Income Tax Appellate Tribunal - Chandigarh
Sh. Rajiv Bajaj, Ludhiana vs Assessee on 15 March, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH 'B', CHANDIGARH
BEFORE Ms. SUSHMA CHOWLA, JUDICIAL MEMBER
AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER
ITA No.1168 to 1170 & 1174 /Chd/2011
(Assessment Years : 2002-03 to 2004-05)
Sh.Rajiv Bajaj, Vs. The A.C.I.T.,
ST.No.10, Gobind Nagar, Central Circle-V,
Jamalpur, Chandigarh Road Ludhiana.
Now Mig Flat 1386, Sector 32,
Ludhiana.
PAN: ACWPB4353P
(Appellant) (Respondent)
Appellant by : Shri Sudhir Sehgal
Respondent by : Smt.Jaishree Sharma, DR
Date of hearing : 15.03.2012
Date of Pronouncement : 19.04.2012
ORDER
PER SUSHMA CHOWLA, J.M, :
These four appeals filed by the assessee are against the order/s of the Commissioner of Income Tax (Appeals)-II, Ludhiana dated 2 2 . 0 9 . 2 0 1 1 a n d 1 5 . 0 9 . 2 0 1 1 r e l a t i n g t o a s s e s s m e n t ye a r s 2 0 0 2 - 0 3 t o 2 0 0 4 - 05 against the order passed u/s 153(A)/144 and 271 (1) (b) of the Income Tax Act, 1961(in short 'the Act').
2. Common grounds of appeal have been raised in all the quantum appeals which are as under:
"1. That the Worthy Commissioner of Income Tax (Appeals) has erred in confirming addition of Rs.35,41,860/- on account of so-called unexplained peak of bank deposits in bank account as calculated by the Assessing Officer (AO).
2. That the addition as per para-1 has been made against the facts and circumstances of the case and submission made by the assessee has not been considered properly.2
3. That the CIT(A) has failed to consider the statement recorded during the course of search of the appellant that he had only lent his name without actual purchases and sales of cloth and, in fact, he has totally ignored the factual aspect of the statement given by the appellant during the course of search.
4. That the CIT(A) has failed to take into consideration the financial status of the assessee in as much as, the appellant did not have movable/immovable assets or any other investment except one Maruti Car.
5. That the CIT(A) has also ignored the evidentiary value of the withdrawals made form the bank account by way of self cheques immediately after the receipt of cheques from M/s Duggal Exports/M/s S.J.Exports and which was utilized for returning the money back to those concerns and that vital evidence has not been considered by the CIT(A), Ludhiana."
3. All these appeals relating to the same assessee on the same issue were heard together and are being disposed off by this consolidated order for the sake of convenience.
4. The brief facts in ITA No.1168/Chd/2011 are that search, seizure/survey operations under section 132/133A of the Act were carried out at the premises of the assessee on 15.10.2003. The assessee failed to furnish any return of income in response notices issued u/ 153A of the Act. During the course of search/survey documents and bank accounts were detected/found. The Assessing Officer issued various questionnaires to the assessee in order to explain the entries in various bank accounts with evidence and also to produce books of account. The perusal of the assessment order reveals the total non-cooperative attitude of the assessee during the assessment proceedings and the Assessing Officer accordingly computed the income under section 153A of the Act r.w.s.144 of the Act. The Assessing Officer computed the peak deposits in the bank accounts maintained by the assessee an addition was made in r e s p e c t o f t h e s a i d p e a k d e p o s i t s i n t h e r e s p e c t i v e a s s e s s m e n t ye a r s . 3
5. The CIT (Appeals) upheld the order of the Assessing Officer. The assessee is in appeal against the order of CIT (Appeals).
6. The learned A.R. for the assessee pointed out that the assessee was earning income from commission on sale of cloth and ya r n and search/survey operations were because of the purchase bills issued by the assessee to M/s Duggal Exports. The learned A.R. for the assessee fairly admitted that no return of income was filed pursuant to notices issued under section 153A of the Act. It was further pointed out by the learned A.R. for the assessee that commission income was already declared in the original return of income filed. The learned A.R. for the assessee fairly admitted that the issue raised in all the appeals was i d e n t i c a l a n d o n l y i n a s s e s s m e n t ye a r s 2 0 0 3 - 0 4 a n d 2 0 0 4 - 0 5 t h e a s s e s s e e had raised an alternative plea of adjustment of peak credits.
7. The learned D.R. for the Revenue placed reliance on the orders of the Assessing Officer and CIT (Appeals) and pointed out the total non- cooperation by the assessee before the Assessing Officer was evident from the perusal of the assessment order. In respect of set off of peak deposits, the learned D.R. for the Revenue placed reliance on the order of the CIT (Appeals) and Assessing Officer.
8. We have heard the rival contentions and perused the record. The facts of the case are that search/survey operations under section 132/133A of the Act were carried out on the residential and business premises of the assessee on 15.10.2003. Similar search/survey operations were also carried out on the premises of M/s Duggal Exports and M/s S.G.Exports on 15.10.2003. The Assessing Officer issued notice under section 153A of the Act requiring the assessee to furnish return of income for the relevant period. The return was due tobe furnished on or 4 before 7.1.2006, but no such return of income was furnished by the assessee. On 9.1.2006 the assessee moved an application seeking copies of the seized/impounded documents which were supplied to him on 17.1.2006. The assessee failed to furnish any return of income even thereafter. The Assessing Officer issued questionnaire alongwith notice/s under section 142(1) of the Act dated 16.1.2006. The assessee sought adjournment from date to date. The assessee did not comply with the notice/s of hearing and also did not produce complete set of books of account for the period 1.4.1997 to 31.3.2004. Because of the non- compliance of the assessee summons were issued under section 131(1) of the Act to the assessee on 1.2.2006 for compliance with regard to books of account. The assessee did appear on 6.2.2006 i.e. the appointed date of hearing but without books of account. The statement of the assessee was recorded on 6.2.2006, which was refused to be signed by him, in which he denied having kept and maintained any books of account. Another notice under section 142(1) alongwith questionnaire dated 20.2.2006 was issued but the same remained un-complied with. The Assessing Officer accordingly proceeded to finalize the assessment ex- parte under section 153A r.w.s.144 of the Act on the basis of the information available on record to the best of his judgment.
9. The above said narration of the non-compliance by the assessee i.e. non-furnishing of return of income pursuant to notice issued under section 153A of the Act and non-appearance before the Assessing Officer during the proceedings for completing assessment for the block period and non-production of the books of account despite various opportunities being allowed to the assessee by the Assessing Officer establishes non- cooperative attitude of the assessee during the assessment proceedings. In view of the aforesaid circumstances the Assessing Officer was left 5 with no other alternative but to complete the assessment under section 153A r.w.s. 144 of the Act. The Assessing Officer at pages 2 to 5 of the assessment order has reproduced various questionnaires issued to the assessee from time to time. The basic queries in all the aforesaid notices were in relation to various entries i.e. both debits and credits in various bank accounts maintained by the assessee. The assessee was found to have been maintaining the following bank accounts:
"(i) Centurian Bank Ltd., 15, Feroze Gandhi Market, Ludhiana(A/c No.5777181)
(ii) Canara Bank, Bharat Nagar Chowk, Ludhiana
(a) A/c No.4480
(b) A/c No.4459 ( i i i ) ICICI Bank, Feroze Gandi Market, Ludhiana
(a) A/c No.1338
(b) A/c No.1339
10. The Assessing Officer vide questionnaire issued dated 27.2.2006, show caused the assessee to explain the peak deposits in saving accounts with evidence both in IC IC I bank and Canara bank. The assessee failed to furnish the nature and source of the said entries in the bank accounts. The Assessing Officer while computing the income in the hands of the assessee adopted the peak deposits in IC IC I bank, the said account was in operation during the assessment year 2002-03, both saving accounts, as income of the assessee. The break-up of the peak amount of deposits/withdrawals is as under:
Account Name & Total amount of Total amount of Date of Amount of No. addr deposits made withdrawls made peak peak deposit ess of the during the year during the year amount of bank under assessment under assessment deposit branch 1338 ICICI 69,15,250/- 67,49,160/- 16.03.2002 20,03,450/-
Bank, Feroze 6 Gandi Market, Ludhiana.
1339 ICICI 51,56,250/- 51,53,422/- 18.02.2002 15,01,950/-
Bank, Feroze Gandi Market, Ludhiana Total 1,20,71,500/- 1.19.02,582/- 35,05,400/-
11. A c c o r d i n g l y, a d d i t i o n o f R s . 3 5 , 0 5 , 4 0 0 / - w a s m a d e i n t h e h a n d s o f the assessee.
12. Before the CIT (Appeals) the assessee furnished only an e x p l a n a t i o n t h a t i t w a s c a r r yi n g o n t h e b u s i n e s s o f d a l a l i i n r e s p e c t o f w a s t e ya r n a n d w a s t e c l o t h . The modus operandi of the business was a r r a n g i n g o f s u p p l y o f w a s t e ya r n / c l o t h t o v a r i o u s m i l l s a n d d a l a l i income being earned therefrom. The assessee operated various bank accounts but claimed that the bills were issued to the concern of S/Shri Subhash Duggal and Jagdish Duggal, against which p a ym e n t was received by account p a ye e cheques and immediately the amounts withdrawn in cash to give back the amount to the said person. The CIT (Appeals) observed that the assessee had not denied that he had not operated the bank accounts, rather he had operated various bank accounts. He had also accepted the transactions in the bank accounts. However, the assessee was unable to substantiate his claim except the statement recorded during the survey i.e. he was only engaged in the business of issuing fake bills of the parties concerned. In the absence of an y books of account being produced, the CIT (Appeals) had upheld the addition of peak deposits to the tune of Rs.35,05,400/-.
13. We find that during the course of search, statement of the assessee was recorded on 15.10.2003 in which he stated that he had not made any purchases in actual fact and the transactions were only on papers. In 7 reply to the question raised by the search team the assessee had stated that S/Shri Subhash Duggal and Jagdish Duggal used to give him cheques which were deposited in his current account Nos.4480 and 4459 with Canara Bank, Ludhiana and the said amount was thereafter withdrawn by self cheques and cash so withdrawn was handed over to the aforesaid persons. In the said statement recorded on 15.10.2003 the assessee stated as under:
"The practice is going on for last one to one and half year. I want to add further that these two accounts have been used mostly for the benefit of M/s Duggal Exports, 165, I.A.A., Baddi (H.P.), S.G. Exports, both belongs to Sh.Jagdish Duggal, Subhash Duggal of Sarabha Nagar, Ludhiana."
14. On the aforesaid commission @ 0.25% was earned by the assessee. Cop y of statement of the assessee recorded is placed on record. In repl y to question No.4 i.e. with regard to the details of bank accounts maintained, the assessee had stated as under:
Period Dr. Cr.
(iii) Centurian Bank Ltd., 15, Feroze Gandhi Market, Ludhiana(A/c No.5777181)
(i) Canara Bank, Bharat Nagar Chowk, Ludhiana
(a) A/c No.4480
(b) A/c No.4459
(ii) ICICI Bank, Feroze Gandi Market, Ludhiana
(a) A/c No.1338
(b) A/c No.1339
15. In repl y to question No.5, the assessee claimed to have maintained books of account regularly from 1.4.2003 upto date on computers and prior to that the books were maintained and were with his Chartered Accountant. The nature of business as per answer of question No.6, the a s s e s s e e w a s t r a d i n g i n ya r n f i b r e , c l o t h h o s i e r y, e t c . With regard to question No.7, the assessee stated to have one shop at SCO 42 in Apron, 8 House Link Road and godown at ground floor. The position of the closing stock as on the date of search was stated to be nil. The assessee vide answer to question No.8 stated that normally goods are supplied to the customers directly after receiving order from them". In reply to question No.9, the introducer of account No.4459 with Canara Bank was Shri J agdish Duggal. In repl y to question No.10, the assessee stated that he used to supply goods to the above said persons on brokerage and later on when he started trading goods, these were supplied on order. In reply to question No.11, the assessee declared that for the period 1.4.2003 to 15.10.2003 the sales affected were approximately Rs.7 to 8 crores. As per reply to question No.12, the purchases were of Rs.49 lacs. The names of the parties from whom the purchases were made were also given by the assessee. In reply to question No.16, the assessee reiterated that the transactions reflected in current account No.4480 with Canara Bank, Bharat Nagar Chowk, Ludhiana was at the instance of S/Shri Subhash Duggal and Jagdish Duggal. The cheques were given by them and deposited in the account and cash on withdrawal was handed over back to them or alternatively they used to take self cheques of equal amount and withdrew the cash themselves. Similar transaction was claimed to be routed through bank account No.4469 with Canara Bank, Ludhiana. The assessee further reiterated that two accounts were used mostly for the benefit of M/s Duggal Exports and S.G.,Exports both belonging to S/Shri Subhash Duggal and J agdish Duggal of Ludhiana. In reply to question No.17, it was explained that commission @ 0.25% for transaction of Rs.10 lacs was given sometime through cheques and sometime in cash.
16. From the perusal of the statement recorded during the course of search it is apparent that the assessee had claimed the transactions in the 9 saving account Nos.4480 and 4459 of Canara Bank to be relatable to two persons i.e. S/Shri Subhash Duggal and Jagdish Duggal on which the assessee claims to be earning commission income. The assessee in his r e t u r n o f i n c o m e f o r t h e ye a r u n d e r c o n s i d e r a t i o n h a d d e c l a r e d b u s i n e s s income of Rs.68,790/- as is apparent from para 3 of the appellate order. The assessee had not furnished any return of income in response to the notice issued under section 153A of the Act nor cooperated with the Assessing Officer during the assessment proceedings or furnished any other evidence before the CIT (Appeals). Even before us the assessee has only furnished copy of statement recorded during the course of search vehemently stating that only the commission income was earned by the assessee. From perusal of the assessment order it transpires that vide questionnaire dated 20.2.2006. The assessee was asked to explain the source of the deposit and source of each of the deposits and purpose of each of the withdrawals made in/from the following bank accounts:
(i) Centurian Bank Ltd., 15, Feroze Gandhi Market, Ludhiana(A/c No.5777181) Period Dr. Cr.
11.10.2003 to 31.03.2004 63,94,757/- 64,00,800/-
(ii) Canara Bank, Bharat Nagar Chowk, Ludhiana
(a) A/c No.4480 Dr. Cr.
07.12.2002 to 31.03.2003 2,31,49,494/- 2,31,51,000/-
01.04.2003 to 31.03.2004 3,90,98,550/- 3,91,00,000/-
(b) A/c No.4459 Dr. Cr.
25.09.2002 to 31.03.2003 3,55,96,043/- 3,55,99,000/-
01.04.2003 to 31.03.2004 1,73,51,117/- 1,73,50,000/-
17. The assessee was also asked to produce books of account
maintained for the purpose from 1.4.1997 to 31.3.2004. Vide the said questionnaire the assessee was further asked to furnish the statement of accounts of saving account Nos.1338 and 1339 with ICIC I Bank Ltd., 10 Feroze Gandhi Market, Ludhiana, with explanation/evidence in support of each of the deposits/withdrawals made therein/from. The assessee failed to comply with the said questionnaire and another questionnaire dated 27.2.2006 was issued to the assessee. In the said questionnaire the Assessing Officer stated that as the assessee has failed to furnish the statement of bank accounts maintained with IC IC I Bank, same were directly called from the bank and perusal of the entries in the said accounts revealed various deposits and withdrawals and also peak deposits as under:
ICICI Bank, Feroze Gandi Market, Ludhiana
(i) A/c No.1338 Period Withdrawals Deposits Peak deposit/date 14.02.2002 to 31.03.2002 67,49,160/- 69,15,250/- 20,03,450/16.03.2002 01.04.2003 to 31.03.2003 1,52,00,708/- 1,52,08,300/- 14,51,430/20.012003 01.04.2003 to 31.03.2004 1,30,10,315/- 1,30,04,025/- 15,05,772/19.01.2004 ICICI Bank, Feroze Gandi Market, Ludhiana
(ii) A/c No.1339 14.02.2002 to 31.03.2002 51,53,422/- 51,56,250/- 15,01,950/18.02.2002 01.04.2003 to 31.03.2003 49,52,786/- 49,50,928/- 11,48,304/18.07.2002 01.04.2003 to 31.03.2004 93,09,310/- 93,10,354/- 18,06,424/08.10.2003
18. The assessee was again asked to explain the source of above entries and produce the books of account. The Assessing Officer in the said letter also worked out the peak deposits in saving account Nos.4459 and 4480 with Canara Bank which are as under:
Canara Bank, Bharat Nagar Chowk, Ludhiana Period Date of peak deposit Amount of peak deposit
(i) A/c No.4459 25.09.2002 to 31.03.2003 12.11.2002 25,01,345/-
01.04.2003 to 31.03.2004 21.08.2003 30,01,957/-
(i) A/c No.4480 07.12.2002 to 31.03.2003 10.03.2003 20,01,310/-
1101.04.2003 to 31.03.2004 08.08.2003 40,01,560/-
19. Another questionnaire dated 6.3.2006 was issued to the assessee in which the earlier queries raised by the Assessing Officer were repeated and the assessee was also asked to substantiate its claim of having received commission @ 0.25% from two concerns M/s Duggal Exports and M/s S.G. Exports. Vide para 5.1 of the said questionnaire the assessee was confronted that in addition to the above said two companies there were transactions with other parties and the assessee was asked to explain the fate of all such transactions whether actual or otherwise with evidence. The Assessing Officer also asked the assessee to produce the books of account being maintained by it, presence of which was a c k n o w l e d g e d i n t h e r e t u r n o f i n c o m e f i l e d f o r a s s e s s m e n t ye a r 2 0 0 2 - 0 3 . The Assessing Officer issued another questionnaire dated 27.2.2006 in which it requisitioned the assessee to explain the transactions reflected in trading account Profit & Loss Account and Balance Sheet relating to a s s e s s m e n t ye a r 2 0 0 2 - 0 3 i n r e s p e c t o f t h e t w o p r o p r i e t a r y c o n c e r n s o f the assessee M/s Bhagwati Trading Corp. and M/s Shiv Shakti Indl. Corp. Further the assessee was also confronted once again with the total amount of deposits/withdrawals in saving account Nos.1338 and 1339 with IC IC I Bank, Feroze Gandhi Market, Ludhiana totaling Rs.35,05,400/- for the period ending 31.3.2002 and also with Canara B a n k a n d C e n t u r i a n B a n k f o r s u c c e e d i n g ye a r / s .
20. Taking into consideration the totality of the facts and circumstances of the case i.e. the statement of the assessee recorded during the course of search on 15.10.2003, various replies given by the assessee to the queries raised by the search team and various questionnaires issued by the Assessing Officer during the assessment proceedings, we find certain anomalies in the statement of the assessee. 12 First of all the assessee in the statement recorded during the course of search had admitted to have been maintained five bank accounts i.e. two bank accounts with Canara bank, two saving accounts with IC IC I Bank, Ludhiana and one saving account with Centurian Bank, Ludhiana. The details of the bank accounts were given by the assessee in answer to query No.4. Thereafter the assessee explained to have carried on the b u s i n e s s o f t r a d i n g i n ya r n , f i b r e , c l o t h h o s i e r y, e t c . d u r i n g t h e f i n a n c i a l year 2001-02 for which it was maintaining a shop and godown at Ludhiana. The assessee in addition was earning commission income. In respect of the queries raised in connection with saving account No.4459 with Canara Bank, the assessee explained that the entries were in relation to paper transactions conducted for S/Shri Subhash Duggal and Jagdish Duggal. Reference is made to query No.9. Further the assessee also gave details of the total sales made by him at about Rs.7.28 crores against purchase of Rs.49 lacs as evidenced from answer to query Nos.11 and 12. The assessee failed to furnish details of its income before any of the authorities and despite various queries and questionnaires issued by the Assessing Officer repeatedly asking to furnish explanation of its entries in the bank accounts, the nature of income reflected and to produce the books of account, the assessee failed to comply with any of various notices so issued by the Assessing Officer. Total non- compliance of the assessee with the Assessing Officer resulted in the assessment being completed under section 153A r.w.s.144 of the Act. The onus was upon the assessee to explain the nature of entries in its bank accounts for the periods under consideration. The assessee however, though confronted on various dates by the Assessing Officer, had failed to give/file any evidence in respect of entries in the two saving account Nos.1338 and 1339 with IC IC I Bank, Ludhiana or in Canara Bank or Centurian Bank. No ex planation was filed before CIT 13 (Appeals) except the plea of earning commission as entry provider. But the plea of the assessee is not acceptable as the entries in the bank account do not match. The plea of commission income earned is also baseless as the assessee has failed to offer such income, except for the meager amounts declared in the original return of income. Further no such ground of appeal has been raised by the assessee. A d m i t t e d l y, t h e bank transactions were of the assessee, but the substantive explanation or documentary evidence has not been filed by the assessee. The entries in the two accounts reflected certain anomalies, as per which peak deposits were worked out by the Assessing Officer as under:
Account Name & Total amount Total amount Date of Amount of No. address of of deposits of peak peak the bank made during withdrawls amount of deposit branch the year made during deposit under the year assessment under assessment 1338 IC IC I 69,15,250/- 67,49,160/- 16.03.2002 20,03,450/-
Bank Feroze Gandhi Market, Ludhiana 1339 IC IC I 51,56,250/- 51,53,422/- 18.02.2002 15,01,950/-
Bank Feroze Gandhi Market, Ludhiana Total 1,20,71,500/- 1,19,02,582/- 35,05,400/-
21. Even in the appellate proceedings before us the assessee though has challenged the addition on account of unexplained bank deposits in bank accounts totaling Rs.35,05,400/- but has failed to explain the transactions in bank accounts. The allegation of the assessee is that the authorities below had failed to consider the statement recorded during the course of search, under which he had claimed to have lent name only 14 without making actual purchase and sale of cloth, has no merit, in view of the totalaity of facts and circumstances of the case and in the absence of any explanation/reconciliation of bank entries. The Assessing Officer i n a l l f a i r n e s s h a s m a d e a d d i t i o n o n a c c o u n t o f p e a k d e p o s i t s o n l y. As pointed out by us in the paras hereinabove the assessee himself claimed to have maintained five bank accounts, the onus is upon the assessee to explain the entries in its bank accounts through entries in the books of account maintained by it. In the absence of onus being discharged b y the assessee, the said receipts are to be treated as income of the assessee. We find support from the ratio laid down by the Hon'ble S u p r e m e C o u r t i n t h e c a s e o f S u m a t i D a ya l V s . C I T [ 2 1 4 I T R 8 0 0 ( S C ) ] . The assessee having failed to discharge the onus in explaining the source of peak deposits in the saving account Nos. 1338 and 1339 with IC IC I Bank during the period ending 31.3.2002, we uphold the addition of Rs.35,05,400/- as income from undisclosed sources. The ground Nos. 1 to 5 raised by the assessee are thus dismissed.
22. Now coming to the appeals in ITA Nos.1169 to 1170/Chd/2011, the learned A.R. for the assessee at the outset had pointed out that the issue in all the appeals i.e. ITA Nos.1168 to 1170/Chd/2011 was identical and in view of our decision in ITA No.1168/Chd/2011 in the paras hereinabove we dismiss ground No. 1 to 5 raised by the assessee in this regard.
23. The assessee has raised an alternate ground of appeal vide ground N o . 6 w h e r e i n i t h a d c l a i m e d t h a t t h e b e n e f i t o f a d d i t i o n e a r l i e r ye a r s p e a k a m o u n t i n g t o R s . 3 5 , 0 5 , 4 0 0 / - a s s e s s e d i n a s s e s s m e n t ye a r 2 0 0 2 - 0 3 should be allowed against the undisclosed income of Rs.25,01,350/- a s s e s s e d i n a s s e s s m e n t ye a r 2 0 0 3 - 0 4 a n d R s . 4 0 , 0 1 , 5 6 0 / - a s s e s s e d i n a s s e s s m e n t ye a r 2 0 0 4 - 0 5 . W e f i n d m e r i t i n t h e p l e a o f t h e a s s e s s e e t h a t 15 once the addition had been made on account of the peak of bank deposits i n a s s e s s m e n t ye a r 2 0 0 2 - 0 3 , t h e s a i d a m o u n t i s a v a i l a b l e i n t h e h a n d s o f the assessee and the benefit of the same is to be allowed against the a d d i t i o n m a d e i n a s s e s s m e n t ye a r s 2 0 0 3 - 0 4 a n d 2 0 0 4 - 0 5 . A c c o r d i n g l y, we direct the Assessing Officer to recompute the income in the hands of t h e a s s e s s e e a f t e r a p p l yi n g s u c h s e t o f f o f p e a k a d d i t i o n s . Ground No.6 raised by the assessee is thus allowed.
24. The issue raised in ITA No.1174/Chd/2011 is against the lev y of penalty u/s 271(1)(b) of the Act amounting to Rs.10,000/-. The Assessing Officer had levied the aforesaid penalty for non-compliance of notice under section 142(1) of the Act by the assessee. The said notice was issued to the assessee alongwith questionnaire on 16.1.2006 for compliance on 20.1.2006, which stood adjourned to 31.1.2006. The Assessing Officer was of the view that the penalty u/s 271(1)(b) of the Act was exigible for the above said default. The perusal of the assessment order reflects the non-compliance by the assessee on various dates of hearing as has been brought out by us in the paras hereinabove. The assessee failed to appear before the Assessing Officer on different dates of hearing and also failed to produce books of account. The Assessing Officer had issued notice under section 142(1) of the Act alongwith questionnaire dated 16.1.2006 for compliance on 20.1.2006. T h e A s s e s s i n g O f f i c e r i n t h e o r d e r l e v yi n g p e n a l t y u / s 2 7 1 ( 1 ) ( b ) of the Act has observed that the compliance on 20.1.2006 stood adjourned to 3 1 . 3 . 2 0 0 6 i m p l yi n g t h e r e b y t h a t t h e r e w a s c o m p l i a n c e o n 2 0 . 1 . 2 0 0 6 a n d the matter was adjouned to 31.1.2006. Penalty in the present case has been levied u/s 271(1)(b) of the Act at Rs.10,000/- for the aforesaid default of non-compliance of notice issued under section 142(1) on 16.1.2006. In the facts and circumstances of the case where the assessee 16 had complied to the aforesaid notice and had appeared before the Assessing Officer and sought adjournment for 31.1.2006, there is no merit in the levy of penalty u/s 271(1)(b) of the Act. A c c o r d i n g l y, w e direct the Assessing Officer to delete the penalty levied u/s 271(1)(b) of the Act.
25. In the result, the appeals in ITA No.1168/Chd/2011 is dismissed, appeals in ITA Nos.1169 & 1170/Chd/2011 are partl y allowed and appeal in ITA No.1174/Chd/2011 is allowed.
Order Pronounced in the Open Court on 19th day of April, 2012.
Sd/- Sd/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 19th April, 2012 *Rati*
Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.
True Copy By Order Assistant Registrar, ITAT, Chandigarh