TaxTMI 
TaxTMI 
2011 (10) TMI 609
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....e up ITA No.226 & 228/Ahd/2011 for Asst. Year 2004-05. Common grounds raised in these appeals are as under :- ITA No.226/Ahd/2011 Asst. Year 2004-05 The following grounds have been raised in this appeal :- 1. The ld. CIT(A) has erred in law and on facts in upholding action of AO to proceed u/s 144 without granting adequate opportunities for furnishing required details. In view of the facts of the case, the impugned order requires to be quashed as bad in law and void ab initio on this ground itself, the same being passed in gross violation of principles of natural justice. 2. The ld. CIT(A) has erred in law and on facts in sustaining addition of ₹ 25,000/- out of total addition of ₹ 50,000/- made by the AO on account of estimation of income from business merely on surmises and conjectures and without proper appreciation of the facts of the case. In view of the facts of the case, the entire addition of ₹ 50,000/- needs to be deleted. ITA No.228/Ahd/2011 Asst. Year 2004-05 The following grounds have been raised in this appeal :- (1) The ld. CIT(A) has erred in law and on facts in upholding action of AO to proceed u/s 144 without granting adequate opportunities....
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.... appeal for Asst. Year 2004-05 is partly allowed." 6, Before us the ld. counsel of the assessee submitted that the addition being of small amount is not seriously pressed. The ld. DR relying on the order submitted that the ground may be decided accordingly. 7. After considering the facts of the case and rival submissions, we are of the opinion that no interference is required in the order of ld. CIT(A) and accordingly the same is confirmed. 8. In all other appeals following common ground has been raised :- IT(SS)A No. 196/Ahd/2011 Asst. Year 2001-02 The ground raised in this appeal is as under :- (1) The ld. CIT(A) has erred in law and on facts in upholding action of AO to levy penalty u/s 271(1)(b) of the Act without proper appreciation of facts. The CIT(A) as well as the AO did not appreciate the fact that the karta of the appellant HUF responded to the impugned notices by appearing for all the cases of his group which were proceeded u/s 153A in pursuance of a search. Further one of the notices refer to the penalty proceedings in which section 271(1)(b) does not apply at all. In view of the facts of the case, the impugned order requires to be quashed as bad in law and penalt....
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....stionnaire requiring very basic details and explanations. In other words the assessment was set into motion merely 2.5 months prior to the limitation period and was concluded within two months of the said notice. 4. The ld. AR of the assessee had attended before the AO on 17/10/2008 in response to the notice dated 26/9/2008 and thereafter the assessee himself attended on 28/11/2008 in response to notice dated 24/11/2008. The assessee also filed reply dated 16/12/2008 in response to notice dated 11/2/2008. 5. The very fact that the assessment has been completed on the basis of the basic details furnished by the assessee vide his reply dated 6/12/2008 itself is an indication of the fact that the AO did not require any further details and explanations. It was pointed out that out of seven assessment years, no addition has been made in respect of four assessment years and for those years the returned income has been accepted by the AO. 6. The penalty for non-attendance has been levied only in case of the three HUFs of the group while interestingly no penalty has been levied in case of the same persons in their individual capacity who all along attended before the AO several times fo....
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....plied with by the appellant. I am sorry to say that, such explanation cannot be a valid explanation for noncompliance of the notices. Further, making of an addition u/s 143(3) of the Income-tax Act is not a prerequisite condition for levying penalty under section 271(1)(b). In fact, levy of penalty under section 271(1)(b) has nothing to do with the quantum of addition made in the assessment. Further, I do not understand as to how non-compliance of notice can be termed as a technical defect. I have, therefore, no hesitation in holding that the appellant did not comply with the notices for a sufficient cause. The penalty of ₹ 50,000/- each levied in all assessment years for five different defaults is therefore, confirmed." 11. The ld. counsel of the assessee submitted that (a) the observations of the ld. CIT(A) for confirming the penalty are incorrect and without proper appreciation of the detailed submissions filed. (b) The appellant has clearly stated that all the required details were duly furnished and that since all the cases of the group were taken up one by one the details in case of the HUF were furnished at a later date as identical notices were issued fixing the same....
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....n observed as under :- "The words 'reasonable cause' are of very wide amplitude and no clear or precise definition can be laid down. In the different judicial pronouncements, the Courts have explained the expression 'reasonable cause' as one that can reasonably be said to be a cause which prevents a man of average intelligence and ordinary prudence, acting under normal circumstances, without negligence or inaction or want of bona fides." Hindustan Steel Ltd. vs. CIT 83 ITR 26 (SC) wherein it has been held as under :- "Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of law, which flows from a bona fide belief." Mahavir Agency vs. ITO (1996) 58 ITD 386 (ITAT Ahd) -wherein it has been observed that no penalty in case of only technical and venial breach of law. In view of above submissions the ld. counsel of the assessee prayed that order of the l....