Judgment:
1. All the above three appeals pertain to same group of assessees and involve identical issues. So, they can be disposed of by this common order for the sake of convenience and brevity.
2. At the time of hearing, Shri U.C. Jain and Shri Rajendra Jain were present on behalf of the assessee and Shri D.N. Pareek was present on behalf of the Department.
3. We have heard the learned rival representatives and have perused evidence on record.
4. In this case, penalty under Section 271(1)(c) of the IT Act, 1961, hereinafter referred to as 'the Act'), was levied by the AO.5. The AO imposed Rs. 5,000 on each of the assessees/appellants for alleged default of non-compliance of notice under Section 142(1) on 17th Nov., 1995 which was allegedly served on 23rd Nov., 1995 requiring compliance on 24th Nov., 1995. On receipt of notices fixing the case under Section 143(2)/142(1) of the Act dt. 17th Nov., 1995, all the three assessees moved an application for adjournment. This fact has not been denied by AO. Rather, it has been admitted in his order under Section 271(1)(b). But the AO did not pass any order under Section 144 of the Act on that date namely, 24th Nov., 1995. The case of the assessee is that the fact of seeking adjournment and non-finalisation of the order under Section 144 of the Act clearly proves that adjournment sought was granted by AO, so penalty cannot be imposed for non-compliance for that date. The learned Authorised Representative has relied on the Tribunal decision in the case of Asstt. CIT v. K.K.Mansinghka in ITA No. 9207/Bom/1990, dt. 26th July, 1996. The Tribunal in that case, under identical situation, deleted the penalty under Section 271(1)(b) of the Act. The excerpt of the decision are placed at p. 3 of the paper book which is being reproduced below : "We have carefully considered the rival submissions and the order of the lower authorities. We are unable to agree with the observation of the AO that it is the choice of the AO to frame an assessment either under Section 143(3)/144. The language of Section 144 is very clear and makes it very imperative by using the word 'shall' for the AO to frame an assessment under Section 144 when there is default in compliance with the notices under Section 143(2) or 142(1). In case the AO does not do it, it may reasonably be presumed that he has considered the default for this reason and for the reasons given by learned CIT(A) in his order, we uphold his order and dismiss the appeal filed by Revenue." 6. On the other hand, the learned Departmental Representative has relied on the orders of the authorities below.
7. After due consideration, we are convinced that the case of the assessee is justified. When the AO chose (not) to pass best judgment assessment under Section 144 on the date on which non-compliance by assessee is alleged and particularly when the assessee has sought adjournment for reasons mentioned in the application, this is not a case of non-compliance which can attract penalty. The learned Authorised Representative has relied on various decisions of the Tribunal which are attached in the paper book. But in the given facts and circumstances of the case, even without following the decision of the Tribunal, we are of the considered opinion that no penalties can be levied in all these cases. But we can draw support from the Tribunal order in question which has been relied upon by the learned Authorised Representative. As a result, we delete all these penalties in the three appeals of the assessees.