1 IN INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) S.No. ITA No. Asstt.Year Appellant Respondent. 1 to 6 192 to 2005-06 to Smt. Asstt. 197/Nag/2016 2010-11. Rajkumari Commissioner of Agrawal, Income-tax, Nagpur. Central Circle- 1(2), Nagpur. 7. 199/Nag/2016 2005-06 Shree Asstt. Agrawal Commissioner of Finance India Income-tax, Pvt. Ltd., Central Circle- Nagpur. 1(2), Nagpur. 8. 206/Nag/2016 2005-06 Thanjavur Asstt. Commerce Commissioner of Pvt. Ltd., Income-tax, Nagpur. Central Circle- 1(2), Nagpur. 9 to 11. 208 to 2007-08 to Thanjavur Asstt. 210/Nag/2016 2009-10 Commerce Commissioner of Pvt. Ltd., Income-tax, Nagpur. Central Circle- 1(2), Nagpur. 12. 217/Nag/2016 2009-10. Dharampal Asstt. Rajkumar Commissioner of Agrawal, Income-tax, Nagpur. Central Circle- 1(2), Nagpur. 13 to 222 to 2007-08 to Marytimes Asstt. 17. 226/Nag/2016. 2011-12. Suppliers Pvt. Commissioner of Ltd., Nagpur. Income-tax, Central Circle- 1(2), Nagpur. 18&19. 320&321/Nag/2016 2006-07 & Shri Darpan Asstt. 2007-08 Agrawal, Commissioner of Nagpur. Income-tax, Central Circle- 1(2), Nagpur. 2 20 to 326 to 2005-06 to Mansa Agro Asstt. 22 328/Nag/2016. 2007-08. Food Commissioner of Processing Income-tax, Pvt. Ltd., Central Circle- Nagpur. 1(2), Nagpur. Appellant by : Shri J.M. Ranade. Respondent by : Smt. Agnes P. Thomas. Date of Hearing : 04-10-2016 Date of Pronouncement : 4th Oct., 2016 O R D E R. These are appeals by assessees belonging to same group against respective orders of learned CIT(Appeals) confirming levy of penalty u/s 271(1)(b) amounting to Rs.10,000/- for each of year. 2. At outset it is noted that assessees belong to same group. Some of group cases have already been decided by this ITAT earlier. Learned counsel of assessee has submitted that facts of these cases and those cases earlier dealt with by Tribunal are same except for minor variation that assessment orders in case of ITA Nos. 206, 208, 209 and 210/Nag/2010 in case of Thanjavur Commerce Pvt. Ltd., Nagpur were passed u/s 144 of I.T. Act and not u/s 143(2) of I.T. Act as in other cases. However, learned counsel submitted that still assessee has case of reasonable cause for non appearance on specified date as mentioned in other cases. Further more learned counsel submitted that this penalty is only for technical breach and hence he placed reliance upon Hon ble Apex Court decision in case of Hindustan Steel Ltd. vs. State of Orissa 83 ITR 26 for proposition that penalty need not be levied for technical breach. 3 3. Per contra learned D.R. relied upon orders of authorities below. She submitted that AO has levied minimum penalty for only one default and that assessee cannot get away for non appearance in search cases. 4. I have carefully considered submissions and perused records. I find that this Tribunal has considered similar issue in case of Shree Agrawal Oil Industries Pvt. Ltd., Nagpur Vs. Asstt. Commissioner of Income-tax, Central Circle-1(2), Nagpur in ITA Nos. 313 to 316/Nag/2016 vide order dated 26-09-2016. adjudication of ITAT is as under : 9. I have carefully considered submissions. I note that in this case as per facts emanating from orders of authorities below assessee was given notice which was served on 11-01-2013 by which assessee was requested to attend and submit details on 15-01-2013. It was this non attendance of assessee against which penalty u/s 271(1)(b) was levied. On 15-02-2013 show cause letter was issued which was served on 18-02-2013 in response to which assessee submitted reply. Thereafter assessment order u/s 143(3) was passed. Now perusal of facts clearly indicate that this was case of search and seizure on big group. Four days time to submit details in such case is not at all reasonable from any stretch of imagination. Further more assessee did reply to subsequent show cause notice and assessment was framed u/s 143(3) of I.T. Act. This has also to be looked into on anvil of assessee s submission that AO has refused assessee recording of attendance specified date and for which assessee has petitioned to higher authorities. 10. In these circumstances, in my opinion, there was reasonable cause for non attendance of assessee. Hence on anvil of section 273B penalty is not leviable. Again issue is squarely covered by decision of ITAT, Delhi Bench in case of Akhil Bhariya Prathmik Shikshak Sangh Bhawan Trust vs. Asstt. Director of Income-tax (supra). I may gainfully refer to concluding portion of Tribunal s order as under : . .3 We have considered facts of case and rival submissions. We find that Hon'ble Gujarat (sic-Rajasthan) High ' Court has clearly distinguished between cls. (a) and (c) of sub-so (1) of S. 275. Under cl. (a), levy of penalty is dependent upon findings of appellate authorities, which is not case under cl. (c). In this case, default of non- attendance to notices was not subject-matter in quanturnt appeat and it in no way depended upon outcome in appeal, 4 penalty depends upon whether default was wilful or not, Therefore, we are of view that ratio of case of Hissaria Bros. (supra) will be applicable in this case also. Consequently, it is also held that order ought to have been passed on or before 31st Sept., 2001, failing which levy will become barred by limitation. 2.4 Coming to 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 case of CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del). In absence of recording of satisfaction in assessment order, mere initiation of penalty will not confer jurisdiction on AD to levy penalty. 2.5 We also find that finally order was passed under s. 143(3) and not under s. 144 of Act. This means that subsequent compliance in assessment proceedings was considered as good compliance and defaults committed earlier were ignored by AD. Therefore, in such circumstances, there could have been no reason to come to conclusion that default was willful. 2.6 In view of aforesaid discussion, it is held that learned CIT(A) was not right in upholding levy of penalty. Thus, appeal is allowed. 11. I find that above case law fully applies on facts of case. Learned CIT(Appeals) has erred in distinguishing this case law as he has opined that assessment order in present case though passed u/s 143(3) of I.T. Act it appeared to him to be passed u/s 144 of I.T. Act. In my considered opinion this is not at all tenable ground for distinguishing decision of ITAT. 12. Further as above facts clearly indicate that it is technical breach and in such circumstances, as held by Hon ble Apex Court in case of Hindustan Steel Ltd. vs. State of Orissa 83 ITR 26, penalty need not be levied Hence in background of aforesaid discussion and precedent I have no hesitation in deleting levy of penalty. Accordingly orders of authorities below are set aside and issue is decided in favour of assessee. 5. I find that facts in present cases are identical to one dealt by Tribunal above except for minor variation in case of Thanjavur Commerce Pvt. Ltd., wherein assessment order was passed u/s 144 of I.T. Act. However, still in this case I find that there was similar reasonable cause for non appearance on specified date as mentioned herein above and also ratio that Hon ble Apex Court decision in case of Hindustan Steel Ltd. (supra) also applies. Accordingly in background of aforesaid discussion and 5 precedent I set aside orders of authorities below and delete levy of penalty. 6. In result, these appeals filed by assessees stand allowed. Order pronounced in Open Court on this 4th day of Oct., 2016. Sd/- ( SHAMIM YAHYA) ACCOUNTANT MEMBER. Nagpur, Dated: 4th Oct. , 2016. Copy forwarded to : 1. ________________________ 216, Devi Kripa Society, Wardhaman Nagar, Nagpur-440001. 2. A.C.I.T., Central Circle-1(2), Nagpur. 3. C.I.T.- (Central), Nagpur. 4. CIT(Appeals), -3, Nagpur. 5. D.R., ITAT, Nagpur. 6. Guard File True Copy By Order Assistant Registrar, Income Tax Appellate Tribunal, Nagpur Bench, Nagpur. Wakode. Rajkumari Agrawal v. Asstt. Commissioner of Income-tax, Central Circle- 1(2), Nagpur