M/s SLN Traders, Bangalore V. ITO, Bangalore

CO 210/BANG/2015

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4025 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-07-2016
• Assessment Year: 1996-1997
• Appeal Filed On: 16-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C RAMESH
• Assessee Lawyers: SWAPNA DAS JT
• Keywords: Initiation of penalty proceedings; Set aside
• Section: 271(1)(c); 274; 27; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.1045/BANG/2015 ASSESSMENT YEAR : 1996-97 THE INCOME TAX OFFICER, WARD 6(3)(2), BANGALORE. VS. M/S. SLN TRADERS, NO.219/11, J.P. CORP, BELLARY ROAD, SADASHIVANAGAR, BANGALORE 560 080. PAN: AAUFS 0268C APPELLANT RESPONDENT CO NO.210/BANG/2015 [IN ITA NO.1045/BANG/2015] ASSESSMENT YEAR : 1996-97 M/S. SLN TRADERS, BANGALORE 560 080. PAN: AAUFS 0268C VS. THE INCOME TAX OFFICER, WARD 6(3)(2), BANGALORE. CROSS OBJECTOR RESPONDENT REVENUE BY : SMT. SWAPNA DAS, JT. CIT(DR) RESPONDENT BY : SHRI C. RAMESH, CA DATE OF HEARING : 28.06.2016 DATE OF PRONOUNCEMENT : 30.06.2016 O R D E R THE APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF CIT(APPEALS)-2, BENGALURU DATED 27.04.2015 DELETING THE PENALTY LEVIED ITA NOS.1045/BANG/2015 & CO NO.210/BANG/2015 PAGE 2 OF 4 U/S. 271(1)(C) OF THE INCOME-TAX ACT, 1961 [HEREINA FTER REFERRED TO AS THE ACT]. THE ASSESSEE HAS FILED THE CROSS OBJECTION S RAISING A PRELIMINARY OBJECTION THAT THE CIT(APPEALS) HAS NOT GIVEN ANY F INDING ON THE SUBMISSIONS OF THE RESPONDENT-ASSESSEE THAT IN LIGH T OF THE DECISION OF THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KARN) , THE PENALTY NOTICE DATED 28.3.2002 ISSUED UNDER THE PROVISIONS OF SECTION 27 4 R.W. SEC. 271 OF THE ACT IS NOT VALID AND LEGAL, THEREFORE THE PENALTY L EVIED IS BAD IN LAW AND HAS TO BE CANCELLED. 2. SINCE THE ASSESSEE HAS RAISED A PRELIMINARY OBJE CTION WITH REGARD TO VALIDITY OF INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT, WE PREFER TO ADJUDICATE THIS GROUND AT THE THRESHOLD. 3. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE NOTICE U/ S. 274 R.W. SEC. 271 OF THE ACT WITH THE SUBMISSION THAT THE AO HAS NOT MENTION ED IN THE NOTICE AS TO WHETHER HE INTENDS TO INITIATE PENALTY PROCEEDINGS ON ACCOUNT OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. IT WAS FURTHER CONTENDED THAT THE HON 'BLE JURISDICTIONAL HIGH COURT HAS CATEGORICALLY HELD IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON & GINNING FACTORY (SUPRA) THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFICALLY STATE THE GROUNDS MENTIONED U/S. 271(1 )(C) I.E., WHETHER IT IS FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH ITA NOS.1045/BANG/2015 & CO NO.210/BANG/2015 PAGE 3 OF 4 INCOME. SENDING PRINTED FORM WHERE ALL THE GROUNDS IN SECTION 271(1)(C) ARE MENTIONED WOULD NOT SATISFY THE REQUIREMENT OF LAW. THEREFORE, IN THE LIGHT OF THESE FACTS, INITIATION OF PENALTY PROCEED INGS IS NOT IN ACCORDANCE WITH LAW AND DESERVES TO BE ANNULLED. 4. THE LD. DR SIMPLY PLACED RELIANCE UPON THE ORDER OF THE CIT(APPEALS). 2. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWE R AUTHORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT IN THE NOT ICE ISSUED UNDER SECTION 274 R.W. SEC. 271 OF THE ACT, THE AO HAS NOT SPECIF ICALLY MENTIONED AS TO WHETHER THE PENALTY PROCEEDINGS ARE INITIATED ON AC COUNT OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME. THIS ASPECT WAS EXAMINED BY THE HON'BLE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT & ANR. V. MANJUNATHA COTTON & GINNING FACTORY ( SUPRA) AND THEY HAVE LAID DOWN THE PARAMETERS UNDER WHICH PENA LTY U/S. 271(1)(C) OF THE ACT HAS TO BE LEVIED. UNDER CLAUSES (P) & (Q) OF PARA 63 OF THE JUDGMENT, THEIR LORDSHIPS HAVE HELD THAT NOTICE U/S . 274 SHOULD SPECIFICALLY STATE THE GROUNDS MENTIONED IN. 271(1)(C), I.E., WH ETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORREC T PARTICULARS OF INCOME. SENDING PRINTED FORM WHERE ALL THE GROUNDS MENTIONE D IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY THE REQUIREMENT OF LAW. 3. IN THE INSTANT CASE, UNDISPUTEDLY THE AO HAS NOT SPECIFICALLY STATED THE GROUND FOR WHICH THE PENALTY PROCEEDINGS ARE IN ITIATED. IN THE LIGHT OF ITA NOS.1045/BANG/2015 & CO NO.210/BANG/2015 PAGE 4 OF 4 THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COU RT, WE ARE OF THE VIEW THAT THE PENALTY PROCEEDINGS ARE NOT PROPERLY INITI ATED, THEREFORE, DESERVES TO BE QUASHED. WE ACCORDINGLY SET ASIDE THE PENALT Y ORDER AND DELETE THE PENALTY ON ACCOUNT OF WRONG INITIATION OF THE PENAL TY PROCEEDINGS. 4. SINCE THE PENALTY PROCEEDINGS ARE QUASHED, WE FI ND NO JUSTIFICATION TO DEAL WITH THE APPEAL OF THE REVENUE ON MERITS. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE, 2016. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 30 TH JUNE, 2016. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.