TaxTMI 
TaxTMI 
2018 (6) TMI 408
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....adjudicating on the facts of the case as submitted in the written submissions made on 10.09.2015. 6. The Ld. CIT(A) ought to have appreciated that the penalty levied of Rs. 30,OOO/-for the said non-compliance for summons dated 03.06.2011, 06~06.2011 and 13.06.2011 is not exigible at all. 7. The Ld. CIT(A) ought to have appreciated that out of the three dates mentioned by the Assessing Officer, there is no single occasion in which there is noncompliance from the appellant. 8. The Ld. CIT(A) ought to have appreciated that there should be at least 7 days gap between the date of serve of notice and the date of hearing and that all the three dates of hearing suffer from this defect in the appellant's case. 9. The Ld. ClT(A), before relying on the statement of the management of M/s.American lnfoserv Pvt. Ltd., ought to have given the appellant an opportunity for cross examining the management. 10. Without prejudice to other grounds, the Ld. ClT(A) ought to have appreciated that the very issuance of summons u/s 131 of the Act to the appellant who is the Authorised Representative of the assessee viz., M/ s. American lnfoserv Pvt. Ltd., calli....
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....1 to Shri P. Murali Mohana Rao for his personal appearance and production of books of account in the case of M/s. American Infoserv Pvt. Ltd, posting the case for hearing on 13.6.2011. Since there was no response to these summons on 13.06.2011, the Dy. CIT-1(1), Hyderabad referred the matter to the Add. CIT on 16.06.2011 for initiation of penalty proceedings u/s 272A(1)(C). Accordingly, the Addl. CIT issued notice to the AR on 17.06.2011 posting the case for hearing on 01.07.2011 which was served on the AR on 21.06.2011. On 01.07.2011, Shri P. Murali Mohana Rao, along with the representative of the assessee appeared and filed a letter stating that there was a minor communication gap between him and the Dy. CIT, and that he was going to attend for the hearing before him. Shri Murali was directed to show compliance by way of production of books of account and other documents by 8.7.2011. However, they were not filed before the Dy. CIT. Thereafter, some more notices were also issued to the AR, but there was no response from him. However, on 9.12.2011, a letter was filed on behalf of M/s. American Infoserv Pvt. Ltd stating that the penalty is not automatic and when reasonable cause is ....
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....the notice u/s 272A(1)(c) of the Act has to be issued for each of the non-compliance to the summons u/s 131(1) of the Act, whereas only one notice has been issued for all the three dates of hearing. He submitted that the assessee had reasonable cause for not appearing before the AO on 3.6.2011 as well as 6.6.2011 as is recorded by the Addl. CIT himself, in the penalty order. Further, he also submitted that the demand notice for penalty has been issued by the Add. CIT in violation of the procedure laid down in section 274(3) of the I.T. Act. He submitted that the Addl. CIT could not have issued the demand notice to the AR as he had no jurisdiction over him. 5. The learned DR, on the other hand, supported the orders of the Addl. CIT and submitted that the AR, party-inperson, failed to explain the reasonable cause for non-compliance to the summons issued u/s 131 of the Act and that the Add. CIT had followed the due procedure in levying the penalty u/s 272A(1)(c) of the Act.. 6. Having regard to the rival contentions and the material on record, we find that the appellant before us is the Authorised Representative of the assessee company M/s. American Infoserv Ltd. In response to ....
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....2; He shall pay, by way of penalty (a sum of ten thousand rupees) for each such default or failure (2) If any person fails- (a) to comply with a notice issued under sub-section (6) of section 94; or (b) to give the notice of discontinuance of his business or profession as required by sub-section (3) of section 176; or (c) to furnish in due time any of the returns, statements or particulars mentioned in section 133 or section 206 [ or section 206C] or section 285B; or (d) to allow inspection of any register referred to in section 134 or of any entry in such register or to allow copies of such register or of any entry therein to be taken; or (e) furnish the return of income which he is required to furnish under sub-section (4A) or sub-section (4C) of section 139 or to furnish it within the time allowed and in the manner required under those sub- sections or (f) to deliver or cause to be delivered in due time a copy of the declaration mentioned in section 197A; or (g) to furnish a certificate as required by section 203 ll[or section 206C]; or (h) to deduct and pay tax as required by sub-section (2) of sec....
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....issioner; and (c) in any other case, by the [Joint] Director or the [Joint] Commissioner (4) No order under this section shall be passed by any income-tax authority referred to in sub-section (3) unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority" We find that the penalty u/s 272A(1) is not automatic and compulsory. The provisions of section 272A(1) and (2) and clause (c) or (d) of sub-section (1) are covered by the provisions of 273B of the Act; as per which, where the assessee has proved that there was a reasonable case for the default, the penalty is not leviable. 8. Further, section 274 lays down procedure for levy of penalty as under: "Section 274 of the I.T. Act (1) No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. (2) No order imposing a penalty under this Chapter shall be made- (a) by the Income- tax Officer, where the penalty exceeds ten thousand rupees; (b) by the Assistant Commissioner, where the penalty exceeds twenty thousa....
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....ng that AO has completed assessment u/s. 143(3) and not u/s. 144, the subsequent compliance can be considered as 'good compliance' for the earlier notices given. The Co-ordinate Bench in the case of Gloubs Infocom Limited Vs. DCIT (supra) has on similar circumstances held as under: "5. We have heard the rival submissions and perused the material on record. We find that the instant appeal is squarely covered by the decision of the Co-ordinate Bench of IT AT Delhi in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan trust vs ACIT 5 DTR 429 (Delhi Tribunal) wherein the Coordinate Bench in paras 2.4 and 2.5 has held as under:- "2.4 Coming to the issue of recording of satisfaction, it may be mentioned that mere initiation of penalty does not amount to satisfaction as held by Hon'ble Delhi High Court in the case of CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del). In absence of recording of the satisfaction in the assessment order, mere initiation of penalty will not confer jurisdiction on the AD to levy the penalty. 2.5 We also find that finally the order was passed under s. 143(3) and not under s.....