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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Ms. SUCHITRA KAMBLE & SHRI WASEEM AHMED
PER SUCHITRA KAMBLE, JUDICIAL MEMBER :
This appeal is filed by the assessee against the order dated 27.06.2019 passed by the CIT(A)-1, Rajkot for the Assessment Year 2006-07.
2. The assessee has raised the following grounds of appeal:
“1. The Ld. CIT (A) has erred in law and facts in passing order confirming penalty u/s.271(1)(b) of Rs.10,000/-. The same needs cancellation.
2. The Ld. CIT (A) has erred in law and facts in passing order confirming penalty without considering the replay filed by the assessee and without giving opportunity to submit his explanation. The order being bad in law needs cancellation.
3. The Ld. CIT (A) has erred in law and facts in not considering the aspect that the order confirming penalty has been passed without considering statutory position. The penalty order passed is bad in law. The penalty needs deletion.
Assessment Year: 2006-07 Page 2 of 5 4. The Ld. CIT (A) has erred in law and facts in not considering the aspect that the order passed confirming penalty is bad in law, illegal and not sustainable in the eye of law. The penalty needs cancellation.
5 The Ld. CIT(A) has erred in law and facts in not considering the aspect that the initiation of the penalty proceedings itself was bad in law. The penalty needs cancellation.
6. The Ld. CIT(A) has erred in law and facts in not considering the aspect that there was no legal service of notice on the assessee giving reasonable time. The penalty needs cancellation.
7. The Ld. CIT(A) has erred in law and facts in not providing adequate and reasonable opportunity. The penalty needs cancellation.
8. The Ld. CIT(A) has erred in law and facts in not providing adequate and reasonable time. The penalty needs cancellation.
The Ld. CIT(A) has erred in passing common order for 3 non compliance jointly for 3 non compliance. Passing of common order is not permissible the order passed by needs cancellation.
The penalty order having been passed after limitation prescribed the same is time barred and needs cancellation.
Without prejudice, the assessee was having reasonable cause on consideration of which no penalty ought to have been levied. The penalty needs cancellation.
Taking into consideration overall legal, statutory and settled law besides factual aspects of the case no penalty ought to have been levied. The penalty needs cancellation.”
The assessee filed return of income on 10.10.2008 declaring total income of Rs.95,930/-. Since there was information in the possession of the Assessing Officer as well as sale of property by the assessee vide sale deed on 01.03.2006 for consideration of Rs.6.50,000/-. However, the Stamp Valuation Authority has determined the value of property at Rs.7,63,964/-. As there was understatement of sale value adopted, the case of the assessee was reopened under the provisions of Section 147 of the Act. The assessment was finalised under Section 143(3) read with Section 144 of the Act on 13.03.2014 assessing total income at Rs.2,39,180/-. In the meanwhile, penalty proceedings under Section 271(1)(b) were initiated for non compliance of statutory notice issued under section 148 and 142(1) of the Act. The Assessment Year: 2006-07 Page 3 of 5 Assessing Officer imposed penalty of Rs.10,000/- levied for each default vide order dated 17.09.2014 under Section 271(1)(b) of the Act.
4. Being aggrieved by the penalty order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
5. Ld. DR relied upon the assessment order, penalty order and the order of the CIT(A).
The Ld. AR has given written submissions before us and no one appeared at the time of hearing when the matter was called up. The Written submissions are reproduced herein below:-
“Written Submissions: - The Ld. A.O. levied penalty of Rs.30.000/- for 3 of non compliance without passing separate order for each of non compliance. The Hon. ITAT Jodhpur in the case of Babu Lal vs. DCIT, 91 TTJ (JD) 368 has been kind enough to hold that the Ld. AO is bound to issue show cause notice and levied penalty separately in case of each and every default, penalty order therefore needs to be quashed.
As per the provisions of the Act penalty U/s 271(1) (b) cannot be levied in respect of notice issued U/s. 148 dated 22/3/2013 and show cause notice issued dated 6/3/2014 by the Ld. A.O. Therefore penalty levied in respect of these 2 notices was erroneous as the act does not provide the same.
3. The Ld. CIT(A) retain one penalty for Rs.10000 and deleted rest two. Thus penalty levied for erroneous action appears to be cancelled by him and the remaining penalty in respect of notice issued u/s 142(1) dated 24/12/2013 remains. The penalty order page 1 para 3 clearly mentions that notice dated 24/12/2013 is shown as served on 27/12/1013. However it does not mention the date of hearing fixed. Thus the action of not mentioning date of hearing fixed itself shows that the copy of the same appears to be not available in the records or if it is available, the notice issued without mentioning date of hearing fixed which shows that an incomplete or erroneous notice issued requiring no action. This is supported from the action of the Ld. AO itself from its own action that he levied penalty in respect of non compliance of notice issued u/s 148 though the act itself does not provide levy of penalty u/s 271(1)(b) yet it was levied unauthorizedly. Thus it appears that unauthorized levy of penalty is followed again by issuance of incomplete notice which is also mention the penalty order itself without mentioning date of hearing fixed. Since the panel provisions are to be followed strictly considering all relevant records and provisions of act which is not done in this case leads to the impression that this Assessment Year: 2006-07 Page 4 of 5 is also erroneous though assessee has taken this grounds before the Ld. CIT(A) but it is treated as not tenable though assessee specifically contended that due to change of address he could not received the notice as the business premises were closed. Instead of calling the evidence of service of notice giving reasonable and adequate time from Ld. AO and verified the proper service the of the assessee is considered as not tenable. The assessee is very much hopeful to get justice for cancelation of penalty as such erroneous actions being bad in law will not be sustained.
Morever, the notice dated 6/3/2014 was also without issuance of adequate and reasonable lime as the compliance thereof was called for by 12/3/2014 whereas the date of service of notice is also not mentioned in the penalty order, Thus giving very inadequate lime the ground on which also penalty levied is deletable following judicial pronouncement as mentioned below.
It is settled law that when insufficient time is given and if the same could not be complied it cannot be penalized since the non compliance can be stated to be not at foe of the assessee but because of issuing authority and this itself can be termed as reasonable cause also.
171 ITR 596 (Hon. Allahabad High Court) - Jagannathprasad Kanaiyalal. 2. 2 M & ROB 172 (USA) - Barber and wood. 3. 249 ITR 216 - Hon. Supreme Court - Tin Box Co. 4. 1998 AIR SC 3038 - State of UP v/s. Strugnalal 5. 78 ITR 728 (Hon. Culcatta High Court) - Pannadevi Saraoji. Hon. ITAT, Rajkot - 1TA No.176/RJT/2013 - Keshubhai G. Mandaliya.” 6.
We have heard the Ld. DR and perused all the relevant material available on record. At the time of assessment proceedings, none appeared on behalf of the assessee for contesting the assessment proceedings under Section 143(3) of the Act read with Section 144 of the Act. i.e. best assessment judgement. In the written submission the assessee has mentioned that as per the provisions of the Act penalty under Section 271(1)(b) of the Act cannot be levied in respect of notices issued under Section 148 dated 22.03.2013 and show causer notice issued dated 06.03.2014 by the Assessing Officer. In the penalty order it was mentioned that the notices issued under Section 142(1) of the Act dated 24.12.2013, 27.12.2013 has not mentioned the date of hearing of the assessment proceedings. Besides this, due to change of address, the assessee could not receive the notice as Business premises were closed. Thus the assessee could not appear at the relevant time before the Assessing Officer. Thus the same cannot be stated to be fault on the part of the assessee and,
Assessment Year: 2006-07 Page 5 of 5 therefore, penalty under Section 271(1)(b) of the Act cannot be imposed. Hence, penalty under Section 271(1)(b) of the Act was not justifiable and the CIT(A) also overlooked these aspects.
In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on this 14th day of September, 2022.