Illec Trading (P) Ltd., Kanpur V. Dy. Commissioner of Income Tax, Central Circle-II, Kanpur

ITSSA 639/LKW/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2661 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 18-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K SINGH
• Assessee Lawyers: S K GARG
• Keywords: Principle of natural justice; Reasonable cause
• Section: 142(1)

Judgement Text

I.T(SS).A. NOS.636 TO 642/LKW/2017 ASSESSMENT YEARS:2009-10 TO 15-16 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.(SS)A. NOS.636 TO 642/LKW/2017 ASSESSMENT YEARS:2009-2010 TO 15-16 M/S ILLEC TRADING (P) LTD., 7/71A, TILAK NAGAR, KANPUR. PAN:AAACI 3483 J VS. DY.C.I.T., CENTRAL CIRCLE-II, KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAIN ST THE RESPECTIVE ORDERS OF THE LEARNED CIT(A)IV, KANPUR, ALL DATED 10/08/2017 FOR ASSESSMENT YEARS 2009-10 TO 2015-16. SINCE THE GRO UNDS RAISED AND THE FACTS INVOLVED IN ALL THE CASES ARE SIMILAR, WE HAV E DECIDED TO DISPOSE OF ALL THESE APPEALS BY A COMMON ORDER. 2. FOR THE SAKE OF CONVENIENCE, WE TAKE UP THE FACTS I NVOLVED IN ITA NO.636/LKW/2017. IN THIS APPEAL THE ASSESSEE HAS R AISED THE FOLLOWING GROUNDS OF APPEAL: 1. BECAUSE THE 'CIT(A) HAS ERRED IN LAW AND ON FA CTS IN HOLDING THAT 'UNDERSIGNED IS OF THE VIEW THAT THE APPELLANT HAS NOT ONLY COMMITTED THE DEFAULT UNDER THE PROVISION OF SECTIO N 271(1)(B) BUT APPELLANT BY SHRI S. K. GARG, ADVOCATE RESPONDENT BY SHRI C. K. SINGH, D.R. DATE OF HEARING 28/02/2019 DATE OF PRONOUNCEMENT 08 /03/2019 I.T(SS).A. NOS.636 TO 642/LKW/2017 ASSESSMENT YEARS:2009-10 TO 15-16 2 ALSO FAILED TO SHOW REASONABLE CAUSE FOR COMMITTING SUCH DEFAULT' AND, BASED ON SUCH A VIEW, IN UPHOLDING PENALTY OF RS.10,000/- AS HAS BEEN LEVIED BY THE ASSESSING OFFICER UNDER SECT ION 271(1)(B) OF THE ACT 2. BECAUSE WHILE UPHOLDING THE LEVY OF PENALTY UNDE R SECTION 271(1)(B), THE 'CIT(A)' HAS FAILED TO CONSIDER AND TAKE INTO ACCOUNT THAT A) THE APPELLANT HAD COMPLIED WITH NOTICE UNDER SE CTION 142(1) AND SUCH A COMPLIANCE COULD NOT HAVE BEEN HELD TO B E PART COMPLIANCE; B) PROCEEDINGS UNDER SECTION 153C, DURING THE COUR SE OF WHICH SUCH NOTICE UNDER SECTION 142(1) HAD BEEN ISSUED WE RE NOT VALID AS PER ADVICE RECEIVED BY THE APPELLANT, AS HAD DUL Y BEEN BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER DURING THE C OURSE OF ASSESSMENT RELATED PROCEEDINGS; C) IN ANY CASE IN COMPLIANCE WITH THE SAID SHOW CA USE NOTICE THE APPELLANT HAD GIVEN DETAILED REASONING FOR ALLEGED NON- COMPLIANCE; D) AFTER CONSIDERING THE SAID RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSING OFFICER HIMSELF HAD TAKEN A REASONABL E VIEW BY NOT PROCEEDING TO PASS AN ORDER LEVYING PENALTY; E) INSTEAD THE ASSESSING OFFICER, ISSUED FURTHER NO TICE(S) UNDER SECTION 142(1); AND F) THERE WAS NO JUSTIFICATION, EITHER ON FACTS OR I N LAW TO PASS AN ORDER LEVYING PENALTY UNDER SECTION 271(1)(B) AND ACCORDINGLY THE PENALTY ORDER THAT HAD BEEN IMP UGNED BEFORE HIM WAS LIABLE TO BE QUASHED. I.T(SS).A. NOS.636 TO 642/LKW/2017 ASSESSMENT YEARS:2009-10 TO 15-16 3 3. BECAUSE THE ORDER LEVYING PENALTY STOOD VITIATED AS THE AUTHORITIES BELOW HAD FAILED TO TAKE INTO CONSIDERATION THE SUR ROUNDING FACTS AND CIRCUMSTANCES OF THE CASE. 4. BECAUSE IN ANY CASE THE TEXT OF THE ORDER LEVYIN G PENALTY UNDER SECTION 271(1)(B) ITSELF SHOWED THAT PENALTY UNDER SECTION 271(1)(B) HAD BEEN LEVIED FOR ALLEGED NON-COMPLIANCE OF SUBSE QUENT NOTICES UNDER SECTION 142(1) AND THERE BEING NO SHOW CAUSE NOTICE ISSUED FOR SUCH SUBSEQUENT NON-COMPLIANCE, ORDER LEVYING PENAL TY UNDER SECTION 271(1)(B) WAS LIABLE TO BE HELD TO HAVE BEEN PASSED IN VIOLATION OF THE PROVISION OF SECTION 274 OF THE ACT AND ACCORDINGLY THE SAME SHOULD HAVE BEEN QUASHED. 5. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY T O THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 3. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS CONTENDED THAT THE AUTHORITIES BELOW HAVE ERRED IN HOLDING THAT THERE WAS NO COMPLIANCE MADE BY THE ASSESSEE TO THE NOTICE DATED 07/10/2016, ISS UED UNDER SECTION 142(1) OF THE INCOME-TAX ACT, 1961. IT HAS BEEN CO NTENDED THAT THE ASSESSEE DULY FILED REPLY DATED 19/10/2016 TO THE S AID NOTICE DATED 07/10/2016 ISSUED BY THE ASSESSING OFFICER, COPY OF WHICH IS AVAILABLE AT PAGES 5 AND 6 OF THE ASSESSEES PAPER BOOK. 3. THE CONTENTION OF THE ASSESSEE IS FOUND TO BE CORRE CT. ASSESSEES PAPER BOOK PAGES 5 AND 6 ARE THE COPY OF ASSESSEES REPLY DATED 19/10/2016 TO THE NOTICE DATED 07/10/2016 ISSUED TO THE ASSESSEE UNDER SECTION 142(1) OF THE ACT, A SCANNED COPY WHEREOF I S REPRODUCED HEREIN BELOW, BEARS THE STAMP OF THE ASSESSING OFFICER AND SIGNATURES THEREON. THESE ARE DATED 19/10/2016. THE DEPARTMENT HAS NOT BEEN ABLE TO SHOW OTHERWISE. I.T(SS).A. NOS.636 TO 642/LKW/2017 ASSESSMENT YEARS:2009-10 TO 15-16 4 I.T(SS).A. NOS.636 TO 642/LKW/2017 ASSESSMENT YEARS:2009-10 TO 15-16 5 I.T(SS).A. NOS.636 TO 642/LKW/2017 ASSESSMENT YEARS:2009-10 TO 15-16 6 4. THE ASSESSING OFFICER HAS NOTED THAT AGAIN NOTICE U /S 142(1) WAS ISSUED ON 31/10/2016 AND DATE WAS FIXED FOR COMPLIA NCE ON 07/11/2016 BUT ASSESSEE DID NOT FILE ANY REPLY OR ADJOURNMENT APPL ICATION BY 08/11/2016. THE ASSESSING OFFICER HAS FURTHER NOTED THAT SHOW C AUSE NOTICE WAS ISSUED ON 08/11/2016 AND DATE OF COMPLIANCE WAS FIXED FOR 16/11/2016 AND ASSESSEE FILED EXPLANATION ON 16/11/2016. IN THIS RESPECT WE FIND THAT ASSESSEE HAD FILED REPLY ON 09/11/2016 INSTEAD OF 0 7/11/2016 AND AGAIN ASSESSEE HAD FURNISHED EXPLANATION ON 16/11/2016 WH ICH ASSESSING OFFICER HIMSELF HAS ADMITTED. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE DID NOT COMPLY WITH THE VARIOUS NOTICES DATED 07/10/2016, 3 1/10/2016 & 08/11/2016, ISSUED UNDER SECTION 142(1) OF THE ACT. THE PROVISIONS OF SECTION 271(1)(B) OF THE ACT GET ATTRACTED ONLY ON THE FAILURE OF THE ASSESSEE TO COMPLY WITH, INTER ALIA, THE NOTICE UNDER SECTIO N 142(1) OF THE ACT. SINCE, IN THE PRESENT CASE, THE ASSESSEE HAS DULY COMPLIED WITH THE NOTICE, PENALTY UNDER CONSIDERATION IS ENTIRE UNCALLED FOR. IT IS, ACCORDINGLY, CANCELLED. THEREFORE, APPEAL IN I.T.A. NO.636 IS ALLOWED AND P ENALTY IS DELETED. 5. THE FACTS, IN OTHER APPEALS OF THE ASSESSEE NUMBERI NG 637 TO 642 ARE SIMILAR AND EVEN DATE OF SHOW CAUSE NOTICES AND THE IR REPLIES ARE SIMILAR THEREFORE, THE PENALTY IS DELETED IN OTHER APPEALS ALSO. 6. IN THE RESULT, ALL THE SEVEN APPEALS FILED BY THE A SSESSEE ARE ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 08/03/2019) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:08/03/2019 *SINGH I.T(SS).A. NOS.636 TO 642/LKW/2017 ASSESSMENT YEARS:2009-10 TO 15-16 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR