Shri Pradeep Kr. Rajgarhi, V. ACIT,

ITA 115/PAT/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9630 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 16-05-2013
• Court: TRIBUNAL
• Department Lawyers: A K RUSTOGI; RAKESH KUMAR ADVOCA
• Assessee Lawyers: T VARKEY JUDIC IA L M EMBER
• Section: 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH:P ATNA BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 115/PAT/2013 ASSESSMENT YEAR:2004-05 SHRI PRADEEP KR. RAJGARHIA, HOUSE OF PREMA KEJRIWAL, PATLIPUTRA PATH, RAJENDRA NAGAR, NEAR TELEPHONE EXCHANGE, PATNA. PAN:ABTPR7040R / V/S . ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-5, PATNA. /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI A. K. RUSTOGI & SHRI RAKESH KUMAR, ADVOCATES /BY RESPONDENT SHRI KAUSIK KR. DAS, DR /DATE OF HEARING 04-04-2017 /DATE OF PRONOUNCEMENT 07-04-2017 /O R D E R PER BENCH: THIS APPEAL FILED BY THE ASSESSEE IS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME- TAX(APPEAL), DHANBAD DATED 30-03-2013 FOR AY 2004- 05. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE LAST PAGE OF THE PENALTY ORDER WHEREIN THE AO HAS MADE THE FOLLOWING FINDING TO IMPOSE THE IMPUGNED PENALTY ON THE ASSESSEE: HENCE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, I BELIEVE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AS WELL AS HAS CONCEALED HIS INCOME IN TH E MEANING OF SECTION 271(1)(C) OF THE I. T. ACT. 3. ACCORDING TO THE LD. COUNSEL, THE PENALTY U/S. 2 71(1)(C) OF THE ACT CAN BE LEVIED ONLY IF THE AO IS ABLE TO COME TO A DEFINITE FINDIN G THAT THE ASSESSEE HAS EITHER FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED HIS I NCOME. IN THIS CASE, IT IS EVIDENT FROM 2 ITA NO. 115/PAT/2013 SHRI PRADEEP KR. RAJGARHIA,AY 2004-05 THE ABOVE FINDING OF THE AO THAT HE FOUND THE ASSES SEE TO HAVE VIOLATED BOTH THE LIMBS OF CHARGES SPECIFIED IN SEC. 271(1)(C) OF THE ACT. TH E LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS NO LONGER RES INTEGRA AND THE AO SHOULD HAVE MADE A DEFINITE FINDING AS TO WHICH CHARGE HAS BEEN MADE OUT AGAINST THE ASSESSEE . WITHOUT DOING SO, THE ORDER OF THE AO IS PATENTLY ERRONEOUS AND, THEREFORE, IT HAS TO BE STRUCK DOWN AND RELIED ON THE ORDER OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEDADOW IN ITA NO. 380 OF 2015 DATED 23.11.2015 WHEREIN THEIR LORDSHIP S UPHELD THE DECISION OF THE TRIBUNAL. IN THAT CASE NOTICE ISSUED BY THE AO BEFORE IMPOSIN G PENALTY U/S.274 READ WITH SECTION 271(1)(C) OF THE ACT WAS HELD BY THE TRIBUNAL TO B E BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE ASSESSEE HAS VIOLATED FOR WHICH THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CO NCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH E LD. COUNSEL POINTED OUT THAT THE SAID ORDER OF THE TRIBUNAL WHICH HAD BEEN UPHELD BY THE HONBLE HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT IN CC NO.11485/2016 VI DE ORDER DATED 23.11.2015. 4. THE LD. DR COULD NOT CONTROVERT THE FACTUAL ASPE CT WHICH HAS BEEN STATED BEFORE US BY THE LD. AR ON THIS ISSUE OR BRING ANY JUDICIAL P RECEDENT TO SUPPORT THE CASE OF THE REVENUE. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO WHILE PASSING THE PE NALTY ORDER HAS FOUND THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AS WELL AS TO HAVE CONCEALED HIS INCOME. AS PER SECTION 271(1)(C) OF THE ACT, THE AO HAS TO MAKE A CATEGORICAL FINDING AS TO WHETHER THE ASSESSEE FALLS IN EITHER OF THE FAULTS SPECIFIE D IN THE TWO LIMBS TO SEC. 271(1)(C) OF THE ACT I.E. AS TO WHETHER THE ASSESSEE HAS FURNISHED T HE INACCURATE PARTICULARS OF INCOME OR HAS CONCEALED HIS INCOME. WE TAKE NOTE THAT IN SSAS E MERALD MEDADOW (SUPRA) THE HONBLE SUPREME COURT HAS UPHELD THE ORDER OF THE HONBLE K ARNATAKA HIGH COURT, WHEREIN THE HONBLE HIGH COURT UPHELD THE ORDER OF THE TRIBUNAL BY HOLDING THAT EVEN WHEN THE NOTICE IS SERVED TO THE ASSESSE PRIOR TO INITIATION OF THE PENALTY PROCEEDING, IT WAS INCUMBENT UPON THE AO TO SPECIFY AS TO WHETHER THE ASSESSEE IS BE ING PROCEEDED AGAINST FOR FURNISHING 3 ITA NO. 115/PAT/2013 SHRI PRADEEP KR. RAJGARHIA,AY 2004-05 INACCURATE PARTICULARS OR FOR CONCEALMENT OF INCOME , WITHOUT DOING SO THE PENALTY ORDER IS FRAGILE IN THE EYES OF LAW AND NEED TO BE CANCELLED . THE HONBLE GUJARAT HIGH COURT IN M/S SARATHI ENGINEERING COMPANY VS. CIT 282 ITR 642 (GUJ) HAS HELD THAT ONLY ON SPECIFIC CHARGE THE PENALTY U/S. 271(1)(C) CAN BE L EVIED ON THE ASSESSEE. SO, IN THE INSTANT CASE, WE TAKE NOTE THAT THE AO IN THE IMPUGNED PENA LTY ORDER HAS HELD THAT THE ASSESSEE FOR VIOLATION OF BOTH THE FAULTS U/S. 271(1)(C) OF THE ACT, WHICH ACTION OF AO CANNOT STAND THE SCRUTINY OF LAW AND, THEREFORE, THE PENALTY ORDER C ONFIRMED BY THE LD. CIT(A) IS CANCELLED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER IS PRONOUNCED IN OPEN COURT ON 07.04.2017 SD/- SD/- (WASEEM AHMED) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 7 TH APRIL, 2017 JD. SR. PS / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ' / CONCERNED CIT 4. ' - / CIT (A) 5. # && , / DR, ITAT, PATNA 6. ( / GUARD FILE. BY ORD ER/ , ASSISTANT REGI STRAR, ITAT, PATNA,