Sri Appajappa Narayana Gopalaraj , Bangalore V. The Income TAx Officer Ward-6(3)(3), Bangalore

ITA 1319/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4652 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 09-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN
• Keywords: Initiation of penalty proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1319 / BANG/201 7 ASSESSMENT YEAR : 20 1 2 - 1 3 SHRI APPAJAPPA NARAYANA GOPALARAJ, # 778/44, 8 TH CROSS, GOKULA 1 ST STAGE, 2 ND PHASE, TRIVENI ROAD, YESHWANTHAPUR, BANGALORE 560 054. PAN: AOYPG0722K VS. THE INCOME TAX OFFICER, WARD 6 [3] [3], BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI M. RAJASEKHAR, ADDL. CIT (DR) DATE OF HEARING : 05 .0 6 .2018 DATE OF PRONOUNCEMENT : 08 .0 6 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A) 6, BANGALORE DATED 06.03.2017 FOR A SSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS LEVYING PENALTY U/S 271[1][C] OF THE ACT AGAINST THE APPELLANT ARE OPPO SED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUM STANCES OF THE CASE. 2. THE ORDER OF PENALTY PASSED U/S 271[1] [C] OF TH E ACT IS BAD IN LAW AS THE NOTICE ISSUED UNDER SECTION 274 RWS 271 OF T HE ACT IS NOT DISCERNABLE WHETHER THE PENALTY PROCEEDINGS IS INIT IATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT 'S CASE. 3. WITHOUT PREJUDICE TO THE ABOVE, THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN LEVYING A PENALTY OF RS. 3,66,583/- U/ S 271[1][C] OF THE ACT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APP ELLANT'S CASE. ITA NO.1319/BANG/2017 PAGE 2 OF 3 4. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIA TE THAT THE APPELLANT HAS NEITHER CONCEALED ANY INCOME NOR FURN ISHED INACCURATE PARTICULARS OF INCOME TO WARRANT LEVY OF PENALTY AN D THEREFORE, THE PENALTY LEVIED U/S.271 [1][C] OF THE ACT REQUIRES T O BE CANCELLED. 5. WITHOUT PREJUDICE TO THE ABOVE, THE PENALTY LEVI ED IS HIGHLY EXCESSIVE AND LIABLE TO BE REDUCED SUBSTANTIALLY. 6. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLA NT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO OR DER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE NOTICE ISSUED BY THE AO U/S. 274 R.W.S. 271(1)(C) OF IT ACT ON 18.03.2015 IS AVA ILABLE ON PAGE NO. 5 OF THE PAPER BOOK AND AS PER THE SAME, THIS IS NOT CLEAR A S TO WHAT IS THE ALLEGATION OF AO AS TO WHETHER THE ASSESSEE HAS CONCEALED THE PAR TICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. H E SUBMITTED THAT UNDER THESE FACTS, NO PENALTY CAN BE IMPOSED AND IN SUPPORT OF HIS CONTENTION, RELIANCE WAS PLACED ON TRIBUNAL ORDER RENDERED IN THE CASE OF SR I A. NAGARAJU VS. ITO IN ITA NO. 2196/BANG/2016 DATED 06.04.2018. HE SUBMITTED A COPY OF THIS TRIBUNAL ORDER. HE ALSO POINTED OUT THAT TRIBUNAL IN THAT C ASE HAS FOLLOWED THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CAS E OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY AS REPORTED IN (2013) 35 9 ITR 565. HE ALSO SUBMITTED THAT SLP WAS FILED BY REVENUE AGAINST THI S JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT AND SAID SLP WAS DISMISSED BY HONBLE APEX COURT AS PER THE JUDGMENT DATED 05.08.2016 IN CC NO. 11485 O F 2016. HE SUBMITTED THAT IN THE PRESENT CASE ALSO, THE ISSUE SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE. AS AGAINST THIS, THE LD. DR OF REVENUE S UBMITTED THAT AS PER THE ASSESSMENT ORDER, THIS IS THE CASE OF THE AO AS NOT ED BY AO ON PAGE NO. 2 OF THE ASSESSMENT ORDER THAT ASSESSEE HAS CONCEALED TH E INCOME AND FURNISHED INACCURATE PARTICULARS AND THEREFORE, THIS IS A FIT CASE FOR INITIATION OF PENALTY PROCEEDINGS U/S. 271 (1)(C) OF IT ACT. HE SUBMITTE D THAT IN VIEW OF THIS FINDING OF AO IN THE ASSESSMENT ORDER, THIS JUDGEMENT OF HON'B LE KARNATAKA HIGH COURT IS NOT APPLICABLE IN THE PRESENT CASE. IN THE REJOIND ER, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT ANY NOTING IN THE ASSESSMENT ORDER IS NOT FINAL AND THE ITA NO.1319/BANG/2017 PAGE 3 OF 3 ASSESSEE IS REQUIRED TO REPLY TO THE NOTICE ISSUED BY THE AO U/S. 274 R.W.S. 271 (1)(C) OF IT ACT AND THEREFORE, WHEN THE ALLEGATION IS NOT CLEAR IN SUCH NOTICE THEN SUCH NOTICE IS BAD IN LAW AS HELD BY HON'BLE K ARNATAKA HIGH COURT AND CONSEQUENTLY, ANY PENALTY ORDER PASSED IN PURSUANCE TO SUCH BAD NOTICE IS INVALID AND IT CANNOT BE SUSTAINED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND NO REASON TO TAKE A CONTRARY VIEW IN THE PRESENT CASE AND THEREFORE, RE SPECTFULLY FOLLOWING THE TRIBUNAL ORDER RENDERED IN THE CASE OF SRI A. NAGAR AJU VS. ITO (SUPRA) AND IN TURN FOLLOWING THE JUDGEMENT OF HON'BLE KARNATAKA H IGH COURT RENDERED IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTO RY (SUPRA), WE HOLD THAT IN THE PRESENT CASE ALSO, THE ORDER IMPOSING PENALTY I S INVALID AND CONSEQUENTLY THE PENALTY IMPOSED IS CANCELLED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 08 TH JUNE, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.