SMT. TEEJA DEVI SAINI, JAIPUR V. INCOME TAX OFFICER, WARD-4-3, JAIPUR

ITA 1258/JPR/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5927 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 06-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HEMANG GARGIEYA
• Keywords: Opportunity of being heard; Reasonable cause; Capital Gains
• Section: 271(1)(c); 274; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1258/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 SMT. TEEJA DEVI SAINI W/O LATE SHRI NATHU MALI VILLAGE-MURLIPURA, JAIPUR CUKE VS. ITO, WARD-4(3), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AYOPT7652H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. HEMANG GARGIEYA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : MS CHANCHAL MEENA (ADDL. CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 24/09/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 29/09/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 28.08.2018 CHALLENGING THE L EVY OF PENALTY AMOUNTING TO RS. 48,505/- U/S 271(1)(C) OF THE ACT FOR A.Y 2008-09. 2. HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ONE OF THE CONTENTIONS ADVANCED BY THE LD. AR WAS THAT F ROM THE PERUSAL OF THE ASSESSMENT ORDER AND THE SHOW CA USE NOTICE ISSUED U/S 274 R/W S. 271(1)(C) DATED 22.03.2016, IT IS NO T AT ALL CLEAR AS TO FOR WHAT PRECISE CHARGE, THE APPELLANT WAS ASKED TO SHO W CAUSE VIZ. WHETHER THE CHARGE IS THAT THE ASSESSEE HAS FURNISH ED INACCURATE ITA NO. 1258/JP/2018 SMT. TEEJA DEVI SAINI, JAIPUR VS. ITO, JAIPUR 2 PARTICULARS OF INCOME OR IT WAS FOR CONCEALING PART ICULARS OF SUCH INCOME IN AS MUCH AS A BARE PERUSAL OF THE SAID SHOW CAUSE NOTICE CLEARLY REVEAL THAT THE INAPPROPRIATE WORDS/UNWANTED CHARGE HAS NOT BEEN STRUCK OFF. THE AO NEITHER SCORED OUT NOR TICKED WH ICH PARTICULAR PART OF ALLEGED OFFENCE, HE WAS RELYING ON. IN FACTS, THIS CONFUSION EVEN CONTINUED WHILE PASSING THE IMPUGNED PENALTY ORDER IN AS MUCH AS AT PG 2, WHERE HE USED THE WORDS . : .. THUS, THE AO IS HIGHLY CONFUSED AND REMAINED INCONCLUSIVE TILL LAST WHEN H E IMPOSED THE PENALTY. HIS CONFUSION IS EVIDENT FROM THE FACT THA T HE USED BOTH THE LIMBS INTERCHANGEABLY WHICH IS NOT PERMISSIBLE. IT WAS FURTHER SUBMITTED THAT IF IT IS ALLEGED THAT INACCURATE PARTICULARS W ERE FURNISHED, IT GOES TO SHOW THAT INCOME WAS DECLARED AND ONCE AO ACCEPTS T HAT INCOME WAS DECLARED THERE CANNOT BE ANY CHARGE OF INACCURATE P ARTICULARS BECAUSE THE RETURNED INCOME AND ASSESSED INCOME W.R.T LTCG OF RS. 3,97,730/- IS SAME. THUS, THERE APPEARS NO PRECISE CHARGE/SATI SFACTION UNDER WHICH THE AO WANTS TO IMPOSE A PENALTY AND HENCE, THE IMP UGNED PENALTY BE DELETED. IN SUPPORT, RELIANCE WAS PLACED ON CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 (KARN), HPCL MITTAL ENERGY LTD. V. ACIT [2018] 97 TAXMANN.COM 3 (AMRITSAR - TR IB.) (TM) AND SHEVETA CONSTRUCTION CO. PVT. LTD. VS. ITO (IN DB NO. 534/2008 VIDE ORDER DATED 06.12.2016). 3. PER CONTRA, THE LD. DR REFERRED TO THE ASSESSMEN T ORDER AND SUBMITTED THAT THE PENALTY HAS BEEN INITIATED FOR C ONCEALMENT OF INCOME AND THERE IS A CLEAR NARRATION TO THIS EFFECT IN TH E ASSESSMENT ORDER. REGARDING THE SHOW-CAUSE NOTICE, SHE HAS SUBMITTED THAT EVEN WHERE THE SPECIFIC CHARGE HAS NOT BEEN SPECIFIED, THE ASS ESSEE HAS BEEN GIVEN ITA NO. 1258/JP/2018 SMT. TEEJA DEVI SAINI, JAIPUR VS. ITO, JAIPUR 3 ADEQUATE OPPORTUNITY AND NO PREJUDICE HAS BEEN CAUS ED TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT IT IS A CAS E WHERE BOTH THE CHARGES OF CONCEALMENT OF INCOME AS WELL AS FURNISH ING OF INACCURATE PARTICULARS OF INCOME ARE ATTRACTED AS THE ASSESSEE HAS CONCEALED AND NOT DISCLOSED CAPITAL GAINS OF SALE OF THE LAND. FU RTHER, COMMISSION AMOUNTING TO RS. 25,000/- HAS BEEN CLAIMED IN THE R ETURN OF INCOME WHICH HAS BEEN DISALLOWED BY THE ASSESSING OFFICER AND THUS, SHOWS FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN SUPPORT, THE LD DR HAS RELIED ON THE HIGH COURT OF MADRAS DECISION IN CASE OF SUNDRAM FINANCE LTD VS. ACIT, CHANNAI REPORTED IN 93 TAXMAN N.COM 250(MAD) AND THE BOMBAY HIGH COURT DECISION IN CASE OF CIT V S. SMT. KAUSHALYA & OTHERS REPORTED IN 216 ITR 660(BOM). 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANCE CASE, WE FIND THAT THE PENALTY PROCEEDINGS HAVE BEEN INITIATED DURING THE COURSE O F ASSESSMENT PROCEEDINGS FOR CONCEALING THE PARTICULARS OF INCOM E REGARDING LONG TERM CAPITAL GAINS ON SALE OF IMMOVABLE PROPERTY AN D THEREFORE, AS FAR AS RECORDING OF SATISFACTION DURING THE COURSE OF A SSESSMENT PROCEEDINGS, THERE IS NO AMBIGUITY. THEREAFTER, IN TERMS OF SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 READ WITH 271(1)(C) DATED 22.03.2016 READS AS UNDER:- DATED: 22.03.2016 TO, SMT. TEEJA DEVI SAINI W/O LATE SHRI NATHU MALI VILLAGE- MURLIPURA, JAIPUR ITA NO. 1258/JP/2018 SMT. TEEJA DEVI SAINI, JAIPUR VS. ITO, JAIPUR 4 WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2008-09, IT APPEARS TO ME THAT YOU: - *HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH ME RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTI CE GIVEN UNDER SECTION 22(1)/22(2)/34 OF THE INDIAN INCOME T AX ACT, 1922 OR WHICH YOU WERE REQUIRED TO FURNISH UNDER SE CTION 139 (1) OR BY A NOTICE GIVEN UNDER SECTION 139(2)/148 O F THE INCOME TAX ACT, 1961, NO. DATED OR HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WITHIN THE TI ME ALLOWED AND TO THE MANNER REQUIRED BY THE SAID SECTION 139 (1) OR BY SUCH NOTICE. *HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WIT H A NOTICE UNDER SECTION 22(4)/23(2) OF THE INDIAN INCOME TAX ACT, 1922 OR UNDER SECTION 142 (1)/ 143 (2) OF THE INCOME TAX ACT, 1961 NO. DATED *HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR F URNISHED INACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFOR ME AT 11.0 0 AM ON 12.04.2016 AND SHOW CAUSE WHY AN ORDER IMPOSING A P ENALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT, 1961. IF YOU DO NOT WISH TO AVIAL Y OUR SELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUG H YOUR AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRI TING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFOR E ANY SUCH ORDER IS MADE UNDER SECTION 271 (1) (C). ITA NO. 1258/JP/2018 SMT. TEEJA DEVI SAINI, JAIPUR VS. ITO, JAIPUR 5 5. THEREAFTER, WHILE PASSING THE PENALTY ORDER DAT ED 19.09.2016, THE AO HAS HELD THAT THE ASSESSEE HAS DELIBERATELY NOT FURNISHED CORRECT PARTICULARS OF INCOME AND HAS CONCEALED HIS INCOME AND HENCE, LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT. 6. IT IS A SETTLED LEGAL PROPOSITION THAT CONCEALME NT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE SPECIFIC AND INDEPENDENT CHARGES AND CARRY THEIR RESPECTIVE MEAN INGS. THE AO NEED TO BE CLEAR IN TERMS OF WHICH SPECIFIC CHARGE HE WANTS TO INVOKE IN A PARTICULAR CASE AND WHERE BOTH THE CHARGES ARE AP PLICABLE, HAVE TO SAY SO IN THE PENALTY NOTICE AND HAS TO RECORD A SP ECIFIC FINDING IN THE PENALTY ORDER AS HELD BY THE HONBLE RAJASTHAN HIGH COURT IN CASE OF SHEWETA CONSTRUCTIONS (SUPRA) WHERE IT WAS HELD AS UNDER: 9. TAKING INTO CONSIDERATION THE DECISION OF THE A NDHRA PRADESH HIGH COURT WHICH VIRTUALLY CONSIDERED THE S UBSEQUENT LAW AND THE LAW WHICH WAS PREVAILING ON THE DATE THE DE CISION WAS RENDERED ON 27.08.2012. IN VIEW OF THE OBSERVATIONS MADE IN THE SAID JUDGMENT, WE ARE OF THE OPINION THAT THE CONTE NTION RAISED BY THE APPELLANT IS REQUIRED TO BE ACCEPTED AND IN THE FINDING OF ASSESSING OFFICER IN THE ASSESSMENT ORDER IT IS HEL D THAT THE AO HAS TO GIVE A NOTICE AS TO WHETHER HE PROPOSES TO L EVY PENALTY FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS. HE CANNOT HAVE BOTH THE CONDITIONS AND IF IT IS SO HE HAS TO SAY SO IN THE NOTICE AND RECORD A FINDING IN THE PENALTY ORDE R. 7. IN THE INSTANT CASE, WE FIND THAT IN THE SHOW-CA USE NOTICE, THE ASSESSING OFFICER HAS NOT INITIATED THE PENALTY ON A SPECIFIC CHARGE AND HAS TALKED ABOUT EITHER CONCEALMENT OF INCOME OR FU RNISHING OF INACCURATE PARTICULARS OF INCOME, HOWEVER, WHILE LE VYING THE PENALTY, ITA NO. 1258/JP/2018 SMT. TEEJA DEVI SAINI, JAIPUR VS. ITO, JAIPUR 6 THE ASSESSING OFFICER HAS TALKED ABOUT BOTH CONCEAL MENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH E AO HAS NOT SPECIFIED IN THE PENALTY ORDER AS TO HOW IT IS A CASE OF APPL ICABILITY OF BOTH THE CHARGES IN THE FACTS AND CIRCUMSTANCES OF THE PRESE NT CASE. WE THEREFORE FIND THAT IT IS A CASE OF LACK OF APPLICA TION OF MIND BY THE ASSESSING OFFICER BOTH AT THE TIME OF INITIATION AN D FINAL LEVY OF PENALTY AND THE AO HAS FAILED TO GIVE A DECISIVE FINDING EV EN AT THE TIME OF PASSING THE PENALTY ORDER. IT IS A CASE WHERE THE ASSESSEE HAS NOT DISCLOSED LONG TERM CAPITAL GAINS ON SALE OF AN IMM OVABLE PROPERTY, THEREFORE, IT IS A CASE OF CONCEALMENT OF INCOME WH EREAS THE AO HAS HELD THE SAME TO BE A CASE OF CONCEALMENT OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN CASE OF HPCL MITTAL ENERGY LTD. V. ACIT (SUPRA), THE THIRD MEMBER HAS H ELD AS UNDER: 21. . HOWEVER, DURING THE PENALTY PROCEEDINGS, H E MUST GET DECISIVE, WHICH SHOULD BE REFLECTED IN THE PENALTY ORDER, AS TO WHETHER THE ASSESSEE IS GUILTY OF 'CONCEALMENT OF P ARTICULARS OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME'. UNCERTAIN CHARGE AT THE TIME OF INITIATION OF PENAL TY, MUST NECESSARILY BE SUBSTITUTED WITH A CONCLUSIVE DEFAULT AT THE TIM E OF PASSING THE PENALTY ORDER. IF THE PENALTY IS INITIATED WITH DOU BT AND ALSO CONCLUDED WITH A DOUBT AS TO THE CONCEALMENT OF PAR TICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF S UCH INCOME ETC., THE PENALTY ORDER IS VITIATED. IN LIGHT OF AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE JURISDICTIONAL HIGH COURT IN CASE OF SHEWETA CONSTR UCTION(SUPRA), WE FIND THAT THE PENALTY ORDER SO PASSED U/S 271(1)(C) IS VITIATED FOR WANT ITA NO. 1258/JP/2018 SMT. TEEJA DEVI SAINI, JAIPUR VS. ITO, JAIPUR 7 OF SPECIFIC CHARGE FOR LEVY OF PENALTY AND THE PENA LTY SO LEVIED IS HEREBY DELETED. IN VIEW OF THE SAME, WE HAVE NOT DEALT WI TH OTHER CONTENTIONS SO ADVANCED BY BOTH THE PARTIES ON MERITS OF THE SA ME. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/09/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29/09/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. TEEJA DEVI SAINI, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 4(3), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1258/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR