SHRI DEEPAK RAMBHAU ASAI (HUF),BHOPAL vs. THE ITO-2(1), BHOPAL

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE Before Shri Kul Bharat, Hon’ble Judicial Member and Shri Manish Borad, Hon’ble Accountant Member ITA Nos. 798 to 804/Ind/2016 A.Ys. 2004-05 to & 2010-11

Rambhau Ghanshyam Asai (HUF) Bhopal ::: Appellant Vs Income tax Officer 2(1) Bhopal ::: Respondent ITA Nos. 805 to 811/Ind/2016 A.Ys. 2004-05 to & 2010-11

Deepak Rambhau (HUF) Bhopal ::: Appellant Vs Income tax Officer 2(1) Bhopal ::: Respondent

ITA Nos. 812 to 818/Ind/2016 A.Ys. 2004-05 to & 2010-11

Late Rambhau Asai Through L/R Smt.Urmila Asai Bhopal ::: Appellant Vs Income tax Officer 2(1) Bhopal ::: Respondent ITA Nos. 819 to 825/Ind/2016 A.Ys. 2004-05 to & 2010-11

Smt. Urmila Asai Bhopal ::: Appellant Vs Income tax Officer 2(1) Bhopal ::: Respondent Appellants by Shri Ashish Goyal & Shri N.D. Patwal Respondent by Shri K.G. Goyal Date of hearing 14.5.2018 Date of pronouncement 16.5.2018

O R D E R PER BENCH

These bunch of 28 appeals in case of four assessees

captioned above relating to the assessment years 2004-05

to 2010-11 are directed against different orders of the

Commissioner of Income Tax (Appeals)-I, Bhopal, all dated

27.4.2016 arising out of different orders u/ 271(1)(b) of Income Tax Act (in short referred as ‘Act’) Act framed by the

ITO 2(1), Bhopal.

heard together and are being disposed of by this

consolidated order for the sake of convenience.

Bench of the Tribunal for short appeal fee and non-

prosecution with the observation that the “assessees are at

liberty to pay the short fee after receipt of this order within

two months and thereafter to make proper application for

restoration of appeals, if so desired, as per law”. We observe

that the assessee had deposited the difference amount of

fee on 11.8.2016 but could not appear before the Tribunal

on the date of hearing on 16.8.2016. After dismissal of the

appeals, the assessees went in appeal before the Hon'ble

High Court of Madhya Pradesh. Hon'ble High Court of Madhya Pradesh admitted the appeals on the following

substantial question of law :-

“Whether on facts and in the circumstances of the case The learned ITAT was justified in law in dismissing the appeals, when the appellants had already rectified the defect by paying the differential challan fees and the relevant challans were on record of learned ITAT ?”

After hearing the parties, the Hon'ble High Court set aside

the order of the Tribunal with a direction to verify about

the deficit court fees which was paid on 11.8.2016 and

thereafter decide the appeals of the assessee on merits in

accordance with law.

Court, we have verified the deposit of deficit court fee and

find that the assessee has already deposited the difference

of appeal fee on 11.8.2016 and accordingly proceed to

decide these appeals on merit.

the learned Commissioner of Income Tax (Appeals) was not 4 justified in confirming the penalty levied u/s 271(1)(b) of

the Act at Rs. 10,000/- in each appeal for non-compliance

with the notices u/s 142(1) of the Act.

similar to each other, we would like to briefly state the facts

of ITA No. 798/Ind/1016 in case of Rambhau Ghanshyam

Asai (HUF). In this case, notices u/s 142(1) of the Act was

issued but in compliance, none attended nor any written

submissions were filed. The Assessing Officer in order to

provide one more opportunity, issued another notice/query

letter on 18.3.2014 fixing the date of hearing on 21.3.2014.

Notices u/s 143(2) of the Act were issued on 20.3.2014

which were duly served on the assessee on 20.3.2014. Vide

letter dated 21.3.2014 the assessee submitted that return

filed on 20.3.2014 for the assessment year 2010-11 may be

considered as return in response to notice u/s 143(2) for

assessment year 2010-11. Thereafter a notice u/s 274 read with section 271of the Act of the Act was issued on

28.3.2014 fixing the case for hearing on 29.4.2014. The

assessee neither appeared nor filed any reply in response

thereto. Again a show cause notices were issued on

9.7.2015 and 31.7.2014 but there was no compliance on

behalf of the assessee. The Assessing Officer, therefore,

inferred that the assessee has nothing to say in the matter.

In this view of the matter, the Assessing Officer observing

that since the assessee has failed to comply with the

provisions of section 142(1) of the Act, imposed penalty of

Rs. 10,000/- u/s 271(1)(b) of the Act for default of non-

compliance.

learned Commissioner of Income Tax (Appeals) but there

also the assessee neither appeared on the dates of hearing

nor filed any written submissions. The learned

Commissioner of Income Tax (Appeals), therefore, observing that the assessee is not interested in pursuing his appeals,

dismissed the appeals of the assessee in limine. Now the

assessees are in appeal before the Tribunal.

assessee contended that it has been consistently held by

various judicial pronouncements including the decisions of

the coordinate Bench of the Tribunal that in case the

assessment is completed u/s 143(3) of the Act, penalty u/s

271(1)(b) of the Act is not justified. He also submitted that

in the case of the assessees, assessments have been

completed u/s 153C r.w.s. 143(3) of the Act and the

assessees gave necessary details before the Assessing

Officer for the purpose of completing the assessment and

as such the penalty u/s 271(1)(b) of the Act was not

exigible. In support of his submission, the learned counsel

for the assessee referred to and relied upon the judgments

in the cases of Akhil Bhartiya Prathmik Shmshak Sangh;

115 TTJ 419 (Del); Hemant Soni and others; ITA Nos. 361

to 1367/Ind/2016, etc.; (Trib. Indore) and Vineet Chauhan

and others ITA Nos. 1061 to 1181/Ind/2016.

supporting the orders of the authorities below.

through the orders of the authorities below and the

judgments relied upon by the learned counsel for the

assessee. This fact is not disputed that all the assessments

were completed u/s 153C r.w.s. 143(3) of the Act and

penalty of Rs.10,000/- u/s 271(1)(b) of the Act was levied

for non-compliance with notices u/s 142(1) of the Act.

u/s 271(1)(b) of the Act in the case of the assessee wherein

the regular assessments were completed u/s 143(3) of the

Act, the Coordinate Bench of the Tribunal has consistently held that in such situation it is not justified for the

Assessing Officer to levy penalty.

Prathmik Shmshak Sangh (supra), ITAT, Delhi Bench ‘G”

has held as under :-

“Where assessee had not complied with notice under section 142(1) but assessment order was passed under section 143(3) and not under section 144, that meant that subsequent compliance in assessment proceedings was considered as good compliance and defaults committed earlier were ignored by Assessing Officer and, therefore levy of penalty under section 271(1)(b) was not justified. “

case of Shri Hemant Kumar Soni (supra) has held as under

:-

“.... 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/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 AO, therefore, levy of penalty u/s. 271(1)(b) of the Act was not justified. The case laws cited by ld. 9 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 order of the Revenue authorities and delete the levy of penalty u/s. 271(1)(b) of the Act in all these appeals”

of Vineet Chauhan & Others (supra) has observed as under :-

“.... 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/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 AO, therefore, levy of penalty u/s. 271(1)(b) of the Act was not justified.

Construction & Others; ITA Nos. 655 to 657/Ind/2016 vide

its order dated 8.7.2016 categorically observed as under :-

“6. After considering the arguments of both the sides, we find that in the present appeals the assessments have been framed u/s 153A r.w.s. 143(3) of the Act in all the cases of the assessees in the present appeals. Therefore, the decision of the Delhi Bench of the Tribunal in the case of Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. Assistant Director of Incometax; (2008) 115 TTJ 419 (Del) squarely applies to the facts of the present appeals. The learned DR could not cite any contrary decision. We, therefore, respectfully following the decision of the Delhi Bench of the Tribunal in the case of Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. Assistant Director of Incometax; (2008) 115 TTJ 419 (Del) wherein it was held that where the assessee had not complied with notice under section 142(1) but assessment order was passed under section 143(3) and not under section 144, that meant that subsequent compliance in assessment proceedings was considered as good compliance and defaults committed earlier were ignored by Assessing Officer and, therefore, levy of penalty under section 271(1)(b) was not justified, set aside the orders of the authorities below and delete the levy of penalty u/s 271(1)(b) of the Act in these appeals. This ground of the assessees is allowed in all these appeals.

corodinate Benches of the Tribunal as well as in the given

facts and circumstances of the case wherein it is clearly

emanating from record that no search and seizure

operation was conducted on the assessee and proceedings u/s 153C of the Act were initiated and the assessee filed

the return in compliance with the notice u/s 153C of the

Act and also furnished the reply to various queries raised

by the Assessing Officer as appearing at pages 9 to 11 of

the paper book. It is also evident that the assessee was

given very little time to furnish long list of requirements

and there was reasonable cause on the part of the assessee

for being unable to file the details on the given data in the

notice. However, the assessee duly complied with the

requirements on the subsequent dates because of

which the assessment was completed u/s 153C r.w.s.

143(3) of the Act. We are, therefore, of the view that both

the lower authorities were not justified in levying and

confirming the penalty u/s 271 (1) (b) of the Act at Rs.

10,000/- in each case. We accordingly set aside the

orders of the authorities below and delete the penalty

of Rs. 10,000/- in each of these cases. Consequently, we allow the grounds raised by four assessees in these 28

appeals.

stand allowed.

Order pronounced in open Court on 16.5.2018.

Sd/- sd/-

(KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER 16th May, 2018 Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By order Private Secretary/DDO, Indore 1. Date of dictation : .2018 2. Date on which the typed draft is placed before the Dictating Member : .2018 3. Date on which approved draft comes to the Sr.P.S./P.S: 4. Date on which the fair order is placed before the dictating Member for pronouncement: