TMI Blog2018 (6) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... e case before us. We also find that the AR has given the explanation for reasonable cause for non-compliance of the summons u/s 131 for each day of the default. The fact that the assessment of the company was ultimately completed u/s 143(3) of the Act also proves that the assessee company has furnished the relevant details. AR has bonafide reasons for non-compliance and the AO had issued only one notice for non-compliance on three dates. - Decided in favour of assessee - ITA No.1173/Hyd/2017 - - - Dated:- 6-6-2018 - Smt. P. Madhavi Devi, Judicial Member And Shri S.Rifaur Rahman, Accountant Member For The Assessee : Shri P. Murali Mohana Rao For The Revenue : Shri M. Naveen, DR ORDER Per Smt. P. Madhavi Devi, J.M. This is assessee s appeal for the A.Y 2011-12 against the order of the CIT (A)-1, Hyderabad, dated 24.04.2017 confirming the penalty levied by the Addl. CIT u/s 272A(1)(c) of the Act. The assessee has raised the following grounds of appeal: 1. The order of the Commissioner of Income Tax (Appeals)-l, Hyderabad, is erroneous both on facts and in law. 2. The Ld. CIT(A) erred in dismissing the appeal. 3. The Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is over writing on the date of hearing in the notice issued u/ s 131 dated 27.05.2011. 15. Without prejudice to other grounds, the learned CIT (A) ought to have appreciated that there was a reasonable cause as stipulated in section 273B of the Act for the appellant for not attending in response to the summons issued u/s 131 of the Act . 2. Brief facts of the case are that there was a survey in the case of M/s. American Infoserve Pvt Ltd u/s 133A of the Act on 25.5.2011 and thereafter, the return of income filed by the assessee on 18.09.2010 was taken for scrutiny by issuance of a notice u/s 143(2) on 1.6.2011. Thereafter, the representative of the said Company, Shri P. Murali Mohana Rao, the appellant before us, was issued summons u/s 131 for production of audit working sheets, copy of Form 3CA, 3CD, 29B and 56F of the company for the financial years 2005-06 to 2010-11 on 03.06.2011. On 3.6.2011, a letter was filed on behalf of Shri Murali Mohan Rao, stating that he is out of the country and is not available till 06.06.2011. The Dy. CIT, therefore, adjourned the case to 6.6.2011. But there was no response on the said date. Subsequently, the statements of the Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved, the AR preferred an appeal before the CIT (A), who confirmed the order of the AO and the appellant Shri P. Murali Mohana Rao is in appeal before us. 3. The aggrieved party in person, Shri P. Murali Mohana Rao, appeared and submitted that he was representing the assessee company M/s. American Infoserv Pvt. Ltd before the AO and that summons u/s 131 were issued to him on 27.05.2011 for appearance and production of the documents of the assessee on 3.6.2011. He submitted that as he was out of the country on the said date, a letter was filed before the AO informing him that he will not be in India till 6.6.2011. He submitted that inspite of the said information being given, the Dy. CIT had adjourned the case to 6.6.2011 on which date he was not available in the country. He submitted that he was not aware of the statement given by the Director Employees of the assessee company M/s. American Infoserv Pvt. Ltd u/s 131 of the Act that the books of account of the said company are with him or the reason for saying so. He submitted that the second summons u/s 131 were issued on 7.6.2011 for appearing on 13.6.2011 on which date he had appeared before the DCIT, but the Dy. CIT ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gap between them as the AO had hearing problem and that on 1.7.2011, the assessee had appeared before the Addl. CIT and explained the reasons for non-compliance on 13.6.2011 and had also intimated his willingness to attend the hearing before the Dy. CIT on further dates of hearing. Thus, according to him, it cannot be a case of wilful noncompliance to the summons u/s 131 of the Act and is not a case for levy of penalty u/s 272A(1)(c) of the Act. 7. For the sake of clarity and ready reference, the relevant provisions are reproduced hereunder: section 272A(1) If any person:- ( a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by an income- tax authority in the exercise of its powers under this Act; or ( b) refuses to sign any statement made by him in the course of any proceedings under this Act, which an income- tax authority may legally require him to sign; or ( c) to whom a summons is issued under sub- section (1) of section 131 either to attend to give evidence or produce books of account or other documents at a certain place and time omits to attend or prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate as required by section 203 and] returns under sections 206 and 206C and [statements under subsection (2A) or sub-section (3) of section 200 or the proviso to sub-section (3) or under sub-section (3A) of section 206C]] shall not exceed the amount of tax deductible or collectible60, as the case may be:] [ Provided further that no penalty shall be levied under this section for the failure referred to in clause (k), if such failure relates to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.] ( 3) Any penalty imposable under sub-section (1) or sub-section (2) shall be imposed- ( a) in a case where the contravention, failure or default in respect of which such penalty is imposable occurs in the course of any proceeding before an income-tax authority not lower in rank than a 62[Joint] Director or a 62[Joint] Commissioner, by such income-tax authority; ( aa) in a case falling under clause (d) of sub-section (1) by the income-tax authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e penalty exceeds ₹ 20,000, except with the prior approval of the Jt. Commissioner. In the case before us, the cause of action for levy of penalty has arisen on each date of default and the penalty of ₹ 10,000 has been levied for each date of noncompliance. Therefore, in effect, the penalty levied is only ₹ 10,000 per default and in such circumstances, it is the ITO/AO who has the power to pass the penalty order and not the Add. CIT. Therefore, we hold that the Addl. CIT had no jurisdiction to pass the penalty order in the case before us. 10. Further, we also find that the AR has given the explanation for reasonable cause for non-compliance of the summons u/s 131 for each day of the default. The fact that the assessment of the company was ultimately completed u/s 143(3) of the Act also proves that the assessee company has furnished the relevant details. The Coordinate Bench of the Tribunal in the case of P.C. Pantulu vs. DCIT in ITA No.276/Hyd/2017 dated 11.4.2018 had considered similar situation to hold as under: 6. We have considered the rival contentions and perused the documents placed on record along with case law relied upon. It is true that assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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