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Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA
Before: Shri Waseem Ahmed & Shri S.S.Viswanethra Ravi
आदेश /O R D E R
PER BENCH:-
These are five appeals by same assessee against the different orders of Commissioner of Income Tax (Appeals)-XXXVI, Kolkata of even dated i.e. on 26.02.2014. Penalty levied by ITO Ward-55(3), Kolkata u/s 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his orders dated 29.06.2012 for assessment years 2004-05 to 2009-10 respectively. Shri S.M. Surana and Sunil Surana, Ld. Authorized Representatives appeared on behalf of assessee and Shri S.M. Das Ld. Departmental Representative represented on behalf of Revenue.
ITA No.559-563/Kol/2014 Assessment Years: 04-05 to 09-10 Dr. Murari Mohan Koley Vs. ITO Wd-55(3), Kol. Page 2 2. Since the facts and circumstances are identical in all the appeals, same were heard together and are being disposed of by this consolidated order for the sake of convenience. We first take up the appeal of assessee in ITA No.559/Kol/2014 relating to Assessment Year 2004-05 as lead case. The grounds raised by the assessee per its appeal are as under:-
Inter-connected solitary issue raised by assessee is that Ld. CIT(A) erred in confirming the penalty order passed by Assessing Officer passed u/s 271(1)(b) of the Act. 4. Briefly, the facts are that assessee in the present case is an individual and assessment was completed u/s 144/147 of the Act on a total income of ₹16,45,790/- vide order dated 30.12.2011. During the course of assessment proceedings, AO initiated penalty proceedings u/s 271(1)(b) of the Act due to non compliance of notice issued u/s. 142(1) of the Act which was subsequently confirmed by AO vide his order dated 29.06.2012. 5. Aggrieved, assessee preferred an appeal before Ld. CIT(A). It was submitted before Ld. CIT(A) that proceedings in response to notice u/s 142(1) of the Act was not attended due to ill-health of assessee’s wife. However, Ld. CIT(A) disregarded the plea of assessee and upheld the order of AO by observing as under:- “7. The appellant’s challenge that as the appellant could not attend to the proceeding due to wife’s illness its also examined. On perusal of record, it is seen that no supporting documents in support of wife’s illness which prevented the appellant to attend such important matter relating to income tax, has been furnished. Further, it is seen that the appellant was assisted by authorized representative during assessment stage and appellate stage. The matter in case of exigency could have been deleted to an authorized representative. Further as is evident from the assessment record and order sheet the AO had issued notices for a period for about 1 year for both assessment as well as penalty proceeding hover, there has been continuous non compliance to the notice issued. Further, during the am as well as penalty proceeding no such plea of wife’s illness has been taken while making continuous non compliance except in the letter dated 30th November, 2011, when the assessment was about to be time barred. The assessee being a senior Govt. Doctor, who was attending to his duties during this period cannot take plea of wife’s illness for not making compliance to Income tax proceedings. In view of the above, it is held that the assessee has not complied to the notices issued without any reasonable cause. Therefore, the penalty imposed u/s. 271(1)(b) is confirmed.”
ITA No.559-563/Kol/2014 Assessment Years: 04-05 to 09-10 Dr. Murari Mohan Koley Vs. ITO Wd-55(3), Kol. Page 3 Being aggrieved by this, assessee came in second appeal before us on the following grounds:- “1.For that the order of the Ld. CIT(A) is arbitrary, illegal and bad in law. 2. For that on the facts and circumstances of the case the penalty imposed on merits was not justified. 3. For that the Ld. CIT(A) erred in dismissing the appeal in limine when the assessment did not receive the penalty order by Speed Post and it was only for that reasons that application for certified copy as made, the pal was filed only after receipt of the certified copy of the penalty order. 4. For that the penalty order was otherwise barred by limitation and therefore should have been cancelled. 5. For that the Ld. CIT(A) erred in confirming the penalty of Rs.10,000/- when there was nothing in the assessment order with regard to the satisfaction to initiate penalty under sec. 271(1)(b) except issue of the penalty notice. 6. For that the Ld. CIT(A) erred in confirming the penalty when the assessee was prevented by sufficient cause from complying with the notice U/s 142(1) on 29.8.2011. 7.For that on the facts and circumstances of the case the order of the CIT(A) be modified and the assessee be given the relief prayed for. 8. For that the assessee craves leave to add, alter or amend any ground before or at the time of hearing.”
Before us Ld. AR for the assessee reiterated same submissions as made before Ld. CIT(A). The ld. AR in support of assessee’s claim has further submitted that appeal against the quantum addition was filed before Hon'ble ITAT with condonation petition and Hon'ble ITAT was pleased to condoned the delay after considering the ill- health of assessee’s wife. The ld. AR further submitted that the issue may be decided on merit. On the other hand, Ld. DR vehemently relied on the order of Authorities Below. 7. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the instant case relates to the penalty imposed by Assessing Officer due to non-compliance of notice u/s. 142(1) of the Act. The AO initiated and imposed penalty under the provision of Sec. 271(1)(b) of the Act and subsequently the action of AO was confirmed by Ld. CIT(A).
ITA No.559-563/Kol/2014 Assessment Years: 04-05 to 09-10 Dr. Murari Mohan Koley Vs. ITO Wd-55(3), Kol. Page 4 Under the provision of Income Tax Act, penalties are leviable on account of several reasons and one of them is due to non-compliance of notice issued by AO. In the instant case, admittedly, assessee has not complied with the notice issued by AO u/s 142(1) of the Act. However, under the Act, the Income Tax Authority has been empowered under the statute to waive off penalty in certain situation, where the assessee is able to prove that there was sufficient cause for non-compliance. The immunity for the instant penalty has been given u/s. 273B of the Act which reads as under:- “[Penalty not to be imposed in certain cases. 273B. Notwithstanding anything contained in the provisions of 71[clause (b) of sub- of] 72[section 271A, 73[section section (1) 271, section 271AA,] section 271B73[, section 271BA], 74[section 271C, 75[section 271BB,] section 271CA,] section 271D, section 271E, 76[section 271F, 77[section 271FA,] 78[section 271FAB,]79[section 271FB,] 80[section 271G,]] 81[section 271GA,] 81a[section 271GB,] 82[section 271H,] 83[section 271-I,] clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA] or 84[section 272B or] 85[sub-section (1) 86[or sub-section (1A)] of section 272BB or] 87[sub- section (1) of section 272BBB or] clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause88 for the said failure.]”
A plain look of the aforesaid provision shows that penalty will not be imposed on the assessee if he proves that there was reasonable cause for the said failure. Now coming to the case on hand, it is not in doubt that the wife of assessee was suffering from cancer as evident from the order of Hon'ble ITAT in assessee’s own case in ITA No.1397, 1399, 1401 & 1403/Kol/2014 for AYs 2004-05 to 2009-10 vide order dated 05.11.2014. The relevant operative portion of the order is reproduced below:- “… First of all it is immaterial to discuss, whether assessment order was served through affixture validly or not but the assessee obtained the copy of assessment order from the AO for the first time and filed appeal within the limitation period after obtaining this assessment order. It is also a fact that the assessee’s wife was under treatment for cancer at Christian Medical College, Vellore during this period of delay. This is evident from the medical certificate issued by Christian Medical College, Vellore,. We find that the cause is reasonable for filing of appeal belatedly i.e. after expiry of limitation period, if there is any. In such circumstances, we condone the delay before CIT and direct him to admit the appeal.”
ITA No.559-563/Kol/2014 Assessment Years: 04-05 to 09-10 Dr. Murari Mohan Koley Vs. ITO Wd-55(3), Kol. Page 5 The aforesaid appeals of the assessee are against the quantum addition made by the lower authorities and pertain to the same years which are before us against the penalty order. After having reliance upon the finding of Hon'ble ITAT, in assessee’s own case (supra), we find that there was sufficient reasonable cause which prevented the assessee to comply with the notice issued u/s 142(1) by AO. Accordingly, we, therefore, set aside the order of Ld. CIT(A) and direct the AO to cancel the penalty u/s 271(1)(b) of the Act. The ground raised by assessee is accordingly allowed. 8. In the result, assessee’s appeal is allowed. Coming to ITA No.560-563/Kol/2014 for A.Ys.05-06 to 09-10. 9. As stated earlier, the issues in these year(s) are as that of the last year. The only difference is the amount involved. Since the facts are exactly identical, both the parties are agreed whatever view taken in the above appeal in ITA No. 559/Kol/2014 of assessee may be taken in the appeals of assessee also, we hold accordingly. In the result, assessee’s appeals ITA No.559 to 563/Kol/2014 are 10. allowed. Order pronounced in open court on 03/03/2017 Sd/- Sd/- (S.S.Viswanethra Ravi) (Waseem Ahmed) Judicial Member Accountant Member *Dkp, Sr.P.S �दनांकः- 03/03/2017 कोलकाता / Kolkata आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. आवेदक/Assessee-Dr. Murari Mohan Koley 114/4/1, Tollygunge Road, Kolkata-26 2. राज�व/Revenue-ITO, Ward-55(3), 54, Rafi Ahmed Kidwai Road, Kolkata-16 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड� फाइल / Guard file. By order/आदेश से, /True Copy/ उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, कोलकाता