Income Tax Appellate Tribunal - Jaipur
Shri Mridul Shah Sisodia, Jaipur vs Income Tax Officer, Ward-7-1, Jaipur on 23 October, 2018
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No. 996/JP/2018
fu/kZkj.k o"kZ@Assessment Year :2008-09
Mridul Shah Sisodia, cuke Income Tax Officer
D-10, Anand Vihar, Railway Colony, Vs. Ward 7(1),
Jagatpura, Jaipur. Jaipur.
TAN/PAN No.: AJYPS 7121 F
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Amit Kumar Jain (CA)
jktLo dh vksj ls@ Revenue by : Shri J.C. Kulhari (JCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 17/10/2018
mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 23/10/2018
vkns'k@ ORDER
PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 16/07/2018 of ld. CIT (A)-3, Jaipur arising from the penalty order passed U/s 271(1)(b) of the Income Tax Act, 1961 (in short the Act) for the A.Y. 2008-09. The assessee has raised following grounds of appeal:
"1. The learned assessing officer had erred under the facts and circumstances of the case in understanding that the assessee deliberately and consciously tried to make non compliance of the notices received. But in fact the proceedings have been duly attended by us time to time. Except for the hearing on 13/10/2015 & 3/12/2015 where we have duly filed adjournment as we could not gather the bank statements from the bank due to some technical 2 ITA 996/JP/2018_ Mridul Shah Sisodia Vs ITO issue as they belong to F.Y. 2007-08 as required by the learned AO. Hence there was no willful act on the part of the assessee for not attending the assessment proceeding in pursuance to the notice issued.
2. Regarding the notice issued as on 30.05.2018; which was adjourned on 13.07.2018, we want to state that due to heavy work load in the month of July for income tax return filing we were unable to attend the case. However all the explanations had already been given. Therefore penalty under section 271 (1) (b) should not be levied.
3. Your appellant reserves the right to add, alter or amend any grounds of appeal on or before the date of hearing of appeal."
2. The Assessing Officer reopened the assessment on the basis of information received regarding purchase of capital asset on 05/7/2007 vide notice issued U/s 148 of the Act on 30/3/2015. During the assessment proceedings, the Assessing Officer issued notices U/s 142(1) of the Act and sought certain information about the transactions, however, the Assessing Officer was satisfied with the explanation of the assessee on the issue of purchase of capital asset and finally assessment was completed accepting the returned income vide order dated 27/2/2016. Subsequently, the Assessing Officer initiated the proceedings U/s 271(1)(b) of the Act for non-compliance of the notices issued U/s 142(1) of the Act. A show cause U/s 274 read with Section 271(1)(b) of the Act was issued on 01/8/2016. In response, the assessee explained that the transaction of purchase of property did not pertain to the assessee but it was the transaction of M/s Satisfaction Foods Corners Pvt.
3 ITA 996/JP/2018_ Mridul Shah Sisodia Vs ITO Ltd. through the assessee in the capacity of Director. Further an information sought by the Assessing Officer regarding the bank statement of the assessee could not be furnished because of the reason that the assessee's bank was merged with the another bank and the information sought by the Assessing Officer was not readily available despite the best efforts of the assessee. The Assessing Officer passed by the impugned order U/s 271(1)(b) of the Act and levied the penalty of Rs. 30,000/- on account of default of non-compliance of notice issued U/s 142(1) of the Act.
3. The assessee challenged the action of the Assessing Officer before the ld. CIT(A) but could not succeed.
4. Before us, the ld AR of the assessee has reiterated the contention that it was beyond the control of the assessee to furnish the requisite information due to merger of the bank. The assessee was not provided the statement by the bank, therefore, the assessee was not able to give the same to the Assessing Officer. The ld. AR has relied upon the various decisions on the point that when non-compliance of notice U/s 142(1) of the Act is due to bonafide reason then the penalty U/s 271(1)(b) of the Act cannot be levied as the assessee was able to prove that there was a reasonable cause for the failure.
4 ITA 996/JP/2018_ Mridul Shah Sisodia Vs ITO
5. On the other hand, the ld DR has relied upon the orders of the authorities below and submitted that the Assessing Officer has given specific instances of non-compliance by the assessee of the notice issued U/s 142(1) of the Act and the assessee has not disputed the non- compliance of the statutory notices. Further even if the assessee was not able to gather the information asked by the Assessing Officer, the assessee was supposed to appear before the Assessing Officer and explain the same. In absence of compliance of notice U/s 142(1) of the Act, the penalty levied U/s 271(1)(b) of the Act is justified.
6. Having considered the rival submissions as well as relevant material on record we note that the Assessing Officer has reopened the assessment to assess the investment made by the assessee in purchase of capital asset on 05/7/2007 for a consideration of Rs. 46,61,262/-. The Assessing Officer asked the assessee to furnish the relevant information and issued notices U/s 142(1) of the Act. Thus, the Assessing Officer proposed to assess the income on account of unexplained investment in the capital asset. The assessee appeared before the Assessing Officer and the Assessing Officer accepted the fact that the asset in question was not purchased by the assessee but it was purchased by the company namely M/s Satisfaction Foods Corners Pvt. Ltd. and the assessee has signed the 5 ITA 996/JP/2018_ Mridul Shah Sisodia Vs ITO sale deed in the capacity of the Director of the said company. The relevant part of the assessment order is as under:
"Subsequently, notice u/s 142(1), 143(2) alongwith query letter was issued to the assessee on 20/08/2015 fixing the case for hearing on 02/09/2015. In response to the above notice and on further dates of hearing, Miss Shilbi Jain, Shri Amit Kumar Jain CA/AR of the assessee attended the assessment proceedings from time to time and furnished document which were examined on text check basis and the case was discussed with him.
After going through the purchased deed, details and explanation filed by the assessee and verifying the affairs of the assessee the Returned Income of Rs. 2,59,490/- is accepted, issued penalty notice u/s 271(1)(b) of the Income Tax Act, 1961. Demand notice and challan issued. Interest u/s 234A, 234B and 234C of the Income Tax Act, 1961 charged accordingly."
Thus, the Assessing Officer was satisfied during the assessment proceedings that in fact said capital asset was purchased by the company and not by the assessee and the assessee was signatory of the sale deed only in the capacity of the Director. Therefore, we find that the assessee has appeared before the Assessing Officer and also furnished the documents and explained the case. Though in response to the some of the notices issued U/s 142(1) of the Act, the assessee could not furnish the relevant information, however, when the said information was not even required if basic document in respect of the transaction of purchase of the capital asset was taken into consideration then in our considered 6 ITA 996/JP/2018_ Mridul Shah Sisodia Vs ITO view, the explanation of the assessee that he could not gather the bank statement from the bank as the bank has not provided the same despite best efforts of the assessee would be regarded as reasonable and bonafide explanation for non-compliance of the notice if any. Accordingly, in view of the above facts and circumstances, we delete the penalty levied U/s 271(1)(b) of the Act.
7. In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 23/10/2018.
Sd/- Sd/-
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(VIKRAM SINGH YADAV) (VIJAY PAL RAO)
ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member
Tk;iqj@Jaipur
fnukad@Dated:- 23rd October, 2018
*Ranjan
vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Mridul Shah Sisodia, Jaipur.
2. izR;FkhZ@ The Respondent- The ITO Ward 7(1), Jaipur.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr¼vihy½@The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 996/JP/2018) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar