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IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, MUMBAI
, ,
BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM
./I.T.A. No. 5112/Mum/2013
( / Assessment Year: 2009-10)
Champshi Popatlal Shah I.T.O. Ward 18(2)(3),
A-115 Madhav Nagar, / Piramal Chambers, Mumbai
Bhawani Shankar Road, Dadar (W), Vs.
Mumbai-400 028
. / . /PAN/GIR No. AANPS 7444 P
( /Appellant) : ( / Respondent)
/ Appellant by : Shri Devendra Jain
/Respondent by : Shri Neil Philip
/ : 05.11.2014
Date of Hearing
/
: 11.11.2014
Date of Pronouncement
/ O R D E R
Per Sanjay Arora, A. M.:
This is an Appeal by the Assessee directed against the Order by the Commissioner
of Income Tax (Appeals)-29, Mumbai (`CIT(A)' for short) dated 17.04.2013, confirming
the levy of penalty u/s.271(1)(b) of the Income Tax Act, 1961 (`the Act' hereinafter) for
the assessment year (A.Y.) 2009-10 vide order dated 01.11.02011.
2. The instant appeal, filed on 10.07.2013, is time barred by 14 days. The assessee,
subsequent to the defect memo being issued by the Registry, filed an Affidavit dated
17.07.2013, explaining severe illness as the reason for the delay. Under the
circumstances, we are satisfied as to the existence of a sufficient cause for the said delay,
and condone the same. The hearing in the matter was, accordingly, proceeded with.
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Champshi Popatlal Shah vs. ITO
3. The only issue arising in the instant appeal is the maintainability in law of the
penalty u/s. 271(1)(b) of the Act, sustained by the first appellate authority at Rs.40,000/-,
i.e., as levied by the assessing authority. The impugned penalty is in respect of four
notices u/s. 142(1) of the Act. The assessee failing to explain the said default in the
penalty proceedings, initiated by the issue of notice u/s.274 on 14.09.2011, the same
stood levied as proposed, i.e., at Rs.10,000/- for each default, as prescribed by law. In
appeal, the ld. CIT(A), on an examination of the assessee's explanation, found the same
to be general in nature and, further, without any substance. The penalty was accordingly
confirmed. Aggrieved, the assessee is in second appeal.
4. Before us, the ld. Authorized Representative (AR), the assessee's counsel, would,
furnishing a copy of the affidavit dated 04.11.2014, stated to bear the same reasons
explaining the default/s as furnished before the authorities below, contend that there had
been substantial compliance in-as-much as all the information as called for had been
submitted, albeit subsequently, with in fact the assessment being framed at the returned
income, also placing a copy of the assessment order of the assessment u/s.143(3) dated
26.12.2011 on record. The ld. Departmental Representative (DR), on the other hand,
would, relying on the orders by the Revenue authorities, vehemently oppose the same,
stating that no case for interference is made out; the assessee's explanation being
frivolous and, in any case, unsubstantiated.
5. We have heard the parties, and perused the material on record. The affidavit dated
04.11.2014 by the assessee, as filed, was neither called for by the court nor is warranted
in the facts of the case in-as-much as it is the reasons or the explanation, i.e., as to a
reasonable cause, which is to be rather proved, as furnished in the penalty proceedings,
that is relevant or material. The same, accordingly, is of little consequence, even as we
observe it to be a reiteration of the reasons as advanced before the authorities below. In
our view, the assessee's explanation is neither convincing nor substantiated. Having
appointed/authorized a counsel, namely, Shri Manoj Bhanushali, ITP, upon receipt of the
notice u/s. 143(2) dated 27.09.2010, it was the said counsel who was required to attend
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ITA No.5112/Mum/2013 (A.Y. 2009-10)
Champshi Popatlal Shah vs. ITO
the assessment proceedings from time to time, furnishing the relevant details, and it is he
who could, where so warranted by the exigencies of the situation, seek time for the same
or for other pressing reasons. Accordingly, the assessee stating of having visited his
native place or being unwell do not count for much; he himself stating the counsel's
preoccupation as the reason for the non-attendance on one of the dates of hearing.
At the same time, therefore, it is the assessee's counsel, rather than the assessee,
running a proprietary firm of retail of sarees, dress material, etc., and who is apparently
not conversant with the proceedings under the Act and, besides, as we gather, a severe
diabetic patient, who is responsible for the same. Penalty, as explained by the apex court
in Hindustan Steel Ltd. v. State of Orissa [1972] 83 TR 26 (SC), may not ordinarily be
levied even where it may be otherwise lawful to do so, i.e., where the assessee's conduct
is not contumacious or is in conscious disregard of his statutory obligations.
We, accordingly, only consider it proper to confirm the penalty for only one
default, i.e., in respect of the fourth notice u/s. 142(1) (dated 14.09.2011), for which the
assessee has admittedly not furnished any explanation. True, vide the said notice the
assessee was allowed time of only three days, and which may not be sufficient. However,
the said notice was firstly a reminder notice and, two, as stated by the ld. CIT(A), and
also observed by us, could be responded to by seeking further time. We decide
accordingly, and the assessee gets part relief, i.e., qua the penalty levied for the default of
non-compliance for the other three notices u/s. 142(1). We decide accordingly.
6. In the result, the assessee's appeal is partly allowed.
Order pronounced in the open court on November 05, 2014
Sd/- Sd/-
(Amit Shukla) (Sanjay Arora)
/ Judicial Member / Accountant Member
Mumbai; Dated : 11.11.2014
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ITA No.5112/Mum/2013 (A.Y. 2009-10)
Champshi Popatlal Shah vs. ITO
. ../Roshani, Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent
3. () / The CIT(A)
4. / CIT concerned
5. , , / DR, ITAT, Mumbai
6. / Guard File
/ BY ORDER,
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai
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