ANITA S. GUPTA, MUMBAI v. ITO WD 24(1)(3), MUMBAI

ITA 1244/MUM/2010 | 2006-2007
Pronouncement Date: 10-12-2010 | Result: Allowed

Appeal Details

RSA Number 124419914 RSA 2010
Assessee PAN AAIPG5330P
Bench Mumbai
Appeal Number ITA 1244/MUM/2010
Duration Of Justice 9 month(s) 24 day(s)
Appellant ANITA S. GUPTA, MUMBAI
Respondent ITO WD 24(1)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 10-12-2010
Date Of Final Hearing 01-12-2010
Next Hearing Date 01-12-2010
Assessment Year 2006-2007
Appeal Filed On 16-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH MUMBAI BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NOW. 1243 & 1244/MUM/2010 (ASSESSMENT YEAR: 2006-07) ANITA S. GUPTA INCOME TAX OFFICER - 24(1)(3) 6/28 MALAD CHS PODDAR ROAD MUMBAI MALAD (E) MUMBAI 400097 VS. PAN - AAIPG 5330 P APPELLANT RESPONDENT APPELLANT BY: SHRI N.K. BHUTA RESPONDENT BY: SHRI A.K. NAYAK O R D E R PER B. RAMAKOTAIAH A.M. THESE APPEALS BY THE ASSESSEE ARE AGAINST THE ORDER S OF THE CIT(A)- XXXIV MUMBAI DATED 17.12.2009. ITA NO. 1243/MUM/20 10 IS WITH REFERENCE TO THE ORDER UNDER SECTION 144 PASSED BY THE A.O. AND CONFIRMED BY THE CIT(A) WHEREAS THE APPEAL IN ITA 1244/MUM/20 10 IS WITH REFERENCE TO THE PENALTY LEVIED UNDER SECTION 271(1)(B) OF ` 10 000/- BOTH FOR THE A.Y. 2006-07. THESE APPEALS ARE HEARD TOGETHER AND DECID ED AS UNDER. ITA NO. 1423/MUM/2010 2. ASSESSEE HAS RAISED THREE GROUNDS GROUND NOS. 1 & 2 PERTAIN TO THE REASONS FOR NON-APPEARANCE BEFORE THE A.O. AND CONF IRMATION OF THE ORDER BY THE CIT(A) PASSED UNDER SECTION 144. GROUND NO. 2 P ERTAINS TO THE ISSUE OF NOT ACCEPTING THE ADDITIONAL EVIDENCE FILED BEFORE THE CIT(A) UNDER RULE 46A. 3. BRIEFLY STATED THE A.O. SELECTED THE CASE FOR SCRU TINY AND ISSUED VARIOUS NOTICES UNDER SECTION 143(2) 142(1) AND AL SO UNDER SECTION 131 ON VARIOUS DATES. THE ASSESSEE DID NOT APPEAR FOR VARI OUS REASONS. ACCORDINGLY THE A.O. BROUGHT TO TAX THE CASH CREDIT IN THE CAPI TAL ACCOUNT OF THE ASSESSEE AT ` 1 60 000/- AND DISALLOWANCE OF INTEREST OF ` 8 680/- CLAIMED BY THE ASSESSEE AGAINST INTEREST INCOME IN THE ORDER PASSE D UNDER SECTION 144. ITA NOS. 1243 & 1244/MUM/2010 ANITA S. GUPTA 2 WHEN THE MATTER WAS CHALLENGED BEFORE THE CIT(A) WI TH REFERENCE TO VARIOUS NOTICES ISSUED AND HOW THE A.O. DID NOT HAVE JURISD ICTION TO COMPLETE THE ASSESSMENT UNDER SECTION 144 THE CIT(A) DISMISSED THE GROUNDS OF APPEAL WITH REFERENCE TO JURISDICTION OF PASSING THE ORDER UNDER SECTION 144. WITH REFERENCE TO GROUND NO. 3 AND CHALLENGE OF CREDIT O F ` 1 60 000/- WHICH WAS RECEIVED AS GIFT FROM MOTHER-IN-LAW AND FATHER-IN-L AW THE ASSESSEE FILED ADDITIONAL EVIDENCES IN SUPPORT OF THE CREDIT BUT T HE CIT(A) REJECTED STATING THAT THE ASSESSEE FAILED TO JUSTIFY THE ADMISSION O F NEW EVIDENCE. IN VIEW OF THIS HE REJECTED THE ADMITTING OF ADDITIONAL EVIDEN CE AND DISMISSED GROUND NO. 3 ALSO. ASSESSEE IS CONTESTING THE ORDER OF THE CIT(A) ON BOTH THE ISSUES. 4. LEARNED COUNSEL SUBMITTED THAT THE A.O. MENTIONS IS SUANCE OF VARIOUS NOTICES BUT THESE WERE NOT COMPLIED WITH DUE TO BON AFIDE REASONS AND ON THE DATE OF SUMMONS ISSUED UNDER SECTION 131 ON 20. 10.2008 THERE WAS AN AGITATION BY ONE OF THE POLITICAL PARTIES (MNS) IN MUMBAI AND THE CITY WAS DISRUPTED. NOT ONLY THAT ON THE NEXT DAY WHEN TRIED TO COME OUT OF THE AREA HER HUSBANDS CAR WAS ALSO DAMAGED. THE POLICE COMP LIANT WAS FILED AND IN THESE CIRCUMSTANCES THE ASSESSEE COULD NOT ATTEND B EFORE THE A.O. FURTHER IT WAS SUBMITTED THAT THE A.O. HAS NOT ISSUED ANY OTHE R NOTICE EXCEPT U/S 131 ON 20.10.2008 AND FAILURE TO COMPLY WITH THE SUMMON S UNDER SECTION 131 DOES NOT ATTRACT INVOKING PROVISIONS OF SECTION 144 . THEREFORE THE ORDER IS TO BE SET ASIDE ON THIS GROUND. IT WAS FURTHER SUBMITT ED THAT THE NOTICE UNDER SECTION 142(1) ISSUED ON 06.03.2008 WAS RESPONDED T O BY THE ASSESSEE BY SEEKING ADJOURNMENT AND AFTER THAT THE A.O. INITIAT ED PENALTY PROCEEDINGS UNDER SECTION 271(1)(B) BUT NO NOTICE WAS ISSUED EX CEPT THE SUMMONS. IN VIEW OF THIS THE ORDER UNDER SECTION 144 WAS BAD I N LAW. WITH REFERENCE TO THE ISSUE ON MERITS ON ADDITION OF ` 1 60 000/- IT WAS HIS SUBMISSION THAT THE AMOUNT WAS RECEIVED FROM FATHER-IN-LAW AND MOTH ER-IN-LAW AND THE ADDITIONAL EVIDENCES WERE NOT ACCEPTED BY THE CIT(A ). HE HAD NO OBJECTION IF THE MATTER IS RESTORED BACK TO THE A.O. FOR EXAMINA TION OF ADDITIONAL EVIDENCES. 5. THE LEARNED D.R. HOWEVER OBJECTED TO THE CONTENTI ONS OF THE ASSESSEE AND STATED THAT THE CIT(A)S ORDER IS TO UPHELD. ITA NOS. 1243 & 1244/MUM/2010 ANITA S. GUPTA 3 6. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE SEQU ENCES OF EVENTS WHICH WE WILL ALSO BE IN DISCUSSION IN THE PENALTY PROCEEDINGS IN ITA NO. 1244/MUM/2010 THERE IS JUSTIFICATION IN ASSESSEES NON-APPEARANCE ON 20.10.2008. EVIDENCE ON RECORD INDICATES THAT THERE WERE DISTURBANCES IN MUMBAI ON THAT DAY ON ACCOUNT OF AGITATION CALLED B Y MR. RAJ THACKERAY AGAINST NORTH INDIANS. IT IS ALSO ON RECORD THAT TH E CAR OF ASSESSEES HUSBAND WAS ATTACKED ON 21.10.2008 AND GLASSES WERE BROKEN BY STONE THROWING AND COPY OF THE FIR LODGED WAS ALSO ENCLOSED WITH THE A PPEAL MEMO BEFORE THE CIT(A). WITH REFERENCE TO SECTION 142(1) NOTICE ISS UED EARLIER THE ASSESSEE HAS RESPONDED TO THE NOTICE BY SEEKING ADJOURNMENT AND ONLY THE SUMMONS UNDER SECTION 131 WERE ISSUED POSTING ON 20.10.2008 . THERE ARE VALID REASONS FOR ASSESSEE NOT APPEARING BEFORE THE A.O. ON THAT DAY. HOWEVER THE A.O. HAS NO POWER TO INVOKE SECTION 144 FOR NON-APP EARANCE ON THE SUMMONS ISSUED. IT IS ALSO ON RECORD THAT THE PENAL TY PROCEEDINGS INITIATED FOR NON-COMPLIANCE OF NOTICE UNDER SECTION 131 WERE ALSO DROPPED BY THE A.O. WHEN THE ASSESSEE EXPLAINED THAT THERE WAS REA SONABLE CAUSE FOR NON- APPEARANCE. PROVISIONS OF SECTION 144 COULD BE INVO KED SUB-SECTION (1)(A) WHEN ASSESSEE FAILS TO MAKE THE RETURN REQUIRED UND ER SECTION 139(1) OR UNDER SECTION 139(4) OR 139(5); UNDER SUB-SECTION ( 1)(B) WHEN HE FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISSUED UNDER SECTION 142(1) OR 142(2A); AND UNDER SECTION (1)(C) WHEN THERE IS FAILURE IN T ERMS OF NOTICE ISSUED UNDER SECTION 143(2). BEFORE INVOKING THE PROVISIONS OF S ECTION 144 THE A.O. IS REQUIRED TO ISSUE A SHOW CAUSE NOTICE CALLING UPON THE ASSESSEE TO SHOW CAUSE WHY THE ASSESSMENT SHOULD NOT BE COMPLETED TO THE BEST OF HIS JUDGEMENT. NO SUCH PROCEDURE WAS FOLLOWED BY THE A. O. NOR THE CONDITIONS SPECIFIED UNDER SECTION 144 WERE SATISFIED IN INVOK ING PROVISIONS OF SECTION 144 AND MAKING AN EXPARTE ASSESSMENT ORDER. MAY BE THE CIT(A) COULD NOT ENTERTAIN THIS GROUND AS THE CIT(A) HAS NO POWER TO SET ASIDE THE ASSESSMENT. SINCE IT IS THE ASSESSEES PLEA THAT TH E ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY AND HAS NO OBJECTION IF THE MATT ER IS RESTORED TO THE A.O. IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER O F THE A.O. UNDER SECTION 144 AND THE ORDER OF THE CIT(A) AND RESTORE THE ASSESSM ENT BACK TO THE FILE OF THE A.O. TO REDO IT AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. THE ITA NOS. 1243 & 1244/MUM/2010 ANITA S. GUPTA 4 ASSESSEE IS FREE TO SUBMIT THE EVIDENCE/ADDITIONAL EVIDENCE IN SUPPORT OF THE CONTENTIONS ON CREDITS IN THE CAPITAL ACCOUNT BEFOR E THE A.O. WHICH SHOULD BE EXAMINED ON MERITS. WITH THESE DIRECTIONS ASSES SEES GROUNDS ARE CONSIDERED ALLOWED. 7. APPEAL ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1244/MUM/2010 8. THIS APPEAL IS AGAINST THE PENALTY LEVIED BY THE A. O. OF ` 10 000/- FOR NON-COMPLIANCE OF NOTICES ISSUED AND CONFIRMED BY T HE CIT(A). THE A.O. ISSUED NOTICE UNDER SECTION 143(2) AT THE TIME OF S ELECTION FOR SCRUTINY POSTING THE CASE ON 27-08-07 AND UNDER SECTION 142( 1) DATED 23.08.2007 FOR POSTING ON 21.09.2007 (AS PER THE ASSESSMENT ORDER) . ASSESSEE HAS NOT APPEARED AND ANOTHER NOTICE UNDER SECTION 142(1) WA S ISSUED POSTING THE CASE ON 06.03.2008. THE ASSESSEE RESPONDED BY SEEKI NG ADJOURNMENT VIDE LETTER RECEIVED BY THE A.O. ON 12.03.2008. SUBSEQUE NTLY THE A.O. HAS SPOKEN TO THE HUSBAND OF THE ASSESSEE MR. SUNIL GUPTA AS PER THE NOTING IN THE ASSESSMENT ORDER ITSELF ON 12.06.2008 AND 16.07.200 8 WITHOUT ISSUANCE OF ANY NOTICE. PENALTY PROCEEDINGS DATED 07.08.2008 WE RE INITIATED POSTING THE CASE ON 21.08.2008. SINCE THE ASSESSEE DID NOT RESP OND NOR SUBMITTED ANY EXPLANATION THE A.O. LEVIED PENALTY OF ` 10 000/- WHICH WAS CONFIRMED BY THE CIT(A). 9. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE ASSE SSEE WAS REPRESENTED BY CHARTERED ACCOUNTANT SHRI VINOD KUM AR J. GUPTA WHO WAS ADMITTED TO HOSPITAL FROM 23.05.2008 TO 02.06.2008 AND THERE AFTER HE WAS ADVISED COMPLETE BED REST THEREFORE HE COULD NOT ATTEND THE PROCEEDINGS BEFORE THE AO NOR INFORMED THE ASSESSEE. IT IS BEY OND THE CONTROL OF THE ASSESSEE AS THE SAID CHARTERED ACCOUNTANT WAS NOT W ELL AND COULD NOT ATTEND THE PROCEEDINGS. CONSEQUENTLY THE PENALTY SH OULD NOT HAVE BEEN LEVIED. THE FACT THAT THE A.O. DROPPED THE PENALTY INITIATED UNDER SECTION 272A(2)(B) WITH REFERENCE TO NON-COMPLIANCE UNDER S ECTION 131 VIDE ORDER DATED 23.03.2009 WAS ALSO BROUGHT TO THE NOTICE OF THE CIT(A). THE CIT(A) HOWEVER CONFIRMED THE PENALTY STATING THAT THERE I S NO CORRELATION BETWEEN THE DATES OF ILLNESS OF THE CHARTERED ACCOUNTANT AN D THE DATES OF HEARING. ITA NOS. 1243 & 1244/MUM/2010 ANITA S. GUPTA 5 10. THE LEARNED COUNSEL REITERATED THE SUBMISSION MADE BEFORE THE CIT(A) AND REFERRED TO VARIOUS EVIDENCE PLACED ON RECORD W ITH REFERENCE TO ILLNESS OF THE CHARTERED ACCOUNTANT AND THE REPLIES GIVEN TO T HE CIT(A). 11. THE LEARNED D.R. RELIED ON THE ORDERS OF THE A.O. A ND THE CIT(A). 12. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE PENA LTY ORDER WE ARE UNABLE TO UNDERSTAND FOR WHICH DEFAULT OF POSTING T HE PENALTY UNDER SECTION 271(1)(B) WAS INITIATED OR LEVIED. AS SEEN FROM THE ASSESSMENT ORDER THE SCRUTINY NOTICE UNDER SECTION 143(2) WAS ISSUED VID E NOTICE DATED 26.06.2007 POSTING THE CASE ON 27.08.2007. BEFORE T HIS POSTING DATE ON 23.08.2007 ITSELF NOTICE UNDER SECTION 142(1) WAS I SSUED POSTING THE CASE ON 21.09.2007. WE ARE UNABLE TO UNDERSTAND HOW THE NOT ICE UNDER SECTION 142(1) CAN BE ISSUED EVEN BEFORE THE DATE OF POSTIN G UNDER THE FIRST NOTICE. IT IMPLIES THAT THE POSTING ON 27-08-07 WAS ADJOURNED TO 21-09-07 BY THE AO. THERE WAS NO COMPLIANCE FOR THE POSTING ON 21-09-07 . HOWEVER ANOTHER NOTICE DATED 20.02.2008 WAS ISSUED POSTING THE CASE ON 06.03.2008 WHICH WAS COMPLIED BY SEEKING ADJOURNMENT VIDE LETTER REC EIVED ON 12.03.2008. INSTEAD OF POSTING THE CASE AGAIN THE A.O. CHOOSE T O SPEAK TO THE HUSBAND OF THE ASSESSEE ON HIS MOBILE TWICE IN A SPAN OF 2 MON THS WHICH THE A.O. PLACED ON RECORD. ONLY ON 06.08.2008 WHEN THERE WAS NO REQUIREMENT FOR ANY COMPLIANCE TO BE GIVEN FOR ANY POSTING PENALTY UNDER SECTION 271(1)((B) WAS INITIATED AND PENALTY WAS LEVIED FOR NON-COMPLI ANCE OF NOTICE ISSUED IN EARLIER CIRCUMSTANCES AND ALSO TO THE TELEPHONIC CO NVERSATIONS. WE ARE AFRAID THAT A TELEPHONIC CONVERSATION CANNOT BE TAK EN AS NOTICE AS THE SAME WERE NOT PROVIDED FOR UNDER THE INCOME TAX ACT. THE ONLY NOTICE WHICH WAS NOT COMPLIED WAS THE NOTICE DATED 23.08.2007 FOR PO STING ON 21.09.2007. HOWEVER THE PROCEEDINGS WERE NOT INITIATED ON THIS NON-COMPLIANCE. OBVIOUSLY THE PROCEEDINGS WERE INITIATED FOR DEFAUL T ON 06.03.2008 VIDE NOTICE DATED 20.02.2008. HOWEVER THERE WAS A COMPL IANCE BY THE ASSESSEE AND THE A.O. HIMSELF ACKNOWLEDGES THAT THE LETTER W AS RECEIVED BY POST FOR ADJOURNMENT ON 12.03.2008. IN THESE CIRCUMSTANCES WE ARE UNABLE TO UNDERSTAND HOW A PENALTY CAN BE LEVIED FOR NON-COMP LIANCE ON 06.03.2008. BE THAT AS IT MAY IT IS ALSO SURPRISING THAT THE C IT(A) CONFIRMED THE PENALTY ITA NOS. 1243 & 1244/MUM/2010 ANITA S. GUPTA 6 STATING THAT THERE IS NO CORRELATION BETWEEN THE DA TE OF ILLNESS OF THE CHARTERED ACCOUNTANT AND THE DATES OF HEARING. WHIL E THE CHARTERED ACCOUNTANT WAS ADMITTED IN HOSPITAL BETWEEN 23.05.2 008 AND 02.06.2008 AND FURTHER ADVISED TWO MONTHS COMPLETE REST THE A SSESSEE COULD NOT APPEAR BECAUSE THERE WAS NO POSTING AT ALL BEFORE T HE A.O. AFTER 06.03.2008. THE NEXT NOTICE WAS ISSUED ON 13.10.2008 UNDER SECT ION 131 POSTING THE CASE ON 30.10.2008 WHICH WAS ALSO NOT COMPLIED DUE TO DISTURBANCES IN MUMBAI BUT THAT EXPLANATION WAS ACCEPTED BY THE A.O . BY DROPPING THE PENALTY PROCEEDINGS INITIATED US 272A(1)(B). WITHOU T GOING INTO THE MERITS OF THE ACTIONS OF THE A.O WE ARE OF THE OPINION THAT THERE IS NO CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(B) AS THE ASSESSEE COM PLIED WITH THE NOTICE POSTING THE CASE ON 06-03-08 BY SEEKING ADJOURNMENT . ACCORDINGLY WE CANCEL THE PENALTY. ASSESSEES GROUNDS ON THIS ARE ALLOWED. 13. APPEAL ALLOWED. 14. IN THE RESULT ITA NO. 1243/MUM/2010 IS ALLOWED FOR STATISTICAL PURPOSES AND ITA NO. 1244/MUM/2010 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER 2010. SD/- SD/- (R.S. PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 10 TH DECEMBER 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXXIV MUMBAI 4. THE CIT XXIV MUMBAI CITY 5. THE DR G BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.