M/s. Subam Benefit Fund Ltd., Thanjavur v. ACIT, Thanjavur

ITA 1372/CHNY/2010 | 2003-2004
Pronouncement Date: 11-03-2011 | Result: Allowed

Appeal Details

RSA Number 137221714 RSA 2010
Assessee PAN AABCS2186B
Bench Chennai
Appeal Number ITA 1372/CHNY/2010
Duration Of Justice 6 month(s) 19 day(s)
Appellant M/s. Subam Benefit Fund Ltd., Thanjavur
Respondent ACIT, Thanjavur
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 11-03-2011
Date Of Final Hearing 08-03-2011
Next Hearing Date 08-03-2011
Assessment Year 2003-2004
Appeal Filed On 23-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NOS. 1369 TO 1372/MDS/2010 ASSESSMENT YEARS : 2000-01 2001-02 2002-03 & 2003 -04 M/S. SUBAM BENEFIT FUND LTD. 111-B THALAYARI STREET PATTUKOTTAI THANJAVUR-614 601. V. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-I THANJAVUR (PAN: AABCS2186B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N. DEVANATHAN RESPONDENT BY : SHRI P.B. SEKARAN O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THESE ARE FOUR APPEALS FILED BY THE ASSESSEE AGAIN ST THE ORDERS OF THE LEARNED CIT(APPEALS) TRICHY IN APPEAL NOS. 110 TO 113/08-09 DATED 07-07-2009 FOR THE ASSESSMENT YEARS 2000-01 TO 2003-04 CONFIRM ING THE LEVY OF PENALTY UNDER SECTION 271B OF THE INCOME TAX ACT 1961. 2. SHRI N. DEVANATHAN ADVOCATE REPRESENTED ON BEHA LF OF THE ASSESSEE AND SHRI P.B. SEKARAN LEARNED CIT-DR REPRESENTED ON BE HALF OF THE REVENUE. 3. THE APPEALS FILED BY THE ASSESSEE ARE BARRED BY LIMITATION BY 333 DAYS AND THE ASSESSEE HAS FILED PETITION FOR CONDONATION OF THE DELAY WHEREBY IT HAS I.T.A. NOS. 1369-1372/MDS/2010. 2 BEEN SWORN VIDE AN AFFIDAVIT OF THE ASSESSEE THAT T HE ASSESSEE WAS 78 YEARS OF AGE AND HE IS THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY AND HE WAS SUFFERING FROM VIRAL FEVER DURING THE MONTH OF SEPT EMBER 2009 WHICH COULD NOT BE DIAGNOSED IN TIME AND WHICH WAS LATER CONFIRMED AS JAUNDICE. FURTHER THE SAID SHRI THIYAGARAJAN WAS ALSO SUFFERING FROM ELEP HANTIASIS WHICH ALSO RESTRICTED HIS MOVEMENT. THE DELAY WAS ALSO ATTRIBUTED IN THE CHANGE OF AUDITOR IN THE MONTH OF OCTOBER 2009 AND THE NEW AUDITOR COULD NO T COLLECT ALL THE RELEVANT PAPERS FOR FILING OF THE APPEAL FROM PREVIOUS AUDIT OR AND THIS WAS COMPLETED ONLY IN JULY 2010. IT WAS THE SUBMISSION THAT DUE TO T HE ABOVE REASONS THE DELAY WAS OCCURRED IN FILING THE APPEALS. IT WAS THEREFO RE PRAYED THAT THE DELAY MAY BE CONDONED. 4. IN REPLY THE LEARNED DR SUBMITTED THAT THE DELA Y WAS SUBSTANTIAL AND SHOULD NOT BE CONDONED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE AFFIDAVIT WHICH IS ALSO ACCOMPANIED BY DOCTORS CERTIFICATE O F THE FAMILY DOCTOR OF SHRI THIYAGARAJAN CONFIRMS THE MEDICAL REASONS FOR THE D ELAY IN FILING THE APPEALS. AS WE FIND THAT THE BELATED FILING OF THE APPEALS IN N O WAY IS FOR ANY MALA FIDE REASON WE ARE OF THE VIEW THAT THE APPEALS FILED B Y THE ASSESSEE ARE LIABLE TO BE ADMITTED AND DISPOSED OF ON MERITS AND WE DO SO. 6. IN REGARD TO THE MERITS IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT FOR THE RELEVANT ASSESSMENT YEA RS THE RETURNS HAD BEEN FILED I.T.A. NOS. 1369-1372/MDS/2010. 3 WITHIN TIME. IT WAS THE SUBMISSION THAT THE ASSESS MENTS HAD BEEN COMPLETED UNDER SECTION 143(1) AND NO ADDITIONS HAD BEEN MADE . IT WAS THE FURTHER SUBMISSION THAT THE ACCOUNTS OF THE ASSESSEE HAD AL SO BEEN AUDITED BY THE AUDITORS. IT WAS THE SUBMISSION THAT WHILE FILING THE RETURNS HOWEVER THE AUDIT REPORT IN FORM 3CB AND 3CD HAD NOT BEEN ENCLOSED AL ONG WITH THE RETURN. IT WAS THE SUBMISSION THAT THE RETURN FOR THE ASSESSME NT YEAR 2000-01 WAS FILED ON 13.11.2000 AND THE ASSESSMENT UNDER SECTION 143(1) WAS DONE ON 18.02.2002. FOR THE ASSESSMENT YEAR 2001-02 THE RETURN WAS FILE D ON 30-10-2001 AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(1) ON 15 -02-2002. FOR THE ASSESSMENT YEAR 2002-03 THE RETURN WAS FILED ON 29- 11-2002 AND THE ASSESSMENT UNDER SECTION 143(1) WAS COMPLETED ON 15 -02-2003. FOR THE ASSESSMENT YEAR 2003-04 THE RETURN WAS FILED ON 27- 11-2003 AND THE ASSESSMENT U/S 143(1) WAS COMPLETED ON 19-01-2004. IT WAS THE SUBMISSION THAT NO ADDITIONS WERE MADE IN THE COURSE OF ANY OF THE ASSESSMENTS. IT WAS THE SUBMISSION THAT THE RETURNED INCOME HAD BEEN ACCEPT ED IN TOTO. IT WAS THE SUBMISSION THAT SUBSEQUENTLY ON 07-03-2008 THE ASSE SSEE WAS SERVED WITH A SHOW CAUSE NOTICE IN REGARD TO THE LEVY OF PENALTY FOR THE NON-FILING OF THE FORM 3CB AND FORM 3CD ALONG WITH THE RETURN. IT WAS THE SUBMISSION THAT THE FORM 3CB AND FORM 3CD HAD BEEN FILED BEFORE THE ASSESSIN G OFFICER IN THE COURSE OF PENALTY PROCEEDINGS. IT WAS THE SUBMISSION THAT AS THE ACCOUNTS OF THE ASSESSEE HAD BEEN AUDITED AND AS NO ADDITIONS HAD BEEN MADE THE NON-SUBMISSION OF THE I.T.A. NOS. 1369-1372/MDS/2010. 4 FORMS 3CB AND 3CD ALONG WITH THE RETURNS OF INCOME WAS A VENIAL BREACH AND NO PENALTY SHOULD BE LEVIED. IT WAS THE SUBMISSION TH AT THE ASSESSMENTS HAVING BEEN COMPLETED AS EARLY AS IN 2002 AND THE LAST ASS ESSMENT HAVING BEEN COMPLETED IN JANUARY 2003 THE SHOW CAUSE NOTICE I SSUED AFTER A PERIOD OF MORE THAN 4 YEARS THE PENALTY WAS LIABLE TO BE CANCELLED . THE LEARNED AUTHORISED REPRESENTATIVE RELIED UPON THE DECISION OF THE ITAT AHMEDABAD B BENCH OF THIS TRIBUNAL IN THE CASE OF H. AJITBHAI & CO. V. ASSIST ANT COMMISSIONER OF INCOME-TAX REPORTED IN 45 ITD 262 TO SUBMIT THAT PENALTY PROCE EDINGS SHOULD NECESSARILY BE INITIATED DURING ASSESSMENT PROCEEDINGS AS IMPLIED BY SEC. 275 AND AS THE NOTICE FOR THE INITIATION OF THE PENALTY WAS ISSUED AFTER MORE THAN 16 MONTHS FROM THE DATE OF COMPLETION OF THE ASSESSMENT THE P ENALTY COULD NOT BE SUSTAINED. 7. IN REPLY THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDER OF THE LEARNED CIT(A) AND THE ASSESSING OFFICER. IT WAS THE SUBMI SSION THAT THE PROVISIONS OF SECTION 275(1) (C) IF THE ACT DID NOT SPECIFY ANY S TARTING POINT FOR INITIATION OF PENALTY. IT WAS THE SUBMISSION THAT THE PENALTY AS CONFIRMED BY THE LEARNED CIT(A) WAS LIABLE TO BE UPHELD. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE PENALTY ORDER CLEARLY SHOWS THAT EVEN BEFORE THE ASSESSING OFFICE R THE ASSESSEE HAS CHALLENGED THE ISSUE OF DELAY IN THE INITIATION OF THE PENALTY ACTION. IT HAS NOT BEEN REBUTTED NOR RESPONDED TO BY THE ASSESSING OFFICER. A PERUS AL OF THE ORDER OF THE LEARNED I.T.A. NOS. 1369-1372/MDS/2010. 5 CIT(A) ALSO CLEARLY SHOWS THAT EVEN BEFORE HIM THE ASSESSEE HAS RAISED THE ISSUE OF TIME BARRING OF THE PENALTY. THE LEARNED CIT(A ) HAS ALSO NOT DISCUSSED ANYTHING ON THIS ISSUE. A PERUSAL OF THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF H. AJITBHAI & CO. REFERRED TO BY THE LEARNED AUTHORISED REPRESENTATIVE CLEARLY SHOWS THAT THE CO-ORDINATE B ENCH OF THIS TRIBUNAL HAS HELD THAT PENALTY PROCEEDINGS SHOULD NECESSARILY BE INIT IATED DURING THE ASSESSMENT PROCEEDINGS AS IMPLIED BY SEC. 275. IT HAS BEEN FU RTHER HELD THAT THE NOTICES FOR INITIATION OF PENALTY HAVING BEEN ISSUED AFTER 16 M ONTHS FROM THE DATE OF COMPLETION OF ASSESSMENTS PENALTY CANNOT BE SUSTAI NED. FURTHER A PERUSAL OF THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE CASE OF SIBONARAYAN PATRO & BROS REPORTED IN 54 TTJ (CTK) 644 ON IDENTI CAL CIRCUMSTANCES HAS HELD THAT PENALTY PROCEEDINGS MUST BE INITIATED IN THE C OURSE OF ASSESSMENT PROCEEDINGS AND PROCEEDINGS INITIATED LONG AFTER CO MPLETION OF ASSESSMENT ARE NOT VALID. BOTH THE DECISIONS OF THE CUTTACK BENCH AS ALSO OF THE AHMEDABAD BENCH ARE IN REGARD TO THE LEVY OF PENALTY UNDER SE CTION 271B. IN THE CIRCUMSTANCES AS IT IS NOTICED THAT THE PENALTY IN THE PRESENT CASE FOR THE ASSESSMENT YEAR 2000-01 HAS BEEN INITIATED AFTER MO RE THAN 4 YEARS FOR THE ASSESSMENT YEAR 2001-02 AFTER MORE THAN 3 YEARS FOR ASSE SSMENT YEAR 2002-03 AFTER MORE THAN 2 YEARS AND FOR ASSESSMENT YEAR 2003- 04 AFTER MORE THAN 1 YEARS FROM THE DATE OF COMPLET ION OF THE ASSESSMENT WE ARE OF THE VIEW RESPECTFULLY FOLLOWING T HE DECISION OF I.T.A. NOS. 1369-1372/MDS/2010. 6 THE CO-ORDINATE BENCHES OF THIS TRIBUNAL AS REFERRED TO ABOVE THE PENALTIES AS LEVIED BY THE ASSESSING OFFICER AND AS CONFIR MED BY THE LEARNED CIT(A) CANNOT BE SUSTAINED. IN THE CIRCUMSTAN CES THE PENALTY LEVIED UNDER SECTION 271B OF THE ACT STANDS CANCELLED FOR ALL THE FOUR ASSESSMENT YEARS. IN THE RESULT THE APPEALS OF THE ASSESSEE STAND ALLOWED. 9. THE ORDER WAS PRONOUNCED IN THE COURT ON 11/03/2 011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 11 TH MARCH 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE