Heena N Kanakia, Mumbai vs Assessee

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 ःथयी लेखा सं.:PAN: ANTPK 4556 B अपीलाथȸ (Appellant) ू×यथȸ (Respondent) अपीलाथȸ Ǒक और से : ᮰ी गोᳲवद जवेᳯर Appellant by Shri Govind Javeri ू×यथȸ Ǒक और से : ᮰ी जीतᱶᮤ कु मार Respondent by Shri Jeetendra Kumar

सुनवाई कȧ तारȣख /Date of Hearing : 06-01-2015 घोषणा कȧ तारȣख /Date of Pronouncement : 23-01-2015

आ दे श

᮰ी िववेक वमाᭅ, ᭠या स: स: ORDER

PER VIVEK VARMA, JM:

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 because "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 2 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 3 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 allowed.

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

(आर.

आर. सी.

सी. शमाᭅ) (िववेक वमाᭅ) Sd/- Sd/-

लेखा सदःय Ûयाईक सदःय (R C SHARMA) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Date: 23rd January, 2015 4 Heena N Kanakia ITA 5299/M/2013

ूित/Copy to:-

1) अपीलाथȸ /The Appellant. 2) ू×यथȸ /The Respondent. 3) The CIT(A)-41, Mumbai. 4) The CIT -Central -III, Mumbai.

5) ǒवभागीय ूितिनिध "एच", आयकर अपीलीय अिधकरण, मुब ं ई/ The D.R. "H" Bench, Mumbai.

6) गाड[ फाईल Copy to Guard File.

आदे शानुसार/By Order / / True Copy / /

उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, मुबं ई Dy./Asstt. Registrar I.T.A.T., Mumbai च᭪हान व.िन.स * *Chavan, Sr.PS