Halimaben Jamalbhai Momin, Ahmedabad V. The ACIT.,Circle-6, Ahmedabad

ITSSA 497/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0615 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 12-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Business income; Reasonable cause

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 00 , ! ' #$, % & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER SR. NO. IT(SS)A.NO. APPELLANT RESPONDENT 1. 497/AHD/2011 (ASSTT.YEAR 2006-07) HALIMABEN JAMALBHAI MOMIN VILLAGE SANATHAL, TAL. SANAND AHMEDABAD. ACIT, CIR.6 AHMEDABAD. 2. 498/AHD/2011 (ASSTT.YEAR 2006-07) KARIMABEN JAMALBHAI MOMIN VILLAGE SANATHAL, TAL. SANAND AHMEDABAD. ACIT, CIR.6 AHMEDABAD. 3. 499/AHD/2011 (ASSTT.YEAR 2006-07) AMINABEN JAMALBHAI MOMIN VILLAGE SANATHAL, TAL. SANAND AHMEDABAD. ACIT, CIR.6 AHMEDABAD. 4. 500/AHD/2011 (ASSTT.YEAR 2006-07) ABDULBHAI JAMALBHAI MOMIN VILLAGE SANATHAL, TAL. SANAND AHMEDABAD. ACIT, CIR.6 AHMEDABAD. 5. 501/AHD/2011 (ASSTT.YEAR 2006-07) MOHAMADBHAI JAMALBHAI MOMIN VILLAGE SANATHAL, TAL. SANAND AHMEDABAD. ACIT, CIR.6 AHMEDABAD. ASSESSEE(S) BY : NONE REVENUE BY : SHRI M.K. SINGH, SR. DR. / DATE OF HEARING : 13/02/2015 / DATE OF PRONOUNCEMENT: 20/02/2015 (/ O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THESE APPEALS ARE FILED BY THE ASSESSEES AGAINST SEPARATE ORDERS OF THE CIT (A)-XI ALL DATED 17.6.2011. 2. NOTICE OF HEARING WAS SENT TO ALL THE ASSESSEES ON 21.1.2015, FIXING THE DATE FOR HEARING OF THE APPEAL ON 13.2.2 015. HOWEVER, POSTAL AD HAS NOT BEEN RETURNED BY THE POSTAL AUTHORITIES. WHEN THE APPEALS WERE CALLED FOR HEARING NONE WAS PRESENT ON BEHALF OF THE ASSESSEE AND IT(SS)A NO.497 TO 501/AHD/2011 2 NEITHER ANY ADJOURNMENT PETITION WAS FILED. HENCE, DR WAS HEARD AND THE APPEALS WERE DISPOSED OF EX PARTE QUA THE ASSESSEE-APPELLANT, CONSIDERING THE SUBMISSIONS OF THE DR. 3. IN ALL THESE APPEALS, COMMON GROUND TAKEN READS AS UNDER: 1. THE ACIT ERRED IN LAW AS WELL AS ON FACTS IN LE VYING PENALTY OF RS.10,000/- UNDER SECTION 272B AND LD.CIT(A) ALS O ERRED IN CONFIRMING THE SAME. 4. DR SUBMITTED THAT IN ALL THE APPEALS, THE FACTS ARE IDENTICAL AND PENALTY HAS BEEN LEVIED FOR NOT QUOTING PAN IN THE APPEAL FILED BEFORE THE CIT(A), AND IN ALL THE CASES, THE CIT(A) HAS CO NFIRMED THE LEVY OF PENALTY UNDER SECTION 272B FOR THE SIMILAR REASONS. IT IS, THEREFORE, SUBMITTED THAT HE WILL BE ARGUING THE APPEAL IN THE CASE OF HALIMABEN JAMALBHAI MOMIN AND THE SAME ARGUMENTS SHOULD BE CO NSIDERED FOR ALL OTHER APPEALS. HE, THEREAFTER, SUPPORTED THE ORDER OF THE CIT(A). 5. WE, THEREFORE, ARE CONSIDERING THE FACTS IN THE CASE OF SMT. HALIMABEN JAMALBHAI MOMIN AND DECIDE THE APPEALS IN THE CASE OF ALL THE ASSESSEES. 6. THE CIT(A) IN THE CASE OF SMT. HALIMABEN JAMALBH AI MOMIN HAS HELD AS UNDER: THIS IS AN APPEAL AGAINST THE ORDER BY WHICH THE AS SESSING OFFICER HAS IMPOSED UPON THE APPELLANT A PENALTY OF RS. 10, 000/- UNDER SECTION 272B OF THE I. T. ACT, 1961 VIDE HIS ORDER DATED 11-11- 2010. AGGRIEVED BY THE A.O'S ORDER, THE APPELLANT I S IN APPEAL BEFORE THE UNDERSIGNED. IN RESPONSE TO THE NOTICE O F HEARING, THE APPELLANT HAD FILED WRITTEN SUBMISSIONS DATED 10-06 -2011. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSMENT U/S. 153C R.W.S. 144 OF THE ACT WAS FINALIZED BY THE ASSESSIN G OFFICER ON 30- 11-2009. ACCORDING TO THE A.O., THE APPELLANT HAD F ILED APPEAL BEFORE THE CIT(A) WHO SUSTAINED THE ADDITION MADE B Y HIM. THE IT(SS)A NO.497 TO 501/AHD/2011 3 APPELLANT FILED FURTHER APPEAL AGAINST THE CIT(A)'S ORDER BEFORE THE HON'BLE ITAT. IT IS OBSERVED BY THE ASSESSING O FFICER THAT ON BOTH THE ABOVE OCCASIONS THE APPELLANT HAS NOT QUOT ED THE PAN. THEREFORE, THE APPELLANT PROCEEDED TO LEVY THE IMPU GNED PENALTY U/S. 272B OF THE. L.T.ACT, 1961. 2.1. IT IS SEEN THAT IN RESPONSE TO THE SHOW CAUSE NOTICE DATED 20- 07-2010 ISSUED BY THE A.O., THE APPELLANT HAD FILED REPLY ON 19-08- 2010 WHICH WAS REPRODUCED BY THE A.O, IN THE PENALT Y ORDER. HOWEVER, THE REPLY FILED BY THE APPELLANT WAS NOT C ONSIDERED BY THE A.O. TO BE SATISFACTORY. THEREFORE, HE HAS LEVI ED IMPUGNED PENALTY AMOUNTING TO RS. 10,000/- U/S. 272B OF THE IT ACT, 1961. 3. THE RELEVANT PARAS OF THE WRITTEN SUBMISSIONS FI LED BY THE APPELLANT BEFORE ME ARE REPRODUCED HEREUNDER :- ' 1. APPELLANT IS AGRICULTURIST RESIDING AT VILLAGE SANATHAL AND DO NOT HAVE ANY OTHER INCOME. THEY HAVE NEVER F ILED RETURN OF INCOME IN PAST AND NOR IN SUBSEQUENT YEAR S. 2. SHE DO NOT FALL IN ANY OF THE CONDITION CONTAI NED IN SECTION 139A OF THE ACT. 139A. (1) EVERY PERSON- (I) IF HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER T HIS ACT DURING ANY PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS SNOT CHARGEABLE TO INCOME-TAX ACT; OR CARRYING ON ANY BUSINESS OR PROFESSION WHOSE TOTAL SALES, TURNOVER GROSS RECEIPTS ARE OR IS LIKELY TO EXCEED (FIVE LAKH) RUPEES IN ANY PREVIOUS YEAR; OR WHO IS REQUIRED TO FURNISH A RETURN OF INCOME UNDER (SUB-SECTION (4A) OF SECTION 139; OR IT(SS)A NO.497 TO 501/AHD/2011 4 (IV) BEING AN EMPLOYER, WHO IS REQUIRED TO FURNIS H A RETURN OF FRINGE BENEFITS UNDER SECTION 115WD) IN ADDITION , WHO HAS NOT BEEN ALLOTTED A PERMANENT ACCOUNT NUMBER SHALL, WITHIN SUCH TIME, AS MAY BE PRESCRIBE D, APPLY TO THE A.O. FOR THE ALLOTMENT OF PERMANENT ACCOUNT NUMBER. 3. SHE HAS SOLD ONE AGRICULTURAL LAND AT VILLAGE SA NTHAL TO ONE PARTY VIDE SALE DEED DATED 27-03-2006, IN THE SALE DEED THEY HAVE MENTIONED THAT THEY DO NOT HAVE PERMANENT ACCOUNT N O. AND THEREFORE FORM NO. 60 HAVE BEEN FILED WITH REGISTER ING AUTHORITY. THIS ENDORSEMENT IS ALSO AVAILABLE IN THE SAME DEED . THIS WAS IN ACCORDANCE WITH THE PROVISIONS OF RULE 114B SECOND PROVISO. 4. AS 132 ACTIONS HAVE BEEN CARRIED ON AGAINST SELL ER ON ALLEGED HIGHER SALES CONSIDERATION PAID, ADDITION BECAUSE O F CAPITAL GAIN HAVE BEEN MADE IN THE HANDS OF APPELLANT. 5. AS THE APPELLANT IS NOT REQUIRED TO OBTAIN PERMA NENT ACCOUNT NUMBER UNDER THE ITL, THERE IS NO REASONS FOR HIM/H ER TO OBTAIN IT AS SHE DON'T FALL IN ANY OF THE CONDITIONS OF SECTI ON 139A AND TRANSACTION ENTERED INTO BY HER AS PER 139A(5)(C) R .W.S. RULE 114B SECOND PROVISO THEY HAVE SUBMITTED FROM NO.60 BEFOR E REGISTERING AUTHORITY SHE HAS NOT VIOLATED ANY LAW. 6. EVEN OTHERWISE IT IS A REASONABLE CAUSE THAT A. SHE DO NOT HAVE ANY BUSINESS INCOME. B. SHE RESIDENT OF A SMALL VILLAGE. C. SHE DO NOT HAVE ANY OTHER ASSETS AND LIABILITY, D. SHE IS ILLITERATE. E. SHE IS LANY AND DOES NOT HAVE ANY AWARENESS ABOU T THIS KIND OF LAW. IN VIEW OF ABOVE FACTS PENALTY U/S. 272B LEVIED ON THE APPELLANT IS ERRONEOUS AND APPELLANT PRAYS THAT IT MAY BE DELETE D. 4. I HAVE CONSIDERED THE ENTIRE GAMUT OF FACTS. TH E ASSESSING OFFICER HAS IMPOSED PENALTY U/S. 272B OF I. T. ACT BECAUSE THE IT(SS)A NO.497 TO 501/AHD/2011 5 ASSESSEE HAS NOT MENTIONED PAN WHILE FILING APPEALS BEFORE CIT(A) AND ITAT. THE PENALTY U/S. 271B IS EXCISIBLE IF THE ASSESSEE FAILS TO COMPLY WITH THE PROVISIONS OF SECTION 139A . SECTION 139(A)(1) DEFINES THE BASIC REQUIREMENTS, IF FULFIL LED, THE ASSESSEE HAS TO GET PAN. SECTION 139A(5) GIVES THE DETAILS O F PROCEEDINGS/CORRESPONDENCE, WHERE MENTIONING OF PAN IS MANDATORY. THUS THE VALIDITY OF THIS PENALTY IS TO BE ASCERTAINED AS PER THE PROVISIONS OF SECTION 139A(1)AND139A(5). 4.1. IT IS A MATTER OF FACT THAT DURING THE YEAR UN DER CONSIDERATION ASSESSEE HAS RECEIVED AN INCOME OF RS.1,80,000/- FR OM SALE OF LAND. THE A.O. HAS ASSESSED THE INCOME OF THE ASSES SEE AT RS. 6,00,000/- AND CIT(A) HAS CONFIRMED THE SAME AT RS. 3,96,560/-. THE APPEAL IS PENDING BEFORE ITAT FOR FURTHER ADJUD ICATION. IN MY CONSIDERED VIEW, FOR THE PURPOSE OF THE PENALTY PRO CEEDINGS, IT WILL BE APPROPRIATE TO CONSIDER THE INCOME RECEIPT OF RS . 1,80,000/- AS EVIDENCE IN REGISTERED DOCUMENTS AND NOT THE ASSESS ED CONSIDERATION, BECAUSE ASSESSED SHARE OF CONSIDERAT ION MAY VARY. THESE FACTS CLEARLY INDICATE THAT THE INCOME OF RS. 1,80,000/- EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO TAX FOR THE A.Y. 2006-07 I.E. RS. 1,35,000/-. THIS WAY THE ASSESSEE IS COVERED WITH THE PROVISIONS SECTION 139A(1)(I). AS PER THE PROVISIONS OF SECTION 139(A)(5)(A) SHE IS REQUIRED TO QUOTE PAN IN ALL HER RETURNS TO, OR CORRESPONDENCE WITH, ANY INC OME-TAX AUTHORITY. 4.1.2 THE A.O. HAS CHARGED THAT THE ASSESSEE HAS N OT QUOTED PAN WHILE FILING APPEALS BEFORE ITAT AND CIT(A) AND IMP OSED PENALTY U/S. 272B. I AM OF THE CONSIDERED .VIEW, THAT PENAL TY U/S. 272B CAN NOT BE IMPOSED FOR DEFAULT OF NOT MENTIONING PAN AT TIME OF FILING OF APPEAL BEFORE ITAT, SINCE, ITAT IS NOT AN INCOME -TAX AUTHORITY AS PER THE PROVISIONS OF SECTION 117(1) OF THE. I. T. ACT. HOWEVER, THE ASSESSEE IS REQUIRED TO QUOTE PAN WHILE CORRESP ONDING WITH CIT(A). THE ASSESSEE HAS CLEARLY VIOLATED PROVISION S OF SECTION 139(A) AND ACCORDINGLY IS LIABLE TO PAY PENALTY U/S . 272B OF THE I. T. ACT. IT(SS)A NO.497 TO 501/AHD/2011 6 4.1.3. IT IS FURTHER TO STATE THAT IN SECTION 139A (5),WORD SHALL HAS BEEN USED, WHICH MAKES IT MANDATORY FOR THE ASS ESSEE TO MENTION PAN ON EVERY CORRESPONDENCE WITH INCOME-TAX AUTHORITY. IN SECTION 272B IT IS MENTIONED 'THE ASSESSING OFFI CER MAY DIRECT THAT SUCH PERSON SHALL PAY' THE WORD MAY SHOULD BE TREATED AS MANDATORY. IN THIS REGARD RELIANCE IS PLACED ON PAT NA HIGH COURT DECISION IN THE CASE OF CIT VS. STANDARD MERCANTILE CO. (1986) 160 ITR 613) WHERE IN IT WAS HELD - '........... THAT ABSENCE OF MENSREA OR FAILURE OF THE REVENUE TO ESTABLISH MENS REA WAS ENTIRELY IRRELEVANT. IT WAS FOR THE ASSESSEE TO SHOW THAT HE HAD REASONABLE CAUSE FOR N OT COMPLYING WITH THE NOTICE. FURTHER, THE TRIBUNAL WA S NOT JUSTIFIED IN TAKING THE VIEW THAT THE IMPOSITION OF PENALTY U/S. 271(1)(B) WAS DISCRETIONARY. THE EXPRESSION 'MAY' I N THE CONTEXT IN WHICH IT HAS BEEN USED MUST BE HELD TO B E MANDATORY THEREFORE, THE TRIBUNAL WAS HELD NOT JUST IFIED IN VACATING THE PENALTY LEVIED UNDER SECTION 271(1)(B) .. SINCE THE LANGUAGE USED IN THE SECTIONS 271(1)(B) A ND 272B IS IDENTICAL, ACCORDINGLY, THE RATIO OF SAID CASE W ILL HOLD GOOD FOR SECTION 272 B ALSO. . 4.1.4. THE ANALYSIS OF SECTION 139A(5) AND 272B SHO WS THAT IN BOTH THE SECTIONS WORD SHALL HAS BEEN USED. IN F ACT WORD SHALL HAS BEEN USED IN OPERATIONAL AS WELL AS PENAL TY SECTION IN SERIES. THIS INDICATE POSITIVE INTENTION OF THE LEGISLATURE THAT PENALTY IS A MUST FOR SUCH VIOLATIONS. 4.1.5. THE ASSESSEE'S ARGUMENT THAT IT HAS SUBMITTE D FORM NO. 60 WAS FILED BEFORE THE REGISTERING AUTHORITY A ND HENCE COMPLIED WITH PROVISIONS OF SECTION 139A(5) R.W.S. 114.B IS NOT RELEVANT. SINCE, THE PENALTY IS BEING IMPOSED F OR DEFAULT OF NOT MENTIONING PAN AT THE TIME FILING OF APPEAL BEFORE CIT(A). 4.1.6. IN VIEW OF ABOVE, I AM OF THE FIRM VIEW THA T THE ASSESSEE HAS VIOLATED THE PROVISIONS, OF. SECTION 1 39A AND IT(SS)A NO.497 TO 501/AHD/2011 7 ACCORDINGLY, I UP HOLD PENALTY IMPOSED U/S. 272B OF RS. 10,000/-. 7. WE HAVE HEARD DR AND PERUSED THE ORDERS OF THE L OWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT C ASE, THE CIT(A) CONFIRMED THE LEVY OF PENALTY UNDER SECTION 272B OF RS.10,000/- ON THE GROUND THAT THE ASSESSEE FAILED TO QUOTE PAN IN APP EAL FILED BEFORE THE CIT(A) IN RESPECT OF ADDITIONS MADE BY THE AO IN TH E ASSESSMENT FOR THE ASSTT.YEAR 2006-07. 8. THE DR SUPPORTED THE ORDER OF THE CIT(A). 9. WE FIND THAT THE ASSESSEE SUBMITTED BEFORE THE L OWER AUTHORITIES THAT THE ASSESSEE IS AN ILLITERATE PERSON HAVING NO BUSINESS INCOME AND NO TAXABLE INCOME EXCEPT PROFIT ON SALE OF AGRICULT URE LAND. IN THE ABOVE CIRCUMSTANCES, AS THE ASSESSEE WAS NOT REQUIR ED TO OBTAIN PAN, AND THEREFORE, PAN COULD NOT BE QUOTED IN THE APPEA L FILED BEFORE THE CIT(A). 10. WE FIND THAT THE DEPARTMENT HAS BROUGHT NO MATE RIAL BEFORE US TO SHOW THAT THE ASSESSEE WAS ALLOTTED PAN BY THE AO A S PER THE PROVISIONS OF SUB-SECTION (2) OF SECTION 139A OF TH E ACT. 11. FURTHER, AS PER THE PROVISIONS OF SECTION 273B, PENALTY UNDER SECTION 272B IS NOT LEVIABLE, IF THE ALLEGED DEFAUL T WAS FOR REASONABLE CAUSE. 12. WE FURTHER FIND FROM THE CHALLAN OF TRIBUNAL FE E, ATTACHED WITH THE APPEAL MEMO THAT THE ASSESSEE HAS QUOTED PAN THEREI N. 13. WE FURTHER FIND THAT NO MATERIAL WAS BROUGHT BE FORE US TO SHOW THAT THE ASSESSEE WAS INFORMED BY THE DEPARTMENT OF HER PAN AND LEGAL REQUIREMENT OF PUTTING PAN AT ANY TIME SO THAT IT C AN BE INFERRED THAT IT(SS)A NO.497 TO 501/AHD/2011 8 THE DEFAULT WAS WILLFUL OR BONA FIDE . KEEPING IN VIEW THE ENTIRE FACTS, IN OUR CONSIDERED VIEW, THE DEFAULT ON THE PART OF THE ASSESSEE WAS BECAUSE OF HER IGNORANCE AND NOT BECAUSE OF ANY MALA FIDE INTENTION, AND THEREFORE, WE DELETE THE PENALTY OF RS.10,000/- LEVIED UNDER SECTION 272B OF THE ACT. THUS, COMMON GROUND IN ALL THE AP PEALS IS ALLOWED. 14. IN THE RESULT, ALL APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 20 TH FEBRUARY, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER