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2015 (12) TMI 185 - ITAT DELHI

2015 (12) TMI 185 - ITAT DELHI - TMI - Penalty under section 272A (1) (c) - non-compliance of the notice u/s 131 - Held that:- Even if a minimum penalty is prescribed, the authority competent to impose penalty will be justified in refusing to impose penalty where there is a technical or venial breach of the provisions of the taxing statute. In the present case, when the assessee is able to establish that the account books were produced during assessment proceedings, however with some delay, then .....

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art of the assessee company. Hence, penalty can be imposed upon the assessee on the allegation of non-compliance of the notice u/s 131 of the Act and the Assessing Officer was not correct in passing penalty order imposing penalty of ₹ 10,000 u/s 272A(1)(c) of the Act. In this situation, we are inclined to hold that the CIT(A) was not justified in confirming the penalty and hence impugned first appellate order cannot be held as sustainable and thus we demolish the same. - Decided in favour .....

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pheld confirming the penalty of ₹ 10,000/-. 2. The grounds raised by the assessee/appellant read as under:- "1. The order passed by CIT (A) -XXXIII is bad in law and void ab-initio. 2. The CIT (A) -XXXIII has erred in confirming the penalty of ₹ 10,000/- on the appellant by the respondent under section 272 A (1) (c) of the Income Tax Act, 1961, without considering the facts and circumstances of the case. 3. The CIT (A)-XXXIII has erred in confirming the penalty of ₹ 10,000 .....

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f the Assessing Officer, impugned order, paper book filed by the assessee, spread over 12 pages and relevant part of the assessment order dated 29.12.2009. 4. At the very outset, from operative part of the penalty order, we note that the penalty has been imposed by observing as under:- "From the above discussion, it is evident that all the preconditions for application and imposition of penalty have been squarely met and it can be reasonably concluded that there is animus i.e. conscious avo .....

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be on relevant and cogent materials. However, from the facts of the case and the reply of the assessee Company in response to the show cause notice u/s 274 r.w.s. 272A(1)(c) of the IT Act 1961, the assessee Company has merely re-iterated its earlier submissions. In any case, the fact of the matter is that the assessee Company was to produce the books of accounts before the Investigation Wing of the Department for verification in its case, which it failed to do so purposely and consciously, and d .....

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as upheld as confirmed by observing and concluding as under:- "6. I have carefully considered the views of the JDIT (Inv.), Unit-V, New Delhi and the appellant on the issue. The appellant has not co-operated with the Investigation Wing and has not furnished the books of accounts asked for. The appellant's submission that the account books were in the server seized by the Income-tax Department is also not a verifiable fact as the account books were never accessed in Investigation Wing ev .....

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ly and will fully failed to produce account books before the Investigation Wing in response to their repeated summons. I therefore hold that the penalty u/s 272A (1)(c) was rightly levied by the JDIT (lnv.), Unit-V, New Delhi. All the three grounds of appeal are therefore dismissed." 5. The crux of the allegations levelled by the Assessing Officer is that there was a conscious avoidance by the assessee to not produce books of accounts in response to summons u/s 131 of the Act issued by the .....

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s of accounts before DCIT which is apparent from the observation in para 3.13 and 3.14 of the assessment order. It was also contended by the assessee that on the one hand, the Department is imposing penalty for non-production of account books and on the other hand, the revenue is not considering the account books on the vague allegation that since the assessee has not produced the books of accounts at the time of search, during post search inquiries and during assessment proceedings, hence lette .....

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tion of bonafide compliance on the part of the assessee specially when no prejudice has been caused to the revenue and the delay in submitting account books did not bring any benefit or wrongful gain to the assessee. 7. Replying to the above, ld. DR supported the action of the Assessing Officer and impugned order and submitted that there was a conscious noncompliance by the assessee to the notices of the DCIT and hence penalty u/s 272A(1)(c) of the Act was correctly levied which was upheld by th .....

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ntrary to the facts noted by him in para 3.13 that the assessee submitted account books, hence, basis of the allegation that the assessee did not comply with the notices of the DCIT is not found to be sustainable. However, we observe that there was a delay in complying with the directions/notices of the DCIT/Assessing Officer but this appears to be due to reasons beyond control of the assessee. In the case of M/s Hindustan Steels Ltd. vs The State of Orissa AIR 1970 Hon'ble Supreme Court 253 .....

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