MADANLAL C. JAIN HUF, MUMBAI v. ADDL CIT RG 19(1), MUMBAI

ITA 1225/MUM/2010 | 2006-2007
Pronouncement Date: 19-01-2011 | Result: Allowed

Appeal Details

RSA Number 122519914 RSA 2010
Assessee PAN AADHM7272H
Bench Mumbai
Appeal Number ITA 1225/MUM/2010
Duration Of Justice 11 month(s) 3 day(s)
Appellant MADANLAL C. JAIN HUF, MUMBAI
Respondent ADDL CIT RG 19(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted J
Tribunal Order Date 19-01-2011
Date Of Final Hearing 19-01-2011
Next Hearing Date 19-01-2011
Assessment Year 2006-2007
Appeal Filed On 15-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'J' BENCH MUMBAI BEFORE SHRI R.V. EASWAR PRESIDENT AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. 1225/MUM/2010 (ASSESSMENT YEAR: 2006-07) M/S. MADANLAL C. JAIN HUF ADDL. CIT RANGE 19(1) 2 SAI CHHAYA BUILDING 4TH ROAD PIRAMAL CHAMBERS LALBAUG KHAR (W) MUMBAI 400052 VS. MUMBAI 400012 PAN - AADHM 7272 H APPELLANT RESPONDENT ITA NO. 1226/MUM/2010 (ASSESSMENT YEAR: 2006-07) SMT. BHAVANA M. JAIN ADDL. CIT RANGE 19(1) 2 SAI CHHAYA BUILDING 4TH ROAD PIRAMAL CHAMBERS LALBAUG KHAR (W) MUMBAI 400052 VS. MUMBAI 400012 PAN - AAEPJ 2314 E APPELLANT RESPONDENT ITA NO. 1227/MUM/2010 (ASSESSMENT YEAR: 2006-07) SHRI MUKESH M. JAIN ADDL. CIT RANGE 19(1) 2 SAI CHHAYA BUILDING 4TH ROAD PIRAMAL CHAMBERS LALBAUG KHAR (W) MUMBAI 400052 VS. MUMBAI 400012 PAN - AABPJ 1570 F APPELLANT RESPONDENT APPELLANT BY: SHRI SUBHASH CHHAJED RESPONDENT BY: SHRI P.N. DEVDASAN O R D E R PER B. RAMAKOTAIAH A.M. THESE APPEALS BY THE APPELLANTS ARE AGAINST THE ORD ER OF THE CIT(A)- XXX MUMBAI DATED 25.11.2009 CONFIRMING THE PENALTY UNDER SECTION 272A(1)(C) OF THE I.T. ACT OF ` 10 000 IN THE CASE OF EACH APPELLANT. ITA NOS. 1225 1226 & 1227/MUM/2010 M/S. MADANLAL C. JAIN HUF & OTHERS 2 2. THE BRIEF FACTS ARE THAT THE A.O. WHILE ASSESSING THE CASE OF SHRI. RAJESH B. JAIN ISSUED SUMMONS TO THE LENDERS TO ATT END PERSONALLY BEFORE THE A.O. AND TO PRODUCE ORIGINAL PASS BOOK AND COPY OF RETURN OF INCOME IN ORDER TO VERIFY THE GENUINENESS OF LOANS GIVEN BY T HEM TO THE ASSESSEE SHRI RAJESH B JAIN FOR A.Y. 2006-07. HOWEVER THE A.O. FO UND THAT THE WITNESSES I.E. THE APPELLANTS DID NOT ATTEND BEFORE HIM ON TH E DATE OF HEARING I.E. 18.12.2008 AND CONSEQUENTLY HE INTIMATED THIS FACT TO THE ADDL. CIT VIDE HIS LETTER DATED 19.01.2009. THE A.O. ALSO RECOMMENDED THAT PENALTY PROCEEDINGS UNDER SECTION 272A(1)(C) MAY BE INITIAT ED AGAINST M/S. MADANLAL C. JAIN (HUF) SMT. BHAVANA M. JAIN AND SH RI MUKESH M. JAIN. THE ADDL. COMMISSIONER INITIATED PENALTY PROCEEDING S AGAINST THE APPELLANTS VIDE LETTER DATED 27.02.2009 STATING THAT THE APPEL LANTS HAD CONTRAVENED THE PROVISIONS OF SECTION 131 OF THE I.T. ACT. THEY WER E ASKED TO SHOW CAUSE ALONG WITH RELEVANT EVIDENCE AS TO WHY PENALTY SHOU LD NOT BE LEVIED UNDER SECTION 272(A)(1)(C) OF THE I.T. ACT. AFTER CONSIDE RING THE REPLY OF THE APPELLANTS THE ADDL. CIT IMPOSED PENALTY OF ` 10 000/- EACH UNDER SECTION 272A(1)(C) OF THE ACT BY HOLDING AS UNDER ( ORDER I N THE CASE OF SHRI MADANLAL C JAIN HUF WAS EXTRACTED): - IT IS CLEAR THAT THE WITNESSES M/S. MADNALAL C. JA IN (HUF) FAILED TO COMPLY WITH THE SUMMONS BY NOT ATTENDING BEFORE ITO 19(1)(2) ON THE PRESCRIBED DATE. THE AFFIDAVIT FILED BY HIM IN RE SPECT OF NON COMPLIANCE OF SUMMON IS A SELF SERVING DOCUMENT WHICH IS INCON SISTENT WITH THE FACTS OF THE CASE AND ALSO EVIDENCE ON RECORD. IT I S NOT CLEAR WHY THE SAME HAS BEEN EXECUTED ON 19.12.2008 WHEN THERE WAS NO REQUIREMENT TO FILE AN AFFIDAVIT FROM ANY OF THE AUTHORITY. BES IDES HAVING PREPARED THIS AFFIDAVIT IT IS NOT CLEAR WHY THE SAME HAS NO T BEEN SUBMITTED TO ANY AUTHORITY SUPERIOR TO ITO 19(1)(2) WHO COULD HAVE T AKEN REMEDIAL ACTION IN THE MATTER. BESIDES NO OTHER INSTANCE OF ANY TYP E WHEREIN ITO 19(1)(2) HAD NOT ATTENDED THE ASSESSEE OR C.A. AFTER CALLING HIM HAS COME TO ANY NOTICE IN LAST TWO YEARS. (SIMILAR ORDERS WERE PASSED IN THE CASES OF SMT. BH AVANA M. JAIN AND SHRI MUKESH M. JAIN) THE PENALTY WAS CONFIRMED BY THE CIT(A) STATING THA T THE CONTENTIONS OF THE APPELLANTS ARE NOT CORRECT. 3. AT THE OUTSET THE LEARNED COUNSEL SUBMITTED THAT ON SIMILAR FACTS IN THE CASE OF SMT. RANJANA JAIN WHO IS ALSO SUMMONED BY THE A.O. THE ITAT ITA NOS. 1225 1226 & 1227/MUM/2010 M/S. MADANLAL C. JAIN HUF & OTHERS 3 HAS DELETED THE PENALTY AND SINCE THE FACTS ARE SIM ILAR THE PENALTY IS TO BE DELETED. 4. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE ORDE RS THE A.O. HAD ISSUED WITNESS SUMMONS NOT ONLY TO THE APPELLANTS B UT ALSO TO THE OTHER PERSONS AND THE PENALTY LEVIED FOR NON APPEARANCE O N SAME FACTS BY SAME OFFICER IN THE CASE OF SMT. RANJANA JAIN WAS CANCEL LED BY THE ITAT IN ITA NO. 1228/MUM/2010 DATED 30 TH SEPTEMBER 2010 BY HOLDING AS UNDER: - 4. A PLAIN PERUSAL OF THE ORDERS OF THE AUTHORITIE S BELOW SHOWS THAT THE ONLY REASON AS TO WHY THE ASSESSEES EXPLANATION FO R NOT APPEARING BEFORE THE INCOME TAX OFFICER IS REJECTED IS THAT W HEN THE INCOME TAX OFFICER DID NOT RECORD HER ATTENDANCE THE ASSESSEE WAS EXPECTED TO APPROACH THE INCOME TAX OFFICERS SUPERIOR AUTHORIT Y AND RECORD THE PRESENCE OR IN THE ALTERNATE THE ASSESSEE WAS EXP ECTED TO AGAIN APPEAR BEFORE THE INCOME TAX OFFICER ON THE VERY NEXT DATE . THIS REJECTION OF THE ASSESSEES EXPLANATION IN OUR CONSIDERED VIEWS IS WHOLLY AND UNSUSTAINABLE IN LAW INASMUCH AS THE PENALTY CAN ON LY BE IMPOSED FOR NOT APPEARING BEFORE THE INCOME TAX OFFICER ON THE SCHEDULE DATE OF APPOINTMENT. THAT IS NOT THE CASE HERE. THE ASSESSE E WAS PRESENT ON THE APPOINTED DAY. THE ASSESSEE IS EXPECTED TO PRESENT BEFORE THE OFFICER REQUIRING HIS PRESENCE. IN ANY EVENT IT IS WHOLLY UNREALISTIC TO ASSUME IN CASE THE ASSESSEE IS CALLED UPON TO APPEAR BEFORE T HE ITO AND DESPITE HER WAITING OUTSIDE THE ROOM OF THE ITO AND DESPITE HER HAVING DULY INTIMATED THE ITO ABOUT HER PRESENCE THERE THE ASS ESSEE DOES NOT GET CALLED IN THE CHAMBER OF THE INCOME TAX OFFICER TH E ASSESSEE SHOULD IMMEDIATELY APPROACH THE HIGHER AUTHORITIES TO INFO RM THE ABOVE ATTITUDE OF THE ITO. THE ASSESSEE IS NOT DUTY BOUND TO DO SO . AS FAR THE SUGGESTION THAT THE ASSESSEE SHOULD HAVE APPEARED O N THE NEXT WORKING DAY THE ASSESSEE IS NOT UNDER OBLIGATION TO DO SO. UNDISPUTEDLY UNDER THE ABOVE CIRCUMSTANCES PERHAPS THE ASSESSEE COULD HAVE APPEARED ON THE SUBSEQUENT DATE TO ASCERTAIN THE REASONS OF HER NOT BEING ALLOWED TO PRODUCE HERSELF ON THE SCHEDULED DATE. HOWEVER JUS T BECAUSE THE ASSESSEE DID NOT SO THE PENALTY FOR NON-COMPLIANCE CANNOT BE IMPOSED. THE PENALTY CAN BE IMPOSED IF THE ASSESSEE IS UNDE R OBLIGATION TO DO SOMETHING AND HE FAILS TO DISCHARGE THAT OBLIGATION . THAT IS NOT EVEN THE CASE OF THE AUTHORITIES BELOW. THE PENALTY CANNOT B E IMPOSED FOR ASSESSEE NOT DOING SOMETHING WHICH THE ASSESSEE OUG HT TO HAVE DONE IN IDEAL CIRCUMSTANCES. HAVING SAID THAT WE ALSO FEEL THAT THE ASSESSEE HAS ALREADY UNDERGONE SUFFICIENT AGONY IN PURSING T HIS LITIGATION AND THE ASSESSEE WILL HOPEFULLY ENSURE IN FUTURE SCRUPULO US COMPLIANCE WITH LEGITIMATE REQUISITIONS FROM THE TAX AUTHORITIES. W E LEAVE IT AT THAT. FOR THE REASONS SET OUT ABOVE WE DEEM IT PROPER TO DELETE THE IMPUGNED PENALTY. THE ASSESSEE GETS RELIEF ACCORDINGLY. ITA NOS. 1225 1226 & 1227/MUM/2010 M/S. MADANLAL C. JAIN HUF & OTHERS 4 5. SINCE THE FACTS ARE SAME FOLLOWING THE RATIONALE A DOPTED BY THE COORDINATE BENCH WE ARE ALSO OF THE OPINION THAT T HE FACTS DID NOT WARRANT ANY PENALTY. ACCORDINGLY PENALTY IS CANCELLED. 6. IN THE RESULT APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON AT THE TIME O F HEARING ON 19 TH JANUARY 2011. SD/- SD/- (R.V. EASWAR) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI DATED: 19 TH JANUARY 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXX MUMBAI 4. THE CIT XIX MUMBAI CITY 5. THE DR J BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.