Sherry Chemical & Pharmaceuticals Pvt. Ltd., New Delhi v. ITO, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI K.D. RANJAN ACCOUNTANT MEMBER ITA NO.1314/DEL./2010 (ASSESSMENT YEAR : 2007-08) M/S. SHERRY CHEMICALS & PHARMACEUTICALS VS. ITO W ARD 8 (2) PRIVATE LIMITED NEW DELHI. 1/50 LALITA PARK GANGA APARTMENTS LAXMI NAGAR DELHI 110 092. (PAN : AAKCS0039C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJNISH GOYAL ADVOCATE REVENUE BY : SHRI KISHORE B. SENIOR DR ORDER PER R.P. TOLANI JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT (APPEALS) FOR THE ASSESSMENT YEAR 2007-08. THE SOLE ISSUE RA ISED IS CONFIRMATION OF PENALTY OF RS.10 000/- U/S 271(1)(B) OF THE INCOME- TAX ACT. 2. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT T HERE IS NO DEFAULT IN ATTENDING THE PROCEEDINGS BEFORE A.O. AS ON 23.2.20 09 SHRI NARENDRA BANSAL FCA COUNSEL OF THE ASSESSEE COULD NOT ATTEND BECAU SE OF SICKNESS. RELEVANT FACTS BEFORE CIT (A) IN THIS REGARD ARE AS UNDER : THE APPELLANT COMPANY HAD FILED ITS RETURN OF INCO ME ON 30.10.2007 DECLARING AN INCOME OF RS.27 890.00. TH E CASE WAS ITA NO.1314/DEL./2010 2 SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S 143 (2) OF THE INCOME TAX ACT (HEREINAFTER CALLED AS ACT) WAS IS SUED ON 20- 09-2008 FIXING THE HEARING OF THE CASE FOR 30-09-20 08. SUBSEQUENTLY ANOTHER NOTICE DATED 30-01-2009 WAS I SSUED U/S 143(2) OF THE ACT WHEREIN THE CASE WAS FIXED FOR 05 -02-2009. ON THE SAID DATE OF HEARING ON 05-02-2009 SHRI NAR ENDRA BANSAL FCA ATTENDED THE PROCEEDINGS AND NOTED DOW N THE DETAILS AND INFORMATION ASKED FOR ON THE ORDER SHEE T BY THE ASSESSING OFFICER AND FURTHER THE CASE WAS ADJOURNE D FOR 23-02- 2009. ON 23-02-2009 SHRI NARENDRA BANSAL FCA WAS UNABL E TO ATTEND THE PROCEEDINGS DUE TO HIS BEING SICK & NOT BEING ABLE TO ATTEND DUE TO REASONS BEYOND HIS CONTROL. IT WAS CONTENDED THAT THIS EXPLANATION WAS FILED BE FORE CIT (A). THE EXPLANATION OF THE ASSESSEE HAS NOWHERE BEEN CONSID ERED BY CIT (A). A COPY OF THE MEDICAL CERTIFICATE OF THE SICKNESS IS FILED . LEARNED COUNSEL CONTENDS THAT THE DELAY WAS CAUSED DUE TO NON-ATTENDANCE OF THE CHARTERED ACCOUNTANT AND NOT DUE TO THE NEGLIGENCE OF ASSESSEE. BESIDES THE ASSESSMENT HAS ULTIMATELY BEEN FRAMED U/S 143(3) ON THE RETURNED I NCOME ITSELF I.E. RS.27 890/- WHICH IMPLIES THAT ULTIMATELY FULL COMP LIANCE WAS MADE. PENALTY SHOULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL T O DO SO AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF IN THE CASE OF HINDUSTAN STEEL LIMITED VS. STATE OF ORISSA 83 ITR 26 (SC). IT WAS THEREF ORE PLEADED THAT THE PENALTY SHOULD BE DELETED. 3. LEARNED DR SUPPORTED THE ORDERS OF LOWER AUTHORI TIES. ITA NO.1314/DEL./2010 3 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. FROM THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE CIT (A) WHICH IS PLACED ON PAPER BOOK IT CLEARLY EMERGES THAT TH E EXPLANATION ABOUT CAS ILLNESS AND CONSEQUENT NON-ATTENDANCE ON HIS PART H AS BEEN EXPLAINED. CIT(A) HAS NOT CONSIDERED THIS EXPLANATION. ASSESS EE SHOULD NOT BE PENALIZED DUE TO CONDUCT OF HIS CHARTERED ACCOUNTAN T AND MEDICAL CERTIFICATE HAS ALSO BEEN FILED. ASSESSMENT ULTIMATELY HAS BEE N FRAMED U/S 143(3) WITHOUT MAKING ANY ADDITION TO THE RETURNED INCOME. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLL OWING THE HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF HINDUSTAN STEEL LIMIT ED (SUPRA) THE PENALTY IS LIABLE TO BE DELETED. WE ORDER ACCORDING. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 26 TH DAY OF MAY 2010 AFTER THE CONCLUSION OF THE HEARING. SD/- SD/- (K.D. RANJAN) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 26 TH DAY OF MAY 2010/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XII NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.