TMI Blog2017 (8) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case constituted reasonable cause being under the scope and ambit of sections 273B of the Act. The Tribunal also held that that in view of the demand in quantum proceeding reduced to nil, the alleged breach or non-compliance is merely technical and venial in nature and therefore penalty should not be levied for such venial breach. In the instant case also the facts and circumstances are identical and thus, respectfully following the finding of the Tribunal (supra), levy of penalty under section 271(1)(b) of the Act is directed to be deleted. - Decided in favour of assessee. - ITA Nos. 4315 to 4321/Del/2015 - - - Dated:- 30-8-2017 - SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER Appellant by Sh. Gautam Jain, Adv. Respondent by Ms. Shweta Nakra Dutta, Sr.DR ORDER PER O.P. KANT, A.M.: These appeals of the assessee are directed against common impugned order dated 07/05/2015 passed by the Ld. Commissioner of Income-tax( Appeals)-XXVI, New Delhi [ in short 'the CIT-(A)'] in relation to penalty proceedings under section 271(1)(b) of the Income-tax Act, 1961 (in short 'the Act') for assessment year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, proceedings under section 153A of the Act were initiated and completed. Consequent to order under section 264 of the Act passed by the Commissioner of Income-tax, setting aside the original assessment, the Assessing Officer completed the assessment under section 144 of the Act on 18/03/2013 determining total income at ₹ 5,00,000/-. During the course of assessment proceedings the assessee failed to comply with the statutory notices issued for attending the proceeding and file submissions particularly on 30/11/2012 and 31/12/2012. In view of the non-compliance, the Assessing Officer initiated penalty proceedings and issued show cause notice on 21/03/2013. In response, the assessee submitted reply on 22/07/2013 that non-compliance was for the reasons beyond control or otherwise arising out of circumstantial reasons and there was no malafide intention on the part of the assessee. The Assessing Officer rejected the submission of the assessee and levied penalty of ₹ 20,000/- for non-compliance on two occasions (Rs. 10,000/- for each default). Before the Ld. CIT-(A), the assessee raised main contention that there was a reasonable cause for non-compliance of the statutory no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sented' before the AO on the said dates and hence there was no case of non-compliance. It was claimed that where the counsel could not attend, 'it was ensured that a date has been obtained or coordinated with the authorities over telephone to explain the reasons for such non-attendance'. Finally, it was submitted that the non compliance was 'unintentional', for 'reason beyond control', and that 'taking it as a special case', the penalty proceedings may be dropped. 8.2. It is noted that contradictory assertions have been made in the written submission that weakens the case of the appellant. On the one hand, the 'reasons' for non-compliance have been cited, and on the other hand, it is asserted that the appellant appeared before the AO on the two dates in respect of which penalty has been imposed by the AO. But it is a matter of record that there was no compliance to the statutory notices fixing the case for hearing on 30.11.2012 and 31.12.2012. 8.3. None of the reasons given in the written submission, namely, search operations on the MDLR group in January 2008, detention of Sh. Gopal Goyal, poor turn-out of employees at work place, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty u/s 271(l)(b) read with section 274, the only aspect that has to be examined is whether there was any reasonable cause that prevented the appellant from complying with the statutory notices issued by the AO. Here, the appellant did not comply appellant could have escaped from the rigours of penalty, had the statutory notice been acknowledged and adjournment requested timely. 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(l)(b). 8.7. It is noted that during the appellate proceedings also, the appellant has ignored the notice requiring attendance for hearing on 28.04.20155. Since no proper explanation for non- compliance to the aforementioned notices has been filed, either before the AO or during the appellate proceedings, there is no basis to alter the finding of the AO. Since the AO gave adequate opportunity to the appellant and imposed penalty as per the provisions of law, after due application of mind, ground 3 of the appeal is dismissed and the penalty order is confirmed. 6. Before us, the learned counsel submitted that detailed reply justifying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: 9. We have heard the rival submissions and also perused the relevant finding given in the impugned order. Here in this case, first of all, on perusal of the penalty notice as appearing at page no. 6 of the paper book, it is seen that nowhere the Assessing Officer has mentioned about any particulars of statutory notice/s for which there was any default on part of the assessee. Show cause notices issued for initiating penalty proceedings should be specific and without any ambiguity, because the assessee while giving the explanation should be aware of the charge for which penalty is being initiated and can give his specific rebuttal. Such vague notice is fatal to the initiation of the proceedings itself. Further from the perusal of the assessment order, it is gathered that the assessee did not attend the proceedings on 20.11.2012 and 30.11.2012. The assessing officer further mentions that on 5.12.2012, Shri Vishal Mehta, AR along with other authorized persons appeared before him and submitted that non-compliance on the part of the assessee on the said date were due to the fact that group head, Shri Gopal Kumar Goyal was currently not available and the whole family members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, we are of the considered opinion that failure to comply with certain notices on a particular date was due to reasonable cause as highlighted by the assessee not only during the course of the assessment proceedings but also before the Assessing Officer and Learned CIT(Appeals) in the impugned penalty proceedings and hence penalty cannot be levied in such circumstances. 10. Apart from that, one important fact brought on record is that, the demand in the quantum proceedings has been reduced to nil , after giving effect to the first appellate order and there has been no substantive non-compliance either during the course of the assessment proceedings or during the appellate proceedings. In such circumstances such an alleged breach or non-compliance is mere technical and venial in nature and therefore, penalty should not be levied for such venial breach. Accordingly, the levy of penalty of ₹ 20,000/- u/s 271(l)(b) for all the assessment years is unsustainable for the reasons given above and is directed to be deleted. Thus, grounds raised by the assessee are allowed. 9. In the instant case also the facts and circumstances are identical and thus, respectfully fol ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
