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Income Tax Appellate Tribunal, “D”, BENCH KOLKATA
Before: SHRI A. T. VARKEY, JM & DR. A.L. SAINI, AM Smt. Alka Gupta &
Appellant by : Shri Soumitra Choudhury, Advocate Revenue by : Shri A. Bhattacharjee, Addl. CIT सुनवाई क� तार�ख / Date of Hearing : 04/07/2018 घोषणा क� तार�ख/Date of Pronouncement: 03/10/2018 आदेश / O R D E R
Per Dr. A. L. Saini, AM:
The captioned two appeals filed by the different assessees, pertaining to Assessment Year 2012-13, are directed against separate orders passed by the ld. Commissioner of Income Tax (Appeals), which in turn arise out of separate penalty orders passed by Assessing Officer u/s 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).
The appeals filed by the assessees for Assessment Year 2012-13, are barred by limitation by 12 days. The assessees have moved petition requesting the Bench to condone the delay. We have heard the parties on this preliminary issue
2 Smt. Alka Gupta M/s. Vijay Wire Industries Assessment Year: 2012-13 and having regard to the reasons given in the petition, we condone the delay and admit these two appeals for hearing.
3. Since, in these appeals, issues involved are identical and common, therefore, these have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. The assessee’s appeal in Assessment Year 2012-13 is taken as the lead case.
4. The grievances raised by the assessee in the lead case ( in ), are as follows:
“1. For that on the facts of the case, the appellate order passed by the ld. CIT(A), Kolkata is completely arbitrary, unjustified and illegal.
2. For that on the facts of the case, the CIT(A) was wrong in confirming the imposed penalty u/s 271(1)(b) amounting to Rs.10,000/- which is completely arbitrary, unjustified and illegal.
3. For that the ld. CIT(A) has failed to appreciate the appellant’s explanations in its true perspective and default was not intentional, hence the penalty is liable to be cancelled and/or quashed.
For that the appellant reserves the right to adduce any further ground or grounds if necessary at or before the hearing of the appeal.”
The facts of the case may be briefly stated. During the course of assessment proceedings, the Assessing Officer issued statutory notices u/s 142(2) and 142(1) of the Act and duly served upon the assessee. In compliance with the said notices, Shri Soumitra Choudhury, Advocate, A/R of the assessee appeared from time to time to explain the return of income and other documents. It may be noted that assessee had made compliance of various notices during the assessment proceedings and submitted the required details asked by the Assessing Officer, vide para 2 and para 3 of assessment order. In the assessee’s case under consideration, the assessment was completed u/s 143(3) of the Act on 29.03.2015.
3 Smt. Alka Gupta M/s. Vijay Wire Industries Assessment Year: 2012-13 6. The Assessing Officer while making the assessment u/s 143(3) of the Act initiated penalty proceedings u/s 271(1)(b) r.w.s. 274 of the Act. During the penalty proceedings, the Assessing Officer noted that the assessee failed to appear on the following dates:
“(i) on 22.10.2013 in response to notice u/s 143(3) dated 23.09.2013. ii) on 01.01.2014 in response to notice u/s 143(2) dated 12.12.2013 iii) on 02.09.2014 hearing re-fixation notice dated 16.08.2014 reference to your petition dt. 08.07.2014 iv) on 24.09.2014 hearing re-fixation notice dated 10.09.2014 reference to your petition dt. 02.09.2014 v) on 09.12.2014 hearing re-fixation notice dated 10.10.2014 reference to your petition dt. 24.09.2014 vi) on 02.12.2014 in response to notice u/s 143(2) dated 27.11.2014 Due to repeated non-compliances from the part of the assessee, the A.O forced to initiate penalty proceedings u/s 271(1)(b) on 21.01.2015. In reply to the penalty notice, the assessee started that “the staff of the assessee firm Sri Anup Mondal has misplaced the notice and totally forgotten about the said notice” which cannot be tenable. It is clearly seen that the assessee has an inclination for “non-compliance”.
Therefore, the assessing officer noted that the assessee willfully evades to appear before the assessing officer. The ld AO also noted that assessee willfully avoided production of documents as was asked for on different dates. Based on these facts the ld AO imposed penalty U/s 271(1) (b) of the Act to the tune of Rs.10,000/-
Aggrieved by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the penalty u/s 271(1)(b) of the Act.
Aggrieved by the order of ld CIT(A), the assessee is in appeal before us.
The ld. Counsel for the assessee submitted that Assessing Officer had imposed penalty in an arbitrary manner. On various dates of hearing, the A/R of the assessee visited the office of the Assessing Officer as evident from the order of the ld assessing officer (vide para 2 and para 3 of the assessment order). The 4 Smt. Alka Gupta M/s. Vijay Wire Industries Assessment Year: 2012-13 ld. Counsel for the assessee drew our attention towards para 2 and para 3 of the assessment order, dated 29.03.2015 and submitted that in the said para, the Assessing Officer himself admitted as follows:
“2. In compliance with the said notices Shri Soumitra Choudhury, Adv. & A/R of the assessee appeared from time to time to explain the return. The case was heard and discussed.
3. During the course of scrutiny proceedings, Shri Soumitra Choudhury, A.R of the assessee furnished the following documents and accounts as requisitioned.
1. Month wise and item wise (Purchases, sales & stock) statement for 01.04.2011 to 31.03.2012.
2. Month wise Purchase quantity and value statement for 01.04.2011 to 31.03.2012.
3. Statement of purchase, stock & sales quantity and value wise for the period 01.04.2011 to 31.03.2012.”
In view of this, it was pleaded that there was no wisdom in the assessment order in support of the alleged non-compliance. Hence penalty should not be levied.
The Ld. DR for the Revenue submitted before us that the Ld. CIT (A) has carefully considered the facts of the case and the applicable case laws in the matter. As per section 271(l)(b), penalty for each instance of default may be levied @Rs.10,000/- if the concerned authority, during the course of proceedings, is satisfied that the person has failed to comply with the statutory notice or the direction of the Assessing Officer. The provisions of Section 271(l)(b) provides that no penalty is to be imposed if the assessee proves that there was a reasonable cause for the failure to comply with the statutory notices. It was submitted that on careful consideration of the facts of the case, the Ld. CIT(A) found that the assessee had failed to appear before the Assessing Officer and therefore, the penalty under Section 271(l)(b) was imposed by the Assessing Officer.
We have given a careful consideration to the rival submissions and perused the materials available on record, we note that it is an undisputed fact that in both the cases, the assessment was completed u/s 143(3) of the Act, and the 5 Smt. Alka Gupta M/s. Vijay Wire Industries Assessment Year: 2012-13 assessee made the compliance of all the statutory notices issued by the assessing officer, as evident from para No.2 and 3 of the assessment order. At the cost of repetition, we would like to reproduce the para No.2 and 3 of the assessment order wherein the assessee submitted the details and made the compliance of notices, which are as follows:
“2. In compliance with the said notices Shri Soumitra Choudhury, Adv. & A/R of the assessee appeared from time to time to explain the return. The case was heard and discussed.
3. During the course of scrutiny proceedings, Shri Soumitra Choudhury, A.R of the assessee furnished the following documents and accounts as requisitioned.
1. Month wise and item wise (Purchases, sales & stock) statement for 01.04.2011 to 31.03.2012.
2. Month wise Purchase quantity and value statement for 01.04.2011 to 31.03.2012.
Statement of purchase, stock & sales quantity and value wise for the period 01.04.2011 to 31.03.2012.”
From the above noted para No.2 and para No.3 of the assessment order, it is evidently clear that the ld. Counsel for the assessee had appeared before the Assessing Officer from time to time and explained the return of income and the case was discussed with the ld. Counsel of the assessee. During the assessment proceedings, the documents and details were also submitted on the various dates which are given in Para No. 3 of the assessment order. Thereafter, we note that Assessing Officer had not issued any further notices to the assessee to call for details, hence there is no any non-compliance of the statutory notices, therefore, penalty u/s 271(1)(b) of the Act should not be levied.
We note that the various dates mentioned by the Assessing Officer in the penalty order, stating non-compliance of notices u/s 271(1)(b) of the Act are not emerging from the assessment order passed by the Assessing Officer u/s 143(3) of the Act. Our view is fortified by the decision of the Coordinate Bench of Delhi, in the case of Globus Infocom Limited vs. DCIT in ITA No.738/Del/2014
6 Smt. Alka Gupta M/s. Vijay Wire Industries Assessment Year: 2012-13 dated 29.06.2016 wherein it was held that “where an order u/s 143(3) has been issued and not u/s 144 of the Act, the same implies that the subsequent compliance of the assessment proceedings is considered as good compliance and defaults earlier committed were ignored by the A.O”.
Therefore, after going through assessment order u/s 143(3) of the Act and, based on the factual position discussed above, we are of the view that it is not a fit case to levy the penalty u/s 271(1)(b) of the Act and accordingly we delete the penalty.
In the result, the appeals filed by the assessee (in & 1553/Kol/2017) are allowed.
Order pronounced in the open court on this 03/10/2018. Sd/- Sd/- (A. T. Varkey) (A. L. Saini) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER कोलकाता /Kolkata; Dated: 03/10/2018 RS, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant- (i) Smt. Alka Gupta 1. (ii) M/s. Vijay Wire Industries ��यथ� / The Respondent.- ITO, Ward-44(2), Kolkata 2. 3. आयकर आयु�त(अपील) / The CIT(A), आयकर आयु�त / CIT 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, कोलकाता / DR, ITAT, Kolkata 5. गाड� फाईल / Guard file. 6.