M/s. Kalhaar Co.Op.Hsg. So.Ltd.,Part-7, Ahmedabad v. The ACIT.,Cent.Circle-1(1),, Ahmedabad

ITSSA 354/AHD/2010 | 2004-2005
Pronouncement Date: 16-09-2010 | Result: Allowed

Appeal Details

RSA Number 35420516 RSA 2010
Assessee PAN AAAAK6216F
Bench Ahmedabad
Appeal Number ITSSA 354/AHD/2010
Duration Of Justice 4 month(s) 24 day(s)
Appellant M/s. Kalhaar Co.Op.Hsg. So.Ltd.,Part-7, Ahmedabad
Respondent The ACIT.,Cent.Circle-1(1),, Ahmedabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 16-09-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 16-09-2010
Date Of Final Hearing 03-09-2010
Next Hearing Date 03-09-2010
Assessment Year 2004-2005
Appeal Filed On 22-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL V.P.(AZ) & HON BLE SHRI T.K. SHARMA J.M. ) I.T.(S.S.)A. NOS. 354 TO 361/AHD./2010 ASSESSMENT YEARS : 2004-2005 TO 2007-2008 M/S. KALHAAR CO.OP. HOUSING SOCIETY LTD. -VS.- A SSISTANT COMMISSIONER OF INCOME TAX PART-7 AHMEDABAD (PAN : AAAAK 6216 F) CEN TRAL CIRCLE-1(1) AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DIPAK SONI RESPONDENT BY : SHRI K. MADHUSUDAN SR . D.R. O R D E R PER BENCH : THESE 8 APPEALS FILED BY THE ASSESSEE ARE AGAINST ORDERS DATED 20.02.2010 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I AHMEDABAD C ONFIRMING THE PENALTY OF RS.10 000/- LEVIED BY THE ASSESSING OFFICER IN EACH OF THE ASSE SSMENT YEARS 2004-05 TO 2007-08 RESPECTIVELY. 2. BRIEF FACTS RELATING TO THE CONTROVERSY INVOLVED IN THIS GROUND OF APPEALS ARE THAT THE ASSESSEE IS ONE OF THE COMPANIES OF NAVRATNA GROUP OF BUILDERS. IN THIS GROUP SEARCH WAS CONDUCTED UNDER SECTION 132 ON 10.05.2006. THE ASSE SSING OFFICER ISSUED THE NOTICE UNDER SECTION 142(1) OF THE INCOME TAX ACT DATED 03.10.20 08 (IN CONNECTION WITH ASSESSMENT PROCEEDINGS UNDER SECTION 153C FOR THE ASSESSMENT Y EARS 2004-05 TO 2007-08 AND THE SAME WAS SERVED TO THE ASSESSEE ON THE SAME DATE. VARIOUS DE TAILS RELATED TO SEIZED DOCUMENTS AND ON OTHER ISSUES WERE ASKED TO BE FURNISHED/ PRODUCED BY THE ASSESSEE. THE DATE OF COMPLIANCE WAS FIXED ON 13.10.2008. SINCE THERE WAS NON- COMPLIANCE FROM THE SIDE OF THE ASSESSEE THE ASSESSING OFFICER INITIATED PROCEEDINGS UNDER SECTION 271(1)( B) OF THE ACT. 3. IN REPLY TO PENALTY NOTICE ISSUED BEFORE LEVYING PENALTY UNDER SECTION 271(1)(B) SHRI BIPIN PANCHAL MANAGER ACCOUNTS OF NAVRATNA GROUP A TTENDED ON 22.10.2008 AND REQUESTED FOR FURTHER TIME. THEREAFTER A NOTICE UNDER SECTION 13 1 WAS ISSUED TO SHRI PRANAV DINESH SHAH DIRECTOR IN VARIOUS NAVRATNA GROUP CONCERNS INCLUDI NG THE ASSESSEE-COMPANY TO PERSONALLY APPEAR WITH EXPLANATION FOR NON-COMPLIANCES MENTION ED IN THE SHOW-CAUSE NOTICE UNDER SECTION 271(1)(B). IN RESPONSE TO THE SAID SUMMONS SHRI PR ANAV D. SHAH APPEARED AND HIS STATEMENT WAS 2 IT(S.S. )A NOS. 354-361/AHD/2010 RECORDED ON 23.10.2008. HE STATED THAT THEIR CONSUL TANT SHRI DEEPAK SONI WAS NOT ABLE TO ATTEND ON MEDICAL EMERGENCY GROUND. THE ASSESSING OFFICER FOUND THE EXPLANATION OF THE ASSESSEE UNSATISFACTORY AND LEVIED THE PENALTY OF RS.10 000/ - IN EACH OF THE ASSESSMENT YEARS 2001-02 TO 2007-08 RESPECTIVELY. 4. ON APPEAL IN THE IMPUGNED ORDER THE LEARNED COM MISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE PENALTY OBSERVING THAT THE ASSERTIONS MADE BY THE ASSESSING OFFICER IN THE PENALTY ORDER REMAINED UNCONTROVERTED BECAUSE THE ASSESSEE HAS NOT ATTENDED THE APPELLATE PROCEEDINGS. IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT SINCE THE ASSESSEE FAILED TO OFFER PLAUSIBLE EXPLANATION I.E . THE REASON FOR NON-COMPLIANCE OF THE NOTICE ISSUED ON 03.10.2008 HE CONFIRMED THE PENALTY LEVI ED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(B) OF THE ACT IN RESPECT OF ALL THE ASSESSME NT YEARS UNDER APPEALS. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE ASSESSEE IS IN APPEALS BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING ON BEHALF OF ASSESSEE SH RI DIPAK SONI LD. AUTHORIZED REPRESENTATIVE APPEARED AND CONTENDED THAT THE REAS ON FOR NON-COMPLIANCE OF NOTICE AS EXPLAINED BY SHRI PRANAV DINESH SHAH DIRECTOR IN V ARIOUS NAVRATNA GROUP CONCERNS INCLUDING THE ASSESSEE-COMPANY WAS OF MEDICAL EMERGENCY OF MY YOUNGER BROTHER NAMELY SHRI VIJAY SONI. LD. COUNSEL OF THE ASSESSEE CONTENDED THAT HIS YOUN GER BROTHER WAS STAYING IN USA. THE NEWS OF HIS SERIOUS SICKNESS WAS RECEIVED ON 31.08.2008 AND HE HAD TO LEAVE FOR USA ON 01.09.2008. HIS YOUNGER BROTHER WAS SUFFERING FROM INCURABLE CANCER AND THEREFORE HE HAD TO STAY IN USA TILL 19.09.2008 WHEN HE BROUGHT BACK HIS YOUNGER BROTHER ALONGWITH HIM. HIS BROTHER WAS SUFFERING FROM UNBEARABLE PAIN AND REQUIRED CONSTANT ATTENTIO N ON ACCOUNT OF WHICH IT WAS NOT POSSIBLE ON HIS PART TO ATTEND THE OFFICE REGULARLY. ULTIMATELY HIS BROTHER EXPIRED ON 14.11.2008. HE ACCORDINGLY SUBMITTED THAT UNDER THE CIRCUMSTANCES THERE WAS A REASONABLE CAUSE. THEREFORE ORDERS LEVYING THE PENALTY UNDER SECTION 271(1)(B) AMOUNTING TO RS.10 000/- IN EACH OF THE ASSESSMENT YEARS BE QUASHED. 5.1. WITH REGARD TO NON-COMPLIANCE BEFORE THE LEARN ED COMMISSIONER OF INCOME TAX(APPEALS) THE LD. COUNSEL OF THE ASSESSEE SUBMI TTED THAT BEFORE THE SAME LEARNED 3 IT(S.S. )A NOS. 354-361/AHD/2010 COMMISSIONER OF INCOME TAX(APPEALS) HE WAS APPEARED IN MAIN CASES WHERE ADDITIONS WERE MADE. THUS THE LD. COUNSEL OF THE ASSESSEE WAS OF T HE BONA FILE BELIEF THAT PENALTY APPEALS WILL BE TAKEN UP AFTER THE DECISION OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN QUANTUM APPEALS OF THE GROUP CASES. 6. ON THE OTHER HAND SHRI K. MADHUSUDAN LD. SR. D .R. APPEARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). HE SUBMITTED THAT PENALTY PROCEEDINGS ARE SEPARATE PRO CEEDINGS. BEFORE THE ASSESSING OFFICER THE ASSESSEE HAS NOT FURNISHED ANY REPLY TO THE SHOW-CA USE NOTICES ISSUED BEFORE LEVYING PENALTY UNDER SECTION 271(1)(B). IN THESE CIRCUMSTANCES TH E ASSESSING OFFICER WAS HAVING NO OPTION BUT TO PRESUME THAT THE ASSESSEE HAD NO EXPLANATION AND THERE WAS NO REASONABLE CAUSE. IN SUCH CIRCUMSTANCES PENALTY UNDER SECTION 271(1)(B) IS L EVIABLE. IN SUPPORT OF THIS HE PLACED RELIANCE ON THE FOLLOWINGS :_ (A) FOR THE PROPOSITION OF PENALTY NOTICE K.P. MADHUSUDANAN VS.- CIT [251 ITR 99 (SC); (B) FOR REASONABLE CAUSE (I) ADDL. CIT VS.- MOHAMMED & SONS [154 ITR 220 (RAJ.) ]; (II) KALAKRITHI VS.- ITO & ANR. [253 ITR 754 (MAD.)]; (III) WOODWARD GOVERNERS INDIA P. LTD. [253 ITR 745 (DEL. )]. IN REJOINDER THE ARGUMENT OF THE LD. COUNSEL OF TH E ASSESSEE SUBMITTED THAT REASON FOR NON- COMPLIANCE OF NOTICES WAS EXPLAINED BY SHRI PRANAV DINESH SHAH DIRECTOR IN VARIOUS NAVRATNA GROUP CONCERNS INCLUDING THE ASSESSEE-COMPANY. THIS REASON WAS THE MEDICAL EMERGENCY OF SHRI VIJAY SONI RESIDENT IN USA (BROTHER OF ASSESSEES CHARTERED ACCOUNTANT) WHO WAS SUFFERING FROM CANCER AND FINALLY EXPIRED ON 14.11.2008. ON T HIS BASIS THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ILLNESS OF HIS BROTHER CONSTITUT ES A REASONABLE CAUSE FOR NOT LEVYING PENALTY UNDER SECTION 271(1)(B) OF THE INCOME TAX ACT. TO S UM UP HE SUBMITTED THAT THE ASSESSING OFFICER OUGHT TO HAVE TAKEN A LENIENT VIEW AND DROP PED THE PENALTY PROCEEDINGS. 7. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN THE ORDER DA TED 12.11.2008 LEVYING THE PENALTY UNDER SECTION 4 IT(S.S. )A NOS. 354-361/AHD/2010 271(1)(B) OF RS.10 000/- IN ONE OF THE ASSESSEE-GRO UP NAMELY M/S. KALASH DEVELOPERS PVT. LTD. FOR THE ASSESSMENT YEAR 2001-02 IN PARA 5 THE ASSE SSING OFFICER HAS MENTIONED AS UNDER :- 5 . FURTHERMORE A NOTICE U/S. 131 WAS ISSUED TO SHRI P RANAV DINESH SHAH DIRECTOR IN VARIOUS NAVRATNA GROUP CONCERNS I NCLUDING KALASH DEVELOPERS PVT. LTD. TO PERSONALLY APPEAR WITH EXPL ANATION ON NON- COMPLIANCES MENTIONED ABOVE. IN RESPONSE TO SAID SU MMON SHRI PRANAV SHAH APPEARED AND HIS STATEMENT WAS RECORDED ON 23. 10.2008.HE STATED THAT THEIR CONSULTANT SHRI DEEPAK SONI WAS NOT ABLE TO ATTEND ON MEDICAL EMERGENCY GROUND. HE HAS ALSO REQUESTED TO GRANT FE W DAYS TO COMPLY THE SAME. IT WAS INFORMED TO HIM THAT IN VIEW OF TH E TIME BARRING DATE INVOLVED NO FURTHER TIME COULD BE GRANTED. FURTHER BEING A DIRECTOR/ MAIN PERSON THE AFFAIRS OF THE GROUP WERE WELL KNO WN TO HIM AND MEDICAL EMERGENCY GROUND OF THE C.A. WAS NOT TENABLE FOR NO N-COMPLIANCES. THE REPLY ON VARIOUS SEIZED DOCUMENTS WAS PENDING SINCE THE PERIODS WHEN SEARCH WAS CONDUCTED. 7.1. FROM THE BARE PERUSAL OF THE AFORESAID PARA W E ARE CONVINCED THAT SHRI PRANAV DINESH SHAH DIRECTOR IN VARIOUS NAVRATNA GROUP CONCERNS I NCLUDING THE ASSESSEE-COMPANY CLEARLY MENTIONED THAT NON-COMPLIANCE OF NOTICES UNDER SECT ION 271(1)(B) IS ON ACCOUNT OF NON- AVAILABILITY OF THEIR CONSULTANT SHRI DEEPAK SONI A S HE WAS NOT AVAILABLE ON MEDICAL EMERGENCY GROUND THAT HIS BROTHER NAMELY SHRI VIJAY SONI RE SIDENT IN USA EXPIRED ON 14.11.2008 SUFFERING FROM CANCER. THE ARGUMENT OF THE ASSESSEE WAS THAT IN THE EVENT OF FAILURE THERE EXISTED A REASONABLE CAUSE I.E. INSUFFICIENT PERIOD ALLOWE D OR AMBIGUITY OF IN THE NOTICE OR NON- AVAILABILITY OF THE ASSESSING OFFICER IN THE OFFICE . WE ARE THEREFORE OF THE VIEW THAT SINCE THERE WAS A REASONABLE CAUSE WITHIN THE MEANING OF SECTIO N273B IT IS NOT A FIT CASE TO LEVY THE PENALTY UNDER SECTION 271(1)(B) OF THE INCOME TAX ACT 1961 . 7.2. IN VIEW OF THE FOREGOING THE PENALTY OF RS.10 000/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(B) IN RESPECT OF EACH OF THE ASSESSM ENT YEARS UNDER APPEALS IS CANCELLED. 8. IN THE RESULT ALL THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 16.09.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 16/ 09 / 2010 5 IT(S.S. )A NOS. 354-361/AHD/2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A.) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR ITAT AHMEDABAD LAHA/SR.P.S.