IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI
BEFORE S/SHRI B.R.BASKARAN,AM AND AMARJIT SINGH, JM

I.T.A. No.458 to 464/Mum/2013
Assessment Years: 2004-05 to 2010-11

Shri Ramesh Kumar Jain (Appellant) vs Dy. Director of Income Tax(International Taxation) (Respondent)
Date of Hearing : 14.9.2015
Date of Pronouncement: 23.9.2015

ORDER

Per AMARJIT SINGH , JM:

All these appeals filed by the assessee are directed against the common order dated 29.11.2012 passed u/s 271(1)(b) by Ld CIT(A)-36, Mumbai and it relates to the assessment years 2004-05 to 2010-11. Since the issue raised in all these appeals is common, therefore, these appeals are being heard together and are being disposed of by this common order.

2. The solitary ground which has been taken by the appellant assessee, is that whether the AO has erred in levying penalty of Rs.10,000/- u/s 271(1)(b) of the Income Tax Act, 1961 (the Act) without correct appreciation of the facts and in law on subject.

3. The facts of the case are that the search and seizure action u/s 132 of the Act was initiated against the appellant-assessee on 7.10.2009. The AO has issued number of notices and reminders but the assessee did not comply with the said notices and reminders, therefore, the penalty to the tune of Rs.,10,000/- in each case was imposed. Feeling aggrieved, the assessee filed the appeals before the ld.CIT(A) but the ld.CIT(A) has also dismissed the appeal of the assessee, hence, the assessee has filed these appeals before this Tribunal.

4. We have heard the rival contentions and perused the record. The ld. Counsel of the assessee has argued that the notice u/s 142(1) was issued for the hearing on 13.9.2011 but the assessee’s representative submitted the explanation stating therein that the representative of the assessee would be unable to appear before him because he was preoccupied with tax audits and subsequently, the assessment was completed under section 153A/143(3) vide order dated 26.12.2012 in the presence of assessee’s representative. Therefore, under the said facts and circumstances of the case, there is no failure on the part of the assessee which attract the penalty under the provisions contend in section 271(1)(b) of the Act, hence, the order of the AO as well as ld.CIT(A) are liable to be set aside and the appeals of the assessee are liable to be allowed. It is also specifically argued that in the assessment order dated 26.12.2011, the representative of the assessee has appeared before the AO from time to time, therefore, in the said circumstances, the penalty is not liable to be levied u/s 271(1)(b). The ld. Counsel of the assessee has placed reliance upon the law settled in following cases :

a) M/s Cabochon Arts Pvt Ltd V/s DCIT –ITA No.5952/Mum/2013 (AY-2009-10) dated 19.2.2015 and other caes;

b) D R Exports International V/s DCIT –ITA No.824/Del/2010- (AY-2005-06) dated 31.8.2010;

c) Sardarmal Kothari V/s ACIT – ITA No.2140/Mds/2012(AY- 2009-10) dated 8.3.2013

5. On the other hand, the ld. DR refuted the said contentions and argued that the AO issued notice dated 29.8.2011 requiring many details from the assessee but he requested for adjournment and did not comply with the said notice and subsequently, issued a show cause notice requiring the attendance of the assessee on 13.9.2011 u/s 271(1)(b) but the assessee again requested an adjournment on account of being a month of tax audit and short time, therefore, the AO has rightly imposed penalty of Rs.10,000/- for each year u/s 271(1)(b) of the Act and the said order has rightly been confirmed by the ld.CIT(A), hence, the present appeals are liable to be dismissed.

6. After giving careful consideration to the rival contentions raised by both the parties and also perusing the record carefully, we came into the notice that the factual position is not disputed before us such as the AO has issued a letter dated 29.8.2011 requiring the presence of the assessee on 7.9.2011 and the assessee requested for adjournment of 15 days vide letter dated 7.9.2011 due to shortage of time. Thereafter, the AO refused to adjourn the case and issued a show cause notice for penalty u/s 271(1)( b) requiring the attendance on 13.9.2011 and the assessee again requested for adjournment by the letter dated 12.9.2011 explaining the reasons that in the months of September, the tax audit was going on, therefore, the assessee was having short time. But, in the said circumstances, the AO imposed the penalty of Rs.10,000/- u/s 271(1)(b). Now, it is to be seen whether the assessee has failed to comply with the relevant notices issued by the AO and therefore, are liable to be imposed the penalty u/s 271(1)(b) of the Act or not. The order dated 29.11.2012 passed by the ld.CIT(A) speaks that the assessee replied to the notice vide letter dated 7.9.2011 and subsequently, in compliance with the show cause notice u/s 271(1)(b), the assessee also sought the adjournment on the ground of fact that the assessee’s representative would be busy in the month of September on account of tax audit. Thereafter, the tax audit and other documental work would be completed. In the said circumstances, the assessee complied with each notice issued by the AO. Subsequently, the assessment was completed vide order dated 26.12.2011 which speaks that the ld. AR of the assessee attended the hearing from time to time and the case was also discussed with them. The situation speaks that the assessee filed the details before the AO and thereafter the assessment order dated 26.11.2011 has been finalized. This can be considered as sufficient compliance and the default committed, if any, earlier has been ignored by the AO. Therefore, in the said circumstances, the penalty levied u/s 271(1)(b) is not liable to be leviable in accordance with law. Moreover, the reasonable cause on account of busy in the month of September on account of tax audit is apparent on record. To arrive at this conclusion this Tribunal has also found support of law settled in:

a) M/s Cabochon Arts Pvt Ltd V/s DCIT (supra);

b) D R Exports International V/s DCIT (supra);

c) Sardarmal Kothari V/s ACIT (supra).

After considering the contentions of both the parties and respectfully following the decisions relied upon by the ld.Counsel, and in the said circumstances, the penalty levied by the AO is wrong and against the laws and facts, hence, we set aside the order of ld. CIT(A) and direct the AO to delete the penalty levied u/s 271(1)(b) of the Act.

7. In the result, the appeals of the assessee are allowed.

Pronounced accordingly on 23rd Sept, 2015.

Sd                                                        Sd

(B.R. BASKARAN)                 (AMARJIT SINGH)
ACCOUNTANT MEMBER    JUDICIAL MEMBER
Mumbai: 23rd Sept, 2015