PENALTY HAS BEEN LEVIED IN CASE OF THE SAME PERSONS IN THEIR IN DIVIDUAL CAPACITY WHO ALL ALONG ATTENDED BEFORE THE AO SEVER AL TIMES FOR THEIR ASSESSMENTS. 7. EVEN IF ANY FAILURE IS PRESUMED, THE SAME CAN BE AT MOST TREATED AS TECHNICAL AND VENIAL BREACH OF LAW WITHOUT ANY M ALA FIDE INTENTION. THE NON-ATTENDANCE AND NON-COMPLIANCE, I F ANY, WAS FOR REASONABLE CAUSE AND NOT WILLFUL, INTENTIONAL O R MALA FIDE, SINCE IT WAS AGAINST THE INTEREST OF THE ASSESSEES THEMSELVES. THEREAFTER TAKING INTO CONSIDERATION OBSERVATION OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) CONFIRM ED THE PENALTY OF RS.50,000/- EACH LEVIED IN ALL THE ASSESSMENT YEARS FOR FIVE DIFFERENT DEFAULTS BY OBSERVING AS UNDER :- 4. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT. NO SPECIFIC REASONS FOR NON-COMPLIANCE OF THE FIVE NOTICES AS M ENTIONED BY THE AO IN THE PENALTY ORDER, HAS BEEN GIVEN BY THE APPELLANT. IT WAS CONTENDED BEFORE ME THAT THE APPELLANT DID NOT ATTEND BEFORE THE AO BECAUSE NO DETAILS WERE CALLED FOR BY THE AO. ACCORDING TO THE M, PENALTY UNDER SECTION 271(1)(B) IS NOT LEVIABLE IN VIEW OF THE AB OVE MENTIONED REASONS GIVEN BY THEM. PENALTY UNDER SECTION 271(1)(B) OF T HE INCOME-TAX ACT IS LEVIABLE WHEN AN ASSESSEE CHOOSES NOT TO COMPLY WIT H THE NOTICES ISSUED BY THE AO U/S 143(2) OR 142(1) OF THE INCOME-TAX AC T. IF HOWEVER, THE ASSESSEE IS ABLE TO PROVE THAT HE COULD NOT COMPLY WITH THE NOTICES FOR SUFFICIENT REASONS, THEN PENALTY U/S 271(1)(B) IS N OT LEVIABLE. THE MAIN REASON FOR NON-COMPLIANCE OF THE ABOVE MENTIONED FI VE NOTICES WAS STATED TO BE THAT, NO DETAILS WERE CALLED FOR BY THE AO AN D THEREFORE THE NOTICES IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 8 ISSUED UNDER SECTION 143(2) OF THE INCOME-TAX ACT W ERE NOT COMPLIED WITH. IN MY OPINION, IT IS NOT A VALID REASON FOR N ON-COMPLIANCE. IF THE CONTENTION OF THE APPELLANT IS ACCEPTED, THEN NO AS SESSEE WOULD COMPLY WITH THE NOTICES ISSUED UNDER SECTION 143(2) OF THE INCOME-TAX ACT. THE APPELLANT COULD NOT PRODUCE BEFORE ME ANY DETAILS W HICH PROVES THAT THE AR OR THE APPELLANT ATTENDED BEFORE THE AO ON THE S AME DATES IN CONNECTION OF OTHER GROUP CASES IN COMPLIANCE OF TH E NOTICES AS MENTIONED BY THE AO IN THE PENALTY ORDER. FURTHER, NON-LEVY OF PENALTY IN THE CASE OF THE INDIVIDUALS IS NOT A VALID REASON F OR NOT LEVY OF PENALTY IN THE CASE OF THE APPELLANT. WHAT HAS TO BE PROVED BY THE APPELLANT IS THAT HE WAS PREVENTED FROM THE SUFFICIENT CAUSE IN COMPL YING THE NOTICES. THE MAIN REASON GIVEN BEFORE ME THAT SINCE NO DETAILS W ERE CALLED FOR BY THE AO, THE NOTICES COULD NOT BE COMPLIED WITH BY THE A PPELLANT. I AM SORRY TO SAY THAT, SUCH EXPLANATION CANNOT BE A VALID EXPLAN ATION FOR NON- COMPLIANCE OF THE NOTICES. FURTHER, MAKING OF AN AD DITION U/S 143(3) OF THE INCOME-TAX ACT IS NOT A PREREQUISITE CONDITION FOR LEVYING PENALTY UNDER SECTION 271(1)(B). IN FACT, LEVY OF PENALTY U NDER SECTION 271(1)(B) HAS NOTHING TO DO WITH THE QUANTUM OF ADDITION MADE IN THE ASSESSMENT. FURTHER, I DO NOT UNDERSTAND AS TO HOW NON-COMPLIAN CE OF NOTICE CAN BE TERMED AS A TECHNICAL DEFECT. I HAVE, THEREFORE, NO HESITATION IN HOLDING THAT THE APPELLANT DID NOT COMPLY WITH THE NOTICES FOR A SUFFICIENT CAUSE. THE PENALTY OF RS.50,000/- EACH LEVIED IN ALL ASSES SMENT YEARS FOR FIVE DIFFERENT DEFAULTS IS THEREFORE, CONFIRMED. 11. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT (A) THE OBSERVATIONS OF THE LD. CIT(A) FOR CONFIRMING THE PENALTY ARE IN CORRECT AND WITHOUT PROPER APPRECIATION OF THE DETAILED SUBMISSIONS FIL ED. (B) THE APPELLANT HAS CLEARLY STATED THAT ALL THE REQUIRED DETAILS WE RE DULY FURNISHED AND THAT SINCE ALL THE CASES OF THE GROUP WERE TAKEN UP ONE BY ONE THE DETAILS IN CASE OF THE HUF WERE FURNISHED AT A LATER DATE AS I DENTICAL NOTICES WERE ISSUED FIXING THE SAME DATE OF ATTENDANCE IN CASE O F ALL THE ASSESSEES OF THE GROUP. (C) THE AO HAD ISSUED IDENTICAL NOTICES FOR ALL THE YEARS I.E. ASST. YEAR 2001-02 TO 2007-08 IN CASE OF ALL ASSESS EES OF THE KASAT- GROUP. (D) THE NOTICES ISSUED BY THE AO IN CASE OF ALL THE ASSESSEES OF THE GROUP WERE OF THE SAME DATE AND THE DATE OF HEARING FIXED WAS ALSO THE SAME. THUS THE ASSESSMENT PROCEEDINGS FOR ALL THE A SSESSEES OF THE GROUP WERE TAKEN UP SIMULTANEOUSLY. (E) THE ASSESSEE HAD FILED COMPLETE DETAILS IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 9 AND EVIDENCES VIDE LETTERS DATED 6/12/2008 AND 16/1 2/2008 AS REQUIRED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. (F) THE ASSESSMENT FOR ALL THE YEARS HAS BEEN COMPLETED ON THE BASIS O F THE DETAILS FURNISHED BY THE ASSESSEE AND NO FURTHER DETAILS WERE ASKED F OR BY THE AO. THAT APART, NO ADDITION HAS BEEN MADE IN 4 OUT OF 7 ASSE SSMENT YEARS IN CASE OF THE ASSESSEE TARACHAND KASAT-HUF, 3 OUT OF 7 YEARS IN CASE OF DINESH KASAT-HUF AND 2 OUT OF 5 YEARS IN CASE OF RAJESH KA SAT-HUF. (G) THE PENALTY HAS BEEN LEVIED ONLY IN CASE OF 3 HUFS OF T HE GROUP AND NO PENALTY HAS BEEN LEVIED IN CASE OF THE SAID PERSONS IN THEIR INDIVIDUAL CAPACITY WHO DULY ATTENDED BEFORE AO SEVERAL TIMES DURING THE ASSESSMENT PROCEEDINGS. THUS TO ALLEGE NON-ATTENDAN CE IN CASE OF HUF ON THE SAME DATE ON WHICH ATTENDANCE WAS MADE AND ACCE PTED BY THE AO IN CASE OF INDIVIDUALS OF SUCH HUFS AS WELL AS OTHER M EMBERS OF THE FAMILY IS WHOLLY UNJUSTIFIED AND BAD IN LAW. (H) THAT SINC E THE AO HAD PREFERRED TO TAKE UP FIRST THE CASE OF INDIVIDUAL ASSESSEES, THE ASSESSEE WAS UNDER THE BONA FIDE BELIEF THAT THE DETAILS IN CASE OF HU F WILL BE FURNISHED WHEN THE SAID CASES ARE TAKEN UP BY THE AO. HOWEVER, COM PLETE DETAILS AS REQUIRED BY THE AO STOOD DULY FURNISHED. THUS EVEN IF ANY FAILURE IS PRESUMED, THE SAME BEING ON ACCOUNT OF BONA FIDE AN D REASONABLE CAUSE AND NOT BEING INTENTIONAL AND WILLFUL, NO PENALTY I S JUSTIFIED. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS IN SUPPORT OF THE FACT THAT THERE WAS A REASONABLE CAUSE IN FURNISHING THE DETAILS AT A LAT ER STAGE I.E. AFTER MAJORITY OF THE DETAILS IN INDIVIDUAL ASSESSMENT WERE FURNIS HED AND THAT EVEN IF THERE IS ANY DEFAULT IT IS MERELY A TECHNICAL AND V ENIAL BREACH OF LAW WITHOUT ANY MALA FIDE INTENTION. FURTHER RELIANCE WAS PLACED ON THE FOLLOWING DECISI ONS :- ORIENTAL MEDICINES (P) LTD. VS. ASSTT. CIT (2007) 1 63 TAXMAN 142 (COCHIN) (MAG.) WHEREIN IT HAS BEEN OBSERVED AS UNDER :- IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 10 THE WORDS REASONABLE CAUSE ARE OF VERY WIDE AMPL ITUDE AND NO CLEAR OR PRECISE DEFINITION CAN BE LAID DOWN. IN THE DIFF ERENT JUDICIAL PRONOUNCEMENTS, THE COURTS HAVE EXPLAINED THE EXPRE SSION REASONABLE CAUSE AS ONE THAT CAN REASONABLY BE SAID TO BE A C AUSE WHICH PREVENTS A MAN OF AVERAGE INTELLIGENCE AND ORDINARY PRUDENCE, ACTING UNDER NORMAL CIRCUMSTANCES, WITHOUT NEGLIGENCE OR INACTION OR WA NT OF BONA FIDES. HINDUSTAN STEEL LTD. VS. CIT 83 ITR 26 (SC ) WHEREIN IT HAS BEEN HELD AS UNDER :- WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO P ERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORI TY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVA NT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY C OMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PEN ALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF LAW, WHICH FLOWS FROM A BONA FIDE BELIEF. MAHAVIR AGENCY VS. ITO (1996) 58 ITD 386 (ITAT AHD) - WHEREIN IT HAS BEEN OBSERVED THAT NO PENALTY IN CASE OF ONLY T ECHNICAL AND VENIAL BREACH OF LAW. IN VIEW OF ABOVE SUBMISSIONS THE LD. COUNSEL OF THE ASSESSEE PRAYED THAT ORDER OF THE LD. CIT(A) BE SET ASIDE AND THE PENALT Y LEVIED FOR ALL THE YEARS IN QUESTION MAY KINDLY BE DELETED. 12. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF LOWER AUTHORITIES AND SUBMITTED THAT FIVE NOTICES ISSUED BY THE AO U/S 143(2) DATED 24/10/08, 04/11/08, 14/11/08, 24/11/08 AND 11 /12/08 WERE NOT COMPLIED BY THE ASSESSEE. THEREFORE, PENALTY PROCEE DINGS U/S 271(1)(B) OF THE ACT WERE INITIATED FOR NON-COMPLIANCE OF THE NO TICES. BEFORE LEVYING PENALTY U/S 271(1)(B) THE AO ISSUED A SHOW CAUSE NO TICE ON 3/6/2009. HOWEVER, THERE WAS ALSO NO COMPLIANCE TO THIS NOTIC E. IN ABSENCE OF ANY REPLY, THE AO LEVIED PENALTY OF RS.10,000/- EACH FO R EACH FAILURE TO COMPLY WITH THE NOTICES ISSUED. THUS THE AO HAD RIG HTLY LEVIED THE PENALTY. THE LD. CIT(A) HAS STATED THAT THE MAIN RE ASON FOR NON- IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 11 COMPLIANCE OF 5 NOTICES WAS STATED TO BE THAT NO DE TAILS WERE CALLED FOR BY THE AO AND HENCE THE NOTICES U/S 143(2) WERE NOT CO MPLIED WITH, WHICH IS NOT A VALID REASON FOR NON-COMPLIANCE. THE NON-COMP LIANCE OF NOTICES CANNOT BE TERMED AS A TECHNICAL DEFECT. THEREFORE, THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY THE A O. HE SUBMITTED THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. C IT(A). 13. HEARD BOTH THE PARTIES, PERUSED THE RECORD AND WE FIND THAT THE ASSESSEES CONSISTENT CONTENTION HAS BEEN THAT MR.D INESH T. KASAT WAS LOOKING AFTER ALL THE CASES OF THE GROUP BEFORE THE AO ALONG WITH THE AUTHORISED REPRESENTATIVE. SINCE ASSESSMENT PROCEED INGS IN ALL THE GROUP CASES (INDIVIDUAL AS WELL AS HUFS) WERE SIMULTANEOU SLY GOING ON AND NOTICES IN ALL THE CASES WERE ALSO ISSUED TOGETHER AND ON THE SAME DATE IN ALL THE CASES, THE ASSESSEES CONTENTION HAS BEEN T HAT DETAILS IN RESPECT OF ALL THE CASES INCLUDING HUFS WERE ALSO SIMULTANEOUS LY GIVEN TO THE AO. THEREFORE, THE AO WAS NOT JUSTIFIED IN HOLDING THAT ASSESSEE DID NOT COMPLY WITH THE NOTICES OF THE AO IN RESPECT OF HUF S ONLY. THIS CONTENTION OF THE ASSESSEE WAS NOT DISPUTED BY THE REVENUE AT THE TIME OF HEARING BEFORE US. WE FURTHER FIND THAT IT IS ALSO NOT IN DISPUTE THAT OUT OF 19 CASES ONLY IN 9 CASES ADDITION WAS MADE BY THE A O OUT OF WHICH IN 7 CASES ADDITION WAS DELETED BY THE LD. CIT(A). THUS IT CANNOT BE SAID THAT THERE WAS NO COMPLIANCE ON THE PART OF THE ASSESSEE IN THE CASE. IN THE LIGHT OF THESE FACTS OF THE CASE, WE ARE OF THE CON SIDERED OPINION THAT ASSESSEE WAS UNDER BONA FIDE BELIEF THAT AS HE WAS APPEARING BEFORE THE AO IN ALL THE GROUP CASES AND GIVING DETAILS ASKED FOR BY THE AO, THERE IS NO NON-COMPLIANCE ON HIS PART IN THE CASE OF HUFS. THE FACT THAT AO DID NOT INITIATE PENALTY PROCEEDINGS IN THE CASES OF IN DIVIDUALS ON SIMILAR FACTS ALSO MAKES THE CASE OF ASSESSEE HUF STRONG THAT NO SUCH ACTION SHOULD HAVE BEEN TAKEN IN THIS CASE ALSO. IN THE LIGHT OF THESE PECULIAR FACTS OF IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 12 THIS CASE, WE HAVE NO HESITATION IN HOLDING THAT TH IS IS NOT A FIT CASE FOR INITIATING PENALTY PROCEEDINGS U/S 271(1)(B) OF THE ACT AND, THEREFORE, THE PENALTY IMPOSED BY THE AO AND SUSTAINED BY LD. CIT( A) IS HEREBY DELETED. 14. SINCE THE ISSUES RAISED IN ALL OTHER CASES, ARE IDENTICAL, THE FACTS AND CIRCUMSTANCES BEING THE SIMILAR, WE DECIDE THE APPE ALS BY FOLLOWING OUR DECISION IN THE CASE OF TARACHAND S. KASAT HUF VS. DCIT REFERRED ABOVE, BY SETTING ASIDE THE ORDERS OF LD. CIT(A) AND DELET ING THE IMPUGNED PENALTY OF RS.50,000/- IN EACH CASE. 15. IN THE RESULT, IT(SS)A NOS. 226/AHD/2011 AND 22 8/AHD/2011 FOR ASST. YEAR 2004-05 ARE DISMISSED AND ALL OTHER 19 A PPEALS ARE ALLOWED. ORDER WAS PRONOUNCED IN OPEN COURT ON 31.10.2011. SD/- SD/- (G. D. AGRAWAL) (D.K. TYAGI) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD, MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD IT(SS) NO.203 & 20 OTHERS ASST. YEAR 2001-02 13 1.DATE OF DICTATION 7/10/2010. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER.OTHER MEMBER 17/10/2011 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..