TaxTMI 
TaxTMI 
2017 (2) TMI 1251
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....,1961 ('the Act') by the assessing officer without appreciating that the appellant had duly responded to and complied with the notice issued under section 142(1) of the Act. 1.2 That the Commissioner of Income Tax (Appeals) erred on facts and in law in holding that the appellant failed to file copy of a bank statement not belonging to the assessee and to furnish a signed consent form in respect of that account which the assessee was not bound to furnish as no provision of law required that. 1.3 Without prejudice, that the CIT(A) failed to appreciate that penalty under section 271 (1)(b) r.w.s.273B of the Act was even otherwise not leviable since there existed 'reasonable cause' for not furnishing the 'consent-form' sought by the assessing office. The appellant craves leave to add to, alter, amend or vary from the above grounds of appeal before or at the time of hearing." 2. The facts of the case in brief are that the income tax department was having an information that the assessee was having an account with HSBC Bank, Geneva, Switzerland under profile name Partman Investments Holdings & Code BUP 9072021170 which was not disclos....
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....ce issued under section 142(1) of the Income tax Act, 1961 submitted that he did not. maintain any foreign bank account with HSBC, Geneva and the same was clarified earlier during the search proceedings and further through various letters/replies filed before the assessing officer. (Page 6 of the Paper book) 1.2.3 The learned assessing officer issued show cause notice dated 31/07/2013 under section 271(l)(b) read with section 274 of the Income tax Act, 1961 fixing the case for 08/08/2013 to show cause why an order imposing a penalty under section 271 (l)(b) of the Income tax Act, 1961 which was duly complied by the appellant. (Pages 7 to 9 of the Paper book) 1.2.4 However, the learned assessing officer imposed penalty under section 271(1)(b) of the Income tax Act, 1961 vide order dated 18/10/2013 as the appellant company denied that he is not maintaining any foreign account with HSBC, Geneva as alleged by the learned assessing officer by considering such reply filed by the appellant in response to notice as equivalent to non - compliance of notice issued under section 142(1) of the Income tax Act, 1961 for the purpose of imposing penalty under se....
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....ppellant filed reply denying of having foreign bank account in HSBC as asked by the learned assessing officer in notice issued under section 142(1) of the Income tax Act, 1961. 1.2.9. It is pertinent to note that as per the provisions of section 271(1) (b) of the Income tax Act. 1961 penalty may be imposed on the assessee for non - compliance of notice issued under section 142 (1) or 143(2) of the Income tax Act. 1961. For the sake of convenience relevant portion of section 271 (1) (b) of the Income tax Act. 1961 is reproduced as under: "271.(1) - If the [Assessing] Officer or the [***] [Commissioner (Appeals)] [or the [Principal Commissioner or] Commissioner] in the course of any proceedings under this Act. is satisfied that any person- (b) has [* * *] failed to comply with a notice [under sub-section (2) of section 115 WD or under sub-section (2) of section 115WE or] under sub-section (1) of section 142 or sub-section (2) of section 143 [or fails to comply with a direction issued under sub-section (2A) of section 142},". 1.2.10 On analysis of the provisions of section 271(1) (b) of the Income tax Act, 1961, penalty under such section may be imp....
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....e. " On analysis of the provisions of section 273B of the Income tax Act, 1961, it is quite evident that if the assessee proves that there is reasonable cause for failure to comply, penalty under section 271 (1)(b) is not imposable. Since, there existed a reasonable cause for non - compliance by the appellant in filing of documents i.e. bank statement of foreign account asked by the learned assessing officer vide notice dated 12/07/2013 issued under section 142(1) of the Income tax Act, 1961. So, the learned assessing officer erred in law in imposing penalty under section 271 (l)(b) of the Income tax Act, 1961 ignoring the provisions of section 273 B of the Income tax Act, 1961. Hence penalty of Rs. 10,000/- imposed under section 271 (1) (b) of the Income tax Act, 1961 is bad in law and liable to be cancelled. " In addition to the above, the appellant relied upon the following case laws:- * Balram Kumar Mahendra v Income-tax Officer [2012] 21 taxmann.com 222 (ITAT-Delhi) * Woodward Governors India Private Limited v Commissioner of Incometax [2001] 118 Taxman 433 (HC - DELHI) (II)) Arguments on Grounds of Appeal No. 3 3.1 The lea....
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....e Assessing Officer in the course of the assessment proceedings under provisions of the Income tax Act, 1961 and it cannot be exercised if he is not satisfied and has not recorded his satisfaction about the existence of the conditions specified in clauses (b), (c) and (d) of subsection (1) of section 271 before the proceedings are concluded. It is also settled in law that satisfaction as envisaged in section 271 should be discernible from the assessment order itself. In addition to above, the appellant relied upon the following case laws:- * Commissioner of Income-tax v Rampur Engineering Co. Limited (2009) 309 ITR 143 (HC - Delhi) * Commissioner of Income-tax v Ram Commercial Enterprises Limited (2002) 246 ITR 548 (HC - Delhi) * Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust v Assistant Director of Income tax (2008) 115 TTJ 419 (ITAT - Delhi) * Assistant Commissioner of Income tax v K K Mansinghka (ITA No. 9207/Bom./1990) (ITAT - Mumbai) * Parmeshwari Textiles v income-tax officer(2005) 146 Taxman 38 (Mag.) (ITAT- Jodhpur) (III)) Arguments on Grounds of Appeal No. 4 4.1 It is pertinent to note that the le....
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.... * Parmeshwari Textiles v Income-tax officer [2005 J 146 Taxman 38 (Mag.) (ITAT - Jodhpur) 2.2. The Ld.CIT(A) however did not find merit in the submissions of the assessee and sustained the penalty levied by the A.O. by observing in para 4.3 of the impugned order as under. "4 2 Findings: The Findings are as under:- I have carefully considered the Penalty order, statement of facts, written submission and oral arguments of Ld. AR. The objection/argument of the appellant are discussed as under.- (i) The appellant has stated that this HSBC account does not belong to him and therefore, the appellant can neither submit the documents required in connection with the bank account nor any consent form. For the sake of arguments for a moment, if the appellant is not having bank account in the HSBC, then the consent form sought by the A.O. should have been filed by the appellant, so that the A.O. can obtain the details of this alleged bank account from the HSBC. For further clarification, the section 142(1)(iii) is reproduced as under.- "Inquiry before assessment. 142(1) For the purpose of making an assessment under this Act, the Assessing ....
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....ommitted by the appellant. The case laws relied upon by the appellant have also been carefully considered and are not applicable, as same are distinguishable to the facts of the appellant. The penalty u/s 271(1)(b) is attracted for each such default and there is no prerequisite that the assessment has to be passed ex-party U/S 144 of the Act, for imposing the penalty. Any compliance made subsequently to the default committed earlier, will not absolve the appellant from the earlier default. However, in the case of the appellant even subsequent to the default under consideration, no compliance was made and the A.O. has taken adverse view in the assessment order passed U/S 153A on 27.02.2015, and addition of Rs. 69,07,414/-has been made by considering undisclosed deposits in the alleged HSBC account, in the hands of the appellant. From the above, it is clear that the appellant failed to furnish the specific information/details for the alleged bank account in the name of the appellant, i.e. consent form, without any reasonable cause. Therefore, there is a noncompliance of the notice U/S 142(1) dated 12.7.2013. In view of the above, I do not find any infirmity....
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....AYs till date. The A.O. also stated in the said letter as under. "In case you do not have the bank account statement, please furnish duly filled up, signed and notarized consent letter so that we may help you obtain the account statement from the bank. Copy of the consent letter enclosed." 5.1. In response to the afore said letter/notice, the assessee vide letter dt. 19^th July, 2013 (a copy of which is placed at page 7 of the assessee's paper book) submitted as under:- "This has reference to the notice issued to the assessee wherein it is stated that as per the information available with the department you are having an account in HSBC bank, Geneva, Switzerland having client profile name Portman Investments Holdings Ltd. (profile Code 9072021170 and the assessee has been asked to provide information/details/documents in relation to the aforesaid. In this regard, it is stated that the assessee is not maintaining any foreign bank account and this position was already clarified during the search proceedings at the time of recording of statement by the assessee and later on also to the investigation team vide letter dt. 9.1.2012 and thereafter to your ....