Prem Mahendra, New Delhi v. ITO, New Delhi

ITA 1367/DEL/2010 | 2005-2006
Pronouncement Date: 31-05-2010 | Result: Allowed

Appeal Details

RSA Number 136720114 RSA 2010
Assessee PAN AAGPM6291F
Bench Delhi
Appeal Number ITA 1367/DEL/2010
Duration Of Justice 2 month(s) 1 day(s)
Appellant Prem Mahendra, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-05-2010
Date Of Final Hearing 31-05-2010
Next Hearing Date 31-05-2010
Assessment Year 2005-2006
Appeal Filed On 29-03-2010
Judgment Text
ITA NOS. 1366 & 1367/DEL/2010 A.Y. 2005-06 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 1366/DEL/2010 A.Y. : 2005-06 SHRI BALRAM KUMAR MAHENDRA VS. ITO WARD 23(1) 27/18 1 ST FLOOR EAST PATEL NAGAR CENTRAL REVENUES BUILD ING NEW DELHI 110 008 INDRAPRASTHA MARG NEW DELH I - 110002 (PAN : AAGPM6291F) AND I.T.A. NO. 1367/DEL/2010 A.Y. : 2005-06 MS. PREM MAHENDRA VS. ITO WARD 23(1) 27/18 1 ST FLOOR EAST PATEL NAGAR CENTRAL REVENUES BUILD ING NEW DELHI 110 008 INDRAPRASTHA MARG NEW DELH I - 110002 (PAN : AAGPM6292G) [APPELLANT] (RESPONDENT) ASSESSEE BY : SH. S.R. WADHWA ADVOCATE DEPARTMENT BY : SH. AMRISH BEDI SR. DR PER BENCH THESE APPEALS ARE FILED BY THE RESPECTIVE ASSESSEE S WHO ARE HUSBAND AND WIFE AGAINST THE RESPECTIVE ORDERS OF THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE LEVY OF PENALTY U/S 271(1) (B) OF THE IT ACT AMOUNTING TO RS. 10 000/- EACH. 2. SINCE THE ISSUES ARE COMMON AND THE APPEALS WER E HEARD TOGETHER. THESE ARE BEING CONSOLIDATED AND DISPOSED OF TOGETHER F OR THE SAKE OF CONVENIENCE. ITA NOS. 1366 & 1367/DEL/2010 A.Y. 2005-06 2 3. THE ASSESSEES IN THESE CASES FILED THE INCOME T AX RETURN ON 31.10.2005 THE SAME WAS PROCESSED U/S 143(1) ON 4.7.2006. NO TICE U/S 143(2) WAS ISSUED ON 15.9.2006 IN THE CASE OF SHRI BALRAM KUMAR MAHENDR A FIXING THE CASE FOR 24.10.2006. THE NOTICE U/S 143(2) WAS AGAIN ISSU ED ON 31.5.2007 FIXING THE CASE FOR 13.6.2007 BUT NO ONE ATTENDED. SHOW CAUSE PENALTY NOTICE U/S 271(1(B) WAS ISSUED ON 28.6.2007 FIXING THE CASE FOR 31.7.20 07 BUT NO REPLY WAS RECEIVED. UNDER THESE CIRCUMSTANCES THE ASSESSING OFFICER H ELD THAT THE ASSESSEE WAS AT FAULT FOR NON-COMPLIANCE OF HEARING ON 31.7.2007. HENCE HE LEVIED THE PENALTY OF RS. 10 000/- U/S 271(1)(B) OF THE IT ACT. 3.1 IN THE CASE OF MS. PREM MAHENDRA NOTICE U/S 143 (2) WAS ISSUED ON 1.2.2007 FIXING THE CASE FOR 22.2.2007. THEREAFTER ANOTHE R NOTICE WAS ISSUED UNDER SECTION 143(2) ON 31.5.2007 FIXING THE CASE FOR 14 .6.2007 BUT NO ONE ATTENDED. SHOW CAUSE PENALTY NOTICE U/S 271(1(B) WAS ISSUED ON 28.6.2007 FIXING THE CASE FOR 31.7.2007 BUT NO REPLY WAS RECEIVED. UNDER TH ESE CIRCUMSTANCES THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS AT F AULT FOR NON-COMPLIANCE OF HEARING ON 31.7.2007. HENCE HE LEVIED THE PENAL TY OF RS. 10 000/- U/S 271(1)(B) OF THE IT ACT. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) THE ASSESSEE STATED THAT NOTICE DATED 31.5.2007 HAD BEEN SENT AT AN OLD ADDRESS AND THEREFORE NOT RECEIVED. LD. COMMISSIONER OF INCOME TAX (APPEAL S) DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE BY HOLDING THAT THE ADDR ESS ON WHICH NOTICE WAS SENT WAS THE SAME AS THAT GIVEN IN THE RETURN OF INCOME. ANY CHANGE IN ADDRESS WAS SUBSEQUENTLY NOT INTIMATED TO THE ASSESSING OFFICER . HENCE HE CONFIRMED THE LEVY OF PENALTY. ITA NOS. 1366 & 1367/DEL/2010 A.Y. 2005-06 3 5. AGAINST THIS ORDER BOTH THE ASSESSES ARE IN APPE AL BEFORE US. 6. BEFORE US LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT NON-RECEIPT OF NOTICE WAS THE REASON FOR THE ASSESSEES NON-APPERANCE AND THIS IS REASONABLE CAUSE U/S 273B OF THE IT ACT. IN THIS REGARD HE REFERRED TO THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF WOODWARD GOVERNOR INDIA P LTD. VS. C.I.T. (2002) 253 ITR 745 (DEL) WHEREIN IT WAS HELD THAT THE LEVY OF PENALT Y IS NOT AUTOMATIC AND THE ABSENCE OF A REASONABLE CAUSE IS NECESSARY. HE FU RTHER SUBMITTED THAT SINCE THE FIRST NOTICE WAS SENT AT THE NEW ADDRESS THE ASSES SING OFFICER VERY MUCH KNEW THE ASSESSEES NEW ADDRESS AND WHICH WAS ON RECORD IN BOTH THE CASES. THE ASSESSEES HAD SHIFTED TO THEIR DAUGHTERS HOUSE IN EAST PATEL NAGAR NEW DELHI FOR THE POST OPERATIVE CARE OF MS. PREM MAHENDRA AND HAD DULY INFORMED THE POST OFFICE AND THEIR NEIGHBOURS. THE DEPARTMENT HAD GOT THE NEW ADDRESS OF THE ASSESSEE AS EARLIER NOTICE DATED 15.9.2006 SEEK ING DETAILS WERE SENT AT THE NEW AND CORRECT ADDRESS. 6.1 LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT PENALTY IN THIS CASE HAS BEEN LEVIED U/S 271(1)(B) OF THE IT ACT. THIS SECTION MANDATES LEVY OF PENALTY FOR INTER-ALIA NOT COMPLYI NG WITH THE NOTICE ISSUED ITA NOS. 1366 & 1367/DEL/2010 A.Y. 2005-06 4 U/S 142(1) OR 142(3). SECTION 273B OF THE IT ACT PROVIDES THAT INTER-ALIA PENALTY U/S 271(1)(B) NEED NOT BE IMPOSED IF IT IS PROVED THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAILURE OF THE ASSESSEE TO COMP LY WITH THE PROVISIONS OF SECTION 271(1)(B). IN THIS CASE WE FIND THAT NON-APPEARANC E OF THE ASSESSEES BEFORE THE ASSESSING OFFICER WAS CAUSED BY NON-RECEIPT OF THE NOTICE. THIS IN OUR CONSIDERED OPINION CAN BE CONSTRUED AS REASONABLE CAUSE U/S 273B FOR NON- COMPLIANCE BY THE ASSESSES. 8. UNDER SUCH CIRCUMSTANCES RIGORS OF PENALTY U/S 271(1)(B) ARE NOT ATTRACTED IN THE CASE OF THE ASSESSEE. IN THIS REGARD WE PLACE RELIANCE FROM THE APEX COURT DECISION RENDERED BY A LARGER BENCH COMPRIS ING OF THREE OF THEIR LORDSHIPS IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 WHEREIN IT WAS HELD THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS AND PEN ALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIB ERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSE D MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORI TY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCE S. EVEN IF A MINIMUM PENALTY IS ITA NOS. 1366 & 1367/DEL/2010 A.Y. 2005-06 5 PRESCRIBED THE AUTHORITY COMPETENT TO IMPOSE THE P ENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNIC AL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FR OM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRI BED BY THE STATUTE. 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AN D PRECEDENT WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. 10. IN THE RESULT BOTH THE APPEALS FIELD BY THE ASSESSES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/5/2010 UPO N CONCLUSION OF HEARING. SD/- SD/- [I.P. BANSAL] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 31/5/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES