M/S OMSHIV BUILDTECH PVT LTD,NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME-TAX, NEW DELHI

Per Manoj Kumar Aggarwal (Accountant Member) 1. The captioned appeals by assessee for Assessment Years [AY] 2006-07, 2007-08 & 2008-09 assails the common order of the Ld. Commissioner of Income-Tax (Appeals)-XXVI [CIT(A)], New Delhi, to 4498/Del/2015 Omshiv Buildtech Pvt. Ltd. Assessment Years-2006-07 to 2008-09 Appeal No.166/14-15; 167/14-15; 168/14-15 dated 08/05/2015 by raising the following effective grounds of appeal :- “

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(1)(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.” Since the facts are common in all the appeals, we dispose of the same by way of this common order for the sake of convenience and brevity. First we take up Rs.20,000/- u/s 271(1)(b) on account of non- appearance on two occasions during quantum assessment proceedings. The penalty was levied by Ld. Deputy Commissioner of Income Tax [AO], Central Circle-15, New Delhi vide order dated 09/05/2014 which has since been confirmed by Ld. CIT(A) against which the assessee is in further appeal before us. 2.1 Facts leading to the same are that the assessee being resident corporate assessee engaged in real estate, land trading & development to 4498/Del/2015 Omshiv Buildtech Pvt. Ltd. Assessment Years-2006-07 to 2008-09 was assessed u/s 144 read with Section 153A on 18/03/2013, consequent upon revision order passed u/s 264 on 16/03/2012 by Ld. Commissioner of Income Tax, Central-II, New Delhi. Since the assessee failed to make any submissions before Ld.AO, the same resulted into best judgment assessment u/s 144. Further, the assessee failed to make appearance during assessment proceedings on various dates as required by Ld. AO and hence, penalty proceedings u/s 271(1)(b) were initiated in the quantum assessment order. 2.2 Consequently, the assessee has been saddled with a penalty of Rs.20,000/- u/s 271(1)(b) vide order dated 09/05/2014 for non- appearance / non-compliance on two dates viz. 10/01/2013 & 16/01/2013. The assessee contested the same on the premise that non- compliance was beyond the control of the assessee in the wake of various on-going proceedings against the group and key persons. However, not convinced, Ld. AO levied the penalty @Rs.10000/- for each default which was contested without any success before Ld. CIT(A) vide impugned order dated 08/05/2015 where Ld. CIT(A), on factual matrix, confirmed the action of Ld. AO. Aggrieved, the assessee is in further appeal before us.

3. The Ld. Counsel of Assessee [AR] assailed the penalty by making multiple submissions and stressed the point that there was reasonable cause for non-compliance within the meaning of Section 273B and hence, the penalty was not justified. Per Contra, Ld. DR pointed out that the original quantum assessment order was set aside upon assessee’s application u/s 264 by Ld. CIT, where the assessee, by sworn affidavit, to 4498/Del/2015 Omshiv Buildtech Pvt. Ltd. Assessment Years-2006-07 to 2008-09 promised to cooperate in the set aside proceedings and despite that the assessee made no serious attempt to attend to proceedings which led to reframing of assessment again u/s 144. The Ld. DR also pointed out that the assessee was actively perusing multiple proceedings before various authorities and debarred from taking the stand that the key person was not available to make the due submissions and comply with the terms of the notices.

4. We have carefully heard the rival contentions and perused relevant material on record. At the outset, it is noted that the assessee, during hearing, contested the penalty proceedings on legal ground by drawing our attention to the show-cause notice issued u/s 274 read with Section 271 and the penalty order on the premises that the penalty order stood vitiated for want of natural justice. Since the same goes to the root of the matter, we take up the same first. A perusal of notice issued u/s 274 read with Section 271 as placed on Page Number-113 of the paper book reveals that the same is in standard printed form without specifying the exact charge for which the penalty was being initiated since two clauses have been ticked-off simultaneously. Further, the notice did not specify the exact dates of default being committed by the assessee. The same, in our opinion, snatches a valuable right of the assessee to contest the same since it is settled legal proposition that the show-cause notice must be specific, crystal clear and without any ambiguity. The vagueness in the same is fatal to the consequential proceedings as per settled legal position.

ITA Nos.4496 to 4498/Del/2015 Omshiv Buildtech Pvt. Ltd. Assessment Years-2006-07 to 2008-09 5. Further, we find that it is not a case that the assessee did not attend the proceedings at all since a perusal of the quantum assessment order itself reveals that the assessee while drawing attention of Ld. AO towards ongoing court proceedings being faced by director / group and family members, made certain compliances by fling the reply in dak.