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Heena N Kanakia, 701/702, Quarter Deck, J P Road, Versova, Andheri (West), Mumbai -400 061 Vs. ACIT, CC-32, Mumbai
January, 27th 2015
                 "" Û   

                 MUMBAI BENCH "H", MUMBAI
                      . .
                      . . ,   

                         ITA No. : 5299/Mum/2013
                          (Assessment year: 2003-04)
Heena N Kanakia,                         Vs    ACIT, CC-32,
701/702, Quarter Deck,                         Mumbai
J P Road, Versova,
Andheri (West),
Mumbai -400 061
  .:PAN: ANTPK 4556 B
 (Appellant)                                   × (Respondent)
                      Appellant by             Shri Govind Javeri
                    ×                     :       
                    Respondent by              Shri Jeetendra Kumar

       /Date of Hearing                           : 06-01-2015
       /Date of Pronouncement                     : 23-01-2015


      ,  :


           The appeal filed by the assessee against the order of
    CIT(A)-41, Mumbai, dated 03.05.2013, sustaining the penalty
    levied at Rs 70,000/- u/s 271(1)(b) of the Income Tax Act, 1961.

    2.     At the time of hearing, the AR submitted that the assessee
    was unable to furnish complete details as called for by the AO
                   "6. Being aggrieved by the penalty order passed by the
                   Assessing Officer the appellant has preferred the current appeal
                   before your honour.
                   7. It is submitted that during the course of the assessment
                   proceedings the appellant had made aware the Assessing
                   Officer about her inability to furnish the details called for due to
                   various difficulties faced by her. The said documents
                                                                Heena N Kanakia
                                                               ITA 5299/M/2013

            substantiating difficulties had been filed before Your Honour
            predecessor during the appellate proceeding for AY 2008-09
            while making submissions in appeal filed against the
            assessment order.
            8. The Assessing Officer was well intimated during the
            assessment proceedings itself that the details called for by the
            Assessing Officer were kept at office situated in X-cube building
            which was under the dispute and seized by Civil Court Dindoshi
            (Borivali Division). Therefore, the appellant could not produce or
            file the details before the Assessing Officer. The appellant craves
            leave to refer to and rely upon the said documents filed during
            the cot4rse of appellate proceedings for A. Y.2008-09 and not re-
            submitting the same now so as to not to burden the record.
            However, if Your Honour seeks such details, the appellant may
            kindly be accordin1 intimated so that the same can be filed
            separately. 9. It is submitted that the appellant had been relying
            on her husband and in laws in respect of compliances of tax
            matters and she is not well aware about the intricacies involved.
            It is submitted that her husband and in laws had been getting
            through various difficulties, passing through very difficult phase
            and as such, could not attend to the various notices issued by
            the Assessing Officer. In spite of all odds, they could manage to
            make partial compliances to the best of their ability as it/s
            evident from the details given by the Assessing Officer in the
            penalty order".
(as extracted from the order of the CIT(A))

3.   The AR further submitted that on those facts only, the
ITAT in assessee's own cases in assessment years 2004-05 to
2007-08, in ITAs no. 5206 to 5209/Mum/2013, held,
            "that the assessee is unable to furnish details as such details
            were kept at the office situated in X-Cube building, which was
            under dispute and seized by Civil Court, Dindoshi (Borivili
            Divn.). Therefore, the assessee is unable to produce the details.
            Even before the id. Commissioner of Income tax (Appeals) inspite
            of various difficulties, the assessee filed such details but the
            same were declined on the ground that the Assessing Officer
            had already provided sufficient opportunity to file these details.
            We are of the view that atleast the id. Commissioner of Income
            tax (Appeals) was expected to examine these details along with
            c1aned difficulties faced by the assessee and then should have
            reached to a conclusion. However, the Ld. Commissioner of
            Income tax (Appeals), on the basis of observation made in the
            assessment order proceeded to dispose of the appeal. This claim
            of the assessee is even evident from para-7 (page-3) of the
            written submission reproduced in the impugned order. The
            difficulties    the assessee were analyzed and appreciated by
            the Tribunal as has been reproduced (supra), in its order dated
            18/10 20 wherein, the appeal was allowed for statistical
            purposes directing the Assessing Officer to readjudicate after
            providing due opportunity to the assessee.
            5. The word 'reasonable cause' in section 273B must necessarily
            have a relation to the failure on the part of the assessee to
            comply with the requirement of law which he/she had failed to
            comply with. In case of delay in compliance, the cause shown by
                                                                      Heena N Kanakia
                                                                     ITA 5299/M/2013

                  the assessee for such delay has to be seen whether there was a
                  "good and sufficient cause" for such noncompliance. If the cause
                  shown is such as to explain the delay constitute a good reason
                  for non-compliance, no penalty would be leviable. However, in
                  cases where the cause shown is such which is only to mitigate
                  the gravity of non-compliance such a cause cannot be
                  extrapolated and treated as being a good cause. A construction
                  which would preserve the exercise of the power in favour of the
                  assessee, under the circumstances, which warrant it is to be
                  preferred to a construction which would result in the likelihood
                  of denial of relief. Reasonable cause is not susceptible of a clear
                  and precise definition but as applied to human action which
                  would constrain a person of average intelligence and ordinary
                  prudence acting under normal circumstances. The assessee,
                  being a lady, who was facing the claimed difficulties, therefore,
                  even under the facts available on record the Assessing Officer
                  was expected not to be so technical in imposing the penalty,
                  more specifically when the documents, as called for, were under
                  dispute and seized by the direction of the Court. Therefore, the
                  assessee could not file these details. We appreciate that the Id.
                  Commissioner of Income tax (Appeals), considering the facts,
                  atleast gave part relief to the assessee. In the present appeals
                  though there is a technical breach on the part of the assessee,
                  still, keeping In view the totality of the facts and the
                  circumstances, by taking a lenient view, the penalty imposed/
                  sustained in each case is deleted. We are observing here that
                  our conclusion is based upon peculiar facts of the present
                  appeals/ difficulties faced by the assessee, therefore, may not
                  be quoted as a precedent".

     4.    Since the penalty has been deleted by the ITAT on same
     and identical facts, we are of the opinion that in the present case
     as well, penalty deserves to be deleted.

     5.    We, therefore, set aside the order of the CIT(A) and direct
     the AO to cancel the penalty of Rs. 70,000/- levied u/s 271(1)(b).

     6.    In the result, the appeal as filed by the assessee is

     Order pronounced in the open Court on 23rd January, 2015.

     . .
    (. . )                                                    ( )
           Sd/-                                                      Sd/-

  (R C SHARMA)                                             (VIVEK VARMA)
ACCOUNTANT MEMBER                                        JUDICIAL MEMBER
Mumbai, Date: 23rd January, 2015
                                                   Heena N Kanakia
                                                  ITA 5299/M/2013

/Copy to:-

      1)  /The Appellant.
      2) × /The Respondent.
      3) The CIT(A)-41, Mumbai.
      4) The CIT ­Central -III, Mumbai.
      5)   "",   ,                       /
         The D.R. "H" Bench, Mumbai.
      6) [ 
         Copy to Guard File.

                                       /By Order
           / / True Copy / /

                                   Dy./Asstt. Registrar
                                    I.T.A.T., Mumbai
*Chavan, Sr.PS
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