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TMI Blog2015 (6) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... her. 2. It may be mentioned here that on 09/06/2015 other group matter on similar facts and circumstances in the case of Mr. Lakhamshi J. Gala were heard and it was common contentions of both the parties that the view taken in the said case would be equally applicable to the present case. It is in this manner these appeals were heard. 3. We have decided the appeals in the case of Mr. Lakhamshi J. Gala vs. DCIT,Cen. Cir.12 in ITA Nos.109/MUM/2014 to 115/MUM/2014, Assessment Years 2004-05 TO 2010-11 vide our order of even date. The said order for the sake of completeness is reproduced below: These appeals are filed by the assessee and they are directed against order passed by Ld. CIT(A)-37, Mumbai dated 01/11/2013 for assessment years 2004-05 to 2010-11. Grounds of appeal in all the appeals are identical and read as under: "1. On the facts and circumstances of the Appellant's case and in law Learned CIT(A) erred in confirming the levied by the AO by provision of section 271(1)(b) of the Income Tax Act, 1961. 2. In any case the Ld. CIT(A) failed to appreciate that the impugned order was passed by the Ld. AO without complying with the provision of Sec. 274 of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 271(1)(b) and assessment was finally completed under section 144 of the Act. Ld. CIT(A) further observed that assessee did not give evidence of compliance with several notices issued under section 142(1) of the Act and did not explain noncompliance. Therefore, Ld. CIT(A) has confirmed the levy of penalty, which is agitated in the present appeals. 4. After narrating the facts, it was submitted by Ld. AR that Ld. CIT(A) has wrongly taken cognizance of other dates on which assessee failed to attend the proceedings, whereas the impugned penalty has been imposed by the AO only for the default of the assessee for non-appearance on 12/2/2013. It was submitted that admittedly for levy of penalty under section 271(1)(b) no separate notice was issued but only on the basis of observation of the AO in the notice issued under section 142(1) the impugned penalty has been imposed and confirmed. It was submitted that on similar facts in group case i.e. in the case of M/s. Speciality Paper Ltd., Ld. CIT(A) has deleted the penalty and reference in this regard was made to order passed by Ld. CIT(A) dated 27/6/2014 for assessment year 2004- 05 to 2009-10, copy was also placed on our record an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and simultaneously action u/s. 132 of the Income Tax Act, 1961 was carried out on the premises of the assessee at Room no.1, 1st Floor; 23 Central Building, Chowpatty Sea Face, Mumbai- 400007. 2. Subsequently notice u/s. 153A of I.T. Act, 1961 dated 07.03.2011 was issued and duly served on the assessee. In response to the notice, the assessee filed his return of income for A.Y. 2004-05 on 23.03.2011 declaring a total income of Rs. 27,82,940/-. 3. Thereafter, notice u/s 143(2) was issued on 11.04.2011 and duly served on the assessee. The date for hearing was fixed on 25.04.2011, but on the designated date no one from the assessee. On 26.04.2011 Assessee submitted letter of adjournment and the case is adjourned till further date. 4. Further, notice u/s. 142(1) dated 25.04.2011 along with questionnaire was issued and duly served on the assessee calling for various details. The date for making submissions and for hearing the case was fixed on 12.05.2011. However, on the designated date no one attended. On 19.05.2011 Assessee has submitted letter adjournment and the case is adjourned to 30.05.2011. 5. Subsequently, the assessee made his first partial submission on 15.06.2011 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that there is continuous non-compliance of various notices onD the part of the assessee and hence the assessment is being completed on the basis of the materials, documents and information as available on record with this office exparte u/s. 144 of the I.T. Act, 1961 after providing the sufficient opportunity of being heard and by following all principles of natural justice". 6.1 It can be seen from the above observations of AO that it does not refer even to the noticed issued under section 142(1) dated 5/2/2013, which required the assessee to attend the assessment proceedings and to submit the evidence on 12/2/2013. Thus, the failure of the assessee to attend the proceedings on 12/2/2013 has not been even made ground for framing ex-parte assessment under section 144 of the Act. In respect of assessment year 2010-11 also no reference has been made to the impugned notice dated 5/2/2013 which required the assessee to attend the proceedings on 12/2/2013. For the sake of brevity the relevant portion of the assessment order for A.Y. 2010-11 is not reproduced. 6.2 Thus, it can be seen that the impugned failure of the assessee dose not result into best judgment assessment and the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ific provision for giving a hearing, the assessee should be given such opportunity to show, if he can, that default or delay in complying with the substantive provisions of law was not without reasonable cause and reference in this regard can be made to the following decisions: CAg IIT v. Smt. P.Parukutti Amma, 105 ITR 79 (Ker); Tarulata Shyam vs. AGIT, 99 ITR 532 (Gauhati); CIT vs. Narang & Co., 98 ITR 462 (Del). 6.4 Hon'ble Madras High Court in the case of CIT vs. D.Ratnam (1995) Tax LR 504, 506 has held that under section 274(1) it is mandatory for the authorities concerned to serve a show cause notice on the assessee requiring him to offer his explanation, consider the explanation, if any, submitted by the assessee and thereafter hold him guilty of concealment etc. 6.5 In the present case assessee has never been put to the notice to explain as to why penalty should not be imposed under section 271(1)(b) as there was only an indication in the notice issued under section 142(1) that the failure of the assessee to attend the proceedings on 12/2/2013 would entail the assessee for levy of penalty under section 271(1)(b) of the Act. But that cannot be said to be fulfillment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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