ITO vs. Audyogik Tantra Shikshan (ITAT Pune)
AO reprimanded for harassing the assessee by wrongly levying penalty
The AO levied penalty u/s 271(1)(c) which was deleted by the CIT(A). The AO filed an appeal before the Tribunal. The assessee filed a CO in which it was inter alia argued that in the assessment order which had been supplied to the assessee, there was no direction for initiating penalty though in the assessment order filed by the department with the memo of the appeal, there was a reference to the issue of notice u/s 271(1)(c). The assessee demanded costs u/s 254(2B). HELD by the Tribunal upholding the assessee's plea:
"… we are surprised to note that contents of assessment orders meant for the same A.Y. 2004-05 in the case of the same assessee, are different. Both the assessment orders are stated to have been passed by the A.O on 25.11.2006 …… The copy of assessment order filed by the assessee with its cross objection is a certified true copy by the ITO and further certified as true copy by the assessee. The above stated facts and circumstances suggest that the A.O has tried to cover up its lapses in not mentioning his satisfaction that it is a fit case for levy of penalty u/s. 271(1)(c) and recording of the initiation of penalty proceedings in the assessment order, which cannot in any way be appreciated. Under these circumstances, there is no reason to doubt the allegation of the assessee that the A.O was adamant to harass the assessee. Thus, in our view, it is a fit case of awarding cost u/s. 254(2B) of the Act, but at the same time, we appreciate the approach of the assessee as discussed hereinabove that they are not interested in the awarding of the cost but their whole purpose in making such request in awarding the cost is only to bring the high handedness of the A.O against the assessee to the notice of the Tribunal. Under the circumstances, we though restrain ourselves from awarding the cost as wished by the assessee, but at the same time, we are inclined to record over here before parting with the order that A.O should have confined himself in making just and proper assessment only, as per the provisions of the law and harassment of the assessee which is not permitted under the Statute should have been avoided at all cost."
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Shramjivi Nagari Sahakari Pat Sanstha vs. ACIT (ITAT Pune)
AO directed to pay costs for "recovery harassment"
The assessee, a credit co-operative society, contravened s. 269SS & 269T because of which penalty u/s 271E was levied. The CIT(A) confirmed the levy of penalty. Before service of the CIT(A)'s order, the assessee's bank account was attached u/s 226(3). The assessee filed a stay application and claimed that as the assessee had to bear costs owing to the illegal action of the AO, costs had to be awarded to it. HELD upholding the assessee's plea:
The AO's order of attaching the bank account of the assessee even before the service of the CIT(A)'s order was wrong in view of (a) the CBDT's letter dated 25.3.2004 advising that penalties u/s 271-D & 271-E for violation of s. 269-SS & 269-T should not be indiscriminately imposed without considering s. 273-B, (b) the CCIT's direction that demand arising out of penalties imposed u/s 271-D & 271-E should be stayed in cases of co-operative credit societies, (c) UOI v/s Raja Mohammed Amir Mohammed AIR 2005 SC 4383 where concern was expressed over dangerous attitude developing amongst Executive resulting in institutional damage & (d) KEC Interntional Ltd 251 ITR 158 (Bom) where it was held that generally coercive measures may not be adopted during the period provided by the Statute to go in appeal. Accordingly, the assessee was unnecessarily subjected to harassment by the actions of the lower authorities. It is thus a fit case for imposing costs u/s 254(2B) on the Revenue to compensate the harassment caused by the officers of the Revenue at fault.
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In Re Rajendra Singh (Bihar Human Rights Commission)
If Search & Seizure action violates "human rights", officers personally liable to pay compensation
The income-tax department conducted search and seizure operations u/s 132 at the premises of the assessee when interrogation & recording of statement was conducted for more than 30 hours and till the odd hours of the night without any break or interval. The assessee filed a complaint alleging violation of human rights. HELD upholding the plea:
The Commission is of the view that the members of the raiding party may take their own time to conclude the search & seizure operations but such operations must be carried out keeping in view the basic human rights of the Individual. They have no right to cause physical and mental torture to him. If the officer-in-charge of the Interrogation/recording of statements wanted to continue with the process he should have stopped the same at the proper time and resumed it next morning. But continuing the process without any break or interval at odd hours up to 3:30 AM, forcing the applicant and/ or his family members to remain awake when it is time to sleep was torturous act which and can not be countenanced in a civilised society. It was violative of their rights relating to dignity of the individual and therefore violative of human rights. Even die-hard criminal offenders have certain human rights which can not be taken away. The applicant's position was not worse than that. In the opinion of the Commission, the Income Tax Department should ensure that the search & seizure operations at large in future are carried out without violating one's basic human rights.
The Department was asked to show-cause why the assessee should not be monetarily compensated – from the salary of the concerned officials.
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warm regards,
CA. Rahul Bajaj
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