M/s. kalash Developers Pvt.Ltd.,, Ahmedabad v. The ACIT.,Cent.Circle-1(1),, Ahmedabad

ITSSA 436/AHD/2010 | 2007-2008
Pronouncement Date: 16-09-2010 | Result: Allowed

Appeal Details

RSA Number 43620516 RSA 2010
Assessee PAN AAACK8848D
Bench Ahmedabad
Appeal Number ITSSA 436/AHD/2010
Duration Of Justice 4 month(s) 23 day(s)
Appellant M/s. kalash Developers Pvt.Ltd.,, 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 2007-2008
Appeal Filed On 23-04-2010
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. 430 TO 436/AHD./2010 ASSESSMENT YEARS : 2001-2002 TO 2007-2008 M/S. KALASH DEVELOPERS PVT. LTD. -VS.- ASSISTANT COMMISSIONER OF INCOME TAX AHMEDABAD (PAN : AAACK 8848 D) CENTRAL CIR CLE-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 SEVEN APPEALS FILED BY THE ASSESSEE ARE AGAI NST THE COMMON ORDER DATED 16.02.2010 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I AHMEDABAD CONFIRMING THE PENALTY OF RS.10 000/- LEVIED BY THE ASSESSING OFFICER IN EACH OF THE ASSESSMENT YEARS 2001-02 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 2001-02 TO 2006-07 AND PROCEEDINGS UNDER SECTION 143(2) READ WITH SECTION 153A R.W.S. 153B(1)(B) OF THE ACT FOR THE ASSESSMENT YEAR 2007-08) SERVED TO THE ASSESSEE ON THE SAME DATE. V ARIOUS DETAILS RELATED TO SEIZED DOCUMENTS AND ON OTHER ISSUES WERE ASKED TO BE FURNISHED/ PRO DUCED 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 PROCEEDIN GS 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 2 IT(S.S. )A NOS. 430-436/AHD/2010 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 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. 3 IT(S.S. )A NOS. 430-436/AHD/2010 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 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. 4 IT(S.S. )A NOS. 430-436/AHD/2010 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 PENALTY ORDER ITSELF THE ASSESSING OFFICER HAS MENTIONED IN PARA 5 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. AT THE RELEVANT TIME THE BROTHER OF SHRI DEEPAK SONI NAMELY SHRI VIJAY SONI WAS SUFFERING FROM CAN CER. HIS BROTHER WAS RESIDING IN U.S.A. AND EXPIRED ON 14.11.2008. IN OUR VIEW THE SERIOUS ILL NESS OF ASSESSEES CONSULTANTS BROTHER CONSTITUTES A REASONABLE CAUSE WITHIN THE MEANING O F SECTION SECTION273B OF THE INCOME TAX ACT 1961. WE ARE THEREFORE OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVYING 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 ASS ESSEE 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. 430-436/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.