Income Tax Appellate Tribunal - Ahmedabad
Piyush Ranchhodbhai Patel, , Surat vs Acit, Circle-4,, Surat on 9 January, 2017
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ, अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER आयकर अपील सं./ IT(SS)A.No.23 to28/Ahd/2016 नधा रण वष / Asstt. Year: 2007-2008 to 2012-13 AND आयकर अपील सं./ IT(SS)A.No.76/Ahd/2016 नधा रण वष / Asstt. Year: 2013-2014 Shri Piyush Ranchhodbhai Patel ACIT, Cent.Cir.4 Shivanjali Bungalow Vs Surat.
Chikuwadi
Somnath Mahadev Road
Surat
PAN : AMFPP 6025 P
अपीलाथ!/ (Appellant) "#यथ!/ (Respondent)
Assessee by : Withdrawal Submissions
Revenue by : Shri K. Madhusudan, Sr.DR
सन
ु वाई क तार ख/ Dateof Hearing : 05/01/2017
घोषणा क तार ख / Date of Pronouncement: 09 /01/2017
आदे श/O R D E R
Present seven appeals are directed at the instance of the assessee against common order of the ld.CIT(A)20.11.2015 for the Asstt.Year 2007-08 to 2013-14.
2. Solitary issue involved in all these appeals is that theld.CIT(A) has erred in confirming levy of penalty amounting to Rs.10,000/- in each assessment year under section 271(1)(b) of the Income Tax Act, 1961. In response to the notice of hearing, the ld.counsel for the assessee has filed written submissions. He contended that similar penalty was imposed upon brother of the assessee Shri Vimal Ranchhodbhai Patel and dispute travelled upto the Tribunal. The Tribunal has deleted the penalty vide order dated IT(SS)A No.23 to 28 & 76/Ahd/2016 (7 Appeals) 2 24.2.2016. On the other hand, the ld.DR relied upon the order of the ld.CIT(A).
3. I have perused the record carefully and I find that there is no disparity on facts. The Tribunal has deleted penalty in the case of assessee's brother on the ground that time given by the AO for compliance of notice was not sufficient. The Tribunal has also observed that the assessee has complied notices though little belatedly. In the written submission filed by the ld.counsel for the assessee it is discernible that the assessee has complied all the notices and submitted requisite details. The AO has issued only one notice and he has given a time of 5 days only, whereas he has called upon to produce a large number of details. The discussion made by the Tribunal in the case of the assessee's brother read as under:
"3. The brief facts of the case are as follows:
Assessee is an individual. There was a search and seizure action u/s.132 of the Act in the case of assessee and his family members on 28.12.2012. Consequent to the search, assessments were completed u/s.143(3) r.w.s. 153A for the various assessment years. Thereafter, A.O. imposed penalty u/s.271(1)(b) of the IT Act amounting to Rs.10,000/- for each of the assessment years concerned for alleged non compliance of notice u/s.142(1) of the Act (notice dated 13.02.2015 for compliance by 18.02.2015).
4. Aggrieved by the imposition of penalty u/s.271(1)(b) of the Act, assessee preferred an appeal before the First Appellate Authority. The First Appellate Authority, however, confirmed the levy of penalty and dismissed the appeals filed by the assessee.
5. Aggrieved by the consolidated order of CIT(A) confirming the levy of penalty, assessee is in appeal before the Tribunal. None appeared on behalf of the assessee, however, a written submission was filed by the C.A. representing the assessee. The assessee has also filed a paper book enclosing the copy of notice issued u/s.142(1) of the Act and assessee's letter in compliance to the notice issued u/s.142(1) of the IT(SS)A No.23 to 28 & 76/Ahd/2016 (7 Appeals) 3 Act. The ld. D.R. on the other hand supported the orders of Income Tax Authorities.
6. I have heard the rival submissions and perused the material on record. Admittedly, in this case, penalty u/s.271(1)(b) of the Act was levied by the A.O. for non compliance of notice u/s.142(1) of the Act (notice dated 13.02.2015). On perusal of the notice issued u/s.142(1) of the Act (which is placed at page no.22 of the paper book filed by the assessee), I notice that it contains 19 pages and it is a consolidated notice for all the assessment years, namely, 2007-08 to 2013-14. The notice u/s.142(1) of the Act contains 19 pages with separate Annexure A, B, C and D. The A.O. in the said notice had called for detailed submission/explanation with evidences for various legal issues and the same had to be complied on or before 18.02.2015 i.e. within five days from the date of issuance of notice u/s.142(1) of the Act. According to me, the A.O. has allowed very less time to the assessee to make compliance in terms of the lengthy questionnaires. It is the claim of the assessee that assessee has requested for reasonable and sufficient time before the A.O. However, nothing is borne out of record for such a claim. From the records of the A.O., it is clear that assessee had duly compliance with all the terms the questionnaires / queries contained in the notice u/s.142(1) of the Act dated 13.02.2015 vide written submission filed on 06.03.2015. The assessee having duly complied with all the details called for, the A.O. had passed order u/s.143(3) of the Act and not u/s.144 of the Act. The order passed u/s.143(3) r.w.s. 153A of the Act is without any estimation of income. It is well established position of law that when assessment order is passed u/s.143(3) of the Act, considering all the submissions/explanations, there is no reason to levying penalty for non compliance of notice u/s.142(1) of the Act. In this context, it relevant to mention the judgment of Hon'ble Delhi High Court in the case of Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. ADIT reported in (2008) 115 TTJ 419 (Delhi), wherein it was held that:
"2.5 We also find that finally the order was passed under s. 143(3) and not under s. 144 of the Act. This means that subsequent compliances in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the AO. Therefore, in such circumstances, there could have been no reason to come the conclusion that the default was willful.
IT(SS)A No.23 to 28 & 76/Ahd/2016 (7 Appeals) 4 2.6 In view of the aforesaid discussion, it is held that the learned CIT (A) was not right in upholding the levy of penalty. Thus, the appeal is allowed."
6.1 The above mentioned judgment of Hon'ble Delhi High Court was followed by the Ahmedabad Bench of Tribunal in case of Swarnaben M. Khanna Vs. DCIT, Surat (2010) 37 SOT 25 (Ahd.). The relevant findings of the Tribunal reads as under:
"In addition, adequate time should be given to the assessee for making compliance. The notices were issued on 14-8-2007 in some cases and compliance were required to be made by 24-8- 2007. Thereafter the Assessing Officer proceeded to initiate the penalty proceedings. In our considered view, it is against the principles of natural justice as no reasonable opportunity is given to them for making compliance of the information sought. For the sake of convenience, we refer to the compliance sought by the Assessing Officer vide letter dated 14-8- 2007 containing Jive pages from Shri Kaushal M. Khanna as similar compliance was sought by him from others as well. If there is apparent impossibility of compliance or compliance could take naturally long time, then the Assessing Officer is expected to give adequate time to the assessees before he infers that they are tending to non-compliance and avoiding to furnish information. The statutory provision for levy of penalty is not for mere technical non-compliance but for actual or habitual defaulters. On the face of present facts where the Assessing Officer has hastily proceeded to initiate penalty proceedings in all the cases, it is difficult to infer that these assessees were intending to make noncompliance, information sought by the Assessing Officer is very detailed and requires assistance from professionals like Advocate or Chartered Accountant. An affidavit has been filed from Shri Kaushal M. Khanna before the ld. CIT(A)-, i.e., erstwhile Chartered Accountant who was handling his tax matters, has left all these assesses and the family is in search of new counsel for making compliance made by the Income-tax Department. It shows that these assessees had really intended to comply with the notices and, therefore, it should not be inferred that there was a default which could invite penalty under section 271(1)(b). The ITAT Delhi Bench-G in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust (supra) has held that if assessment order is passed under section 143(3), and not under IT(SS)A No.23 to 28 & 76/Ahd/2016 (7 Appeals) 5 section 144 then non-compliance is deemed to have been waived."
6.2 In view of the aforesaid reasoning and the judicial pronouncements, I hold that penalty levied u/s.271(1)(b) of the Act is not warranted in facts and circumstances of the instant case and I therefore delete the same. It is ordered accordingly."
4. On perusal of the record, I find that facts and circumstances in the case of the assessee are similar. Therefore, respectfully following the order of the Tribunal I allow all these appeals and delete the penalty imposed under section 271(1)(b) of the Income Tax Act for non-compliance of notice.
5. In the result, appeals of the assessee are allowed. Order pronounced in the Court on 9th January, 2017 at Ahmedabad.
Sd/-
(RAJPAL YADAV) JUDICIAL MEMBER