TaxTMI 
TaxTMI 
2017 (8) TMI 1339
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.... of the assessment year 2002-03, having ITA No. 4315/Del/2015 as the lead case. 4. The grounds of appeal raised by the assessee in assessment year 2002-03 are as under: "1. That the learned Commissioner of Income Tax (Appeals)-XXVI, New Delhi has erred both in law and on facts in upholding the levy of penalty of Rs. 20,000/- u/s 271 (l)(b) of the Act. 2. That while upholding the levy of penalty the learned Commissioner of Income Tax (Appeals) has failed to appreciate that order levying penalty was based on findings contrary to the order of assessment and, overlooking the reply furnished by the appellant during the penalty proceedings and, therefore untenable in law. 2.1 That the learned Commissioner of Income Tax (Appeals) has also failed to appreciate that there was reasonable cause on the part of the appellant and, as such penalty sustained is illegal, invalid and untenable. 2.2 That order of the learned Commissioner of Income Tax (Appeals) is otherwise also based on factual misappreciation of the facts and circumstances of the case and, complete misinterpretation of the provisions contained in section 271(l)(b) of the Act. 3. That the learned Commissioner of Income Ta....
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....nal and for reasonable cause', which was cited to be . the 'volume arising out of 303 group assessments' that were 'required to be concluded within short span on 5 months'. It was submitted that the appellant was a part of the MDLR group comprising of several entities, in respect of which search operations were mounted by the Department on 31/1/2008; that following revision petition u/s 264, as many as 246 assessments relating to AY 02-03 to 08-09 were pending assessment; that in addition 57 assessments relating to AY 10-11 were also pending; that in all 303 number of assessments were getting barred by limitation on 31/3/2013; that voluminous details were required by the AO; that the group was burdened with a number of questionnaires; and that the group was 'driven' to take legal remedies. Non compliance was also attributed to 'circumstantial factors', namely, the non-availability of the 'main controlling person', Sh. Gopal Goyal due to legal detention, non-accessibility of records due to judicial inquiry/investigation and poor 'employees turnover ratio'. It was claimed that sincere efforts were made by the appellant, but informat....
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....espect of which also, as per the AO, the requisite details were not being filed. In considering the matter of penalty u/s 271(l)(b), that relates to non- compliance to a statutory notice, issued in the case of a specific assessee for a particular AY requiring attendance on the stated date, the pendency of a large number of other cases of the group is an irrelevant fact. 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 Court, which in turn required substantial paperwork, was a personal and private decision of the assessees of the group and can hardly constitute a justification for non-compliance of the statutory notices in the case of the appellant. Moreover, if the 'circumstances', cited as 'reasonable cause' for non-complia....
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....r set of circumstances, the Tribunal has deleted the penalty levied under section 271(1)(b) of the Act. Accordingly, he prayed that penalty in the case of the assessee, might also be deleted. 7. On the other hand, Ld. Sr. DR opposed deletion of penalty and submitted there was no reasonable cause for non-compliance on the part of the assessee. 8. We have heard the rival submissions and perused the relevant material on record. We find that in the case of Jawala Prashad Aggarwal, which is also one of the cases of the MDLR Group, the Tribunal has deleted the penalty u/s 271(1)(b) of the Act. In the said case also due to non-compliance of statutory notices on two occasions penalty of Rs. 20,000/- under section 271(1)(b) Act was levied by the Assessing Officer in each of the assessment years from 2002-03 to assessment year 2008-09. In the said case also the assessee submitted reasons of non- compliance as more than 303 group assessments conducted during short span of five months and therefore it was difficult to comply with all the notices on the appointed dates. Also it was submitted that main controlling person of the group, Sh. Gopal Goyal was detained in judicial custody since Augu....
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.... have been made through replies/letters sent to the Assessing Officer either by filing in the dak or through registered/speed post. This is further corroborated by details of replies filed in various group cases as referred to by Ld. Counsel before us. Ostensibly there may be a case of delay in compliance or filing of replies before AO and not personally appearing before the Assessing Officer on a particular date, but compliances in form of replies do have been filed in the course of assessment proceedings and all the necessary details required for the purpose of assessment has been provided. What are required to be seen while levying penalty for non-compliance of statutory notices, is the facts and circumstances for non-appearance on the specified date, that is, whether there was any reasonable cause and the overall conduct of the assessee. The main planks for reasonable cause pleaded by the assessee has been that, firstly, the key person/group head, Shri Gopal Kumar Goyal who was entrusted with 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 ongoin....