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TMI Blog2022 (7) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... rial. AO has completely ignored the request of the assessee then the question of paying the copying charges or specifying the documents does not arise. The contention of Ld. DR on this point is devoid of merits. Therefore, the case of the assessee falls in the ambit of section 273B as the assessee has proved that there was a reasonable cause for failure to comply with the notice issued under section 142(1) - The decisions relied upon by the learned DR would not help the case of the Revenue in the specific facts of the present case. Accordingly, the penalty levied u/s 271(1)(b) is deleted. Appeal of assessee allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed penalty without application of mind. 3. That in any view of the matter a survey u/s 133A of the IT Act was conducted on 11/09/2018 and in the course of survey certain loose papers were seized for earlier years etc and therefore a notice under section 148 of the IT Act dated 18/10/2018 was issued and in compliance to said notice a request in writing vide the letter dated 29/10/2018 was made requiring thereby copies of seized materials, reasons recorded and also statement recorded but the assessing officer failed to provide the copies of the same to the appellant, hence the action of the assessing officer in imposing penalty which was confirmed by the Commissioner of Income Tax (appeal) without considering the facts properly is unjustified, incorrect and illegal. 4. That in any view of the matter before the learned Commissioner of Income Tax (appeal) a voluminous paper book was filed which includes submission, statement, affidavit, copy of the original return, various case laws including the decisions of jurisdictional High Court, Copies of ITAT order, copies of CIT (Appeals) order in other cases but the Commissioner of Income Tax (appeal) failed to consider the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 4.1.2019 and again requested the Assessing Officer to supply the copies of the documents impounded during the course of survey carried out on 11.9.2018. The assessee also made a reference of the reply dated 29.10.2018 and was annexed to the said reply dated 4.1.2019. The learned AR has thus contended that the assessee has duly replied to the notice issued by the Assessing Officer but for want of the copies of the impounded material, the assessee was not in a position to either file the return of income or to comply with the notice issued under section 142(1). He has referred to the reply of the notice issued under section 148 as well as under section 142(1) which are placed at page nos. 13 and 18 of the paper book. He has further contended that even the quantum appeals are still pending adjudication before the CIT(A)(National Faceless Appeal Centre, Delhi). He has filed the status of the appeals available on the website of the National Faceless Appeal Centre, Delhi and submitted that the appeals were last listed in the month of February, 2021 and thereafter, no date is mentioned in the status report. The learned AR has also referred to the submissions of the assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impounded documents whatsoever, as the assessee also not paid the copying charges and therefore, the assessee cannot take this plea and excuse for non filing the return of income as well as non-compliance of notice under section 142(1) of the Act. He has further contended that it is a case of persistent non-compliance of statutory notices issued under section 142(1) for all the assessment years under consideration. The Assessing Officer issued repeated reminders but of no avail therefore, the assessee has committed the default without any reasonable cause and hence the penalty levied under section 271(1)(b) is justified. He has relied upon the decision of Hon'ble jurisdiction High Court in the case of Shivji Palace Hotel and Club (P.) Ltd. vs. Commissioner of Income Tax 37 taxmann.com 215 (Alld). The learned DR has also relied upon the impugned orders of the authorities below. 5. We have considered the rival submissions as well as relevant material on record. The Assessing Officer levied the penalty under section 271(1)(b), vide order dated 30.1.2019 as under:- "Assessment proceedings for 'income escaping assessment' u/s 147 were initiated with Notice u/s 148 date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtinent to note that in the notice under section 148 dated 17.10.2018, the Assessing Officer allowed 30 days' time to the assessee to file the return. For ready reference, the notice issued under section 148 placed at page no. 14 of the paper book is reproduced as under:- Notice Under Section 148 of the Income Tax Act, 1961/317 Sir, Madam/M/s. Whereas I have reason to believe that your income chargeable to Tax for the Assessment Year 2014-15 has escaped Assessment within the meaning of section 147 of the Income Tax Act, 1961. I, therefore, propose to assess/re-assess the income/loss for the said Assessment Year and I hereby require you to deliver to me within 30 days from the service of this notice, a return in the prescribed form for the said Assessment Year. This notice is being issued after obtaining the necessary satisfaction of the ADL/JCIT, RANGE -1, ALLAHABAD." Therefore, the assessee was having the time upto 16.11.2018 to file the return of income in response to the notice under section 148. In the meantime, the assessee has requested the Assessing Officer /DCIT Circle-1, vide letter dated 29.10.2018 to supply the copies of the documents / records including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016-17 and 2017-18 and request for supply of documents impounded during the course of survey In connection with above I beg to submit that I have applied for the copy of documents impounded during the course of survey carried out at my hospital premises at 800/603A, Mumfordganj, Allahabad. A copy of application dated 29th October 2018 is enclosed herewith for the perusal of your goodself. 2. As the aforesaid documents is required to compile my returns of income to be filed in compliance to the notice u/s 148 and make the compliance to the notices issued under section 142(1) of the Income Tax Act, 1961. It is therefore requested to your goodself may kindly supply the copy of documents impounded during the course of survey to make the necessary compliance to the notices issued under section 148 and 142(1)." 8. The assessee has reiterated its request to supply the copy of the documents impounded during the course of survey and also made a reference of the earlier application dated 29.10.2018. The Assessing Officer in the meantime ignored the request of the assessee to supply the copies of the impounded material issued the reminders of notice under section 142(1) on 15th / 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces were made but on 22.02.19 (i.e. within less than 4 months) ex-parte assessments were framed when the time limit for framing the assessment was upto 31.12.19. Further penalty was also imposed by alleging non-compliance which is incorrect as there was no limitation for forming the assessments in 4 months when original returns were already on records. The allegation of non-compliance is at all not correct and for which the assessee is seriously objecting for imposition of such penalty in arbitrary manner. The brief of the case are as under -: That the assesses is an individual engaged in medical profession from the year 2012 and running a nursing home under the name and style of M/s Ayushi IVF & Laparoscopy Centre (Hospital) and has been filing her returns of income for last more than 25 years. In respect of business activities, regular books of accounts have been maintained and audited too year after year. The assessment records of the assessee in the department from beginning till date are neat and clean in respect of making compliances as a result there was no ex-parte decision nor any penalty under any provisions of the I.T. Act was ever imposed. The returns were always fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o required a copy of the assessee's statement recorded at the time survey but the requests were unheard and till date nothing was provided to the assessee which shows approach and working of the department in present case. That in compliance to the notices dated 16.10.2018 u/s 148 of the IT Act the assessee filed an application on 29.10.2018 requiring photo copies of the documents seized during the survey, copy of reason if any recorded for issue of the notices u/s 148 of the IT Act and also copy of assessee's statement recorded at time of survey but the department kept silent and provided only copies of few documents only and in spite of assessee's requests copy of reason so recorded for issue of the notice u/s 148 of the IT Act was not provided to the assessee till date and as a result the assesses is unaware that on what basis/ground the proceeding was started. Even the assessee approached the higher authorities also to direct the assessing officer to provide copies, of the aforesaid documents to the assessee but of no use as nothing was done. Sir kindly consider that on 16.10.2018 the notices u/s 148 of the IT Act were issued and on 22.02.2019 assessment was fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and effective opportunity of being heard to the assessee imposed a penalty of Rs. 10,000/- for each of the above mentioned assessment years vide his orders dated 30.01.2019 in arbitrary manner which is highly objectionable, unjustified and wrong, therefore the same is liable to be deleted in all fairness as well as in the facts and circumstances of the case. That in this regard the assessee reply upon following decisions including the decision of Hon'ble Supreme Court in the case of Hindustan Steel Limited v. State of Orissa (83 ITR 36) where it was held that order imposing penalty for failure to carry out a statutory obligation is the result of quasi criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately. The said order of Hon'ble Supreme Court was followed by various ITAT benches and copies of those decisions are enclosed at page no of the paper book It is therefore prayed that in the light of submission made above and considering the various decisions penalty as imposed is not correct and liable to be deleted." 9. The assessee has clearly pointed out before the CIT(A) that the Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nducted on 11/09/2018 and in the course of survey certain loose papers were seized for earlier years etc and therefore a notice under section 148 of the IT Act dated 18/10/2018 was issued and in compliance to said notice a request in writing vide the letter dated 29/10/2018 was made requiring thereby copies of seized materials, reasons recorded and also statement recorded but the assessing officer failed to provide the copies of the same to the appellant, hence the action of the assessing officer in imposing penalty which was confirmed by the Commissioner of Income Tax (appeal) without considering the facts properly is unjustified, incorrect and illegal. 4. That in any view of the matter before the learned Commissioner of Income Tax (appeal) a voluminous paper book was filed which includes submission, statement, affidavit, copy of the original return, various case laws including the decisions of jurisdictional High Court, Copies of ITAT order, copies of CIT (Appeals) order in other cases but the Commissioner of Income Tax (appeal) failed to consider the materials/evidences with judicious approach hence his action is not a judicious action in the eyes of law and show a fatal flow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued under section 274 r.w.s. 271(1)(b) was without supplying the assessee copies of the impounded material and thereby the assessee could not comply with the notice under section 142(1) of the Income Tax Act. Further, it is evident from the record that for the assessment year under consideration, the Assessing Officer finally supplied the copies of the impounded material only on 28.01.2019 whereas the impugned order under section 271(1)(b) was passed on 30.01.2019. In fact, supplying the copies of the seized document just before passing the penalty order goes to prove that assessee was deprived of the relevant record required for compliance of notice issued under section 142(1) of the Act. Therefore, assessee was having a reasonable cause for non-compliance of the notice under section 142(1) of the Act for want of the necessary record impounded by the Department and copies of the same was not supplied to the assessee in time so as to do the needful for compliance of notice under section 142(1) of the Act. Accordingly, in the facts and circumstances of the case, we are of the considered view that the assessee was having a reasonable cause for failure to comply with the notice unde ..... 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