M/s Mathura Prasad Sri Prakash, Kannauj v. IAC, Agra

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NO. 919/AGR./1982 ASSTT. YEAR : 1975-76 M/S. MATHURA PRASAD SHRI PRAKASH VS. INSPECTING A .C.I.T.(ASTT.) MAKRAND NAGAR KANNAUJ. AGRA. (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI RAJENDRA SHARMA ADVOCATE FOR RESPONDENT : SHRI VINOD KUMAR JR. D.R. ORDER PER H.S. SIDHU J.M. : THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 26.03.1982 OF LEARNED CIT(A) AGRA ON THE FOLLOWING GROUNDS : 1. BECAUSE THE LEARNED CIT(APPEALS) WRONGLY AND IL LEGALLY UPHELD THE PENALTY IMPOSED ON THE APPELLANT FIRM. 2. BECAUSE THE LEARNED CIT(APPEALS) WRONGLY UPHELD THE LEVY OF PENALTY INSPITE OF THEIR BEING TOTAL LACK O F MENS REA. 3. BECAUSE THE LEARNED CIT(APPEALS) DID NOT APPREC IATE THE FACT THAT THE RETURN OF LOSS AS WAS FILED DID NOT R EQUIRE ANY 140-A PAYMENT. 4. BECAUSE THE EXTENSION OF TIME SOUGHT ON 31.12.1 975 HAS BEEN WRONGLY AND ILLEGALLY BRUSHED ASIDE AND IGNORE D BY THE LEARNED CIT(APPEALS). 2 5. BECAUSE LEVY OF PENALTY IS ILLEGAL SINCE AFTER SUFFERING THE HUGE LOSS AND BEING BLACK LISTED BY THE TAMIL NADU GOVERNMENT THE FIRM WAS UNDERGOING A CRITICAL AND DISTURBED PHASE. 2. THE ASSESSEE FILED ITS ORIGINAL RETURN ON 31.01. 1976 SHOWING LOSS OF ` 11 47 970/- AND THEREAFTER FILED REVISED RETURN ON 16.08.1976 SHOWING LOSS OF ` 8 90 720/-. THE FORMS NO. 6 WERE FILED ON VARIOUS D ATES BUT LASTLY TIME WAS EXTENDED FOR FILING THE RETURN UPTO 30.10.1975. THE ASSESSEE REQUESTED FOR EXTENSION OF TIME UPTO 31.01.1976 WHICH WAS REJECTE D BY THE INCOME-TAX OFFICER ON 19.01.1976 AND THE SAME WAS SERVED UPON THE ASSE SSEE ON 24.01.1976. SINCE THE RETURN WAS DUE TO BE FILED BY 30.10.1975 THUS THE RE WAS DELAY OF THREE MONTHS IN FILING THE RETURN. 3. THE ASSESSING OFFICER ISSUED A NOTICE U/S. 274 R EAD WITH SECTION 271 DATED 15.05.1978 FIXING THE CASE FOR 17.06.1978. IN RESP ONSE TO THE SAME THE ASSESSEE FILED ITS REPLY DATED 14.06.1978 STATING THEREIN TH AT THE ASSESSEE HAS FILED THE RETURN WITHIN THE EXTENDED TIME. THE ASSESSEE FURTHER STAT ED THAT THE RETURN WAS FILED SHOWING LOSS AND NO TAX WAS PAYABLE U/S. 140-A OF T HE ACT HENCE THE DELAY IN FILING THE RETURN. DUE TO THE TRANSFER OF INCOME-TA X OFFICER THE NEW INCUMBENT AGAIN ISSUED A FRESH SHOW CAUSE NOTICE DATED 07.07. 1980. IN RESPONSE TO THE SAME THE ASSESSEE REPEATED THE SAME PLEAS AS TAKEN BEFOR E THE EARLIER ITO. AFTER CONSIDERING THE REPLY OF THE ASSESSEE THE ASSESSIN G OFFICER HELD THAT AS PER RECORD 3 THE ASSESSEE SOUGHT EXTENSION UPTO 31.01.1976 BUT THE SAME WAS REJECTED BY THE INCOME-TAX OFFICER AND INTIMATED TO THE ASSESSEE VI DE INTIMATION DATED 19.01.1976 WHICH WAS SERVED UPON THE ASSESSEE ON 24.01.1976. T HUS THE RETURN WAS NOT FILED WITHIN THE TIME. THE INCOME-TAX OFFICER ALSO HELD T HAT THE QUESTION OF LOSS RETURN DOES NOT ARISE NOR THE GROUNDS TAKEN IN THE SHAPE O F LOSS RETURN CAN EXEMPT THE ASSESSEE FROM THE DEFAULT OF SECTION 271(1)(A) OF T HE ACT. EVEN OTHERWISE AGAINST THE ASSESSMENT ORDER THE ASSESSEE WENT IN APPEAL B EFORE THE CIT(A) AND THE LEARNED CIT(A) VIDE HIS ORDER DATED 14.02.1979 DISM ISSED THE APPEAL FILED BY THE ASSESSEE UPHOLDING THE ASSESSED INCOME WHICH HAD B EEN WORKED OUT BY THE INCOME-TAX OFFICER AT RS.5 78 740/-. FURTHER THE A SSESSEE WENT IN APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL A BENCH AHMED ABAD AGAINST THE ORDER OF LEARNED CIT(A) AND THE TRIBUNAL HAD ALSO DISMISSED THE ASSESSEES APPEAL AND CONFIRMED THE ORDER PASSED BY THE CIT(A). THUS THE CONTENTIONS OF THE ASSESSEE HAVE NO FORCE IN AS MUCH HE COULD NOT PROVE ITS RE TURNED LOSS EVEN AT THE LEVEL OF THREE HIGHER AUTHORITIES AND THE INCOME ESTIMATED B Y THE INCOME-TAX OFFICER HAS BEEN CONFIRMED UPTO THE ITAT LEVEL AFTER PASSING A DETAILED ORDER. LASTLY THE INSPECTING ASSTT. COMMISSIONER (ASSESSMENT) AGRA H ELD THAT THE ASSESSEE WAS ENJOYING THE TAXABLE INCOME AND HAS FAILED TO FILE THE RETURN OF INCOME WITHIN TIME/EXTENDED TIME AND THE ASSESSEE HAS ALSO FAILED TO PROVE THAT HE WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE TO FILE THE RETU RN OF INCOME WITHIN TIME. 4 THEREFORE THE ASSESSEE IS LIABLE FOR PENALTY U/S. 271(1)(A) OF THE ACT AND ACCORDING TO THE PROVISIONS OF SECTION 271(2) THE ASSESSED T AX WOULD BE ` 5 32 233/-. ON THE SAME VERY BASIS PENALTY U/S. 271(1)(A) OF THE ACT @ 2% PER MONTH FOR THREE MONTHS WAS LEVIED AT ` 15 970/- AND THE ASSESSING OFFICER DIRECTED THE ASS ESSEE TO PAY THE SAME BY WAY OF PENALTY U/S. 271(1)(A) VIDE ORDER DATED 18.03.1981. 4. AGGRIEVED BY THE SAID ORDER THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WHO VIDE THE IMPUGNED ORDER DA TED 26.03.1982 DISMISSED THE APPEAL FILED BY THE ASSESSEE BY HOLDING THAT THE AS SESSEE HAS FAILED TO EXPLAIN THE REASONABLE CAUSE FOR NOT FILING THE RETURN WITHIN T IME AND CONFIRMED THE ORDER DATED 18.03.1982. HENCE THE ASSESSEE HAS FILED THE PRESE NT APPEAL. 5. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE LEARNED FIRST APPELLATE AUTHORITY HAS PASSED THE IM PUGNED ORDER WITHOUT APPRECIATING THE FACTS AND RECORD OF THE ASSESSEE F IRM AND WRONGLY LEVIED THE PENALTY IN DISPUTE. HE FURTHER STATED THAT THE LEAR NED FIRST APPELLATE AUTHORITY DID NOT APPRECIATE THE FACT THAT THE RETURN OF LOSS FILED B Y THE ASSESSEE DID NOT REQUIRE ANY 140-A PAYMENT. HE LASTLY STATED THAT THE ASSESSEE W AS UNDER THE BONA FIDE BELIEF THAT THE RETURN FILED BY THE ASSESSEE SHOWING LOSS DOES NOT REQUIRE ANY TAX PAYABLE 5 U/S. 140-A THEREFORE THE DELAY IN FILING THE RETU RN IS EXCUSABLE IN THE INTEREST OF JUSTICE. 6. ON THE CONTRARY THE LEARNED DR RELIED UPON THE ORDER PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD AND WE ARE OF THE CONSIDERED OPINION THAT THE REVEN UE AUTHORITY HAS LEVIED PENALTY IN DISPUTE ON ACCOUNT OF DELAY IN FILING THE RETURN . NO DOUBT THE ASSESSEE HAD APPLIED FOR EXTENSION OF TIME WHICH WAS GRANTED FO R FILING THE RETURN UPTO 30.10.1975. THE ASSESSEE HAS ALSO FILED AN APPLICAT ION FOR FURTHER EXTENSION WHICH WAS REJECTED BY THE INCOME TAX OFFICER AND COMMUNIC ATED TO THE ASSESSEE ON 24.01.1976 AND IMMEDIATELY THEREAFTER THE ASSESSEE HAS FILED ITS RETURN ON 31.01.1976. ACCORDING TO THE REVENUE AUTHORITY THE RE IS A DELAY OF ABOUT THREE MONTHS IN FILING THE RETURN BUT THE EXPLANATION OF THE ASSESSEE IS THAT BECAUSE THE ASSESSEE HAS FILED THE RETURN SHOWING LOSS AND NO T AX WAS PAYABLE U/S. 140-A THEREFORE THE DELAY IS EXCUSABLE IN THE INTEREST OF JUSTICE AND SECONDLY THE ASSESSEE HAD RECEIVED THE COMMUNICATION OF REJECTION OF ITS APPLICATION ON 24.01.1976 AND IMMEDIATELY THEREAFTER RETURN WAS FILED ON 31.01.19 76. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE QUANT UM OF PENALTY IN DISPUTE 6 AMOUNTING TO ` 15 970/- WE ARE OF THE CONSIDERED OPINION THAT THE MATTER IS RELATING TO THE ASSESSMENT YEAR 1975-76 AND THE ASS ESSEE IS CONTINUOUSLY PURSUING ITS MATTER BEFORE THE REVENUE AUTHORITIES AS WELL A S BEFORE THE TRIBUNAL. SECONDLY THE EXPLANATION OF THE ASSESSEE REGARDING LOSS RETU RN AND NO TAX WAS PAYABLE U/S. 140-A IS ALSO REASONABLE AND ACCEPTABLE. THEREFORE IN THE INTEREST OF JUSTICE THE PENALTY IN DISPUTE DESERVES TO BE CANCELLED. WE TH EREFORE CANCEL THE SAME BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH FEBRUARY 2011. SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH FEBRUARY 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT CONCERNED 5. DR ITAT AGRA 6. 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