KASHYAP MAGANBHAI VAGHASIYA,SURAT vs. DY. COMMISSIONER OF INCOME TAX, SURAT

Since the issues involved in all the appeals are common and identical except variance of amount, therefore we have clubbed all these appeals and heard together, and a consolidated order is being passed for the sake of convenience and brevity. The facts as well as grounds of appeal raised by assessee in the case of Sanjaybhai Arjunbhai Patel in for assessment year 2012-13, have been taken into consideration for deciding these appeals en masse.

The grounds of appeal

raised by the assessee in “lead” case in for assessment year 2012-13, are as follows: “1.On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in levying penalty of Rs.5,000/- u/s 271(1)(b) of the I.T. Act, 1961.

The facts of the case which can be stated quite shortly are as follows: During the course of assessment proceedings, following notices were issued u/s 142(1) of the Act:

After that assessee has filed before the assessing officer, the relevant documents and evidences. The assessing officer, in his assessment order has mentioned that assessee has submitted required documents and details for making the assessment. The relevant para of the assessment order dated 31.05.2021, framed under section 143(3) read with section 153A of the Act, is reproduced below: “3.During the year under consideration, the assessee has shown to have received income from profit and gains from business or profession and is also a partner in diamond manufacture-exporter firm, M/s Om Anand Exports. The assessee has time to time furnished online submissions through the ld.Authorised Representative, Chartered Accountants, M/s Jagasheth & Co.”

Aggrieved by the order of ld CIT(A), the assessee carried the matter in appeal before the Ld. CIT(A) who has partly deleted the penalty imposed by the assessing officer, observing as follows: Page | 3 -159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya

Aggrieved by the order of Ld. CIT(A), the assessee is in further appeal before us.

Shri P.M. Jagasheth, Learned Counsel for the assessee argued that during assessment stage, the assessee sought adjournment on 14.12.2020 and -159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya thereafter assessee sought another adjournment on 28.12.2020. Then after, the assessee has submitted the required details and documents before the Assessing Officer from time to time, as evident from para no.3 of the assessment order. The Ld. Counsel also contended that order was passed by the Assessing Officer on merits u/s 143(3) r.w.s. 153A of the Act, vide assessment order dated 31.05.2021. Since the assessment order has been passed on merit and the assessee has submitted the required details and documents after taking appropriate adjournments, therefore the assessee should not be penalized. The Ld. Counsel also submitted that these required details and documents were submitted before the Assessing Officer in difficult conditions of severe Covid-19 pandemic period. Hence, Ld. Counsel, this way, prays the Bench that assessee made sufficient compliance of the notices issued by Assessing Officer, therefore penalty may be deleted.

On the other hand, ld Sr. DR for the Revenue submits that during the assessment proceedings, assessee took only adjournments therefore Assessing Officer was right in levying penalty under section 271(1)(b) of the Act. This way, Ld. Sr.DR for the Revenue reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and is not being repeated again for the sake of brevity.

We have heard both the parties and perused the materials available on record. We note that Ld. Counsel for the assessee, assailing the imposition of penalty, has pleaded before us that Assessing Officer had imposed penalty in an arbitrary manner. The ld Counsel pointed out that on two occasions, the assessee had taken adjournments. In order to make paper book/compilation of documents and evidences, the assessee took few adjournments and in fact, later on, the assessee has submitted the required details and documents before the assessing officer which is acknowledged -159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya by the assessing officer in the assessment order itself, and the assessment order was passed u/s 143(3) r.w.s. 153A of the Act.

We find force in the arguments of ld Counsel, and noticed that Assessing Officer while framing the assessment order u/s 143(3) r.w.s. 153A of the Act, has himself mentioned in the assessment order that assessee submitted details and documents vide para no.3 of the order, which is reproduced below: “3.During the year under consideration, the assessee has shown to have received income from profit and gains from business or profession and is also a partner in diamond manufacture-exporter firm, M/s Om Anand Exports. The assessee has time to time furnished online submissions through the ld.Authorised Representative, Chartered Accountants, M/s Jagasheth & Co.”

This shows that assessment order, u/s 143(3) r.w.s. 153A of the Act, was framed by assessing officer after getting the required documents and details. Therefore, we note that when the assessee has submitted the required details and documents during the scrutiny assessment proceeding and based on these details and documents, the Assessing Officer has framed the assessment on merit. In view of this, we note that there was no wisdom in the assessment order in respect of alleged non-compliance. Therefore, we note that when the Assessing Officer has framed the assessment order u/s 143(3) r.w.s. 153A of the Act and assessment order has not been passed u/s 144 of the Act, therefore the penalty u/s 271(1)(b) of the Act, for non- compliance should not be levied. To pass order by the Assessing Officer u/s 143(3) r.ws. 153A of the Act means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier was ignored by the Assessing Officer.

We find that the instant appeal is squarely covered by the decision of the Co-ordinate Bench of ITAT Delhi in the case of Akhil Bhartiya Prathmik -159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya Shikshak Sangh Bhawan Trust vs ACIT 5 DTR 429 (Delhi Tribunal) wherein the Coordinate Bench in paras 2.4 and 2.5 has held as under :-

As the facts of this case are identical, we hold that the imposition of penalty u/s 271(1)(b) of the Act was patently wrong, specially in view of the fact that the impugned assessment order has been passed u/s 143(3). While setting aside the impugned order, we direct the Assessing Officer to delete the penalty.”

We also note that Ld. CIT(A) sustained penalty at Rs.5,000/- partly for second default. However, the quantum of penalty u/s 271(1)(b), for each default is Rs.10,000/-, which is mentioned in clause (ii) sub-Section-1 of Section 271(1)(b) of the Act. Therefore, we note that penalty sustained by the Ld. CIT(A) is not in accordance with the provision of Section 271(1)(b) and clause (ii) of that Section. We note that Law is well settled that when the statute requires to do certain thing in certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on a legal maxim 'Expressio unius est exclusion alteris', meaning there by that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner and following of other course is not permissible. (Nazir Ahmed v. King Emperor AIR 1936 PC 253; Ram Phal Kundu v. Kamal Sharma [2004] 2 SCC 759 and Indian Bank's Association v. Devkala Consultancy Service AIR 2004 SC 2615). Similar view has been expressed in the Orissa Rural Housing Development Page | 7 -159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya Corpn. Ltd, 343 ITR 316 (Orissa). Hence, ld CIT(A) has erred in sustaining the part penalty of Rs.5000/-, u/s 271(1)(b) of the Act, therefore order passed by the ld CIT(A) is not in accordance with the provisions of law.

Based on above facts and circumstances, we are not inclined to accept the contention of the Assessing Officer in imposing the penalty u/s 271(1)(b) of the Act, therefore we delete the penalty.

Considering the facts that we have already allowed assessee’s appeal in “lead” case in for A.Y.2012-13, the facts and grounds raised in other appeals are identical and similar, therefore our instant adjudication shall apply mutatis mutandis to the aforesaid other appeals of Assessees also.

Before parting, we would like to state that in ITA No.159/SRT/2022,ITANo.153/SRT/2022 and ITANo.154/SRT/2022, the Assessing Officer levied penalty under section 272A(1)(d) of the Act, which is pari materia with Section 271(1)(b) of the Act. Therefore, our instant adjudication shall apply to these appeals and penalty levied u/s 272A(1)(d) of the Act is hereby deleted.

In combined result, all the twelve appeals of the assessees are allowed.