TMI Blog2015 (6) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... PER BENCH: These appeals are filed by the assessee and they are directed against order passed by Ld. CIT(A)-37, Mumbai dated 01/11/2013 for assessment years 2004-05 to 2010-11. Grounds of appeal in all the appeals are identical and read as under: 1. On the facts and circumstances of the Appellant s case and in law Learned CIT(A) erred in confirming the levied by the AO by provision of section 271(1)(b) of the Income Tax Act, 1961. 2. In any case the Ld. CIT(A) failed to appreciate that the impugned order was passed by the Ld. AO without complying with the provision of Sec. 274 of the Income Tax Act 1961. 3. The appellant craves leaves to add, to amend, alter modify and/ or withdraw any or all the above grounds of appeal, each of which are without prejudice to one another. 2. In all these cases penalty of ₹ 10,000/- is imposed under section 271(1)(b) of the Income Tax Act, 1961(the Act). In all these cases facts are identical and these appeals were disposed of by Ld. CIT(A) by a consolidated order. 3. The penalty order in each of the case is same and for the sake of clarity the order is reproduced below: Penalty Order u/s. 271(1)(b) r.w.s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reas the impugned penalty has been imposed by the AO only for the default of the assessee for non-appearance on 12/2/2013. It was submitted that admittedly for levy of penalty under section 271(1)(b) no separate notice was issued but only on the basis of observation of the AO in the notice issued under section 142(1) the impugned penalty has been imposed and confirmed. It was submitted that on similar facts in group case i.e. in the case of M/s. Speciality Paper Ltd., Ld. CIT(A) has deleted the penalty and reference in this regard was made to order passed by Ld. CIT(A) dated 27/6/2014 for assessment year 2004-05 to 2009-10, copy was also placed on our record and was also given to Ld. DR. In the said case similar report was obtained and after finding that no show cause notice was issued for levy of penalty, it was held that by Ld. CIT(A) that it was in violation of cardinal principle of natural justice. It was further held by Ld. CIT(A) that those observations regarding section 271(1)(b) were in the notice issued under section 142(1) of the Act dated 28/1/2013 and not for the non-compliance of notice dated 5/2/2013. Thus, it was submitted by Ld. AR that Ld. CIT(A) has committed an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd duly served on the assessee. The date for hearing was fixed on 25.04.2011, but on the designated date no one from the assessee. On 26.04.2011 Assessee submitted letter of adjournment and the case is adjourned till further date. 4. Further, notice u/s. 142(1) dated 25.04.2011 along with questionnaire was issued and duly served on the assessee calling for various details. The date for making submissions and for hearing the case was fixed on 12.05.2011. However, on the designated date no one attended. On 19.05.2011 Assessee has submitted letter adjournment and the case is adjourned to 30.05.2011. 5. Subsequently, the assessee made his first partial submission on 15.06.2011 and second partial submission was made on 21.10.2011. 6. Further notice u/s. 142(1) dated 15.10.2012 was issued asking the assessee to submit complete details as requested in the questionnaire issued earlier. The date for compliance of this notice was fixed on 29.10.2012, but on the designated date no one attended, nor had any adjournment letter been filed. 7. In view of consistent non-compliance on the part of the assessee more reminder notice u/s. 142(1) dated 29.10.2012 was issued and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticed issued under section 142(1) dated 5/2/2013, which required the assessee to attend the assessment proceedings and to submit the evidence on 12/2/2013. Thus, the failure of the assessee to attend the proceedings on 12/2/2013 has not been even made ground for framing ex-parte assessment under section 144 of the Act. In respect of assessment year 2010-11 also no reference has been made to the impugned notice dated 5/2/2013 which required the assessee to attend the proceedings on 12/2/2013. For the sake of brevity the relevant portion of the assessment order for A.Y. 2010-11 is not reproduced. 6.2 Thus, it can be seen that the impugned failure of the assessee dose not result into best judgment assessment and the said notice has not been even referred in the assessment orders passed by AO in respect of all the assessment years. 6.3 In the light of above mentioned facts, we have to consider that whether levy of impugned penalty is justified or not. Admittedly, penalty has been imposed only on the basis of some observations of AO in the notice issued under section 142(1) on the basis of which it is claimed that assessee was put to the notice that in case of failure of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. D.Ratnam (1995) Tax LR 504, 506 has held that under section 274(1) it is mandatory for the authorities concerned to serve a show cause notice on the assessee requiring him to offer his explanation, consider the explanation, if any, submitted by the assessee and thereafter hold him guilty of concealment etc. 6.5 In the present case assessee has never been put to the notice to explain as to why penalty should not be imposed under section 271(1)(b) as there was only an indication in the notice issued under section 142(1) that the failure of the assessee to attend the proceedings on 12/2/2013 would entail the assessee for levy of penalty under section 271(1)(b) of the Act. But that cannot be said to be fulfillment of the requirement of section 274(1) as the same require that assessee should be given reasonable opportunity of being heard and fulfillment of such requirement is absent in the present case. 6.5 In view of above discussion, we hold that Ld. CIT(A) has committed an error in upholding the impugned penalty in respect of all these years. We delete the impugned penalty in all the years and appeals filed by the assessee are allowed. 7. In the result, all the appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
