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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, HONBLE & DR. A. L. SAINI, HONBLE
Consolidated Appeals (7)
to 405/SRT/2023 Janai Exports आदेश / O R D E R PER BENCH: This is the bunch of seven appeals filed by the same assessee, pertaining to different assessment years, all are directed against the orders passed by the Learned Commissioner of Income Tax [in short ‘the ld. CIT(A)’] which is in turn arise out of separate penalty orders passed by the Assessing Officer under section 271(1)(b) / 272A(1)(d) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
At the outset, we note that appeals filed by the assessee are barred by limitation by twenty five (25) days. The assessee moved a petition, requesting the Bench to condone the delay. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the petition, we condone the delay and admit the appeals for hearing.
Since, the issue involved in all these appeals, are common and identical, therefore these appeals have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. The facts as well as the grounds narrated in for AY.2013-14 have been taken into consideration for deciding all these appeals en masse.
The grounds of appeal
raised by the assessee in ‘lead case’ in are as follows: “1. On facts and circumstances of the case, the learned CIT(A) has grossly erred in passing the impugned appellate order without properly appreciating the facts and merits of the case as were duly discussed in the memorandum of appeal and submission. Therefore, the appellate order of the learned CIT(A), needs to be quashed as being erroneous, illegal and bad-in-law.
2. On facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in confirming the action of the learned AO in levying penalty of Rs. ITA Nos. 399 to 405/SRT/2023 Janai Exports 10000/- u/s. 271(1)(b) of the Act without appreciating the fact that the assessee has submitted details as asked for in routine manner and without considering the reasons given as the delay in submission of part details was due to Covid-19 pandemic wherein whole country is fighting with 2nd wave of Covid-19 pandemic and everyone were doing work with proper safety measures. Further, The Assessee has submitted that during the course of assessment proceedings, the assessee has co-operated and order u/s 153A has been passed which Learned CIT(A) has not taken into consideration. Hence, the impugned levy of Penalty of Rs.10000/- as made by the learned AO and confirmed by the learned CIT(A) in the hands of the assessee u/s. 271(1)(b) of the Act needs to be deleted as being absolutely erroneous, illegal and bad-in- law.
3. The assessee craves leave to add, amend, alter, substitute, modify in any or all the above grounds of appeal, if necessary, on the basis of submissions to be made at the time of personal hearing.
4. The Assessee prays for granting such other relief as may be deemed just and proper by your Honour considering the factual and legal aspects of the case of the assessee.”
5. Brief facts qua the issue are that the notice under section 142(1) of the Income Tax Act, 1961 was issued on 16.01.2021 and Vide the said notice, the assessee was asked to furnish details for AY.2013-14. However, the assessee failed to furnish reply in response to the said notice. Thereafter, a reminder letter was issued to assessee on 30.01.2021 and once again the assessee was asked to furnish the details called for by the notice dated 16.01.2021. The assessee again failed to respond. When the assessee failed to comply with the terms of notices under section 142(1) dated 16.01.2021 and the reminder letter dated 30.01.2021, a show cause notice, under section 274 r.w.s. 271(1)(b) dated 09.02.2021 was issued. However, no reply was furnished by the assessee in response to said notice. In light of above facts, it was held by the assessing officer that due to failure on part of the assessee to comply with statutory notices issued, the penalty under section 271(1)(b) shall be levied in the case of assessee. In view of the above, the assessing officer imposed penalty under section 271(1)(b) of the to 405/SRT/2023 Janai Exports Income Tax Act, 1961 for non-compliance of the terms of statutory notice at Rs.10,000/-.
6. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has partly allowed the appeal of the assessee, observing as follows: “6.1 I have gone through the penalty orders and submissions made by the assessee. The AO has levied penalty u/s 271(l)(b)for non-compliance of the notices issued u/s 142(1). The AR of the assessee submitted that the assessee during the assessment proceedings submitted all the necessary details and complied with the notices issued by the Assessing officer from time to time. Further, the AR of the assessee submitted that the delay in submission of part details was due to Covid-19 pandemic, wherein whole country is fighting with 2nd wave of Covid-19 pandemic and everyone is doing work with proper safety measures. Hence, it should not be considered as default for non-compliance of legal notice and penalized the same u/s 271(l)(b) of the Act. Further the AR of the assessee submitted that the assessment order was finally passed u/s 143(3) of the Act and not u/s 144 of the Act. Hence delay in filing submission should not be constructed strictly, more so when the assessee has co-operated and replied and attended all the hearings in the case. 6.2 On perusal of the submission, it is noticed that complete details were filed by the assessee during assessment proceedings and subsequently, the assessment order has been finally passed u/s. 143(3) of the Act. This proves that necessary compliance has been made eventually before the assessment order was passed by the AO, it is not case where the assessee had totally ignored the notices and had subsequently met the entire requirements of the AO to his satisfaction. The Hon'ble ITAT Delhi in the case of Rekha Rani 154 ITD 617 has held that where default was same, penalty of Rs,.10,000/- could be imposed for first default made by Assessee in this regard only. Penalty could not be imposed for each and every notice issued u/s. 143(2), that remained not complied with, on part of the Assessee. Accordingly, the first penalty imposed u/s. 271(l)(b) of Rs. 10,000 for A.Y. 2013- 1.4 is confirmed. The subsequent penalties for the same default of non- compliance with notices u/s 142(1) are directed to be deleted. As a result, appeal no. 10099/2012- 13 is confirmed and the Appeal no. 10100/2012-13for the A.Y. 2013-14 is directed to be deleted. Overall, the assessee gets relief of Rs. 10,000/- . Ground No.1 is partly allowed.”
7. Aggrieved by the order of ld. CIT(A), the assessee is in further appeal before us. to 405/SRT/2023 Janai Exports 8. None appeared on behalf of the assessee. However, we have received an adjournment application from assessee. We note that issue raised by the assessee in all these appeals is very small issue, which is covered by several judgments of this Coordinate Bench of ITAT-Surat, therefore we have rejected the adjournment application of the assessee and with the consent of the learned Departmental Representative (ld. DR), for the Revenue, we have heard these seven appeals for adjudication.
We have heard ld. DR for the Revenue. The ld DR submitted that the order passed by the Assessing Officer is not under section 144 of the Act, therefore Bench may take an appropriate decision to adjudicate these appeals. We note that assessee is a partnership firm carrying on the business of sale of diamonds. A search action u/s. 132 of the Act was carried out in the case of the assessee firm on 28-06-2018 at its various business premises at Surat and Mumbai. The learned AO has issued notice u/s. 142(1) of the Act dtd, 30.01.2021.Thereafter, the learned AO had issued notice u/s 274 r.w.s. 271(l)(b) of the Act dated 09.02.2021 requesting the assessee to furnish the explanation on 12/02/2021 as to why penalty u/s. 271(l)(b) should not be levied for non-compliance to notice u/s. 142(1) dtd. 30/01/2021. The assessee has submitted part reply on 15-02-2021 to the aforesaid notice u/s 274 r.w.s. 271(l)(b) of the Act dated 09-2-2021 explaining that due to requirement of compilation of details for number of years in respect of Mumbai and Surat offices, it could not be submitted on time, however, they will give full co-operation during the course of assessment proceedings. Further, due to emergence /spread of Covid-19 and due to this, restriction on employee to be present in office premise in certain limit, imposed by SMC-Surat and staff constraints in the office of Authorised representative and as well as in the office of the assessee, ITA Nos. 399 to 405/SRT/2023 Janai Exports compilation of data for block period in required format as required by AO would require some time. However, subsequently, the assessee also has submitted further submissions in response to details subsequently asked by the learned AO during the course of assessment proceedings.
From the above facts, we note that assessee had in fact co-operated in the assessment proceedings and complied with all the legal notices during the course of assessment proceedings and in this back ground the AO has passed the order u/s. 153A r.w.s 143(3) of the Act on 18/09/2021. Thus order passed by the AO is not under section 144 of the Act. We note that Coordinate Bench of ITAT, Surat in case of Shri Premswarup Jethabhai Patel, for A.Y. 2007-08 to 2013-14, 2668, 2669, 2670, 2671, 2672, 2673, 2674/AHD/2016 and in case of Niranjanaben D, Patel, ITA No. 2651 to 2657/AHD/2016 and in case of Devyani P. Patel, ITA No. 2658 to 2664/AHD/2016, held that all assessment orders have been framed u/s 143(3) r.w.s. 153A of the Act and merely because the assessee could not comply with the notice for a single default due to reason beyond his control, the penalty u/s 271(1)(b) of the Act cannot be imposed. The Coordinate Bench of ITAT Ahmedabad in case of Sunilbhai J. Shah, ITA No. 284 to 289/Ahd/2015 & 361 l/Ahd/2015, Vasantaben J Shah, ITA No. 272 to 277/Ahd/2015 & 3609/Ahd/20I5, Manishaben Sunil Shah ITA No. 3610/Ahd/2015 held that though assesses failed to complied with several notice initially and explained the reason for non-appearance, final order passed u/s 143(3) of the Act and the assessee later on submitted all the details required for assessment, hence penalty was deleted.
Respectfully, following the binding precedents, as narrated above, we delete the penalty sustained by ld CIT(A) u/s 271(l)(b)/ 272A(1)(b) of the Act.
ITA Nos. 399 to 405/SRT/2023 Janai Exports 12. In the result, all seven appeals filed by the assessee (in to 405/SRT/2023) are allowed.
Registry is directed to place one copy of this order in all appeals folder / case file(s).
Order is pronounced on 18/08/2023 in the open court.