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Income Tax Appellate Tribunal, DELHI BENCH: ‘A’, NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI O.P. KANT
Rs. 20,000/- u/s 271 (l)(b) of the Act.
2. That while upholding the levy of penalty the learned Commissioner of Income Tax (Appeals) has failed to appreciate that order levying penalty was based on findings contrary to the order of assessment and, overlooking the reply furnished by the appellant during the penalty proceedings and, therefore untenable in law. 2.1 That the learned Commissioner of Income Tax (Appeals) has also failed to appreciate that there was reasonable Cause on the part of the appellant and, as such penalty sustained is illegal, invalid and untenable. 2.2 That order of the learned Commissioner of Income Tax (Appeals) is otherwise also based on factual misappreciation of the facts and circumstances of the case and, complete misinterpretation of the provisions contained in section 271(l)(b) of the Act.
3. That the learned Commissioner of Income Tax (Appeals) has otherwise too confirmed the penalty without providing fair, reasonable and meaningful opportunity and as such order passed is contrary to the principles of natural justice and, therefore a nullity. It is therefore prayed that the penalty-levied u/s 271 (l)(b) of the Act of Rs. 20,000/- and upheld by the learned Commissioner of Income Tax (Appeals) be deleted and, appeal of the appellant company be allowed.
The facts in brief of the case are that in the case of assessee a search and seizure action u/s 132 of the Income-tax Act, 1961 (in short ‘the Act’) was conducted on 31.01.2008. An order under Section 144 of the Act, consequent upon the order under 264 of the Act passed by the learned Commissioner of Income Tax (CIT) setting aside the original assessment was passed in this case on 08.03.2013. During the course of assessment proceedings, the assessee failed to attend on few occasions. The Assessing Officer initiated penalty under Section 271(1)(b) of the Act for failure to attend the proceedings on 30.11.2012 and 28.01.2013. The Assessing Officer observed similar non-compliance in assessment years 2003-04 to 2008-09. The learned CIT(A) passed a combined order for assessment years 2003-04 to 2008-09. Aggrieved with the confirmation of the penalty, the assessee is in appeal before the Tribunal.
At the outset, learned counsel for the assessee submitted that out of the assessment years 2003-04 to 2008-09, the Tribunal has already deleted the penalty levied under Section 271(1)(b) of the Act of Rs.20,000/- each, in assessment years from 2003-04 to 2008-09, except the assessment year under consideration. He submitted that the facts and circumstances being identical and the order of the learned CIT(A) being consolidated, following the decision of the Tribunal for other years, the penalty under reference should also be deleted.
4. On the contrary, the learned DR relied on the order of the lower authorities.
We have heard the rival submission and perused the relevant material on record. We observed that the Tribunal in order dated 20.03.2018 has decided the appeal against the consolidated order of the learned CIT(A) for assessment year 2003-04 to 2008-09 except for the assessment year under consideration in to 4477/2015 and ITA No. 4479 to 4480/2015. The relevant finding of the Tribunal is reproduced as under: “4. We have perused the copy of the order dated 6.11.2017 in ITA Nos.4518 to 4521/Del/2015 wherein ITA No.4426 to 4434/Del/2015. Learned AR submitted that there are many more appeals involving the similar facts with similar deletion of the penalty. In to 4521/Del/2015 vide paragraph nos. 3 & 4, a coordinate bench of this Tribunal held that,- “3. At the outset, it is submitted by the Ld.AR that in a number of cases relating to the companies of MDLR Group, authorities levied penalty u/s 271(l)(b) of the Act but after considering the plea of the assessee on facts, the Tribunal found that the detention of Sh. Gopal Goyal who was entrusted with the income tax matters and was looking after the entire working of the group in judicial custody, initiation of about 300 group assessments in the way of search proceedings, poor turnout of the employees resulting in the delayed compliance being made through post to constitute reasonable cause falling within the scope and ambit of Section 273B of the Act and on that ground, the Tribunal deleted the penalty. Copies of the orders dated 28.08.2017 & 29.08.2017 in ITA Nos. 4426 to 4434/Del/2015 are filed. Ld. DR placed reliance on the orders of the authorities below.
We have carefully gone through the record and the orders filed by the Ld.AR and found that under similar circumstances, a Co-ordinate Bench of this Tribunal considered the facts pleaded by the assessee at length and held that the reasons pleaded by the assessee, which are similarly pleaded now, constitute reasonable cause within the meaning of Section 273B of the Act and deleted the penalty levied against the assessee. While respectfully following the same, we hold that the assessee was prevented by reasonable cause from compliance with the notice, and on that ground we delete the penalty levied u/s 271(l)(b) of the Act. ”
5. In view of the fact that in all these matters including the appeals now under consideration, the similar facts are involved raising the question of the sustainability of the penalty u/s 271(l)(b) of the Act in the facts and circumstances pleaded by the tax payers. Inasmuch as there is no change in the facts and circumstances, we do not find any compelling reason to deviate from the view taken by different coordinate benches of this Tribunal while deleting the penalty holding that the uncontroverted facts pleaded by the assessees do constitute sufficient reason or reasonable cause within the ambit of Section 273B of the Act. With this view of the matter, while
respectfully following the decisions of the coordinate benches, we hold that the assessee was prevented by reasonable cause from complying with the notice issued by the AO. While holding so, we delete the penalty levied u/s 271(l)(b) of the Act.”
We find that the facts and circumstances of the year under consideration are identical to the assessment year 2003-04, 2004-05, 2005-06, 2007-08 and 2008-09 and the order of the learned CIT(A) being a consolidated order for assessment year 2003-04 to 2008-09, respectfully following the finding of the Tribunal (supra), we delete the penalty of Rs.20,000/- being a reasonable cause in failure to attend the proceedings before the Assessing Officer. Accordingly, the grounds raised
by the assessee are allowed. 7. In the result, the appeal of the assessee is allowed. The decision is pronounced in the open court on 13th August, 2018.