M/S Keti Infrastructure Private Limited, Indore V. THE DCIT (CENTRAL), Indore

ITA 1309/IND/2016

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8648 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-01-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 15-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI
• Keywords: Depreciation; Opportunity of being heard; Reasonable cause
• Section: 271(1)(c); 274; 139(1); 13; 153; 22; 27; 6; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA.NO. ITA NO.540/IND/2017 & ITA NO.1309/IND/2016 ASSESSMENT YEAR 2011-12 & 2012-13 M/S KETI INFRASTRUCTURE PVT.LTD, 31/6, VATSALYA CHAMBERS, SNEH NAGAR MAIN ROAD INDORE PAN : AADCK0722H : APPELLANT V/S DCIT (CENTRAL), INDORE : REVENUE REVENUE BY SHRI HARSHIT BARI, SR.DR ASSESSEE BY SHRI PANKAJ SHAH , CA DATE OF HEARING 11.01.2021 DATE OF PRONOUNCEMENT 13 . 0 1 . 202 1 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE OF THE ASSESSE PERTAINING TO ASSESSMENT YEARS 2011-12 AND 2012-13 ARE M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 2 DIRECTED AGAINST THE ORDERS OF LD. PR. COMMISSIONER OF INCOME TAX- III, (IN SHORT LD. CIT], INDORE 05.05.2017 AND 15. 09.2016 WHICH ARE ARISING OUT OF THE ORDER U/S 271AAA OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 25.9.2014 FRAMED BY DCIT (CE NTRAL), INDORE. 2. SOLE GRIEVANCE RAISED IN BOTH THESE APPEALS IS A GAINST THE FINDING OF LD. CIT(A) CONFIRMING THE LEVY OF PENALT Y U/S 271AAA OF THE ACT BY THE LD. A.O AT RS.7,24,540/- AND RS.30,0 4,050/- LEVIED FOR ASSESSMENT YEARS 2011-12 AND 2012-13 RESPECTIVE LY. 3. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE IMPUGNED PENALTY WAS LEVIED FOR THE WITHDRAWAL OF E XCESS CLAIM OF DEPRECIATION DURING ASSESSMENT PROCEEDING POST TO S EARCH ON 05.05.2011 CARRIED OUT U/S 132 OF THE ACT AT KETI-K ALYAN GROUP. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ISSUE RAISED IN THESE APPEALS IS SQUARELY COVERED IN FAVOUR OF T HE ASSESSEE AND THE IMPUGNED PENALTY IS LIABLE TO BE DELETED IN VIE W OF THE DECISION OF HON'BLE I.T.A.T. INDORE IN ONE OF THE GROUP CASE OF THE ASSESSEE NAMELY DCIT V/S KALYAN TOLL INFRASTRUCTURE LIMITED & DCIT V/S KALYAN-KETI TOLL PVT. LTD IN ITA NOS.928 & 929/IND/ 2019 DATED 28.9.2020. HE FURTHER SUBMITTED THAT IN THE INSTAN T CASE ALSO M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 3 DEFECTIVE NOTICE WAS ISSUED WITHOUT SPECIFYING THE CHARGE TO BE LEVELED AGAINST THE ASSESSEE U/S 271AAA OF THE ACT AND ON THE MERITS ALSO THE ISSUE IS COVERED IN FAVOUR OF THE A SSESSEE. 4. LD. DEPARTMENTAL REPRESENTATIVE THOUGH SUPPORTED THE ORDER OF LOWER AUTHORITIES COULD NOT CONTROVERT THIS FACT THAT SIMILAR ISSUE HAVE BEEN DECIDED IN OTHER GROUP CASES TO WHICH THE ASSESSEE BELONGS. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE SOLE GRIEVANCE BY THE ASSESS EE FOR ASSESSMENT YEARS 2011-12 AND 2012-13 IS AGAINST THE LEVY OF PENALTY U/S 271AAA OF THE ACT AT RS.7,24,540/- AND RS.30,04,450/- WHICH WAS CONFIRMED BY LD. CIT(A) AN D WAS IMPOSED BY THE LD. A.O ON THE ALLEGED CONCEALED INC OME ON ACCOUNT OF EXCESS CLAIM OF DEPRECIATION. 6. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ON LEGAL GROUND ITSELF THE IMPUGNED PENALTY DESERVES TO BE D ELETED AS DEFECTIVE NOTICE WAS SERVICED TO THE ASSESSEE WHICH HAS MADE THE PROCEEDINGS U/S 271AAA R.W.S. 274 OF THE ACT VOID AB INITIO. M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 4 7. ON PERUSAL OF THE NOTICE WE FIND THAT SIMILAR TY PE OF NOTICE WERE ISSUED FOR ASSESSMENT YEARS 2011-12 AND 2012-1 3. FOR THE PURPOSE OF ADJUDICATION WE REPRODUCED BELOW THE NOT ICE FOR ASSESSMENT YEAR 2011-12:- NOTICE UNDER SECTION 274 READ WITH SECTION 271AAA O F THE INCOME TAX ACT, 1961 PAN- AADCK0722H OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX (CENTRAL), INDORE DATE: - 05/03/2014 M/S. KETI INFRASTRUCTURE PRIVATE LIMITED, 31/6, VAT SALYA CHAMBERS, SNEH NAGAR, T MAIN ROAD, INDORE WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 201112 IT APPEARS TO ME THAT YOU:- *HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH ME RETURN OF INCOME WITH YOU WERE REQUIRED TO FURNISH BY A NOTICE GIVEN UNDE R SECTION 22(1)/22(2}/34 OF THE INDIA INCOME TAX ACT, 1922 OR WHICH YOU WERE REQUIRED TO FURNISH UNDER SECTION 139)1} OR BY A NO TICE GIVEN UNDER SECTION 139(2)/148 OF THE INCOME TAX ACT 1961, NO DATED O R HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WITHIN THE AL LOWED AND THE MANNER REQUIRED BY THE SIDE SECTION 139(1) OR BY SUCH NOTI CE. *HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WIT H A NOTICE UNDER M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 5 SECTION 22(4)/23{2} OF THE INDIA INCOME TAX ACT, 19 22 OR UNDER SECTION 142(1)/143(2) OF THE INCOME TAX ACT1961. NO. DATED HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FU RNISHED INACCURATE PARTICULARS OF SUCH INCOME . YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME ON 01/ 04/2014 AT 3:00 PM AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON Y OU SHOULD NOT BE MADE UNDER SECTION 271AAA OF THE INCOME TAX ACT 196 1 IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEAR D IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRI TING ON OR BEFORE THE SIDE DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271AAA. PEN.REG.NO SD/- (RAM KUMAR YADAVA) DEPUTY COMMISSIONER OF INCOME TAX (CENTRAL) INDORE 8. ON PERUSAL OF THE ABOVE REFERRED NOTICE WE FIND THAT THE LD. A.O HAS NOT MENTIONED SPECIFIC CHARGE IN THE NOTICE AS PROVIDED U/S 271AAA R.W.S. 274 OF THE ACT. RATHER LD. A.O HAS ME RELY MENTIONED ONE LINE IMPORTED FROM SECTION 271(1)(C) OF THE AC T WHICH IN THE INSTANT CASE IS NOT APPLICABLE ON THE ASSESSEE. ON GOING THROUGH THE ABOVE REPRODUCED DEFECTIVE NOTICE WE FIND THAT SIMILAR NOTICE WAS ISSUED TO ANOTHER GROUP CONCERN OF THE ASSESSEE M/S KETI TOLL INFRASTRUCTURE LTD ON 26.3.2014 AND THE LEGAL ISSUE OF LEVY OF M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 6 PENALTY U/S 271AAA OF THE ACT WAS BEFORE THIS TRIBU NAL IN ITA NO.928/IND/2019 AND THE PENALTY U/S 271AAA OF THE A CT WAS DELETED BY THIS TRIBUNAL OBSERVING AS FOLLOWS:- 13. THE ABOVE NOTICE CLEARLY SPELLS OUT THAT THE P ROVISIONS UNDER WHICH THE NOTICE WAS ISSUED FOR LEVY OF PENALTY U/S 271AA A BUT THE CHARGES MENTIONED THEREIN REFERS TO THOSE PROVIDED IN SECTI ON 271(1)(C) OF THE ACT. LD. A.O FAILED TO MENTION THE CHARGES PROVIDED U/S 271AAA OF THE ACT. WE FIND THAT THIS ISSUE IS ALSO SQUARELY COVERED IN FA VOUR OF THE ASSESSEE BY THE DECISION OF HON'BLE COORDINATE CHANDIGARH BENCH IN THE CASE OF GILLCO DEVELOPERS & BUILDERS (P) LTD (SUPRA) WHEREIN THE T RIBUNAL AFTER OBSERVING THAT THE NOTICE ISSUED IS DEFECTIVE HELD IN FAVOUR OF THE ASSESSEE AND QUASHED THE PENALTY PROCEEDINGS OBSERVING AS FOLLOW S:- 19. NOW COMING TO THE LEGAL ISSUES RAISED BY THE AS SESSEE, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT EVEN THE NOTICE SERVED UPON THE ASSESSEE U/S 274 OF THE ACT IS ALSO INVALID. WE HAV E GONE THROUGH THE SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE. THE LD. C OUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE LETTER / NOTICE ISSUED U/S 274 READ WITH SECTION 271AAA OF THE ACT DATED 13.1.2014 , WHICH FOR THE SAKE OF REFERENCE IS EXTRACTED AS UNDER:- NOTICE U/S 274 READ WITH SECITON 271AAA OF THE INC OME TAX ACT, 1961 OFFICE OF THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1II, AAYAKAR BHAWAN, SECTOR 17-E, CHANDIGARH DATED 13.01.2014 M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 7 TO M/S GILCO DEVELOPERS AND BUILDERS PVT LTD., SCF 23024, GILCO VALLEY MORINDA ROPAR ROAD, ROPAR, PUNJAB 140001 WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2012-13, IT APPEARS TO ME THAT YOU HAVE NOT RECORDE D THE TRUE PARTICULARS OF YOUR INCOME IN THE BOOKS OF ACCOUNTS OR NOT DISC LOSED ACCURATE PARTICULARS OF INCOME. THEREFORE, YOU ARE REQUIRED TO SHOW CAUSE AS TO WHY PENALTY PROCEEDINGS U/S 274 READ WITH SECTION 271AA A(1) OF THE INCOME TAX ACT MAY NOT BE LEVIED AGAINST YOU. IN THIS REGA RD, YOU ARE HEREBY REQUESTED TO APPEAR BEFORE THE UNDERSIGNED AT 11.00 A.M. ON 20.02.2014 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON Y OU SHOULD NOT BE MADE U/S 271AAA(1) OF THE INCOME-TAX ACT, 1961). IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD I N PERSON OR THOUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRI TING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE U/S 271AAA(1). (SEAL) SD/- (LAGANPREET SANDHU). DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, CHANDIGARH 20. A PERUSAL OF THE ABOVE NOTICE SHOWS THAT THOUGH THE ASSESSING OFFICER HAS INTENDED TO INITIATE PENALTY PROCEEDINGS U/S 27 1AAA(1) OF THE ACT, HOWEVER, THE WORDING WRITTEN IN THE BODY OF THE LET TER DOES NOT CONFORM TO THE CHARGES OF THE PROVISIONS OF SECTION 271AAA OF THE ACT, RATHER, THE ASSESSEE HAS BEEN SHOW CAUSED ON THE CHARGE OF FURN ISHING OF INACCURATE PARTICULARS OF INCOME, WHICH FALLS UNDER THE SCOPE AND PURVIEW OF SECTION 271(1)(C) OF THE ACT. THE ASSESSEE, THEREFORE, IS N OT SHOW CAUSED FOR LEVY OF M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 8 PENALTY UNDER THE PROVISIONS OF SECTION 271AAA, RAT HER FOR DOING AN ACT INVITING PENALTY U/S 271(1)(C) OF THE ACT, WHICH OT HERWISE IS NEITHER ARISING OUT OF THE FACTS OF THE CASE NOR ESTABLISHED AGAINS T THE ASSESSEE. THUS, THE PENALTY PROCEEDINGS CONDUCTED AGAINST THE ASSESSEE U/S 271AAA OF THE ACT WERE INVALID AT ITS VERY INCEPTION BECAUSE OF T HE DEFECTIVE AND INVALID SHOW CAUSE NOTICE, RENDERING THE ENTIRE PENALTY PRO CEEDINGS VOID ABNITIO. THE PENALTY LEVIED AGAINST THE ASSESSEE IS THUS NOT SUSTAINABLE ON THIS SCORE ALSO. 14. AS THE ABOVE DECISION OF HON'BLE CHANDIGARH TRI BUNAL IS SQUARELY APPLICABLE ON THE ASSESSEE WE THEREFORE RESPECTFULL Y FOLLOWING THE SAME DECIDE THIS LEGAL ISSUE ALSO IN FAVOUR OF THE ASSES SEE HOLDING THAT THE PENALTY PROCEEDINGS CARRIED OUT IN THE CASE OF THE ASSESS WERE VOID AB- INITIO SINCE THE NOTICE ISSUED ITSELF IS DEFECTIVE AND NOT IN ACCORDANCE WITH LAW. THUS IN VIEW OF ABOVE DECISION AND IN THE GIV EN FACTS AND CIRCUMSTANCES OF THE CASE AND VARIOUS JUDGMENTS REF ERRED ABOVE, WE FIND NO REASON TO INTERFERE IN THE FINDING OF LD. CIT(A) DELETING THE PENALTY OF RS.70,78,640/- LEVIED U/S 271AAA OF THE ACT. ACCO RDINGLY THE GROUND RAISED IN ITA NO.928/IND/2019 BY THE REVENUE STANDS DISMISSED. 9. ON PERUSAL OF ABOVE WE FIND THAT SINCE THE LEG AL ISSUE REMAINS THE SAME AND SO IS THE NOTICE BEING DEFECTIVE AND N OT IN ACCORDANCE WITH LAW HAS BEEN ISSUED IN THE CASE OF ASSESSEE FO R ASSESSMENT YEAR 2011-12 AND 2012-13 THE PENALTY PROCEEDINGS U/ S 271AAA OF THE ACT ARE HELD TO BE VOID AB INITIO. WE ACCORDINGLY DELETE THE PENALTY [LEVIED U/S 271AAA OF THE ACT AT RS.7,24,54 0/- AND RS.30,04,450/- ON THIS LEGAL GROUND ITSELF. M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 9 10. AS REGARDS MERITS OF THE CASE THOUGH ACADEMIC I N NATURE WHICH IN THE INSTANT APPEALS RELATES TO LEVY OF PEN ALTY FOR WITHDRAWAL OF EXCESS CLAIM OF DEPRECIATION DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, WE FIND THAT AFTER BEING SU BJECTED TO THE SEARCH PROCEEDINGS U/S 132 OF THE ACT ON 05.05.2011 , THE APPELLANT SURRENDERED THE CLAIM OF EXCESS DEPRECIATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE MANNER OF SURRENDER O F DEPRECIATION CLAIM WAS EXPLAINED DURING THE SEARCH PROCEEDINGS A ND THE SAME WAS ACCEPTED BY LD. A.O. THE ASSESSMENT ORDER WAS PASSED DISALLOWING THE DEPRECIATION SURRENDERED BY THE APP ELLANT. DEMAND NOTICE U/S 156 OF THE ACT PURSUANT TO ORDER U/S 153 A OF THE ACT WAS PASSED WITH NIL DEMAND. THE QUANTUM ORDER WAS ACCE PTED AND NO FURTHER APPEAL WAS PREFERRED. IMMUNITY FROM LEVY O F PENALTY ON UNDISCLOSED INCOME OF SPECIFIED PREVIOUS YEAR IS AV AILABLE AS PROVIDED IN SUB-SECTION 2 OF THE 271AAA OF THE ACT , IF THE ASSESSEE; (I) IN THE COURSE OF SEARCH, IN A STATEMENT UNDER SUB-SECTION 4 OF SECTION 132(4) OF THE ACT, ADMITS THE UNDISCLOS ED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 10 (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCL OSED INCOME WAS DERIVED; (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY , IN RESPECT OF THE UNDISCLOSED INCOME. 11. NOW EXAMINING THE FACTS OF THE CASE OF THE ASSE SSEE, WE FIND THAT FIRSTLY THE EXCESS DEPRECIATION CLAIMED PERTAI NS TO THE SPECIFIED YEAR UNDER CONSIDERATION, SECONDLY THE ALLEGED UNDI SCLOSED INCOME IN THE FORM OF EXCESS DEPRECIATION WAS ADMITTED DUR ING THE COURSE OF SEARCH, THIRDLY ASSESSEE HAS SUBSTANTIATED THE M ANNER IN WHICH INCOME HAS BEEN DERIVED AND LASTLY AS REGARDS THE D EMAND OF TAX THE SAME IS NOT APPLICABLE SINCE THERE WAS NO TAX O N SURRENDER OF DEPRECIATION CLAIM WITHDRAWN DURING THE ASSESSMENT PROCEEDINGS SINCE THERE WERE LOSSES. 12. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE ARE OF THE VIEW THAT ON MERIT ALSO THE ASSESSEE DES ERVES THE RELIEF AND WE ACCORDINGLY ALLOW THE GROUNDS RAISED ON MERI TS BY THE ASSESSEE AND DELETE THE PENALTY U/S 271AAA OF THE A CT AT RS.7,24,540/- AND RS.30,04,450/- FOR ASSESSMENT YEA R 2011-12 M/S KETI INFRASTRUCTURE PVT. LTD ITA NO.540/IND/2017 & 1309/IND/2016 11 AND 2012-13 RESPECTIVELY. ACCORDINGLY BOTH THE APP EAL OF THE ASSESSEE STANDS ALLOWED. 13. IN THE RESULT APPEALS OF THE ASSESSEE FOR ASSES SMENT YEARS 2011-12 AND 2012-13 ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 13.01 .2021. SD/- SD/- ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 13 JANUARY, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE