The Sub-Registrar,, Rewari v. Director of Income Tax (CIB), Chandigarh

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA JUDICIAL MEMBER ITA NO.1190 /CHD/2010 (FINANCIAL YEAR : 2008-09) & ITA NOS.1193 1194 & 1197 /CHD/2010 (FINANCIAL YEARS : 2004-05 2005-06 & 2007-08) THE SUB REGISTRAR VS. THE DIRECTOR OF INCOME TAX (CIB) TEHSIL COMPOUND SCO 98-100 3 RD FLOOR BAWAL DISTT. REWARI. SECTOR 17-C CHANDIGARH. PAN: RTKS09731B ITA NO.1191 /CHD/2010 (FINANCIAL YEAR : 2008-09) & ITA NOS.1192 1195 &1196 /CHD/2010 (FINANCIAL YEARS : 2004-05 2005-06 & 2007-08) THE SUB REGISTRAR VS. THE DIRECTOR OF INCOM E TAX (CIB) TEHSIL OFFICE COMPOUND SCO 98-100 3 RD FLOOR RLY. ROAD KOSLI DISTT. REWARI. SECTOR 17-C CHAND IGARH. PAN: RTKS09723A (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SMT. JAI SHREE SHARMA ORDER PER BENCH THESE EIGHT APPEALS ARE FILED BY THE TWO DIFFERENT ASSESSEES AGAINST PENALTY LEVIED U/S 271FA OF THE INCOME TAX ACT RELA TING TO FINANCIAL YEARS 2004-05 2005-06 2007-08 AND 2008-09. 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING COMMON GR OUNDS OF APPEAL:- 1. THAT THE APPELLANT HUMBLY REITERATES FOR YOUR BENIGN AND WORTHY CONSIDERATION ALL THE FACTS AND GROUNDS OF APPEAL PUT FORWARD BEFORE THE LD FIRST APPELLATE AUTHORITY. 2. THAT THE PENALTY IS NOT JUST AND FAIR UNDER THE CIRCUMSTANCES. THAT THERE EXISTS NO ADEQUATE AND V ALID JUSTIFICATION FOR LEVYING PENALTY UNDER SECTION 271 FA UPON THE APPELLANT. FACTS BEARING THE APPELLANTS SUBMISSION HAVE NOT BEEN ACCORDED DUE WEIGHT AS WARRANTED UNDER THE CIRCUMSTANCES OF LAW. 3. THAT THE LD FIRST APPELLATE AUTHORITY HAS COMMITTED ERROR IN LAW BY NOT PASSING A SPEAKING OR DER IN THE APPEAL. THAT THE OFFICE OF THE CIT (APPEALS ) HAS RETURNED THE APPEAL WITHOUT AFFORDING ANY OPPORTUNI TY OF HEARING OF THE APPELLANT. THAT THE CIT (APPEALS) H AS BEEN EXPECTED UNDER THE ACT TO GIVEN AN OPPORTUNITY OF HEARING APPELLANT IN THIS REGARD. THE LEARNED FIRS T APPELLATE AUTHORITY HAS DECIDED THE APPEAL WITHOUT GOING THROUGH THE CONTENTS OF THE APPEAL AND STATUT ORY LAW APPLICABLE TO THE APPEAL THROUGH HIS OFFICE SUPERINTENDENT. THE FIRST APPELLATE AUTHORITY HAS NOT NEITHER CONSIDERED THE SECTION 246A OF THE INCOME T AX ACT NOR THAT THE DIRECTOR OF INCOME TAX (CIB) ACTS IN A QUASI-JUDICIAL CAPACITY HIS ORDER ARE SUBJECT TO TH E APPEAL UNDER SECTION 246A (1)(Q). THAT THE DIRECT OR OF INCOME TAD (CIB) HAS FAILED TO ACT AS TO THE PROVIS IONS (SEC 271FA READ WITH SECTION 273) OF THE INCOME TAX ACT 1961. 4. THAT IT APPEARS THAT C I T (APPEALS) HAS DELEGAT ED IT SPOWERS TO THE SUPERINTENDENT OF THE OFFICE TO P ASS ANY ORDER ON AN APPEAL PRESENTED TO THE OFFICE WHI CH HE IS NOT AUTHORIZED TO DO SO. THAT THE OFFICE SUPERINTENDENT IS NOT AN INCOME TAX AUTHORITY U/S 1 16 OF THE INCOME TAX ACT 1961. THAT A VALID ORDER UNDER INCOME TAX ACT CAN BE PASSED BY AN INCOME TAX AUTHORITY AS ENUMERATED U/S 116. 5. THAT THE CIT (APPEALS) HAS VIOLATED THE BASICS L AW OF THE INCOME TAX ACT 1961. THE SECTION HAS NOT SP ECIFY ANY PRECONDITION AS TO AN APPEAL CAN FILED IN RESPE CT OF BY WHOM THESE ORDERS SHOULD HAVE BEEN PASSED. THAT SECTION 246A SPEAKS AS FOLLOWS : 246.APEALABLE ORDERS BEFORE COMMISSIONER (APPEALS) (1) ANY ASSESSEE AGGRIEVED BY ANY OF THE FOLLOWING ORDERS (WHETHER MADE BEFORE OR AFTER THE APPOINTED DAY) MAY APPEAL TO THE COMMISSIONER (APPEALS) AGAINST :- - (A) TO (P) X X X X 3 (Q) AN ORDER IMPOSING A PENALTY UNDER CHAPTER XXI; 6. THAT UNDER THE INCOME TAX ACT 1961 THE CIT (APPEALS) HAS NO RIGHT TO RETURN APPEAL FILED BEFOR E HIM. HE IS SUPPOSED TO DECIDE THE APPEAL ONE WAY OR THE OTHER WAY. THE OFFICE SUPERINTENDENT TO THE CIT (APPEALS) HAS NO POWER TO RETURN THE APPEALS PRESEN TED TO THE OFFICE. 7. THAT EVEN UNDER THE PROVISIONS OF THE CIVIL PROCEDURE CODE 1908 (BASIC CIVIL LAW OF INDIA) WHE N A PLAINT IS RETURNED TO THE PARTY IT IS DONE BY THE P ASSING AN ORDER BY CIVIL JUDGE AFTER AFFORDING AN OPPORTUN ITY OF HEARING OF THE PLAINTIFF/PETITIONER. NO READER TO THE COURT OF CIVIL JUDGE HAS A RIGHT TO RETURN A PLAINT TO THE PLAINTIFF. 8. THAT APPEAL IS A VALUABLE RIGHT CONFERRED BY LEGISLATION UPON THE ASSESSEE UNDER THE INCOME TAX ACT 1961. THAT THE ACT DO NOT SPEAK THAT NO APPEAL SHA LL LIE AGAINST THE ORDER PASSED UNDER SEC 271FA. BUT SECT ION 246(1)(Q) SAYS THAT AN APPEAL SHALL LIE TO AN ORDER IMPOSING PENALTY 275) OF THE INCOME TAX ACT 1961. THAT ONLY A SPECIFIC PROVISIONS EXCLUDES THE GENERA L PROVISION OF ACT. IT CANNOT BE DENIED AT THE STROK E OF A PEN BY APPELLATE AUTHORITY OR ITS SUBORDINATE STAFF . IT IS WHAT HAS BEEN DONE IN THE PRESENT APPEAL BY CIT (APPEALS). THAT INDIRECTLY THE CIT (A) HAS REFUSED TO ADMIT THE APPEAL FILED BY THE APPELLANT. 9. THAT EVEN ON THE MERITS THE PENALTY ORDERS PASSE D BY THE DIRECTOR OF INCOME TAX (CIB) ARE NOT IN THE TRUE SPIRIT OF THE SECTION 285BA (1) READ WITH SEC 271FA . IT IS IN VIO0LATION OF THE NATURAL JUSTICE AS WELL AS LAW OF INTERPRETATION APPLICABLE TO THE INCOME TAX PROCEED INGS. THAT NOTICE OF DEMAND SERVICED ALONG WITH THE COPY OF ORDER IS ALSO DEFECTIVE. THAT THE PENALTY ORDER PA SSING AUTHORITY HAS STRIKE OUT ONLY PARA 8 OF THE NOTICE WHICH RELATES TO THE APPEAL TO THE INCOME TAX APPELLATE TRIBUNAL. IT HAS NOT WHERE STRIKE OFF PARA 6 (OF D EMAND NOTICE) WHICH RELATES TO THE FIRST APPEAL BEFORE TH E COMMISSIONER OF INCOME-TAX (APPEALS) ROHTAK. 10. THAT THE JUSTICE SHOULD NOT ONLY BE DONE BUT APPEARS TO HAVE BEEN DONE MANIFESTLY AND UNDOUBTEDL Y. THE HON'BLE SUPREME COURT SAYS THAT THE TAXING 4 AUTHORITIES SHOULD NOT ACT IN A MANNER INDICATE THA T THE SCALES OF JUSTICE ARE WEIGHTED AGAINST THE ASSESSEE . 3. THE ASSESSEE IS AGGRIEVED BOTH BY LEVY OF PENAL TY U/S 271FA OF THE ACT AND ALSO BY NON SPEAKING ORDER PASSED BY THE CI T(A) AGAINST THE ORDER OF DIT (CIB) CHANDIGARH DATED 16.6.2010 / 15.6.2010 IN THE CASE OF THE SUB REGISTRAR TEHSIL COMPOUND BAWAL DISTT . REWARI & THE SUB REGISTRAR RAILWAY STATION ROAD KOSLI REWARI (HA RYANA).. 4. THE ASSESSEE HAS MOVED AN APPLICATION FOR ADJOUR NMENT DATED 31.1.2011 BUT NONE WAS PRESENT ON BEHALF OF THE ASS ESSEE TO SEEK THE ADJOURNMENT OR FOR HEARING OF THE APPEAL. WE FIND NO MERIT IN THE ADJOURNMENT APPLICATION MOVED BY THE ASSESSEE AND T HE APPEALS ARE DISPOSED OF AFTER HEARING OF THE LD. DR FOR THE REV ENUE. 5. ALL THE EIGHT APPEALS RELATING TO THE SAME ISSUE ARE HEARD TOGETHER AND ARE BEING DISPOSED BY THIS CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. 6. THE BRIEF FACTS OF THE CASE ARE THAT THE DIT (CI B) CHANDIGARH HAD PASSED AN ORDER U/S 271FA OF THE INCOME TAX ACT DAT ED 16.6. 2010 RELATING TO THE FINANCIAL YEARS 2004-05 2005-06 2 007-08 AND 2008-09 HOLDING BOTH THE ASSESSEE TO HAVE DEFAULTED IN NOT FURNISHING THE ANNUAL INFORMATION RETURN IN TIME IN RESPECT OF PURCHASE AND SALE OF IMMOVABLE PROPERTY BY ANY PERSON/S VALUED AT RS. 30 LACS OR M ORE FOR THE FINANCIAL YEARS 2004-05 2005-06 2007-08 AND 2008-09. THE A SSESSEE WAS HELD TO BE LIABLE FOR PENALTY U/S 271FA OF THE ACT @ RS. 1 00/- PER DAY FOR DEFAULT. THE TOTAL NUMBER OF DAYS OF DEFAULT IN THE CASE OF SUB REGISTRAR TEHSIL COMPOUND BAWAL (HARYANA) AT 1016 DAYS AND IN THE CASE OF SUB 5 REGISTRAR RAILWAY STATION ROAD KOSLI REWARI (HAR YANA) AT 274 DAYS. ACCORDINGLY PENALTY OF RS. 1 01 600/- AND RS. 27 4 00/- RESPECTIVELY WERE IMPOSED. THE ASSESSEE FURNISHED AN APPEAL BEFORE T HE CIT(A) AGAINST THE SAID ORDER OF THE DIT (CIB) CHANDIGARH FOR ALL THE CAPTIONED FINANCIAL YEARS IN QUESTION. THE SAID APPEALS WERE RETURNED TO THE THE SUB REGISTRAR TEHSIL COMPOUND BAWAL DISTT. REWARI BY THE OFFICE SUPDT. O/O CIT(A) ROHTAK WITH THE REMARKS THE LD. DIT (CIB) CHANDIGARH PASSED THE ORDERS U/S 271FA OF THE INCOME TAX ACT. APPEALS FOR THE ORDER U/S 271FA DO NOT LIE WITH THIS OFFICE. FURTHER APP EALS FOR THE ORDERS PASSED BY COMMISSIONER INCOME TAX (OR DIT) DO NOT L IE WITH THIS OFFICE AS PER SECTION 246A . 7. THE ASSESSEE IS AGGRIEVED BY THE NON SPEAKING OR DER PASSED BY THE CIT(A) AND ITS SUMMARILY REJECTION BY THE OFFICE SU PDT OF THE OFFICE CIT(A) ROHTAK. THE SECOND ISSUE RAISED BY THE ASS ESSEE IS THAT UNDER THE PROVISIONS OF SECTION 246A OF THE ACT WHERE ANY AS SESSEE IS AGGRIEVED BY ANY OF THE ORDERS MENTIONED THERE UNDER HAS THE RI GHT TO APPEAL TO THE CIT(A) AGAINST SUCH ORDERS. THE ORDERS WHICH CAN BE APPEALED ARE ENUMERATED FROM (A) TO ( R ) U/S 246A(1) OF THE INC OME TAX ACT. AN APPEAL LIES TO THE CIT(A) AS PER SUB CLAUSE (Q) TO SECTION 246A(1) AGAINST AN ORDER IMPOSING PENALTY UNDER CHAPTER XXI. THE ASSESSEE VIDE GROUND NO.5 HAS RAISED THE ISSUE OF NON ADJUDICATION OF T HE APPEAL BY THE CIT(A). 8. WE FIND THAT IN THE PRESENT CASE AN APPEAL WAS F ILED BEFORE THE CIT(A) AGAINST THE ORDER IMPOSING PENALTY U/S 271FA OF THE ACT. THE 6 SAID ORDER WAS PASSED BY DIRECTOR OF INCOME TAX (CI B) ROHTAK HOLDING THE ASSESSEE EXIGIBLE TO LEVY OF PENALTY U/S 271FA OF THE ACT. WE FIND THAT CIT(A) HAS NOT PASSED A SPEAKING ORDER IN THE CASE AND VIDE LETTER DATED 4.8.2010 THE APPEALS FILED BY THE ASSESSEE W ERE REJECTED UNDER THE SIGNATURE OF OFFICE SUPDT O/O CIT(A) ROHTAK. UNDER THE PROVISIONS OF SECTION 250 OF THE INCOME TAX ACT THE CIT(A) HAS T O PASS A SPEAKING ORDER IN RESPECT OF THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AFTER HEARING THE ASSESSEE. THE CASE OF THE ASSESSEE BE FORE US IS THAT AN APPEAL LIES BEFORE THE CIT(A) AGAINST AN ORDER OF PENALTY IMPOSED UNDER CHAPTER XXI OF THE INCOME TAX ACT. IN SUPPORT OF HIS SUBM ISSION HE HAS REFERRED TO THE PROVISION OF SECTION 246A(1)(Q) OF THE INCOME TAX ACT. THE AFORESAID SUBMISSION MADE BY THE ASSESSEE NEEDS SERIOUS CONSIDERATION BY THE CIT(A) BEFORE SUMMARILY DISMIS SING THE APPEALS. THE CIT(A) OUGHT TO HAVE ADJUDICATED UPON THE MAINT AINABILITY OF THE APPEALS FILED BY HIM IN TERMS OF SECTION 246A (1)(Q ) BY PASSING A SPEAKING ORDER IN THIS BEHALF. WE FIND THAT CIT(A) IN THE PRESENT CASE HAS FAILED TO FOLLOW THE PROCEDURE IN APPEAL PROCEEDING S AS LAID DOWN IN SECTION 250 OF THE INCOME TAX ACT. IN THE INTEREST OF JUSTICE WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF CIT(A) TO DECIDE THE ISSUE RAISED BY THE ASSESSEE VIDE A SPEAKING ORDER. A REASONABL E OPPORTUNITY OF HEARING SHALL BE AFFORDED TO THE ASSESSEE. THE GRO UND OF APPEALS RAISED BY THE ASSESSEE ARE THUS ALLOWED FOR STATISTICAL PU RPOSES. WE ARE NOT ADDRESSING THE ISSUE ON MERITS IN VIEW OF OUR SETTI NG ASIDE THE ISSUE TO THE FILE OF CIT(A). 7 ITA NO.1190 1193 1194 & 1197 /CHD/2010 & ITA NO.1191 1192 1195 &1196 /CHD/2010 9. IN THE RESULT ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF FEBRUARY 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 TH FEBRUARY 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR