Shri Anil Chandra Paul Dakshin Dinajpur v. Dcit Cc Xxvii Kolkata Kolkata

1 Ita Nos 887 893 Kol 2016 Asses Sment Years 2006 2007 To 2012 2013 In The Income Tax Appellate Tribunal Kolkata D Bench Kolkata Before Shri P M Jagtap Accountant Member And Shri S S Viswanethra Ravi Judicial Member I T A Nos 887 888 889 890 891 892 893 Kol 2016 Assessment Years 2006 07 07 08 08 09 09 10 10 11 11 12 2012 13 Shri Anil Chandra Paul Appellant Thana Road Gangarampur Dakshin Dinajpur 733 124 Pan Afbpp 1902 L Vs Deputy Commissioner Of Income Tax Respondent Central Circle Xxvii Kolkata Aayakar Bhawan Poorva 110 Shanti Palli E M Bye Pass Kolkata 700 107 Appearances By Shri Subash Agarwal Advocate For The Assessee Shri A K Tiwari Cit D R For The Department Date Of Concluding The Hearing December 05 2017 Date Of Pronouncing The Order December 13 2017 O R D E R Per Bench These Seven Appeals Filed By The Assessee Are Direc Ted Against Seven Separate Orders Passed By The Ld Commissione R Of Income Tax Appeals 21 Kolkata All Dated 15 02 2016 Whereb Y He Confirmed The Penalties Imposed By The Assessing Officer Under Se Ction 271 1 B Of The Act For All The Seven Years Under Consideration I E A Y 2006 07 To 2012 13 2 The Assessee In The Present Case Is An Individua L Who Belongs To Paul Group A Search And Seizure Action Under Secti On 132 1 Of The Act Was Conducted In The Cases Belonging To Paul Group Including The Case Of The Assessee Pursuant To The Said Action Notices Under Section 153 A 2 Ita Nos 887 893 Kol 2016 Asses Sment Years 2006 2007 To 2012 2013 Were Issued By The Assessing Officer In Response T O Which The Returns Of Income For The Years Under Consideration Were Filed By The Assessee During The Course Of Assessment Proceedings For All The Seven Years Under Consideration Notices Under Section 142 1 W Ere Issued By The Assessing Officer Calling For The Information From The Assessee As Required For The Purpose Of Assessments There Was However No Compliance On The Part Of The Assessee To Some Of T He Notices Issued By The Assessing Officer Under Section 142 1 And Acco Rdingly Penalty Under Section 271 1 B Was Imposed By The Assessing Offi Cer At The Rate Of Rs 10 000 For Each Non Compliance For All The Sev En Years Under Consideration Aggregating As Under Assessment Year Amount 2006 07 Rs 20 000 2007 08 Rs 20 000 2008 0 9 Rs 20 000 2009 10 Rs 20 000 2010 11 Rs 20 000 2011 12 Rs 20 000 2012 13 Rs 20 000 3 The Penalties Imposed By The Assessing Officer U Nder Section 271 1 B For All The Years Under Consideration Wer E Challenged By The Assessee In The Appeals Filed Before The Ld Cit Ap Peals And The Following Submissions Were Made By The Assessee Before The Ld Cit Appeals In Support Of His Case That The Said Penalties Were Li Able To Be Cancelled Being Not Sustainable On Facts As Well As In Law In The Instant Case Shri Ranjan Kumar Paul Who I S The Son Of Shri Anil Chandra Paul Aged About 75 Years The Assessee Is Looking After The Taxation Matter Of The Assesse E It Is Humbly Submitted That The Health Condition Of The A Ssessee Shri Ranjit Kumar Paul Eider Brother Of Sri Ranjan Kurnar Paul Was Very Critical Due To Severe Illness Durin G The Course Of Assessment Proceedings The Ld A O Issued Noti Ces U S 142 1 On 05 07 2013 28 10 2013 It Is Humbly Sub Mitted That Shri Ranjan Kumar Paul Was Busy In Looking Af Ter His Brother For His Treatment During That Period For T Hat Reason The Director Neither Can Attend The Hearing On The 3 Ita Nos 887 893 Kol 2016 Asses Sment Years 2006 2007 To 2012 2013 Specified Dates Nor Could Inform His Consultant To Comply Such Notices Details Of His Medical Reports Along With Prescrip Tions Are Annexed Herewith And Marked As Annexure A B It Is Humbly Submitted That Finally When There Was A Slight Recovery In His Brothers Health Proper Com Pliances Were Made Before The Ld A O And The Assessment Wa S Completed U S 143 3 153 A It Is Further Submitted That The Assessee Was Nowhere Trying To Avoid The Proceeding S And Was Always Cooperating In Every Possible Manner C It Is Further Submitted That During The Course Of Penalty Proceedings U S 271 1 B The A R Of The Assessee Filed A Bonafide Submission Explaining The Reason For Non Appearance And Also Requested For Dropping The Pena Lty Proceeding U S 271 1 B Of The Act Copy Of The Sa Me Is Annexed Herewith And Marked As Annexure B However The Ld A O Imposed Penalty Of Rs 20 000 For Non Co Mpliance Of Notices U S 142 1 Issued On Several Elates With Out Considering The Facts That The Assessee Was Prevent Ed By Reasonable Cause For Such Failure Of Non Compliance S And There Was No Deliberate Intention On The Part Of As Sessee For Not Complying With The Said Notice D In The Case Of Hindustan Steel Ltd Vs State Of Orissa 83 Itr 26 Honble Supreme Court Has Held That Penalty Should Not Be Imposed Merely For The Technical Or The Veni Al Breach Of Law And The Authorities May Decline To Uphold Th E Penalty Considering The Nature Of Breach 4 The Ld Cit Appeals Did Not Find Merit In The S Ubmissions Made On Behalf Of The Assessee And Proceeded To Confirm The Penalties Imposed By The Assessing Officer Under Section 271 1 B For T He Following Reasons Given In His Impugned Orders Which Are Common For All The Seven Years Under Consideration The Appellant Has Filed Three Grounds Of Appeal B Ut All Grounds Are Mainly Regarding Imposition Of Penalty U S 271 1 B Of The Act In View Of This The Matter Is Discussed With T He Ld A R And Accordingly All The Grounds Are Taken Up Together F Or Adjudication The Ld Authorized Representative Of The Appellant Appeared On 10 02 2016 And Challenged The Imposition Of Penalty U S 271 1 B Of The Act On The Ground That The Assessment Was A Lready Completed On 28 03 2014 But Penalty Order U S 271 I B Of The Act Is Passed On 15 09 2014 And Therefore The A O Is Not Justified In Course Of Discussion It Is Explained As To Why Pen Alty Proceeding Is Initiated At The Time Of The Completion Of Assessme Nt And The Penalty Proceeding Has To Be Completed Within Presc Ribed Time Period Then The Ld A R Referred To The Illness Of Shri Ranjit 4 Ita Nos 887 893 Kol 2016 Asses Sment Years 2006 2007 To 2012 2013 Kumar Paul A Member Of The Family And Argued That Since Shri Ranjit Kumar Paul Was Not Well There Were Non Comp Liances In Response To The Notices U S 142 1 Of The Act During Assessment Proceeding This Explanation Has Not Been Submitted Till Date The Copy Of Discharge Summary Of Shri Ranjit Kurnar Pau L Shows That He Was Operated In Appollo Hospital On 20 05 2011 A Nd Duly Discharged On 06 06 2011 Later On He Was Hospitali Zed For Two Days In February March 2013 5 1 The Penalty U S 271 1 B Of The Act Is Impo Sed On The Assessee For The Non Compliance To The Notices Issu Ed U S 142 1 Of The Act Issued On 26 06 2013 01 07 2013 And 13 12 2013 Wherein Request Was Made To The Assessee To Appear On 08 07 2013 12 07 2013 And 20 02 2013 Reference Is Made To The Operation Of Shri Paul In 2011 And Two Days Hospitalized In Febr Uary March 2013 5 2 It Is Seen That Shri Ranjit Kurnar Paul Was N Ot In The Hospital During The Period When Non Compliance Took Place I T Is Also Seen That The Appellant Besides Not Informing The Asses Sing Officer About The Said Medical Reason During The Assessment Proceeding Or Subsequently During The Penalty Proceeding Did Not Mention A Word About It At The Time Of The Filing Of Appeal O R Even Later Till 10 02 2016 The Appeal In This Case Was Filed On 14 11 2014 Even After That The Appellant Did Not Refer To This As T He Reason For The Non Compliance During The Assessment Proceeding Whi Ch Resulted Into The Initiation And Subsequently Imposition Of Penalty U S 271 1 B Of The Act This Is Neither Referred In T He Grounds Of Appeal Nor In The Statement Of Facts Only Curing T He Course Of The Instant Appeal Proceeding I E On 10 02 2014 The Ap Pellant Has Referred To The Said Excuse Regarding Illness Of A Member Of The Family Due To Which There Were Non Compliances But The A R Of The Appellant Failed To Explain As To How Did It Stop T He Appellants Ld A R From Appearing Before The Assessing Officer 5 3 The Ld A R Submitted That During The Course Of Penalty Proceedings U S 271 1 B The A R Of The Assessee Filed A Bonafide Submission Explaining The Reason For Non Appearance And Also Requested For The Dropping The Penaltv Proceeding U S 271 1 B Of The Act It Is Pertinent To Mention That The Referr Ed Submission Dt 23 05 2014 Does Not Mention A Word About The Ill Ness Of Shri Ranjit Kumar Paul The A O Has Only Reproduced The Entire Submission In The Relevant Penalty Order U S 271 1 B Of The Act The Said Submission Of The Ld Ar Dt 23 05 2014 Is Reproduced Below Have Been Alleged To Have Failed To Respond On Few Occasions On The Given Dates As Per Your Notice Ser Ved U S 142 1 143 2 For A Y 2006 07 To A Y 2012 13 How Ever I Had No Intentions To Defy Or Disobey The Order Further It Is Also A Matter Of Fact That No Penalty Notice U S 271 1 B Was Se Rved From Your End During The Pendency Of Assessment Proceedings A Nd The Same Was Served Only At The Time Of Completion Of Assess Ment U S 153 A 143 3 That Is On 28 03 2014 Hence The Alleg Ed Offence Has 5 Ita Nos 887 893 Kol 2016 Asses Sment Years 2006 2007 To 2012 2013 Already Been Exonerated By Your Honour And Therefor E No Further Action Shall Be Sustained In The Eye Of Law Hence I Request Your Honour That The Penalty Proceedings U S 271 1 B F Or Ay 2006 07 To Ay 2012 13 May Please Be Dropped For The Same Of Justice It Is Apparent That No Valid Reason Is Mentioned A Nd The Illness Of Shri Paul Is Certainly Not Mentioned As The Reason For The Referred Non Compliances Of The Notices U S 142 1 Of The Ac T 5 4 The Ld A R Continued To Argue That Shri Ranji T Kumar Pauls Illness Had Prevented Them From Complying With The Notices U S 142 1 Of The Act However It Is Seen That Shr I Ranjit Kumar Paul Was Not Representing Before The Department Or For That Matter Associated With Any Income Tax Proceeding The Ld A R Agreed With This But He Insisted That The Illness Of Shri Paul Was The Only Reason It Is Seen That The Appellant Had Made A Pl Ea While Requesting For The Condonation Of Delay In The Fili Ng Of Appeal At That Point Of Time The Appellant Has Submitted That The Cost Accountant Shri Gurudas Dey Was On Leave So The Del Ay In The Filing Of Appeal Shri Gurudas Dey Is The Td Air Of The Appellant In This Case Thus It Is Seen That The Said Excuse That On E Person In Family Was Not Well So No Compliance Is Not Considered Va Lid In Course Of Appeal Proceeding The Ld A R Failed To Explain As To Why The Illness Of Shri Ranjit Kumar Paul Which Is The Onl Y Excuse For Lion Compliance Was Not Brought To The Knowledge Of The Assessing Officer During Assessment Penalty Proceeding Or Lat Er At The Time The Filing Of Instant Appeal Or For That Matter T Ill 10 02 2016 And Secondly How Did The Referred Illness Prevented Th E Appellant In Complying Through Any Authorized Representative 5 5 The Ld A R Could Not Reply To The Above But Argued Repeatedly That Due To The Illness Of Shri Ranjit K Urnar Paul The Non Compliances Took Place This Is No Reasonable E Xplanation The A R Was Also Requested To Inform Whether All Ac Tivities Of The Appellant Stopped Due To The Stated Excuse Or Only The Compliance Before The Assessing Officer Got Affected The A R Did Not Reply The Case Law Hindustan Steel Ltd Vs State Of Orissa 83 Itr 26 Cited By The Appellant Has Been Referred But T Hat Is Not Applicable In The Instant Appeal Matter Thus It Is Seen That The Assessee Had Deliberately Not Complied With The Not Ices Duly Issued By The Ao U S 142 1 Of The Act Later On T He Appellant Has Taken A Plea Regarding Illness Of One Of The Family Member Which Is An Apparent Case Of Afterthought It Is Also Seen That The Referred Non Compliances Affected The Assessment Pr Oceeding And The Same Gets Reflected In The Observation In This Regard As Made In The Relevant Assessment Order In View Of That The Instant Penalty Proceeding Was Initiated Every Time The He Aring Is Fixed The Assessing Officer Has To Prepare And Then Witho Ut Any Prior Intimation Or Request For Adjournment The Assessee Does Not Appear Even Afterwards The Assessee Does Not Submi T Any Explanation This Type Of Deliberate Non Compliance As Done By The Assessee In This Case Adversely Affects The Pr Ocess Of Assessment And The Completion Of The Important Asse Ssment Proceeding Got Delayed As Discussed The Explanatio Ns Of The Ld 6 Ita Nos 887 893 Kol 2016 Asses Sment Years 2006 2007 To 2012 2013 A R Dated 10 07 2016 Does Not Substantiate The Clai Ms As Made In The Grounds Of Appeal Thus In View Of The Facts An D Circumstances Of The Case The Assessing Officer Was Justified In Imposing Penalty U S 271 1 B Of The Act And Levy Rs 20 000 For N On Compliance Of Notices U S 142 1 Of The Act Therefore Appeal On The Referred Grounds Is Dismissed Aggrieved By The Orders Of The Ld Cit Appeals Con Firming The Penalties Imposed By The Assessing Officer Under Section 271 1 B The Assessee Has Preferred These Appeals Before The Tribunal 5 We Have Heard The Arguments Of Both The Sides An D Also Perused The Relevant Material Available On Record 6 The Ld Counsel For The Assessee At The Outset Has Submitted That The Common Issue Involved In The Case Of The Assess Ee In These Appeals Is Squarely Covered In Favour Of The Assessee By The D Ecision Of The Tribunal Rendered In The Case Of Smt Shabari Paul An Asses See Belonging To The Same Group Rendered Vide Its Order Dated 17 11 2017 Passed In Ita Nos 825 831 Kol 2016 Whereby The Similar Penalties Imp Osed Under Section 271 1 B For A Ys 2006 07 To 2012 13 Have Been Ca Ncelled By The Tribunal By Relying On The Order Of Its Bench At De Lhi In The Case Of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust Vs Assistant Director Of Income Tax 115 Ttj Del 419 Wherein It Was Held That The Fact That The Assessment Was Finally Completed By The Assessi Ng Officer Under Section 143 3 Was Sufficient To Show That There Wa S Substantial Compliance Made By The Assessee It Was Held That T He Default Committed By The Assessee Thus Could Not Be Said To Be Wilful And The Penalties Imposed Under Section 271 1 B Was Liable To Be Ca Ncelled 7 The Ld Cit D R In This Regard Has Relied On T He Decision Of The Delhi Bench Of This Tribunal Rendered On 05 10 2017 In The Case Of Sanjay Dalmia Ita Nos 3795 To 3801 Del 2014 And Submit Ted That The Penalties Imposed Under Section 271 1 B In The Sa Id Case For A Ys 2006 07 To 2012 13 Were Confirmed By The Tribunal A Fter Taking Into 7 Ita Nos 887 893 Kol 2016 Asses Sment Years 2006 2007 To 2012 2013 Consideration Its Earlier Decision Rendered In The Case Of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust Supra A Per Usal Of The Order Passed By The Tribunal In The Said Case However S Hows That Although The Decision In The Case Of Akhil Bhartiya Prathmik Shi Kshak Sangh Bhawan Trust Supra Was Referred To By The Tribunal In Pa Ragraph No 17 As A Part Of The Submissions Made On Behalf Of The Asses See The Same Had Not Been Dealt With Or Discussed In The Operative Porti On Of The Order There Is Thus No Finding Or Observation Recorded By The T Ribunal In The Order Passed In The Case Of Sanjay Dalmia Supra So As T O Say That The Decision In The Case Of Akhil Bhartiya Prathmik Shikshak San Gh Bhawan Trust Was Considered And Distinguished In Any Case The Fact S Involved In The Case Of Sanjay Dalmia Supra Were Materially Different From The Facts Involved In The Case Of The Assessee As Rightly Poi Nted Out By The Ld Counsel For The Assessee Inasmuch As The Assessee In The Said Case Had Failed To Furnish The Information Required By The A Ssessing Officer With Respect To His Account With Hsbc Bank Geneva Swit Zerland And He Had Also Failed Alternatively To Furnish Notarized Cons Ent Letter Confirming That He Did Not Have Any Bank Account With Hsbc Ban K Geneva Switzerland After Taking Note Of This Non Complian Ce On The Part Of The Assessee The Tribunal Held That The Assessee Was M Aking An Attempt To Forestall The Enquiry Of The Revenue And The Penalt Ies Imposed Under Section 271 1 B Were Confirmed By The Tribunal T He Facts Involved In The Present Case On The Other Hand Are Materially Different Inasmuch As Though There Was Non Compliance On The Part Of The Assessee To Two Of The Notices Issued By The Assessing Officer Under S Ection 142 1 He Complied With The Other Notices Issued By The Asses Sing Officer Under Section 142 1 By Furnishing Information Required B Y The Assessing Officer For The Purpose Of Assessments As Pointed Out By The Ld Counsel For The Assessee The Assessing Officer Found The S Aid Information Furnished By The Assessee As Sufficient For The Pur Pose Of Assessment As Noted In Paragraph No 7 Of The Assessment Orders A Nd Completed The Assessments Under Section 153 A 143 3 Of The Act T He Information Required By The Assessing Officer For The Purpose O F Assessments Thus Was 8 Ita Nos 887 893 Kol 2016 Asses Sment Years 2006 2007 To 2012 2013 Duly Furnished By The Assessee In Order To Enable T He Assessing Officer To Complete The Assessments Under Section 153 A 143 3 Of The Act And There Was Thus Substantial Compliance Made By The A Ssessee And It Was Not The Case Of Wilful Default Committed By The Ass Essee To Justify The Imposition Of Penalty Under Section 271 1 B As He Ld By Honble Delhi Bench Of This Tribunal In The Case Of Akhil Bharti Ya Prathmik Shikshak Sangh Bhawan Trust Supra 8 At The Time Of Hearing Before Us The Ld Cit D R Has Also Relied On The Decision Of The Honble Supreme Court In The Ca Se Of Manmohad Das Vs Vishnu Das Air 1967 Sc 643 In Support Of The Revenues Case And Contended That The Ordinary Rule Of Construction A S Held By The Honble Supreme Court Is That The Provision Of A Statute M Ust Be Construed In Accordance With The Language Used Therein Unless Th Ere Are Compelling Reasons Such As Where A Literal Construction Woul D Reduce The Provision To Absurdity Or Prevent Manifest Intention Of The L Egislature From Being Carried Out However As Rightly Pointed Out By The Ld Counsel For The Assessee From The Relevant Provisions Of Section 27 1 1 B The Language Used Therein He May Direct That Such Person Shall Pay By Way Of Penalty Is Such That The Authorities Are Given Discretion To Impose Penalty Further Section 273 B Provides That No Penalty Shall Be Imposable On The Person Or The Assessee As The Cas E May Be For Any Failure Referred To In The Provisions Of Section 27 1 1 B If He Proves That There Was Reasonable Cause For The Said Failure In This Regard It Would Be Useful To Refer To The Decision Of The Honble Supr Eme Court In The Case Of Hindustan Steel Vs State Of Orissa 83 Itr 26 Wh Erein It Was Held That Even If A Minimum Penalty Is Prescribed The Author Ity Competent To Impose The Penalty Will Be Justified In Refusing To Impose Penalty When There Is A Technical Or Venial Breach Of The Provis Ions Of The Act As Already Noted By Us Substantial Compliance Was Mad E By The Assessee During The Course Of Assessment Proceedings By Furn Ishing The Relevant Details And Information Required By The Assessing O Fficer For The Purpose Of Assessment As Is Evident From The Assessment Co Mpleted By The 9 Ita Nos 887 893 Kol 2016 Asses Sment Years 2006 2007 To 2012 2013 Assessing Officer Under Section 153 A 143 3 For All The Years Under Consideration And Therefore The Default On The Par T Of The Assessee In Not Complying With The Two Notices Issued By The Assess Ing Officer Under Section 142 1 Was Merely Of A Technical Or Venial Nature For Which The Imposition Of Penalties Under Section 271 1 B Was Not Justified As Such Considering All The Facts Of The Case We Hol D That The Penalties Imposed By The Assessing Officer Under Section 271 1 B And Confirmed By The Ld Cit Appeals For All The Years Under Con Sideration Are Not Sustainable And Cancelling The Same We Allow These Appeals Filed By The Assessee 9 In The Result All The Seven Appeals Filed By Th E Assessee Are Allowed Order Pronounced In The Open Court On 13 Th Day Of December 2017 Sd Sd S S Viswanethra Ravi P M Jagtap Judicial Member Accountant Member Kolkata The 13 Th Day Of December 2017 Copies To 1 Shri Anil Chandra Paul Thana Road Gangarampur Dakshin Dinajpur 733 124 2 Deputy Commissioner Of Income Tax Central Circle Xxvii Kolkata Aayakar Bhawan Poorva 110 Shanti Palli E M Bye Pass Kolkata 700 107 3 Cit Appeals 21 Kolkata 4 Cit Kolkata 5 The Departmental Representative 6 Guard File True Copy By Order Senior Private Secretary Head Of Office Ddo Income Tax Appellate Tribunal Kolkata Benches Kolkata Laha Sr P S