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TMI Blog2023 (1) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... ers by the DCIT, Central Circle-1, Kanpur u/s. 271(1)(b) of the Act, all dated 27.03.2019. Since all the appeals relating to both the two assessees belong to one group of Rich Udyog Net Worth Ltd. and facts are identical, arising out of respective consolidated orders of Ld. CIT(A), we dispose of all these appeals by this consolidated order for the sake of convenience. 2. Assessee has taken as many as nine/ten grounds in the appeals challenging the levy of penalty of Rs. 10,000/- u/s. 271(1)(b) of the Act for each of the seven years involved, respectively. 3. The issue in these present appeals before us was elaborately dealt in another set of appeals in the case of Ashesh Agrawal Vs. DCIT, Central Circle-1 in ITA No. 292 to 298/LKW/2020 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount were impounded by the Ld. AO without assigning any reason inasmuch as the said books were impounded in the course of assessment proceedings without any authority to do so u/s. 142(1) of the Act. Subsequently, Special Auditors also repeatedly stated before the Income Tax Department about the non-compliance by the assessee in the special audit proceedings for getting the accounts audited. 3.1. Owing to non-compliance by the assessee, Ld. AO issued show cause notice u/s. 144 of the Act dated 31.07.2018 against which assessee filed its reply on 07.08.2018. Ld. AO passed the assessment order on 24.08.2018 u/s. 144 r.w.s. 153A of the Act by making various additions. Thereafter, Ld. AO issued notice u/s. 271(1)(b) of the Act to show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue that the words used in section 271 is "may direct". The expression "may" in the context in which it has been used must be held to be mandatory." 4. Ld. CIT(A) laid emphasize on the requirement that onus is on the assessee to show that there is a reasonable cause as prescribed u/s. 273B of the Act to answer the charge of having failed to comply with the requirement posed by the Ld. AO in the assessment proceedings. While dismissing the appeal, Ld. CIT(A) noted that assessee had not discharged the onus that there existed reasonable cause for non-compliance of statutory requirements u/s. 142(2A) of the Act. Ld. CIT(A) also noted that imposition of penalty u/s. 271(1)(b) of the Act is not qua assessment and is not dependent upon the outcom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptioned assessment years are misconceived as borne out from the facts on record from the noting of the order sheet entries. Accordingly, Ld. Counsel submitted that there exists reasonable cause within the meaning of section 273B of the Act and, therefore, the penalty so imposed is ought to be deleted. 7. Per contra, Ld. CIT, DR placed reliance on the orders of the authorities below. 8. We have heard the rival contentions and have carefully gone through the material available on record and have given our thoughtful consideration to the submissions made before us. Before adverting on the issue, we appraise ourselves with the relevant provisions of law which are reproduced hereunder: "271(1) If the Assessing officer or the Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the Act, we note that where a reasonable cause exists with the assessee for the failure on his part to comply with the statutory requirement, penalty need not to be imposed. Before us, Ld. Counsel for the assessee, through the order sheet entries of the assessment proceedings, evidently demonstrated that relevant ledgers for all the years under consideration were impounded by the Ld. AO in the course of assessment itself which has prevented the assessee in making compliance to the requirements of the special auditors for getting the special audit u/s. 142A of the Act completed. We also note that the Ld. CIT(A) himself while noting down various principles relating to penalty imposition has stated in one of the points that onus wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol, the circumstances will be taken as a valid excuse. 10. It is also pertinent to note that ideally an appeal arising from penalty order is to be decided after finalization of the quantum proceedings. This practice embargo is not applicable on the ld. Assessing Officer for visiting the assessee with penalty but after passing the penalty order, the Appellate Authority, i.e. CIT(Appeals) or ITAT ought to have waited completion of the quantum proceeding at appellate level. However, after going through the record available before us, we deem it appropriate to adjudicate this appeal without getting ourselves influenced of the quantum proceedings pending before the Appellate Authority. The reason we assign for adopting such a course of act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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