SHRI HEMANT KUMAR SONI,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

07.10.2016 for the above assessment years.

learned CIT(A) has 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.

the case of the 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 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

Shri Hemant Kumar Soni & Ors. I.T.A.Nos.1361/Ind/2016 to 1367/Ind/2016 etc. A.Y.2008-09 to Page 4 of 10 2014-15

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

case laws relied upon 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

Shri Hemant Kumar Soni & Ors. I.T.A.Nos.1361/Ind/2016 to 1367/Ind/2016 etc. A.Y.2008-09 to Page 5 of 10 2014-15

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 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 each assessment year from

assessment year 2008-09 to assessment year 2014-15 in the

case of all the assessees.

submitted that in all these appeals, the facts and the issue

Shri Hemant Kumar Soni & Ors. I.T.A.Nos.1361/Ind/2016 to 1367/Ind/2016 etc. A.Y.2008-09 to Page 6 of 10 2014-15

involved are identical and, therefore, he will be arguing the

facts in the case of Shri Hemant Kumar Soni. The AR

submitted that notice u/s 142(1) dated 30.9.2015 in all 30

cases & group 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 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

Shri Hemant Kumar Soni & Ors. I.T.A.Nos.1361/Ind/2016 to 1367/Ind/2016 etc. A.Y.2008-09 to Page 7 of 10 2014-15

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.

Revenue Authorities and cited some decisions of the Tribunals.

Shri Hemant Kumar Soni & Ors. I.T.A.Nos.1361/Ind/2016 to 1367/Ind/2016 etc. A.Y.2008-09 to Page 8 of 10 2014-15 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

Shri Hemant Kumar Soni & Ors. I.T.A.Nos.1361/Ind/2016 to 1367/Ind/2016 etc. A.Y.2008-09 to Page 9 of 10 2014-15 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 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.

Shri Hemant Kumar Soni & Ors. I.T.A.Nos.1361/Ind/2016 to 1367/Ind/2016 etc. A.Y.2008-09 to Page 10 of 10 2014-15 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. In result, all the appeals of the assessees are allowed. The order has been pronounced in open court on the 16th January, 2017.

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 : 16 January, 2017.