TaxTMI 
TaxTMI 
2019 (11) TMI 654
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....ate default on the part of the appellant in making compliance to the requirements of summon under section 131 of the Income Tax Act dated 12.09.2007 when each and every date of hearing was attended by the Authorised Representative and thereafter another modified summon was issued on 12.10.2007 in respect of same requirements thereby merging summon dated 12.09.2007 which had automatically become in-fructuous in light of the issuance of new summon dated 12.10.2007. 3. That without prejudice in any view of the matter the Ld. CIT(A) should have appreciated that the appellant was prevented by a reasonable cause within the meaning of section 273B of the Income Tax Act in alleged non-compliance of summon issued under section 131 of the Income Tax Act and, therefore, there was no justification in the levy of penalty under section 272A(l)(c) of the Income Tax Act. 4. That the appellant craves leave to add, alter, amend or withdraw any or all the grounds of appeal on or before the date of hearing." ITA No.- 3511/Del/2012 "1. That on the facts and circumstances of the case as well as in law the Ld. CIT(A) is not justified in confirming the penalty of Rs. 10,000/-....
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.... and circumstances of the case and also without prejudice relying on the provisions of section 273B of the Income Tax Act foi reasonable cause for the delay in complying with the requirements made by summon issued under section 131 of the Income Tax Act. In para 2.1 of the penalty order the Addl. Commissioner of Income Tax has set out the brief facts of the case as reported to him by the Assessing Officer. Thereafter in para 2.2 he has extracted the reply of the appellant submitted to him in response to his show cause notice dated 30.01.2009. Thereafter the para 3.1 to para 3.5, the Addl. Commissioner of Income Tax has reached to the conclusion that the appellant has failed to discharge his legal obligations and the non-compliance of the assessee is visible on the record itself and thereafter he has proceeded to levy penalty of Rs. 10,000/- on the appellant for failure to comply with the requirements called for vide summon under section 131 of the Income Tax Act. 5. The appellant filed a written submissions. The relevant portion, setting out the facts of the case reads as follow:- The brief facts of the case are that in this case during the cours....
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....t only and, therefore, in all the accounts the information which was called for had to be collected and assimilated which was not a easy task. Here it is necessary to bring on record that the assessment proceedings of the appellant were also in progress and in the intervening period between 12.10.2007 to 26.12.2007, i.e. the last date of hearing of the case various notices were issued by the L'd Assessing Officer including summon under section 131 of the Income Tax Act on 23.10.2007 and again on 04.12.2007 calling for further information required for the purposes of assessment and it will very well be appreciated that the preparation of details which were called for through summon of the L'd Assessing Officer on 12.10.2007, for non- compliance of which penalty has been levied, was not only the job which was entrusted with the appellant company and he had to look after all the aspects of the assessment and furnishing of the details which were called for from time to time, (copies of the notices and summon are enclosed herewith). Further, as regards calling for the information on print out mode, all along since the issue of the summon the appellant had asked the L'd....
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....mon dated 12.10.2007 further more summons were issued by the Assessing Officer in the course o the assessment proceedings for compliance of various further details and the concerned staff was practically engaged in the preparation of the details which were called for by the Assessing Officer relating to the assessment proceedings which were getting barred by limitation on 31.12.2007 and also some time was required for preparation of the return for the A.Y. 2007-08 which was to be filed by 31st October and since the information which was called for by the Assessing Officer vide summon issued on 12.10.2007 was at a very late stage, assimilation of the information called for vide summon could not be made by the appellant due to paucity of time and, therefore, there was a reasonable cause within the meaning of section 273B of the Income Tax Act with the appellant in making only part compliance in respect of the information called for vide summon issued by the Assessing Officer. 9. In light of the above facts and circumstances, it was prayed by the appellant that this was not a fit case for levy of penalty under section 272A(l)(c) of the Income Tax Act and, therefore, the penal....
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....d to levy penalty of Rs. 10,000/- on the appellant for failure to comply with the requirements called for vide summon under section 131 of the Income Tax Act. 5. The appellant filed a written submissions. The relevant portion, setting out the facts of the case reads as follows The brief facts of the case are that in this case during the course of the assessment proceedings summon under section 131 of the Income Tax Act was issued by the L'd Assessing Officer on 12.09.2007 calling for certain information with reference to deposits on CD format. The appellant objected to the calling for information on the CD format and, therefore, on 12.10.2007 another summon was issued calling for the same information in respect of collections and repayments of deposit in print out form. The appellant company is a Residuary Non-Banking Company. During the year it has mobilized deposits to tune of Rs. 6,391.65 crores through the services of its agent M/s Sahara India spread over 1500 branches and this amount represented collections made from about 3 crore depositors. The L'd Assessing Officer required the appellant to furnish branch-wise details of collections sort....
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....the appellant company and he had to look after all the aspects of the assessment and furnishing of the details which were called for frontline to time, (copies of the notices and summon are enclosed herewith). Further, as regards calling for the information on print out mode, all along since the issue of the summon the appellant had asked the L'd Assessing Officer as whether he was prepared to accept the details in the print out form but he kept on insisting the same to be on CD format only. Because of these reservations the appellant submitted the details which were called for by the L'd Assessing Officer in respect of 70 branches. The L'd Assessing Officer thereafter treated the appellant to be in default in respect of non-submission of details of the balance branches and has levied penalty under section 272A(l)(c) of the Income Tax Act. Another factor which has to be taken in to consideration is that part compliance of the same has been made by the appellant and, therefore, the same cannot be equated with non-compliance and the appellant should not have been visited with the penalty under section 272A(l)(c) of the Income Tax Act on the facts and circum....
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....x Act with the appellant in making only part compliance in respect of the information called for vide summon issued by the Assessing Officer. 9. In light of the above facts and circumstances, it was prayed by the appellant that this was not a fit case for levy of penalty under section 272A(l)(c) of the Income Tax Act and, therefore, the penalty should be cancelled. 10. I have considered the submission given by the appellant as well as the observation of the Assessing Officer. The contention of the appellant that the details asked by the Assessing Officer was voluminous and had to be collected and assimilated may be true but this does not absolve the appellant of the fact that it did not comply with the requirements made by the Assessing Officer. When the accounts are maintained on computer then the contention that the information was voluminous cannot be taken as an alibi for not furnishing the same. It hardly takes a few minutes to print the information and even if it is to be collected from various branches the same can be retrieved in few minutes by receiving it through Emails. The Assessing Officer in the penalty order has mentioned the various dates on which ....
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.... Disk ("CD"). However, according to him, there was no statutory obligation on the part of the assessee to submit the information in the form of CD and that filing of the details in the form of printouts is sufficient compliance. However, he fairly admitted that even in the form of printouts, no details were submitted by the assessee in respons to the aforesaid summons dated 12.09.2007. Regarding the summons dated 12.10.2007, the Ld. Counsel for assessee submitted that the same information which was earlier called for by the AO vide summon dated 12.09.2007 in the form of CD were now called for in the form of print outs vide summons dated 12.10.2007. The Ld. Counsel for assessee submitted that partial compliance was made to the aforesaid subsequent summons dated 12.10.2007. The Ld. Counsel for assessee also relied on order dated 23.05.2008 of Co-ordinate Bench of ITAT, Delhi, in ITA No. 581, 586 to 589/Del/2006 for Assessment Years 1999-00, 2001-02 & 2002-03 wherein Coordinate Bench of ITAT, Delhi had deleted penalty levied U/s 272A(1)(c) of I.T. Act. He also took us through the contents of the Paper Book; and contended that the penalties levied U/s 272A(1)(c) of I.T. Act for Assessm....
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....is distinguishable, as mentioned in foregoing paragraph (E) of this order; we have find that the aforesaid penalty levied by Ld. Addl. CIT, and confirmed by the Ld. CIT(A); was just and proper in the facts and circumstances of the appeals before us. Accordingly, penalties levied by the Addl. CIT and confirmed by the Ld. CIT(A) are hereby upheld. (G) In the result, appeal filed by assessee is dismissed. Order pronounced in the open court on 07/11/2019. ============= Document 1 2.1 under:- The brief facts of the case as reported by the Assessing Officer are as "Summons u/s.131 of the Income Tax Act, 1961 dated 12/09/2007 was issued to the assessee company and thereby assessee company M/s. Sahara India Financial Corporation Ltd. was asked to furnish the details as per Annexure-A attached with the summon before the undersigned on 25/09/2007. Sh. Sanjeev Singh appeared on behalf of the assessee on 25/09/2007 in response to Summon dated 12/09/2007 and filed an adjournment application. Considering the assessee's request, the hearing of the case is fixed for 3/10/2007. On 4/10/2007, the authorized representative of the assessee, Sh.D.R. Rajan ....
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....ce certain details but after 10 days assessee came up with adjoumment application. This clearly shows that assessee does not want to furnish the details as required vide notice u/s.131 dated 12.10.2007. Meaning thereby that assessee is not cooperative with the Department. Assessee is once again requested to fumish the following details as desired by this office vide notice u/s.131 dated 12.10.2007, on or before 2.11.2007 failing which adverse inference will be drawn and coercive action will be taken as per I.T.Act, 1961." On the appointed date 02-11-2007, Assessee has failed to furnish the details as required vide summon dated 12-09-2007 & 12-10-2007." In response to the notice dated 30.01.2009, the assessee vide its reply dated 06.04.2009 has submitted as under:- "In this case penalty proceedings under section 272A(1)(c) have been initiated by your honour on the basis of information received from the Assistant Commissioner of Income Tax, Central Circle-6, New Delhi according to which the assessee has without reasonable cause failed to furnish the details as required vide summons u/s.131 dated 12.09.2007 and accordingly you have as....
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.... wherein assessee was requested to furnish the complete details of depositors on CD. addition to this certain other details (as per Annexure-A enclosed with notice u/s.131) were called for (in print out form). Assessee is once again requested to comply the summon and furnish the details in print cut form as required in Annexure-A enclosed with the notice. Case is fixed for 22.10.2007. On the very said date, i.e. 12.10.2007 another summon u/s 131 of the Income Tax Act was issued by the Assessing Officer in which similar information was called for once again by the Assessing Officer as was called for in the summon dated 12.09.2007 and it was clarified that the information is being called for by him in print-out form. The said summon also included certain more information which was further requisitioned from the assessee by the Assessing Officer. Your honour will appreciate that there is no non-compliance on the part of the assessee to the summon issued on 12.09.2007. Once, summons were again issued on 12.10.2007 by the Assessing Officer with certain modification, the summon issued on 12.09.2007 stands merged with the summon issued on ....
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.... information in print format. On this, the A.O. again issued summons u/s.131 on 12.10.2007 wherein the requirement of furnishing the information on CD format was not required but the other details called for were the same as on 12.09.2007 besides some more. 3.3 The assessee has taken the plea that there was no non-compliance on 12.09.2007 as the A.O. issued a fresh summons on 12.10.2007 with certain modification and therefore, the summons dated 12.09.2007 stood merged with the summon dated 12.10.2007. Thus, the main plea of the assessee is that the summons dated 12.09.2007 stood merged with the summons dated 12.10.2007 and, hence, there can be no penalty for non-compliance of the summons dated 12.09.2007. 3.4 The stand taken by the assessee is not acceptable. It is a fact that the assessee failed to furnish the on the stipulated date of 25.09.2007 as required under the summons u/s.131 dated 12.09.2007. The assessee requested for Document 5 adjournment of three weeks on 25.09.2007. The A.O. has granted an adjournment of one week in the first instance upto 3.10.2007 and another one week or slightly more upto 12.10.2007. On this day, t....
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....ied that there was a failure on the part of the assessee without any reasonable cause and the assessee's claim that there was reasonable cause for failure to comply with the summons u/s.131 is rejected and penalty of Rs. 10,000- for the default of 12.09.2007 is hereby imposed. Document 6 2.1 under:- The brief facts of the case as reported by the Assessing Officer are as "Summons u/s.131 of the Income Tax Act, 1961 dated 12/09/2007 was issued to the assessee company and thereby assessee company M/s. Sahara India Financial Corporation Ltd. was asked to furnish the details as per Annexure-A attached with the summon before the undersigned on 25/09/2007. Sh. Sanjeev Singh appeared on behalf of the assessee on 25/09/2007 in response to Summon dated 12/09/2007 and filed an adjournment application. Considering the assessee's request, the hearing of the case is fixed for 3/10/2007. On 4/10/2007, the authorized representative of the assessee, Sh.D.R. Rajan appeared and filed an adjournment application. Vide note sheet dated 4/10/2007, the case was fixed for 12.10.2007 and during the course of hearing on 04.10.2007, the following note sh....
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....s. 131 dated 12.10.2007. Meaning thereby that assessee is not cooperative with the Department. Assessee is once again requested to furnish the following details as desired by this office vide notice u/s. 131 dated 12.10.2007, on or before 2.11.2007 failing which adverse inference will be drawn and coercive action will be taken as per I.T.Act, 1961." On the appointed date 02-11-2007, Assessee has failed to furnish the details as required vide summon dated 12-09-2007 & 12-10-2007." In response to the notice dated 30.01.2009, the assessee vide its reply dated 06.04.2009 has submitted as under:- "In this case penalty proceedings under section 272A(1)(c) have been initiated by your honour on the basis of information received from the Assistant Commissioner of Income Tax, Central Circle-6, New Delhi according to which the assessee has without reasonable cause failed to furnish the details as required vide summons u/s. 131 dated 12.10.2007 and accordingly you have asked the assessee to show cause as to why penalty under section 272A(1)(c) of the Income Tax Act may not be levied on the assessee. In this connection, your honour's attention ....
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....tted. In the intervening period, i.e., 12.10.2007 to 26.12.2007 various other notices under section 131 were issued by the Assessing Officer on 23.10.2007 and 4.12.2007 and other information in respect of assessment proceedings was called for by him and the assessee was also busy in the preparation thereof so as to comply with the requirements of other summons issued by the Assessing Officer. Further due date of filing of the return for the Assessment Year 2007-08 also fell which was 31.10.2007 which also consumed some time of the representative of the assessee. Looking to all these factors, considering the magnitude of the details called for and the fact that the assessee has complied with the details although in part, it will be appreciated that there is no non-compliance on the part of the assessee as has been alleged in the report submitted before your honour by the Document 9 Assessing Officer for initiating the proceedings u/s. 272A(1)(c) of the Income Tax Act. Without prejudice to the above, it may further be added that prima facie the notice issued by your honour u/s.272A(1)(C) of the Income Tax Act for the first time on ....
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....t can only be said that the assessee is under a legal obligation to comply with the procedures in tax proceedings. Therefore, a plea of failure to comply with one proceedings on account of another future legal compliance shall not be normally admissible. The Assessing Officer seems to have given multiple adjournments to the assessee in the course of the assessment proceedings. The summons u/s. 131 was issued dated 12.09.2007 The assessee took adjournments on 25.09.2007, 4.10.2007, 12.10.2007. The Assessing Officer again issued a summon on 12.10.2007 because of the continued non-compliance and ask for the details to be furnished by 22.10.2007. But the assessee again filed an adjournment application on 23.10.2007. The assessee was given a final Document 10 opportunity to furnish the details on 02.11.2007 on which date again no details were furnished. Therefore, the non-compliance of the assessee is visible on record. As per the assessee's own version, after taking all this time, it only furnished partial details. Therefore, there is complete failure on the part of the assessee to discharge its legal obligation to the summons u/s.131 date....
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....tituted by summon dated 12.10.2007. Thus, in effect first summons dated 12.9.2007 were rendered infructuous. In any case, summons dated 12.9.2007 stand merged in second summons dated 12.10.2007. Therefore, no penalty for non compliance of summons dated 12.9.2007 is warranted, more so because non compliance on 25.9.2007 and 4.10.2007 was not without reasonable cause. It is submitted accordingly. Document 13 Brief Synopsis Issue: Levy of penalty u/s 27 A(1)(c) for non compliance of summons u/s 131 dated 12.10.2007. Facts in brief Date 12.9.2007 25.9.2009 And 4.10.2007 12.10.2007 22.10.2007 Particulars Summon u/s 131 was issued (ITA No.3510/D/2011). Assessee was required inter-alia to file details on CD of top 400 depositors of 1500 branches spread all over India as per Annexure-A (page 12 & 13 of paper book). Summon dated 12.9.2207 was received on 15.9.2007 and details were to be furnished on 25.9.2009. Since information sought was extensive and substantial time was required to assimilate the data as above, therefore, the assessee requested for three weeks time (page 14 of paper book) but the case was adjour....