Scil Capital India P.Ltd, Mumbai vs Assessee

सर्वश्री आय.सी.शभमव, रेखम सदस्म एवुं श्री संजम गगव, न्ममयमक सदस्म BEFORE SHRI R.C.SHARMA, AM & SHRI SANJAY GARG, JM आमकय अऩीर सं./ITA No.2840/Mum/2012 ( नििाारण वषा / Assessment Year :2008-09) SCIL Capital India Pvt. Ltd., Vs. DCIT, Range-3(3), 21, Mittal Chambers, 228 Mumbai Nariman Point, Mumbai-21 स्थममी रेखम सं ./ जीआइआय सं ./ PAN/GIR No. : AAACS 8065 J (अऩीरमथी /Appellant) .. (प्रत्मथी / Respondent)

यनधमवरयती की ओर से /Assessee by : Shri K.K.ved यमजस्र् की ओर से /Revenue by : Shri Neil Philip

सुनर्मई की तमयीख / Date of Hearing : 23/03/2015 घोषणम की तमयीख/Date of Pronouncement 08/05/2015

आदे श / O R D E R

PER R.C.SHARMA (A.M):

This appeal is filed by the assessee against the order of CIT(A)

dated 1-11-2011 for the assessment year 2008-09 in the matter of

imposition of penalty of Rs.10,000/- u/s.271(1)(b)

2. The solitary issue raised in this appeal is in regard to levy of penalty

u/s.271(1)(b) by the AO and confirmed by the CIT(A) on account of non-

appearance.

3. Rival contentions have been heard and record perused. Facts in

brief are that the assessee company is a non-banking finance company

and also is engaged in the business of trading in cotton bales and herbs.

The assessee filed its return of income disclosing loss of Rs.69,92,390/- 2 ITA No.2840/12

under normal provisions of the Act and book profit of Rs.15,43,368/-

computed under the provisions of Section 115JB of the Act. The case of

the assessee was processed u/s.143(1). Thereafter the case of the

assessee was selected for scrutiny and notices u/s.142(1) and 143(3)

were issued, which were served on the assessee. However, nobody

appeared before the AO in response to the said notices. Again notice

u/s.142(1) was issued but there was no reply from the assessee.

Therefore, the AO issued a show cause notice to the assessee on 20-7-

2010 to explain as to why the penalty u/s.271(1)(b) of the Act should not

be levied on the assessee. In response to the same, the assessee

appeared before the AO, however, he could not filed the details in Tapal.

Therefore, the AO levied the penalty of Rs.10,000/- for non-compliance to

the statutory notices as per provisions of Section 271(1)(b) of the Act.

4. By the impugned order, the CIT(A) confirming the action of the AO,

dismissed the appeal of the assessee, against which the assessee is in

further appeal before us.

5. Ld. AR before us contended that the assessee had filed relevant

documents as required by the AO partially and the representative of the

assessee had attended before the AO, however, the AO whimsically

levied penalty for non-appearance, which is baseless and the appeal of

the assessee deserves to be allowed. He placed reliance on the following

decisions :-

i) S.Velu Palandar Vs. DCIT (1972) 83 ITR 683;

ii) Hindustan Steel Ltd. Vs. State of Orissa, 83 ITR 26; and

iii) Swarnaben M. Khanna Vs. DCIT (2010) 37 SOT 25 (Ahd.).

3 ITA No.2840/12 6. On contrary, ld. DR relied on the orders of the authorities below and

contended that the assessee avoided to comply the notice issued by the

AO again and again, therefore, levy of penalty in the case of assessee is

just and proper.

7. We have considered rival contentions and perused the record

carefully. From the record we found that the AO levied penalty stating that

the assessee did not cooperate in the proceedings. However, from the

order of the CIT(A) we found that the assessee has appeared before the

AO and filed partial documents as required by the AO. Ld. AR drew our

attention to the letters submitted by the assessee before the AO, which

are placed in the paper book. We have also perused the letter dtd. 2-7-

2010 issued by the AO from which it is found that the AO had not called

for any details and, therefore, which details the AO was referring to, is not

clear. The AO has mentioned that the assessee filed partial details on 19-

7-2010, is self contradictory. If nobody attended in reply to the notice

issued by the AO, then the assessee could have never become aware of

the pending details which were required to be submitted. From the

aforesaid fact, it is clear that the assessee has represented the case

before the AO, however, there was small delay in attending to the

hearing. Hon'ble Madras High Court in the case of S.Velu Palandar, 83

ITR 683 has held that in view of practical difficulties faced by the

assessee, penalty u/s,271(1)(b) should not be imposed. In the case of

Hindustan Steel Ltd., 83 ITR 26, the Hon'ble Supreme Court has opined

that penalty should not be imposed merely because the statute 4 ITA No.2840/12

empowers. In the said case, it has further been observed that for mere

technical or venial breach of law, penalty should not be imposed. We also

found from the record that the AO left office early on the day the assessee

was to be present and thereafter the assessee only could have filed the

details partially. There may be some instances where the authority may

not be in a position to take up the case on the date fixed for hearing due

to official pressure or other assignments. Keeping in view the totality of

facts and circumstances of the case, it is not a fit case for levy of penalty

u/s.271(1)(b) for non-appearance.

8. In the result, appeal of assessee is allowed.

Order pronounced in the open court on this 08/05/2015.

Sd/- Sd/- (संजम गगव) (आय.सी.शभमव) (SANJAY GARG) (R.C.SHARMA) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER भंफ ु ई Mumbai; ददनमंक Dated 08/05/2015 प्र.कु.मभ/pkm, यन.स/ PS

आदे श की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to :

1. अऩीरमथी / The Appellant प्रत्मथी / The Respondent. आदे शािसार/ BY ORDER,

2.

3. आमकय आमक् ु त(अऩीर) / The CIT(A), Mumbai.

उप/सहायक पुंजीकार

4. आमकय आमुक्त / CIT (Asstt. Registrar)

5. वर्बमगीम प्रयतयनधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai आयकर अपीऱीय अधिकरण, भुंफई /

6. गमर्व पमईर / Guard file. ITAT, Mumbai

सत्ममवऩत प्रयत //True Copy//