M/S MA BHAGWATI SUGAR MILL LTD.,BHOPAL vs. THE DCIT CENTRAL-1, BHOPAL

आदेश /O R D E R

PER BENCH All these appeals have been filed by different assessees against different

orders of the learned CIT(A)-3, Bhopal dated 06.10.2016 for the above assessment

years.

erred in confirming the levy of penalty u/s 271(1)(b) of the I.T. Act at Rs.10,000/- in

each assessment year in the cases of all these assessees.

assessee and group had taken place on 29.01.2014. After that notices were issued

by the AO u/s 142(1) of the Act dated 30.09.2015 fixing the date of hearing for

15.10.2015 to submit the required information/documents as per the

Ma Bhagwati Power P. Ltd. 3 I.T.A. Nos. 1466 to 1513 of 2016 questionnaire alongwith the books of accounts. It was specifically mentioned in

the notice that failure to comply with the notice would lead to imposition of

penalty u/s 271(1)(b) for Rs. 10,000/-. However, it was seen that on the date fixed

for hearing i.e. on 15.10.2015 no submissions were filed with regard to the

notice/questionnaire u/s 142(1) of the Act. Therefore, show cause notice for

penalty was issued by the AO to the assessee on 07.12.2015 as to why penalty

should not be levied u/s 271(1)(b) of the Act for non compliance to notice u/s

142(1) dated 15.10.2015. The date of hearing was fixed for 15.12.2015. However,

again no reply/submissions were filed by the assessee on or before the date of

hearing, Also, no reason/explanation was given by the assessee for non-

compliance on the said date. Therefore, the AO levied penalty u/s 271(1)(b) of the

Income-tax Act, 1961, for Rs. 10,000/- on 04.01.2016, for non compliance to notice

u/s 142(1) dated 15.10.2015 for each assessment year from 2008-09 to 2014-15

by the assessee are contradictory in nature and do not support the case of the

assessee. In this case, the assessee has not complied with the notice/questionnaire

u/s 142(1) of the Act dated 15.10.2015. It cannot be said that there was

reasonable cause with the assessee, which prevented him to comply with the

statutory notice. The assessee has deliberately tried to delay the assessment

Ma Bhagwati Power P. Ltd. 4 I.T.A. Nos. 1466 to 1513 of 2016 proceedings before the AO in order to create hindrances for the investigation. The

AO is the investigator as well as prosecutor and adjudicator in the tax assessment

proceedings. It is the duty of the assessee to facilitate the process of verification

and investigation to support its credentials. The AO is bound by law to complete

assessment proceedings as per the limitations of the Act. Deliberate delaying

tactics during the course of assessment proceedings hamper the work of the

office. The ld. CIT(A) confirmed the penalty of Rs. 10,000/- imposed by the AO u/s

271(1)(b) of the Income-tax Act, 1961, for all the present assessment years in the

case of all the assessees.

appeals, the facts and the issue involved are identical and, therefore, he will be

arguing the facts in the case of M/s. Ma Bhagwati Power P. Ltd. The AR submitted

that notice u/s 142(1) dated 30.9.2015 in all group appeals was received on

09.10.2015, to be complied on 15.10.2015, which was practically impossible to

comply with all details in short span of 7 days. However, subsequent notices dated

17.12.2015 to 24.12.2015 were duly complied and assessment was framed u/s

143(3). Further, Sheri D.S.Tiwari, AR of the assessee had verbally requested time

for filing details. Therefore, there was no delaying tactics to hamper investigation.

The learned counsel for the assessee submitted that it is held by the Delhi Bench

Ma Bhagwati Power P. Ltd. 5 I.T.A. Nos. 1466 to 1513 of 2016 of the Tribunal in the case of Akhil Bhartiya Prathmik Shmshak Sangh Bhawan

Trust vs. Assistant Director of Income Tax; (2008) 115 TTJ 419(Del) 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 be Assessing Officer and therefore, levy of penalty

u/s 271(1)(b) was not justified. The Learned Counsel further stated that very

recently, this Bench of Tribunal in the cases of Vinit Chouhan & others in ITA No.

1061 to 1181 has deleted the penalties on the absolute identical facts. In that case

also the notices dated 30.09.2015 were served asking the assessee to file the

details and the counsel of the assessee Shri Rajendra Sharma attended and

personally requested for the time and the Tribunal deleted the penalty on the

ground that the assessments were completed u/s 143(3) after considering all the

details submitted by the assessee and as such no penalty u/s 271(1)(b) could be

levied. He relied upon the decision in the case of Akhil Bhartiya Shiksha Sangh

Bhawan Vs ACIT 115 TTJ 419 and Parmeshwari Textiles Vs ITO 92 TTJ page 764.

and cited some decisions of the Tribunals.

Ma Bhagwati Power P. Ltd. 6 I.T.A. Nos. 1466 to 1513 of 2016 7. We have heard the rival contentions of both the parties and have perused

the material available on record. We find that the present issue has been decided

by this very Bench in the group appeals i.e. Hemant Kumar Soni and others vide

order dated 16.1.2017. The present group appeals are also connected with the

group appeals of Hemant Kumar Soni and others. Vide above order dated

16.1.2017, we have decided the present issue in favour of the assessees. For ready

reference, we are reproducing hereunder the relevant finding recorded by us:

“7. 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

Ma Bhagwati Power P. Ltd. 7 I.T.A. Nos. 1466 to 1513 of 2016 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 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. 8. Following our above order on the identical facts and circumstances relating

to assessees’ group, we set aside the orders of the Revenue Authorities and delete

the penalty u/s 271(1)(b) of the Act in all the present appeals.

Sd/- Sd/- (डी.ट�.गरा�सया) (ओ.पी.मीना) �या�यक सद�य लेखा सद�य (D.T.GARASIA) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER

�दनांक /Dated : 18th January, 2017.