Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Home Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles News Highlights
Extracts
Home List
← Previous Next →

Shivanandan Buildcon Pvt. Ltd., Nageshwar Builders Pvt. Ltd. Versus DCIT, Central Circle 14, New Delhi

2017 (11) TMI 792 - ITAT DELHI

Penalty u/s 271(1)(c) - failure on the part of the assesses to attend the assessment proceedings - proof of reasonable cause - main plea for reasonable cause pleaded by the assessee/s has been that the key person/group head, Shri Gopal Kumar Goyal who was entrusted with the income tax matters and was looking after the entire working of the group was in judicial custody in some criminal proceedings and the entire group and family members were engaged in ongoing court proceedings for his early rel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e said failure of not complying with the notice served on them under sub-section (1) of section 142 of the Act. - The facts submitted by assessee for reasonable cause have not been controverted by the AO or the Ld. CIT (Appeals). All these facts and circumstances, under any prudence, do constitute reasonable cause falling within the scope and ambit of section 273B and accordingly, we are of the considered opinion that failure to comply with certain notices on a particular date was due to rea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri Gautam Jain, Adv. Shri Piyush Kumar Kamal, Adv. For The Respondent : Shri R.C. Dandey, Sr. DR ORDER PER BENCH : These are a batch of seven appeals filed by three assessees challenging the confirmation of penalty imposed under section 271 (1) (b) of the Income Tax Act, 1961 (hereinafter called the Act ). Since the factual circumstances under which the penalties were imposed are similar in all the seven app .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t, whereas M/s Nageshwar Builders Private Limited is a company engaged in the business of construction and sale of real estate properties. 2.1 A search was conducted at the premises of all the three companies on 31/01/2008 and assessment orders u/s 144 of the Act, consequent to orders u/s 264 of the Act passed by the Ld. CIT setting aside the original assessments were passed in case of all the three assessees. 2.2 Penalty proceedings u/s 271(1)(b) of the Act were also initiated in the case of al .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it was the submission of the assessee/s before the AO that the non-compliance was because of reasons beyond the control of the assessee/s and arising out of circumstantial reasons. The assessee/s also submitted that there was no mala fide intention on the part of the assessee/s to have evaded the compliance of the statutory notices. The assessee/s had also preferred writ/s petition/s against the proceedings taken by the AO wherein the Hon ble Delhi High Court vide interim order dated 22/03/2013 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

had been kept in abeyance subsequent to the directions of the Hon ble High Court. Thereafter, the AO did not accept the plea of the assessee/s that there was a reasonable cause on the part of the assessee/s for non-compliance of the notices issued under section 271(1)(b) of the Act and proceeded to impose the penalties. Accordingly, the AO imposed the penalties as under - SNo Assessee Assessment Year Penalty Amount (Rs.) 1 Shivganesh Buildcon (P) Ltd 2007-08 20,000/- 2 Shivganesh Buildcon (P) L .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ubmission, namely, search operations on the MDLR group in January 2008, detention of Shri Gopal Goyal, poor turn-out of employees at work place, large number of pendency of assessments u/s 153A, and preparation of voluminous details, constitute reasonable cause that prevented the appellant from complying with the aforementioned notices or filing letters to seek adjournment. Search had taken place in January 2008, following which 153A proceedings were inevitable. The revision petitions u/s 264 we .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Moreover, the burden of pendency of assessments was larger for the AO, who was required to examine each case, examine the seized materials, obtain the explanation of each assessee, carry out necessary verifications, afford opportunity to each of them in terms of the principle of natural justice, and thereafter pass the assessment order before the time barring date. Thus, the reasons cited in the written submission are rejected. 8.4. Filing of several writ petitions before the Hon'ble High C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2012 and 28.12.2012. 8.5. As per section 271(1)(b) read with section 273B, the penalty u/s 271(1)(b) is visited upon the taxpayer who has failed to comply with the notices mentioned therein, for each default unless reasonable cause for such failure is proven. In the case at hand, the appellant has made assertions and claims that are not valid for non-compliance of statutory notices. No compelling and reasonable cause for failure to comply with the statutory notices has been advanced. 8.6. While .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

However, the appellant chose to completely ignore the statutory notices, and therefore in the absence of a reasonable cause, became liable for penalty u/s 271(1)(b). 2.4 Now the assessee/s have approached the ITAT challenging the confirmation of penalty. 3. The Ld. AR submitted that non-compliance on the part the assessee/s on the said date were due to the fact that group head, Shri Gopal Kumar Goyal was not available and the whole family members and the group heads were engaged in ongoing court .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

peals). 5. We have heard the rival submissions and have also perused the material on record. From a perusal of section 273B, we can understand that, notwithstanding anything contained in the provisions of clause (b) of Sub-section (1) of section 271, no penalty shall be imposed on the person or the assessee as the case may be, for any failure referred to in the said provision, if he proves that there was reasonable cause for the said failure. So it can be understood that penalty cannot be impose .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ligence and ordinary prudence. The expression reasonable is not susceptible of a clear and precise definition; for an attempt to give a specific meaning to the word not space. It can be described as rational according to the dictates of reason and is not excessive or immoderate. The word reasonable has in law the prima facie meaning of reasonable with regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know (see In re, A Solicitor (1945) KB 368 (CA).R .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

271C, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure. A clause beginning with notwithstanding anything is sometimes appended to a section in the beginning with a view to give the enacting part of the section in case of conflict an overriding effect over the provision of Act mentioned in the non obstante clause (see Orient Paper and Industries Ltd .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tante clause will not be an impediment for the operation of the enactment (see Smt Parayankandiyal Eravath Kanapravan Kalliani Amma v K Devi, AIR 1996 SC 1963) Therefore, in order to bring in application of section 271C in the backdrop of section 273B, absence of reasonable cause, existence of which has to be established by the assessee, is the sine qua non. Levy of penalty under section 271C is not automatic. Before levying penalty, the concerned officer is required to find out that even if the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

applied to human action is that which would constrain a person of average intelligence and ordinary prudence. It can be described as probable cause. It means an honest belief founded upon reasonable grounds, of the existence of a state of circumstances, which assuming them to be true, would reasonably lead any ordinarily prudent and cautious man, placed in the position of the person concerned, to come to the conclusion that the same was the right thing to do. The cause shown has to be considered .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Forum
what is new what is new
  ↓     bird's eye view     ↓  


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version