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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: HONBLE KUL BHARAT & HONBLE MANISH BORAD
O R D E R PER BENCH.
The above captioned bunch of 6 appeals are at the instance of assessee which are directed against the orders of Ld. Commissioner of Income Tax (Appeals), Bhopal (In short ‘CIT(A)] dated 24.01.2018.
As the issue raised in all these appeals are similar, these were heard together and are being disposed off by this common order for the sake of convenience and brevity.
It is agreed by both the parties that facts involved in all these appeals are common and the common issue relates to the levy of ITANo.401 to 406 of 2018 2 Harminder singh Bhatia penalty u/s 271(1)(b) of the Act at Rs.10,000/- for non-compliance to the notice issued u/s 142(1) of the Act.
At the outset, Ld. counsel for the assessee submitted that the issue raised in these bunch of appeals is squarely covered in favour of the assessee by the decision of this coordinate Bench in case of Smt. Pushpa Verma and Others vide ITANo.361 to 367/Ind/2018 dated 24.01.2018 wherein the Hon'ble Tribunal deleted the penalty levied u/s 271(1)(b) of the Act on observing that the assessments were framed u/s 143(3) of the Act and not as an ex-parte order u/s 144 of the Act.
Per contra. Ld. Departmental Representative(DR) though supported the orders of the lower authorities but could not controvert the submissions made by the ld. counsel for the assessee.
We have heard rival contentions, considered the facts, perused the material placed before us and carefully gone through the decision referred and relied by the Ld. counsel for the assessee. The sole grievance raised in these six(6) appeals is against the order of Ld. CIT(A), confirming the levy of penalty of Rs.10,000/- u/s 271(1)(b) of the Act for non-complying to notice issued u/s 142(1) of the Act.
We observe that similar issue came up before us in other group cases of which assessee also belongs and we deleted the penalty levied u/s 271(1)(b) of the Act vide our order dated 24.01.2019 in case of Pushpa Verma (supra) observing as follows:
ITANo.401 to 406 of 2018 3 Harminder singh Bhatia
“12. It is brought to our notice that except in the case of Sunit Madhok, assessments in all the other assessee(s) have been framed u/s 153A r.w.s 143(3) of the Act which shows that proper representation was there before the assessing officer by the assessees and assessee(s) participated in the assessment proceedings to the satisfaction of Ld. Assessing Officer. In these facts where the assessment orders have not been framed ex- parte u/s 144 of the Act but have been framed u/s 143(3) of the Act than the penalty levied u/s 271(1)(b) has been held to be unjustified by Coordinate Bench Indore in the case of Pramila Ghodhe vs. DCIT (2017) 49 CCH 0401 dated 20.03.2017 observing as follows: “We have considered the facts, rival submissions and perused the material available on record. We find that the assessment in this case was made under section 143(3) of the Act, which means that there was subsequent compliance to the notices issued by the authorities. We also noted that Ld. counsel also attended before the AO on 17.12.2015 and filed replies in all the cases including the case of the assessee. The AO verbally agreed but counsel’s presence was not recorded. We are of the view that the assessee has a reasonable cause for non- appearance on that day. Therefore, there is no justification for levying the penalty u/s 271(1)(b) of the Act. Secondly, in this matter, the assessments have been completed u/s 143(3) due to subsequent compliances in the assessment proceedings, which was considered as good compliances and default committed earlier were ignored. We also bolster our view by placing reliance in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust v. ADIT (2008) 115 TTJ 419(Del)/115 ITJ 419 (Del), wherein it was held that where the assessee had not complied with notice u/s 142(1) but assessment order was passed u/s 143(3) and not u/s. 144, that meant that subsequent compliance in assessment proceedings was considered as good compliance and defaults committed earlier were ignored by the Assessing Officer, therefore levy of penalty u/s. 271(1)(b) of the Act was not justified. Thus, we set aside
ITANo.401 to 406 of 2018 4 Harminder singh Bhatia the orders of the Revenue Authorities and delete the levy of penalty u/s 271(1)(b) of the Act in these appeals.
Under same set of facts relating to penalty u/s 271(1)(b) of the Act, similar view of deleting penalty has been taken by Coordinate Bench Indore in another case of Hemant Kumar Soni & Ors. Vs. DCIT (2017) 49 CCH 0350 dated 16.01.2017 which reads as follows: “We have heard rival contentions of both the parties and perused the material available on record. We find from the assessment orders in all these group appeals that the assessments have been completed u/ s 143(3) of the IT. Act. We find that the Assessing Officer has levied penalty 271(1)(b) for non-appearance on 15.10.2015. As per ld. Authorized Representative of the assessee, the assessees' counsel appeared and stated categorically that he appeared for seeking time. The counsel regularly attended the proceedings and the assessments have been framed u/ s 143(3) and not u/ s 144. We find that this was the first notice for compliance and since the voluminous records and papers were required to be scrutinized and individually in each case, the appropriate replies were to be filed, the assessee prayed for the time to submit the reply and ultimately submitted all the necessary replies and cooperated with the Department. We are of the view that assessees had reasonable cause for non-appearance on that day. Therefore, there is no justification for levying the penalty u/s 271(1)(b) of the Act. Secondly, in this matter, the assessments have been completed u/s 143(3) of the Act, therefore, no penalty can be levied if the assessments have been completed u/s 143(3) and there is subsequent compliances in the assessment proceedings was considered as good compliances and default committed earlier were ignored. Therefore, penalty u/s 271(1)(b) was deleted by various Tribunals. In the case of Akhil Bhartiya Parthmik Shmshak Sangh Bhawan Trust vs. ADIT (2008) 115 TTJ 419 (Del), it was held that where the assessee had not complied with notice u/s142(1) but ITANo.401 to 406 of 2018 5 Harminder singh Bhatia
assessment order was passed u/s 143(3) and not u/s 144, that meant that subsequent compliance in assessment proceedings was considered as good compliance and defaults committed earlier were ignored by the Assessing Officer, therefore, levy of penalty u/s 271(1)(b) of the Act was not justified. The case laws cited by ld. Departmental Representative are distinguishable on facts, hence, inapplicable to this case. We also noted that in the Vinit Chouhan group cases, an order is passed in a group in I.T.A.Nos. 1061 to 1181/Ind/2016 dated 23.11.2016, in which similar set of facts the penalty levied u/s 271(1)(b) was set aside. Therefore, respectfully following the said order and facts, we set aside the orders of the Revenue Authorities and delete the levy of penalty u/s 271(1)(b) of the Act in all these appeals.”
We, therefore, in the given facts and circumstances of the case and respectfully following the decision of the Coordinated Bench, are of the considered opinion that levy of penalty u/s 271(1)(b) of the Act was fair and justified in the case of Smt. Pushpa Verma, M/s. Regent Beers & Wines Ltd., Patel Education & Welfare Society, Arun Kumar Verma, Mrs. Vaishali Shivhare, Ram Swaroop Shivhare & Harminder Singh Bhatia and accordingly all grounds raised by the assessees in the appeals in ITANo.361 to 367/Ind/2018, ITANo.345 to 349/Ind/2018, ITANo.353 to 358/Ind/2018, ITANo.368 to 374/Ind/2018, ITANo.375 to 381/Ind/2018, ITANO.389 to 395/Ind/2018 & ITANo.400/Ind/2018 are allowed and Revenue is directed to delete the penalty u/s 271(1)(b) of the Act in these cases.
We, therefore, respectfully following the above referred decision of the Tribunal and in the given facts and circumstances of the case, are of the view that though the assessee made default in making due compliance to the initial notice issued u/s 142(1) of the Act due
ITANo.401 to 406 of 2018 6 Harminder singh Bhatia to reasonable cause but subsequent compliance were made in the assessment proceedings which were considered as good compliance and assessments have been completed u/s 143(3) of the Act and not u/s 144 of the Act as an ex-parte order, therefore, the penalty levied u/s 271(1)(b) of Rs.10,000/- is liable to be deleted in all these six appeals relating to the assessee namely Mr. Harminder Singh Bhatia for A.Ys. 2011-12 to 2016-17 in ITANos.401 to 406/Ind/2018.
In the result, appeals of the assessee in ITANos. 401 to 406/Ind/2018 are allowed.
The order pronounced in the open Court on 07.06.2019.