Pushpa Doshi, Kolkata V. ITO, WD-55(2), KOLKATA, Kolkata

ITA 1171/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0714 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHERJEE CIT RE
• Keywords: Peak credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D, KOLKATA [BEFORE SHRI P.M. JAGTAP, AM AND SHRI S.S. VISWANETHRA RAVI, JM] I.T.A. NO. 1171/KOL/2016 ASSESSMENT YEAR: 2006-07 PUSHPA DOSHI...........................................APPELLANT C/O. S.L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOLKATA 700001. [PAN : ADSPD 6579 Q] I.T.O. WARD 55(2) KOLKATA......................RESPONDENT 54, RAFI AHMED KIDWAI ROAD, KOLKATA 16. APPEARANCES BY: SHRI ANIL KOCHAR, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI ARINDAM BHATTACHERJEE, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : DECEMBER 06, 2017 DATE OF PRONOUNCING THE ORDER : DECEMBER 13, 2017 ORDER PER P.M. JAGTAP, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) 6, KOLKATA DATED 27.01.2016 WHEREBY HE CONFIRMED THE PENALTY OF RS. 2,16,475/- IMPOSED BY THE A.O. UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 21.08.2006 DECLARING A TOTAL INCOME OF RS. 48,162/-. IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 31.12.2008, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE A.O. AT RS. 9,93,750/- AFTER MAKING INTER ALIA IN THE FOLLOWING ADDITIONS: 2 I.T.A. NO. 1171/KOL/2016 ASSESSMENT YEAR: 2006-07 PUSHPA DOSHI 1. MATURITY VALUE OF MIP 95 UTI RS. 3,28,000/- 2. PEAK CREDIT ON UNDISCLOSED ACCOUNT WITH CENTURIAN BANK OF PUNJAB RS. 4,18,578/- 3. SHORT TERM CAPITAL GAIN RS. 1,67,519/-. 3. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE ALSO INITIATED BY THE A.O. IN RESPECT OF ABOVE THREE ADDITIONS AND SINCE THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED DURING THE COURSE OF THE PROCEEDINGS WAS NOT FOUND ACCEPTABLE BY HIM, THE A.O. IMPOSED PENALTY OF RS. 2,16,475/- UNDER SECTION 271(1)(C) BEING 100% OF THE TAX SOUGHT TO BE ADDED BY THE ASSESSEE IN RESPECT OF THREE ADDITIONS MADE TO HIS TOTAL INCOME. 4. THE PENALTY IMPOSED UNDER SECTION 271(1)(C) WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(A) AND SINCE THE SUBMISSIONS MADE BY THE ASSESSEE IN SUPPORT OF HIS CASE WERE NOT FOUND ACCEPTABLE BY THE LD. CIT(A), HE PROCEEDED TO CONFIRM THE PENALTY OF RS. 2,16,475/- IMPOSED BY THE A.O. UNDER SECTION 271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CHALLENGED THE PENALTY IMPOSED UNDER SECTION 271(1)(C) ON THE ASSESSEE BY RAISING A PRELIMINARY ISSUE THAT THE NOTICE ISSUED BY THE A.O. INITIATING THE PENALTY PROCEEDINGS BEING DEFECTIVE, THE PENALTY IMPOSED UNDER SECTION 271(1)(C) IN PURSUANCE THEREOF IS NOT SUSTAINABLE. HE HAS PLACED ON RECORD, A COPY OF THE SAID 3 I.T.A. NO. 1171/KOL/2016 ASSESSMENT YEAR: 2006-07 PUSHPA DOSHI NOTICE ISSUED BY THE A.O. AND POINTED OUT THAT IRRELEVANT PORTION HAVING BEEN NOT STRUCK OFF BY THE A.O. IN THE SAID NOTICE, THE EXACT CHARGE AGAINST THE ASSESSEE AS TO WHETHER HE CONCEDED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME WAS NOT CLEAR. IN SUPPORT OF THIS CONTENTION, THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE LATEST DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF JEETMAL CHORARIA VS ACIT RENDERED VIDE ITS ORDER DATED 01.12.2017 PASSED IN ITA NO. 956/KOL/2016 WHEREIN A SIMILAR ISSUE IS DECIDED BY THE TRIBUNAL AFTER TAKING INTO CONSIDERATION, THE RELEVANT DECISION OF THE DIFFERENT HIGH COURTS VIDE PARAGRAPH NO. 14 AND 15 OF ITS ORDER WHICH READ AS UNDER: FROM THE AFORESAID DISCUSSION IT CAN BE SEEN THAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIGH COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHES AT BANGALORE HAVE TO FOLLOW THE DECISION OF THE HONBLE KARNATAKA HIGH COURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) AND OTHER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA. IT IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE, THEREFORE, PREFER TO FOLLOW THE VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NOTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE 4 I.T.A. NO. 1171/KOL/2016 ASSESSMENT YEAR: 2006-07 PUSHPA DOSHI CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE, THEREFORE, HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 6. IN OUR OPINION, THE DECISION RENDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF JEETMAL CHORARIA VS ACIT (SUPRA) IS SQUARELY APPLICABLE IN THE PRESENT CASE AND EVEN THE LEARNED DR HAS NOT DISPUTED THIS POSITION. WE, THEREFORE, RESPECTFULLY FOLLOW THE SAID DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL AND CANCEL THE PENALTY IMPOSED BY THE A.O. UNDER SECTION 271(1)(C) AND CONFIRMED BY THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2017. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13/12/2017 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. PUSHPA DOSHI, C/O. S.L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOLKATA 01. 2. ITO WARD 55(2), 54, RAFI AHMED KIDWAI ROAD, KOLKATA -16. 3. THE CIT(A) 4. THE CIT 5 I.T.A. NO. 1171/KOL/2016 ASSESSMENT YEAR: 2006-07 PUSHPA DOSHI 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA