SMT SHABARI PAUL,KOLKATA vs. DCIT, CC-XXVII, KOLKATA, KOLKATA
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that since the assessment was ultimately framed under Section 143(3), substantial compliance was made, and the default was not willful. Following judicial precedents, the penalty was deleted.
What were the facts?
The assessee failed to comply with notices issued under Section 142(1) during assessment proceedings under Section 153A/143(3). The Assessing Officer imposed a penalty under Section 271(1)(b) for this non-compliance.
What were the issues?
Whether a penalty under Section 271(1)(b) is justified for non-compliance with notices when the assessment is ultimately completed under Section 143(3), and if reasonable cause existed for the non-compliance.
Which sections of the Income-tax Act were involved?
Section 153A,Section 143(3),Section 142(1),Section 271(1)(b)
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(1)Show listHide list
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- Hindustan Steel Ltd. v. State of Orissa502 citing83 ITR 26 · 1972 · SC
Income Tax Appellate Tribunal, KOLKATA BENCH “D” KOLKATA
Before: Shri Waseem Ahmed & Shri S.S.Viswanethra Ravi
Shri Subash Agarwal, Advocate आवेदक क� ओर से/By Assessee Shri Arindam Bhattacherjee, Addl. CIT-DR राज!व क� ओर से/By Respondent 01-11-2017 सुनवाई क� तार�ख/Date of Hearing 17-11-2017 घोषणा क� तार�ख/Date of Pronouncement आदेश /O R D E R PER BENCH:- These are seven appeals by one assessee are against the different orders of Commissioner of Income Tax (Appeals)-21, Kolkata of even date i.e. 18.02.2016. Assessments were framed by DCIT,CC-XXVII, Kolkata u/s 153A/143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his orders dated 28.03.2014 for assessment years 2006-07 to 2012-13 respectively. The penalty levied by Assessing Officer u/s 271(1)(b) of the Act. Shri Subash Agarwal, Ld. Advocate appeared on behalf of assessee and Shri Arindam Bhattachaerjee, Ld. Departmental Representative appeared on behalf of Revenue.
ITA No.825-831/Kol/2016 A.Ys 06-07 to 12-13 Smt. Shabari Paul Vs. DCIT,CC-XXVII,Kol Page 2 2. In all the appeals the facts and circumstances are identical except amount involved, therefore all the appeals were heard together and are being disposed of by this consolidated order for the sake of convenience. We first take up the appeal in relating to A.Y. 2006-07 as lead case.
3. The ground as raised by the assessee reads as under:- “1. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the penalty to the tune of Rs.10,000/- imposed by the AO u/s 271(1)(b) of the Act.
For that the Ld. CIT(A) ought to have deleted the entire penalty of Rs.10,000/- imposed u/s 271(1)(b) since the assessee was prevented by reasonable cause for non appearance during the course of assessment proceeding.
That the appellant craves leave to add, alter or delete all or any of the grounds of appeal
.”
4. The sole issue raised by the assessee in this appeal is that Ld CIT(A) erred in confirming the penalty order of Assessing Officer u/s 271(1)(b) of the Act.
5. Briefly, the facts are that the assessee is an Individual and belongs to Paul Group where a search & seizure operation was conducted u/s 132 of the Act. Therefore, the assessee was covered under the search proceedings u/s 153A of the Act. The Assessing Officer during the course of assessment proceedings u/s 153A/143(3) of the Act issued notice u/s 142(1) of the Act but the assessee failed to comply the same. The necessary details stand as under. S.No. Date Particulars Remarks 1. 16.4.2013 Notice issued U/s 142(1) Compliance by the assessee 2. 28.10.2013 Notice issued U/s 142(1) Non-Compliance by the assessee In this notice the hearing date was fixed on 6.11.2013 but the Reply was filed late i.e. 13.11.2013 In view of above, the AO during assessment proceedings initiated penalty proceedings u/s 271(1)(b) of the Act. Finally, the AO after considering the reply of the assessee imposed the penalty for Rs.10,000/- for the default committed by the assessee as discussed above.
6. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before ld. CIT(A) submitted that the health condition of one of the partner of the firm was very critical, therefore the compliances could not made. The assessee in support -831/Kol/2016 A.Ys 06-07 to 12-13 Smt. Shabari Paul Vs. DCIT,CC-XXVII,Kol Page 3 of its claim has also produced the copy of medical certificates. The assessee in support of its claim has also relied on the judgment of the Hon’ble Apex Court in the case of Hindustan Steel Limited v. State of Orissa reported in 83 ITR 26(SC). However, Ld. CIT(A) disregarded the contention of the assessee and confirmed the order of AO.
7. Aggrieved by the above finding of Ld. CIT(A), the assessee is in appeal before the Tribunal.
8. The ld. AR before us filed paper book which is running pages from 1 to 21 and submitted that all the queries raised by the AO during assessment proceedings were duly replied by the assessee as evident from the order of AO- paragraph number 6 which reads as under:- “6.0 Further various queries were raised before the assessee on different dates, reply of which has been submitted, perused and placed on records.” Accordingly, the ld AR submitted that substantial compliances were made by the assessee during the course of assessment proceedings. Therefore, no penalty in the instant case is called for. The Ld AR in this regard has relied on the order of Hon’ble ITAT in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust Vs. Assistant Director of Income tax reported in 115 TTJ (Del) 419. The relevant extract reads as under:- “2.5 We also find that finally the order was passed under s. 143(3) and not under s. 144 of the Act. This means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the AO. Therefore, in such circumstances, there could have been no reason to come to the conclusion that the default was willful”. On the other hand, the ld. DR submitted that the medical certificates were not produced before the AO to justify that there was reasonable cause which prevented the assessee to response the notice issued under section 142(1) of the Act. The ld. DR also contended that the assessee in the instant case was intentionally delaying the proceedings to take the assessment at the fag-end in order to divert the attention of the AO. He vehemently supported the order of lower authorities. -831/Kol/2016 A.Ys 06-07 to 12-13 Smt. Shabari Paul Vs. DCIT,CC-XXVII,Kol Page 4 In rejoinder, Ld AR submitted that all the medicals bills were duly produced before the Ld CIT(A) and he got co-terminus power to verify the same but he failed to do so. The Ld AR also submitted that the penalty cannot be imposed on account of technical ground. In this regard the learned AR relied on the judgment of Hon'ble Supreme Court in the case of Hindustan Steel (supra).
9. We have heard the rival contentions of both the parties and perused and carefully considered the material on record; including the judicial pronouncements cited and placed reliance upon. At the outset, it was observed that in the identical facts and circumstances the Hon’ble Delhi Tribunal has decided the issue in favour of assessee in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust (Supra) by observing that the assessment was framed under section 143(3) of the Act which proves that substantial compliances were made by the assessee. Thus, it cannot be held that the default committed by the assessee was willful. Thus, we are inclined not to uphold the order of lower authorities. 9.1 Similarly, we also find that the Hon’ble Apex Court in the case of Hindustan Steel (supra) has held that the penalty should not be imposed unless the assessee acted deliberately. The relevant extract reads as under : “Obligation is the result of a quasi- criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute.” As we have already decided the issue in favour of assessee in view of the above facts, therefore we are not inclined to comment on the contentions raised by the Ld DR at the time of hearing as well as observations made by the Ld CIT(A) in his order. Respectfully following the aforesaid judgments we reverse the order of authorities below. Accordingly, AO is directed to delete the same.
10. In the result, assessee’s appeal is allowed.
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