M/S. SUN INFRASTRUCTURE PVT.LTD,NASHIK vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE - 2, NASHIK

PDF · subscribers
ITA 3015/PUN/2017Status: DisposedITAT Pune16 March 2021AY 2007-085 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had a reasonable cause for non-compliance due to the difficulty in collecting scattered records within the limited timeframe. Therefore, the penalty imposed under section 271(1)(b) was deleted based on the provisions of section 273B.

What were the facts?

Following a search action, the assessee was issued a notice under section 142(1) for compliance within a short period of four working days due to intervening holidays. The assessee failed to appear and furnish details, leading to a penalty under section 271(1)(b).

What were the issues?

Whether the assessee had a reasonable cause for non-compliance with the notice issued under section 142(1) and if the penalty under section 271(1)(b) should be deleted.

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 273B,Section 142(1),Section 132,Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE – VIRTUAL COURT

Before: SHRI R.S. SYAL & SHRI S.S.VISWANETHRA RAVI

For Respondent: Shri Vitthal Bhosale

order for the sake of convenience.

2.

For reference sake, we are taking up the factual matrix from the appeal folder for the assessment year 2007-08. A search and seizure action u/s.132 of the Act was taken in Suyojit group, Nashik on 21- 03-2012. Notice u/s. 142(1) dt. 11-08-2015 was issued seeking compliance on 21-08-2015. Since the assessee did not appear, the AO imposed penalty of Rs.10,000/- u/s.271(1)(b) of the Act. The assessee pleaded for a reasonable cause before the ld. CIT(A) through written submissions, that have been reproduced in para 3.1 of his order. Not convinced, the ld. CIT(A) echoed the penalty, which has brought the assessee before the Tribunal. Similar facts obtain in respect of the other two years as well.

3.

We have heard the ld. DR through Virtual Court and gone through the relevant material on record. There is no appearance from the side of assessee despite notice. As such, we are proceeding to dispose of the appeals ex parte qua the assessee. From the facts narrated in para 3.1 of the impugned order, it can be seen that the assessee maintained regular books of account which were audited.

Consequent upon the search, the assessments for the relevant seven years were completed in March, 2013. The ld. CIT, invoking his power u/s.263, set aside the assessment orders for the years under consideration. It was in pursuance of such orders u/s.263 that the AO initiated instant assessment proceedings for which notice dated 11.08.2015 u/s.142(1) was issued which was served upon the assessee on 14-08-2015. Compliance was sought on 21-08-2015.

There were three holidays between this period of seven days in total, namely, 15th August, intervening Saturday and Sunday, thereby leaving only four days at the disposal of the assessee for putting in appearance and furnishing the details. The assessee stated before the ld. CIT(A) that the proceedings u/s.263 were represented by Advocate Dewani from Nagpur since such proceedings were carried out at Nagpur. Thereafter, the record was carried to Shri Abhay Gundecha, Chartered Accountant in Pune for filing of appeals against the order passed u/s.263 of the Act.

Because of these proceedings, the relevant records were frequently moved from Nashik, Pune and Nagpur depending upon the necessity where these were required. In view of this peculiar situation, we find that it was difficult on the part of the assessee to collect different records from the scattered places in a short period of four days, which was at the disposal of the assessee for complying with the requirements of the AO. There is no doubt that the assessee did not comply with the notice issued by the AO and thus, became liable for penalty u/s.271(1)(b) of the Act. However, section 273B states that wherever there is a reasonable cause in not complying with the requirements resulting into imposition of penalty including section 271(1)(b) under consideration, the penalty needs to be deleted. Adverting to the facts of the instant case, we find that there was a reasonable cause with the assessee in not complying with the requirements of the AO in such a short period for the reasons discussed hereinabove. This being a reasonable cause has brought the case within the ambit of section 273B of the Act. We, therefore, order to delete the penalty imposed by the AO and confirmed in the first appeal in respect of all the three years under consideration.

4.

In the result, all the appeals are allowed. Order pronounced in the Open Court on 16th March, 2021.

More judgments on Section 271(1)(b)

All 2,912 judgments and leading authorities on Section 271(1)(b) →

Recent GST High Court judgments

Search GST case law →