Shri Piyush Ranchhodbhai Patel, Surat V. The ACIT, Central Circle-4, Surat

ITSSA 23/AHD/2016

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2849 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 11-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Non compliance
• Section: 143(3); 153A; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ IT(SS)A.NO.23 TO28/AHD/2016 / ASSTT. YEAR: 2007-2008 TO 2012-13 AND ./ IT(SS)A.NO.76/AHD/2016 / ASSTT. YEAR: 2013-2014 SHRI PIYUSH RANCHHODBHAI PATEL SHIVANJALI BUNGALOW CHIKUWADI SOMNATH MAHADEV ROAD SURAT PAN : AMFPP 6025 P VS ACIT, CENT.CIR.4 SURAT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : WITHDRAWAL SUBMISSIONS REVENUE BY : SHRI K. MADHUSUDAN, SR.DR / DATE OF HEARING : 05/01/2017 / DATE OF PRONOUNCEMENT: 09 /01/2017 $%/ O R D E R PRESENT SEVEN APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST COMMON ORDER OF THE LD.CIT(A)20.11.2015 FOR THE ASSTT.YEAR 2007-08 TO 2013-14. 2. SOLITARY ISSUE INVOLVED IN ALL THESE APPEALS IS THAT THELD.CIT(A) HAS ERRED IN CONFIRMING LEVY OF PENALTY AMOUNTING TO RS .10,000/- IN EACH ASSESSMENT YEAR UNDER SECTION 271(1)(B) OF THE INCO ME TAX ACT, 1961. IN RESPONSE TO THE NOTICE OF HEARING, THE LD.COUNSEL F OR THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS. HE CONTENDED THAT SIMILAR PEN ALTY WAS IMPOSED UPON BROTHER OF THE ASSESSEE SHRI VIMAL RANCHHODBHAI PAT EL AND DISPUTE TRAVELLED UPTO THE TRIBUNAL. THE TRIBUNAL HAS DELETED THE PE NALTY VIDE ORDER DATED IT(SS)A NO.23 TO 28 & 76/AHD/2016 (7 APPEALS) 2 24.2.2016. ON THE OTHER HAND, THE LD.DR RELIED UPO N THE ORDER OF THE LD.CIT(A). 3. I HAVE PERUSED THE RECORD CAREFULLY AND I FIND T HAT THERE IS NO DISPARITY ON FACTS. THE TRIBUNAL HAS DELETED PENALTY IN THE CASE OF ASSESSEES BROTHER ON THE GROUND THAT TIME GIVEN BY THE AO FOR COMPLIANCE OF NOTICE WAS NOT SUFFICIENT. THE TRIBUNAL HAS ALSO OBSERVED THAT TH E ASSESSEE HAS COMPLIED NOTICES THOUGH LITTLE BELATEDLY. IN THE WRITTEN SU BMISSION FILED BY THE LD.COUNSEL FOR THE ASSESSEE IT IS DISCERNIBLE THAT THE ASSESSEE HAS COMPLIED ALL THE NOTICES AND SUBMITTED REQUISITE DETAILS. THE A O HAS ISSUED ONLY ONE NOTICE AND HE HAS GIVEN A TIME OF 5 DAYS ONLY, WHER EAS HE HAS CALLED UPON TO PRODUCE A LARGE NUMBER OF DETAILS. THE DISCUSSION MADE BY THE TRIBUNAL IN THE CASE OF THE ASSESSEES BROTHER READ AS UNDER: 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: ASSESSEE IS AN INDIVIDUAL. THERE WAS A SEARCH AND S EIZURE ACTION U/S.132 OF THE ACT IN THE CASE OF ASSESSEE AND HIS FAMILY MEMBERS ON 28.12.2012. CONSEQUENT TO THE SEARCH, ASSESSMENTS W ERE COMPLETED U/S.143(3) R.W.S. 153A FOR THE VARIOUS ASSESSMENT Y EARS. THEREAFTER, A.O. IMPOSED PENALTY U/S.271(1)(B) OF THE IT ACT AM OUNTING TO RS.10,000/- FOR EACH OF THE ASSESSMENT YEARS CONCER NED FOR ALLEGED NON COMPLIANCE OF NOTICE U/S.142(1) OF THE ACT (NOTICE DATED 13.02.2015 FOR COMPLIANCE BY 18.02.2015). 4. AGGRIEVED BY THE IMPOSITION OF PENALTY U/S.271(1 )(B) OF THE ACT, ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY. THE FIRST APPELLATE AUTHORITY, HOWEVER, CONFIRMED THE L EVY OF PENALTY AND DISMISSED THE APPEALS FILED BY THE ASSESSEE. 5. AGGRIEVED BY THE CONSOLIDATED ORDER OF CIT(A) CO NFIRMING THE LEVY OF PENALTY, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. NONE APPEARED ON BEHALF OF THE ASSESSEE, HOWEVER, A WRITTEN SUBMISSI ON WAS FILED BY THE C.A. REPRESENTING THE ASSESSEE. THE ASSESSEE HAS AL SO FILED A PAPER BOOK ENCLOSING THE COPY OF NOTICE ISSUED U/S.142(1) OF THE ACT AND ASSESSEES LETTER IN COMPLIANCE TO THE NOTICE ISSUE D U/S.142(1) OF THE IT(SS)A NO.23 TO 28 & 76/AHD/2016 (7 APPEALS) 3 ACT. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE O RDERS OF INCOME TAX AUTHORITIES. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. ADMITTEDLY, IN THIS CASE, PENALTY U/S.271(1 )(B) OF THE ACT WAS LEVIED BY THE A.O. FOR NON COMPLIANCE OF NOTICE U/S .142(1) OF THE ACT (NOTICE DATED 13.02.2015). ON PERUSAL OF THE NOTICE ISSUED U/S.142(1) OF THE ACT (WHICH IS PLACED AT PAGE NO.22 OF THE PAPER BOOK FILED BY THE ASSESSEE), I NOTICE THAT IT CONTAINS 19 PAGES AND I T IS A CONSOLIDATED NOTICE FOR ALL THE ASSESSMENT YEARS, NAMELY, 2007-0 8 TO 2013-14. THE NOTICE U/S.142(1) OF THE ACT CONTAINS 19 PAGES WITH SEPARATE ANNEXURE A, B, C AND D. THE A.O. IN THE SAID NOTICE HAD CALL ED FOR DETAILED SUBMISSION/EXPLANATION WITH EVIDENCES FOR VARIOUS L EGAL ISSUES AND THE SAME HAD TO BE COMPLIED ON OR BEFORE 18.02.2015 I.E . WITHIN FIVE DAYS FROM THE DATE OF ISSUANCE OF NOTICE U/S.142(1) OF T HE ACT. ACCORDING TO ME, THE A.O. HAS ALLOWED VERY LESS TIME TO THE ASSE SSEE TO MAKE COMPLIANCE IN TERMS OF THE LENGTHY QUESTIONNAIRES. IT IS THE CLAIM OF THE ASSESSEE THAT ASSESSEE HAS REQUESTED FOR REASONABLE AND SUFFICIENT TIME BEFORE THE A.O. HOWEVER, NOTHING IS BORNE OUT OF RE CORD FOR SUCH A CLAIM. FROM THE RECORDS OF THE A.O., IT IS CLEAR TH AT ASSESSEE HAD DULY COMPLIANCE WITH ALL THE TERMS THE QUESTIONNAIRES / QUERIES CONTAINED IN THE NOTICE U/S.142(1) OF THE ACT DATED 13.02.2015 V IDE WRITTEN SUBMISSION FILED ON 06.03.2015. THE ASSESSEE HAVING DULY COMPLIED WITH ALL THE DETAILS CALLED FOR, THE A.O. HAD PASSE D ORDER U/S.143(3) OF THE ACT AND NOT U/S.144 OF THE ACT. THE ORDER PASSE D U/S.143(3) R.W.S. 153A OF THE ACT IS WITHOUT ANY ESTIMATION OF INCOME . IT IS WELL ESTABLISHED POSITION OF LAW THAT WHEN ASSESSMENT OR DER IS PASSED U/S.143(3) OF THE ACT, CONSIDERING ALL THE SUBMISSI ONS/EXPLANATIONS, THERE IS NO REASON TO LEVYING PENALTY FOR NON COMPL IANCE OF NOTICE U/S.142(1) OF THE ACT. IN THIS CONTEXT, IT RELEVANT TO MENTION THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHMSHAK SANGH BHAWAN TRUST VS. ADIT REPORT ED IN (2008) 115 TTJ 419 (DELHI), WHEREIN IT WAS HELD THAT: 2.5 WE ALSO FIND THAT FINALLY THE ORDER WAS PASSED UNDER S. 143(3) AND NOT UNDER S. 144 OF THE ACT. THIS MEANS THAT SUBSEQUENT COMPLIANCES IN THE ASSESSMENT PROCEEDING S WAS CONSIDERED AS GOOD COMPLIANCE AND THE DEFAULTS COMM ITTED EARLIER WERE IGNORED BY THE AO. THEREFORE, IN SUCH CIRCUMSTANCES, THERE COULD HAVE BEEN NO REASON TO C OME THE CONCLUSION THAT THE DEFAULT WAS WILLFUL. IT(SS)A NO.23 TO 28 & 76/AHD/2016 (7 APPEALS) 4 2.6 IN VIEW OF THE AFORESAID DISCUSSION, IT IS HELD THAT THE LEARNED CIT (A) WAS NOT RIGHT IN UPHOLDING THE LEVY OF PENA LTY. THUS, THE APPEAL IS ALLOWED. 6.1 THE ABOVE MENTIONED JUDGMENT OF HONBLE DELHI H IGH COURT WAS FOLLOWED BY THE AHMEDABAD BENCH OF TRIBUNAL IN CASE OF SWARNABEN M. KHANNA VS. DCIT, SURAT (2010) 37 SOT 25 (AHD.). THE RELEVANT FINDINGS OF THE TRIBUNAL READS AS UNDER: IN ADDITION, ADEQUATE TIME SHOULD BE GIVEN TO THE ASSESSEE FOR MAKING COMPLIANCE. THE NOTICES WERE ISSUED ON 14-8- 2007 IN SOME CASES AND COMPLIANCE WERE REQUIRED TO BE MADE BY 24-8- 2007. THEREAFTER THE ASSESSING OFFICER PROCEEDED TO INITIATE THE PENALTY PROCEEDINGS. IN OUR CONSIDERED VIEW, IT IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS NO REASONABLE OPPO RTUNITY IS GIVEN TO THEM FOR MAKING COMPLIANCE OF THE INFORMAT ION SOUGHT. FOR THE SAKE OF CONVENIENCE, WE REFER TO THE COMPLI ANCE SOUGHT BY THE ASSESSING OFFICER VIDE LETTER DATED 14-8- 20 07 CONTAINING JIVE PAGES FROM SHRI KAUSHAL M. KHANNA AS SIMILAR C OMPLIANCE WAS SOUGHT BY HIM FROM OTHERS AS WELL. IF THERE IS APPARENT IMPOSSIBILITY OF COMPLIANCE OR COMPLIANCE COULD TAK E NATURALLY LONG TIME, THEN THE ASSESSING OFFICER IS EXPECTED T O GIVE ADEQUATE TIME TO THE ASSESSEES BEFORE HE INFERS THAT THEY AR E TENDING TO NON-COMPLIANCE AND AVOIDING TO FURNISH INFORMATION. THE STATUTORY PROVISION FOR LEVY OF PENALTY IS NOT FOR MERE TECHNICAL NON-COMPLIANCE BUT FOR ACTUAL OR HABITUAL DEFAULTER S. ON THE FACE OF PRESENT FACTS WHERE THE ASSESSING OFFICER HAS HA STILY PROCEEDED TO INITIATE PENALTY PROCEEDINGS IN ALL TH E CASES, IT IS DIFFICULT TO INFER THAT THESE ASSESSEES WERE INTEND ING TO MAKE NONCOMPLIANCE, INFORMATION SOUGHT BY THE ASSESSING OFFICER IS VERY DETAILED AND REQUIRES ASSISTANCE FROM PROFESSI ONALS LIKE ADVOCATE OR CHARTERED ACCOUNTANT. AN AFFIDAVIT HAS BEEN FILED FROM SHRI KAUSHAL M. KHANNA BEFORE THE LD. CIT(A)-, I.E., ERSTWHILE CHARTERED ACCOUNTANT WHO WAS HANDLING HIS TAX MATTERS, HAS LEFT ALL THESE ASSESSES AND THE FAMILY IS IN SEARCH OF NEW COUNSEL FOR MAKING COMPLIANCE MADE BY THE INCOM E-TAX DEPARTMENT. IT SHOWS THAT THESE ASSESSEES HAD REALL Y INTENDED TO COMPLY WITH THE NOTICES AND, THEREFORE, IT SHOULD N OT BE INFERRED THAT THERE WAS A DEFAULT WHICH COULD INVITE PENALTY UNDER SECTION 271(1)(B). THE ITAT DELHI BENCH-G IN THE CASE OF AK HIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST (SUPRA) HAS HE LD THAT IF ASSESSMENT ORDER IS PASSED UNDER SECTION 143(3), AN D NOT UNDER IT(SS)A NO.23 TO 28 & 76/AHD/2016 (7 APPEALS) 5 SECTION 144 THEN NON-COMPLIANCE IS DEEMED TO HAVE B EEN WAIVED. 6.2 IN VIEW OF THE AFORESAID REASONING AND THE JUDI CIAL PRONOUNCEMENTS, I HOLD THAT PENALTY LEVIED U/S.271( 1)(B) OF THE ACT IS NOT WARRANTED IN FACTS AND CIRCUMSTANCES OF THE INSTANT CASE AND I THEREFORE DELETE THE SAME. IT IS ORDERED ACCORDINGLY. 4. ON PERUSAL OF THE RECORD, I FIND THAT FACTS AND CIRCUMSTANCES IN THE CASE OF THE ASSESSEE ARE SIMILAR. THEREFORE, RESPECTFUL LY FOLLOWING THE ORDER OF THE TRIBUNAL I ALLOW ALL THESE APPEALS AND DELETE THE P ENALTY IMPOSED UNDER SECTION 271(1)(B) OF THE INCOME TAX ACT FOR NON-COM PLIANCE OF NOTICE. 5. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED. ORDER PRONOUNCED IN THE COURT ON 9 TH JANUARY, 2017 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER