LAKHAMSHI J. GALA (HUF), MUMBAI V. ACIT 18(2), MUMBAI

ITA 1088/MUM/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5135 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 16-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Assessment record; Set aside
• Section: 271(1)(c); 274; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1088/M/2017 ASSESSMENT YEAR: 2009-10 M/S. LAKSHAMSHI J. GALA (HUF), HAROON HOUSE, 1 ST FLOOR, 294 PERIN NARIMAN STREET, FORT, MUMBAI 400 001 PAN: AAAHL 0065N VS. ACIT 18(2), MUMBAI (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI MANI JAIN, A.R. REVENUE BY : SHRI ANOOP HIWASE, D.R. DATE OF HEARING : 23.08.2018 DATE OF PRONOUNCEMENT : 28.09.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 08.09.2015 OF THE COMMISSIONE R OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GRO UNDS OF APPEAL IS AGAINST THE CONFIRMATION OF PENALTY OF RS .66,93,970/- BY THE LD. CIT(A) AS MADE BY THE AO UNDER SECTION 27 1(1)(C) OF THE ACT. ITA NO.1088/M/2017 M/S. LAKSHAMSHI J. GALA (HUF) 2 3. THE ASSESSEE HAS ALSO FILED THE ADDITIONAL GROUN DS RAISING THE TECHNICAL ISSUE WHICH IS REPRODUCED AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE INCO ME-TAX ACT, 1961 BY THE LD. ASSESSING OFFICER (AO), IS WITHOUT RECORDING SATISFACTION AND CHARGE FOR INITIATING PENALTY PROCEEDINGSAND IS BAD IN LAW AND THE CONSEQUENTIAL PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT IS BAD IN LAW AND NOT SUSTAINA BLE IN THE EYES OF LAW. 4. WE WOULD LIKE TO DEAL WITH THE TECHNICAL ISSUE RA ISED BY THE ASSESSEE IN THE ADDITIONAL GROUND FIRST OF ALL. 5. THE LD. A.R. SUBMITTED BEFORE US THAT THE LEGAL I SSUE BEING RAISED IS EMANATING FROM THE NOTICE ISSUED UN DER SECTION 274 READ WITH SECTION 271 OF THE ACT AND THEREFORE IS COMING OUT OF THE RECORDS BEFORE THE AUTHORITIES BELOW AND THE SAME SHOULD BE ADMITTED. IN DEFENCE OF HIS ARGUMENTS, TH E LD. A.R. RELIED ON THE DECISION OF APEX COURT AND BOMBAY HIG H COURT IN THE CASES NAMELY; 1. NATIONAL THERMAL POWER COMPANY LTD. VS. CIT 229 ITR 383 (SC) 2. CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD . (2012) 349 ITR 336 (BOM.) AND 3. JUTE CORPORATION INDIA VS. CIT (1991) 187 (ITR) 688. 6. THE LD. D.R., ON THE OTHER HAND, OPPOSED THE ADMISS ION OF ADDITIONAL GROUND ON THE TECHNICAL ISSUE BY SUBM ITTING THAT SUCH ISSUE WAS NEVER RAISED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE ISSUE RAISED OF NON STRIKING OFF THE ONE OF THE TWO LIMBS WHICH IS NOT RELEVANT IS AN ISSUE COMING FROM THE ASSESSMENT RECORDS WHICH WAS BEFORE ITA NO.1088/M/2017 M/S. LAKSHAMSHI J. GALA (HUF) 3 THE AUTHORITIES BELOW AND THEREFORE THE SAME IS BEI NG ADMITTED FOR ADJUDICATION IN VIEW OF THE DECISIONS IN THE CASE OF NATIONAL THERMAL POWER COMPANY LTD. VS. CIT 229 ITR 383 (SC), CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LT D. (2012) 349 ITR 336 (BOM.) AND JUTE CORPORATION INDIA VS. CIT (1991) 187 (ITR) 688. 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD INCLUDING THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 OF THE ACT, WE OBSERVE THAT WHILE ISSUING THE NOTICE, THE AO HAS NOT STRUCK OFF ONE OF THE TWO LIM BS WHICH IS NOT RELEVANT OR ON WHICH THE PENALTY WAS NOT BEING PROPOSED. A PERUSAL OF NOTICE SHOWS THAT THE SAME HAS BEEN IS SUED IN A STANDARD FORMAT WITHOUT APPLICATION OF MIND. IN OTH ER WORDS, IT IS NOT MENTIONED IN THE NOTICE WHETHER THE PENAL TY IS BEING PROPOSED TO BE LEVIED FOR CONCEALMENT OF PARTICULAR S OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCO ME. IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTO RY AND OTHERS 359 ITR 565 THE HONBLE KARNATAKA HIGH COURT HAS HELD THAT THE AO HAS TO SPECIFY THE SPECIFIC CHARGE ON WHICH THE PENALTY IS PROPOSED TO BE LEVIED AND NON MENTIO NING OF SPECIFIC CHARGE OR ISSUING THE NOTICE IN A STANDARD FORMAT WOULD RENDER THE ENTIRE PROCEEDING AS INVALID AND B AD IN LAW. EVEN THE SPECIAL LEAVE PETITION FILED BY THE REVENU E BEFORE THE HONBLE SUPREME COURT WAS DISMISSED BY THE APEX COURT IN SLP NO.1398 OF 2014 DATED 11.07.2016. LIKEWISE IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2016 A SIMILAR ISSUE WAS DECIDED IN FAVOU R OF THE ASSESSEE. THE SLP FILED BY THE REVENUE IN THE APEX COURT WAS ITA NO.1088/M/2017 M/S. LAKSHAMSHI J. GALA (HUF) 4 ALSO DISMISSED BY THE APEX COURT. THE HONBLE BOMB AY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY IN IT A NO.1154 OF 2014 AND OTHERS DATED 05.01.2017 HELD THE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE. SINCE THE FACTS OF THE CAS E OF THE ASSESSEE ARE IDENTICAL, WE, THEREFORE, FOLLOWING THE RATIO LAID DOWN BY THE VARIOUS JUDICIAL FIRMS AS STATED ABOVE , SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY ON THE GROUND THAT THE SPECIFIC LIMB ON WHICH THE P ENALTY WAS PROPOSED TO BE LEVIED WAS NOT MENTIONED IN THE NOTI CE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.09.2018. SD/- SD/- (C.N. PRASAD) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 28.09.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.