Shri Ravjibhai Bhimjibhai Bhavishiya, Ahmedabad v. The Income tax Officer,Ward-11(3),, Ahmedabad

ITA 743/AHD/2010 | 2006-2007
Pronouncement Date: 09-09-2010 | Result: Partly Allowed

Appeal Details

RSA Number 74320514 RSA 2010
Assessee PAN ADNPB1216F
Bench Ahmedabad
Appeal Number ITA 743/AHD/2010
Duration Of Justice 6 month(s)
Appellant Shri Ravjibhai Bhimjibhai Bhavishiya, Ahmedabad
Respondent The Income tax Officer,Ward-11(3),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 09-09-2010
Date Of Final Hearing 09-09-2010
Next Hearing Date 09-09-2010
Assessment Year 2006-2007
Appeal Filed On 09-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC AHMEDABAD BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.743/AHD/2010 ASSESSMENT YEAR :2006-07 DATE OF HEARING:9.9.10 DRAFTED:9.9.10 RAVJIBHAI BHIMJIBHAI BAVISHIYA 21 SURAJ PARK SOCIETY B/H PRATIK SOCIETY INDIA COLONY ROAD BAPUNAGAR AHMEDABAD PAN NO.ADNPB1216F V/S . INCOME TAX OFFICER WARD-11(3) 1 ST FLOOR ROOM NO.135 NARAYAN CHAMBERS NR. NEHRU BRIDGE ASHRAM ROAD AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI HEMANT JAIN AR RESPONDENT BY:- SHRI S.K. JHA SR-DR O R D E R THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDE R OF COMMISSIONER OF INCOME-TAX (APPEALS)-XVI AHMEDABAD IN APPEAL NO.CI T(A) XVI/ITO. WD. 11(3) /052/2009-10 DATED 26-11-2009. THE ASSESSMENT WAS FRAMED BY ITO WD-11(3) AHMEDABAD U/S.144 R.W.S 145 OF THE INCOME -TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 04-12-2008 FOR THE ASSESSMENT YEAR 2006-07. THE PENALTY UNDER DISPUTE WAS LEVIED BY ASSESSING OFFICER U/S.271(1)(B) OF THE ACT VIDE HIS ORDER DATED 30-06-2009. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN CONFIRMING THE PENALTY LEVIED BY ASSESSING OFFIC ER U/S.271(1)(B) OF THE ACT. FOR THIS ASSESSEE HAS RAISED THE FOLLOWING TWO EFF ECTIVE GROUNDS:- I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.90 000/- AS I MPOSED BY AO IN ITS ITA NO.743/AHD/2010 A.Y. 2006-07 RAVJIBHAI B BAVISHIYA V. ITO WD-11(3) ABD PAGE 2 ORDER U/S.250(6) OF THE INCOME TAX ACT 1961 DATED 26/11/2009 WHICH IS WHOLLY ILLEGAL UNLAWFUL AND AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND EQUITY AND ABSOLUTELY ARBITRARY AND SUMMARY MANNER WITHOUT CONSIDERING APPELLANTS PRACTICAL INABILITY TO APPE AR. II) THE LEARNED CIT(A) HAS ERRED IN PASSING THE SUB JECT ORDER WITHOUT REBUTTING ALL THE ARGUMENTS ADVANCED BY THE APPELLA NT BEFORE HIM AND IN SUMMARY MANNER WITHOUT ANY JUSTIFIABLE MANNER. 3. THE BRIEF FACTS ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED IN HIS ASSESSMENT ORDE R THAT THE ASSESSEE HAS MADE NON-COMPLIANCE TO THE NOTICE U/S.142(1) AND 14 3(2) OF THE ACT AS UNDER:- NO NOTICE U/S NOTICE ISSUED DATE SERVED DATE OF HEARING REMARKS 01 142(2) 26-06-07 ACKNOWLEDGEMENT SLIP RECEIVED 08-08-07 NO ONE ATTENDED NOR ANY ADJOURNMENT SEEKED FOR. 02 142(1) 31-01-08 -DO- 15-02-08 RAVJIBHAI ATTENDED AND ADJOURNMENT SEEKED FOR. 03 142(1) 28-03-08 -DO- 29-04-08 NO ONE AT TENDED NOR ANY ADJOURNMENT SEEKED FOR. 04 142(1) 06-06-08 -DO- 24-06-08 - DO- 05 142(1) 27-06-08 -DO- 14-07-08 -DO- 06 142(1) 31-07-08 -DO- 13-08-08 -DO- 07 142(1) 28-08-08 -DO- 09-09-08 -DO- 08 142(1) 10-09-08 -DO- 19-09-08 -DO- 09 142(1) 30-09-08 -DO- 10-10-08 -DO- 10 142(1) 30-10-08 -DO- 12-11-08 -DO- 11 142(1) 14-11-08 -DO- 03-12-08 -DO- FOR THIS THE ASSESSING OFFICER LEVIED THE PENALTY AS THE ASSESSEE DEFAULTED IN NOT ATTENDING THE NOTICES ISSUE U/S.142(1) 143(2) OF THE ACT ON VARIOUS DATES AS NOTED ABOVE. ACCORDINGLY HE LEVIED THE PENALTY AT RS.1.10 LAKH AS THE ASSESSEE COULD NOT ADDUCE ANY EXPLANATION. THE CIT( A) DELETED THE LEVY OF PENALTY IN RESPECT OF NOTICE U/S 143(2) OF THE ACT DATED 26-06-2007 AND NOTICE ISSUED U/S.142(1) DATED 31-01-2008 FOR WHICH ASSESS EE ATTENDED ON15-02- 2008. FOR REST OF THE NINE DEFAULTS THE CIT(A) SUS TAINED THE PENALTY FOR AN ITA NO.743/AHD/2010 A.Y. 2006-07 RAVJIBHAI B BAVISHIYA V. ITO WD-11(3) ABD PAGE 3 AMOUNT OF RS.90 000/- FOR WHICH ASSESSEE IS IN APPE AL BEFORE THE TRIBUNAL. THE CIT(A) CONFIRMED THE LEVY OF PENALTY VIDE PARA-4 AND 4.1 OF HIS APPELLATE ORDER AS UNDER:- 4. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT. I HAVE ALSO PERUSED THE ASSESSMENT ORDER & PENALTY ORDER U/S.27 1(1)(B). AS REGARDS THE DATE OF HEARING FIXED ON 8-8-2007 29-7 -2008 24-6-2008 THE REASONS GIVEN BY THE APPELLANT IS THAT THE ACCO UNTANT HAS ASSURED HIM THAT HE WOULD ATTEND HEARING BEFORE THE ASSESSI NG OFFICER. THE HEARING FIXED ON 15-2-2008 WASATT4ENDED BY THE APPE LLANT HIMSELF AND ADJOURNMENT WAS GRANTED BY THE ASSESSING OFFICER. T HE OTHER HEARINGS FIXED ON 14-7-08 13-8-08 9-9-08 19-9-08 10-10-0 8 12-11-08 & 3-12- 08 WERE STATED TO BE UNCOMPLIED WITH DUE TO THE REA SONS MARRIAGE OF SON AT AMRELI. THERE WAS NO LITERATE PERSON AT AHM EDABAD TO COMPLY WITH THE NOTICES. 4.1 AS REGARDS THE HEARING FIXED DON 15-2-2008 THE SAME WAS ATTENDED BY THE APPELLANT HIMSELF & ADJOURNMENT WAS GRANTED BY THE ASSESSING OFFICER THEREFORE THERE IS NO DEFAULT FOR THE NOT ICES FIXING HEARING ON 8- 8-2007 & 15-2-2007 BECAUSE THE DEFAULT OF FIRST NOT ICE GETS EXPLAINED BY THE ADJOURNMENT GRANTED BY THE ASSESSING OFFICER. T HEREFORE NO PENALTY CAN BE LEVIED IN RESPECT OF THESE TWO DEFAULTS. THE APPELLANT & HIS CA COULD NOT STATE BEFORE ME AS TO WHAT WAS THE NAME O F HIS ACCOUNTANT WHO WAS TO LOOK AFTER THE HEARING & WHY HE COULD NO T ATTEND HEARING BEFORE ASSESSING OFFICER IF ON 8-8-2007 THE ACCOUNT ANT ASSURED THE APPELLANT TO LOOK AFTER HIS INCOME TAX HEARING BEFO RE THE ASSESSING OFFICER THEN WHAT WAS THE NEED OF THE APPELLANT ATT ENDING BEFORE THE ASSESSING OFFICER ON15-2-2008. THIS CLEARLY SHOWS T HAT THE EXPLANATION GIVEN BY THE APPELLANT THAT HIS ACCOUNTANT HAS ASSU RED HIM OF HEARING IS NOT CORRECT THEREFORE THE PENALTY LEVIED ON THE DE FAULTS ON 29-4-08 & 24-6-08 IS CONFIRMED. AS REGARDS THE EXPLANATION OF THE APPELLANT FOR NON COMPLIANCE ON OTHER DATES DUE TO MARRIAGE OF HI S SON AT AMRELI. I FIND FROM THE INVITATION CARD OF THE MARRIAGE THAT THE MARRIAGE TOOK PLACE DURING 18-11-08 TO 20-11-08 WHEREAS THE HEARING WAS NOT FIXED DURING THESE DAYS OR EVEN ONE WEEK BEFORE OR AFTER THESE D ATES. FURTHER FROM THE INVITATION CARD IT IS NOTICED THAT THE MARRIAG E WAS NOT OF THE SON OF THE APPELLANT BUT HIS BROTHERS SON THEREFORE THE WRITTEN SUBMISSION OF THE APPELLANT TO THIS EXTENT IS FOUND TO BE INCORRE CT. I THEREFORE HAVE NO HESITATION IN HOLDING THAT THE APPELLANT DELIBERATE LY CHOSE NOT TO COMPLY THE NOTICES. THE EXPLANATION GIVEN BEFORE ME IS AFT ER THOUGHT WHICH IS FACTUALLY INCORRECT. THE ASSESSING OFFICER IS THERE FORE DIRECTED TO DELETE PENALTY OF RS.10 000/- EACH FOR FIRST TWO DEFAULTS. IN OTHER WORDS THE PENALTY OF RS.90 000/- IS SUSTAINED. THE APPELLANT GETS RELIEF OF RS.20 000/-. ITA NO.743/AHD/2010 A.Y. 2006-07 RAVJIBHAI B BAVISHIYA V. ITO WD-11(3) ABD PAGE 4 AGGRIEVED ASSESSEE CAME IN SECOND APPEAL BEFORE TH E TRIBUNAL. 3. BEFORE ME LD. COUNSEL FOR THE ASSESSEE SHRI HEM ANT JAIN CLEARLY ADMITTED THE DEFAULT BUT ONLY STATED THAT ASSESSEE IS A MARGINAL ASSESSEE AND HIS INCOME ASSESSED BY ASSESSING OFFICER IS AT RS.1 .10 LAKH ON ESTIMATE BASIS. HE STATED THAT ASSESSEES RETURN OF INCOME F ILED ON 12-06-2007 FOR ASSESSMENT YEAR 2006-07 DECLARING TOTAL INCOME OF R S.1 23 540/- WITH A GROSS TURNOVER OF RS.15 86 481/- FROM JOB WORK OF TEXTILE WORK. THE AO HAS PASSED ASSESSMENT ORDER U/S.144 OF THE ACT WITH AN ESTIMAT ED INCOME AT 15% OF GROSS RECEIPTS AND MADE AN ADDITION OF RS.1 10 126/ - ON ESTIMATED BASIS. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE THE PENALTY IMPOSED U/S.271(1)(B) IS APPROXIMATELY EQUAL TO INCOME ADDE D IN ASSESSMENT PROCEEDINGS AND IN SUCH A CASE TOTAL TAX WAS LEVIAB LE OF RS.27 406/- INCLUDING INTEREST WHEREAS PENALTY IMPOSED U/S.271(1)(B) IS RS.1.10 LAKH. THE ASSESSEE DID NOT FILE ANY APPEAL AGAINST INCOME ADD ED U/S.144 OF THE ACT AND DEPOSITED TAX DEMANDED IN ASSESSMENT. THE ASSESSEE BEING A SMALL BUSINESSMAN AND UNABLE TO APPOINT LEGAL PERSONS FOR REGULAR TAX COMPLIANCES INSTEAD ASSESSEE HAS ASSIGNED ALL THE WORK TO THE A CCOUNTANT WHO ASSURED THE ASSESSEE FOR ATTENDING BEFORE ASSESSING OFFICER FOR FINALIZATION OF ASSESSMENT PROCEEDINGS. LD. COUNSEL FOR ASSESSEE ST ATED BEFORE ME THAT ASSESSEE RELIED UPON HIS ACCOUNTANT ON THE CONTRAR Y ACCOUNTANT DID NOT COMPLY HIS COMMITMENT IN THIS REGARD FOR WHICH AN AFFIDAVIT WAS FILED BY ASSESSEE ACCEPTING MISTAKE THOUGH IT WAS UNINTENTI ONAL FOR NON-COMPLIANCE ON THE PART OF THE ASSESSEE. LD. COUNSEL FOR ASSESS EE FURTHER STATED THAT BEING A MARGINAL BUSINESSMAN THE IMPOSITION AND LEVIED OF PENALTY WILL UNDUE HARDSHIP TO ASSESSEE. ON THE OTHER HAND LD. SR-DR STATED THAT THERE IS NO CASE FOR THE ASSESSEE AND HE HAS NOT FILED ANY EXPL ANATION THAT THE DEFAULT IS DUE TO BONA FIDE BELIEF OR UNINTENTIONAL. 4. HAVING HEARD THE RIVAL CONTENTIONS AND GOING THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE I FIND THAT FOR ABOVE NI NE OCCASIONS NEITHER APPLIED ITA NO.743/AHD/2010 A.Y. 2006-07 RAVJIBHAI B BAVISHIYA V. ITO WD-11(3) ABD PAGE 5 FOR ADJOURNMENT NOR ATTENDED THE PROCEEDINGS. THIS IS AN ADMITTED POSITION. THE ASSESSEE EVEN DURING PENALTY PROCEEDINGS REMAIN ED SILENT AND NOT RESPONDING TO STATUTORY NOTICES IN ANY WAY DURING T HE PENAL PROCEEDINGS. THE CIT(A) HAS CONFIRMED THE LEVY OF PENALTY IN RESPECT OF NOTICES ISSUED FROM 28- 03-2008 TO 14-11-2008 ON NINE OCCASIONS AS NOTED AB OVE IN THE CHART. AS REGARDS TO THE EXPLANATION OF THE ASSESSEE THAT HE WAS ABROAD TO CANADA DURING 28-02-2009 TO 03-08-2009 THAT MEANS ON FOUR OCCASIONS HE WAS OUT OF INDIA I.E. FOR 28-03-2008 06-06-2008 27-06-2008 AND 31-07-2008 HE COULD NOT ATTEND AND ACCORDINGLY I AM OF THE VIEW THAT TH ERE IS REASONABLE CAUSE FOR NOT ATTENDING THE HEARINGS. ACCORDINGLY I DIRECT T HE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED FOR THESE FOUR OCCASIONS AND I S USTAIN THE BALANCE PENALTY FOR FIVE OCCASIONS. ACCORDINGLY THE ASSESSEES APP EAL IS PARTLY ALLOWED. 5. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09/09/2010 SD/- (MAHAVIR SINGH) (JUDICIAL MEMBER) AHMEDABAD DATED : 09/09/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XVI AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD