Smt. Jaya Nagaraja, Bangalore V. Income Tax Officer, Ward-5(3)(2), Bangalore

ITA 1383/BANG/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9913 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 15-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S V RAVISHANKAR
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 13 83 /BANG/201 7 ASSESSMENT YEAR : 20 09 - 10 SMT. JAYA NAGARAJA, #19, SUMERU, NTI LAYOUT, RMV 2 ND STAGE, OPP: HIGH COLONY, 1 ST MAIN, BANGALORE 560 094. PAN: ACDPN4778R VS. THE INCOME TAX OFFICER, WARD 5 (3) (2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S.V. RAVISHANKAR, ADVOCATE RESPONDENT BY : SHRI R.N. SIDDAPPAJI, ADDL. CIT (DR) DATE OF HEARING : 19 . 11 .2018 DATE OF PRONOUNCEMENT : 07 . 1 2 .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)-5, BANGALORE DATED 23.03.2017 F OR ASSESSMENT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) PASSED UNDER SECTION 250 OF THE ACT IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PR OBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES TO BE LIABLE TO A PENALTY O F RS. 8,09,552/- UNDER SECTION 271(1)(C) OF THE ACT, ON THE FACTS AN D CIRCUMSTANCES OF THE CASE. 3. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT APPR ECIATING THAT THE NOTICE ISSUED UNDER SECTION 274 R.W.S 271(1)(C) OF THE ACT, WAS BAD IN LAW ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT APPR ECIATING THAT THE LEARNED ASSESSING OFFICER HAS NOT ASSUMED PROPER JU RISDICTION IN PENALTY PROCEEDINGS DUE TO THE DEFECTIVE NOTICE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT APPR ECIATING THAT THE ITA NO. 1383/BANG/2017 PAGE 2 OF 4 PENALTY PROCEEDINGS HAVE NOT BEEN PROPERLY INITIATE D, BY RECORDING SATISFACTION IN THE ASSESSMENT PROCEEDINGS, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN APPRECIA TING THAT PENALTY WAS NOT AUTOMATIC AND THE AO HAS NOT EXERCISED THE DISCRETION NOT TO LEVY PENALTY ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT APPR ECIATING THAT THE PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND THE AO OUGHT TO HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN IGNORING THE FACT THAT PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF INCOME A ND THERE WAS NO INSTANCE OF CONCEALMENT BY THE APPELLANT ON THE FAC TS AND CIRCUMSTANCES OF THE CASE. 9. WITHOUT PREJUDICE, THE LEARNED CIT(A) WAS NOT JU STIFIED IN IGNORING THE FACT THAT THE APPELLANT HAS UTILISED A PORTION OF THE CAPITAL GAINS AND PENALTY IF LEVIED OUGHT TO HAVE BEEN RESTRICTED TO THE EXTENT OF UNUTILISED CAPITAL GAINS, ON THE FACTS AND CIRCUMST ANCES OF THE CASE. 10. WITHOUT PREJUDICE, THE LEARNED CIT(A) WAS NOT J USTIFIED IN IGNORING THE FACT THAT THE ADDITION OF INCOME OF THE SPOUSE AND MOTHER WERE TO BE TAXED IN THEIR INDIVIDUAL HANDS AND THE ADDITION S WERE ILLEGAL AND HENCE THE SATISFACTION DERIVED IN LEVYING PENALTY O N ALL THE ADDITIONS WERE BAD IN LAW ON THE FACTS AND CIRCUMSTANCES OF T HE CASE. 11. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRM ING THE PENALTY LEVIED ON ADDITIONS MADE IN RESPECT OF INTEREST EAR NED BY SPOUSE AND MOTHER OF THE APPELLANT ON THE FACTS AND CIRCUMSTAN CES OF THE CASE. 12. WITHOUT PREJUDICE, THE PENALTY LEVIED IS HIGHLY EXCESSIVE AND REQUIRES TO BE SUBSTANTIALLY REDUCED ON THE FACTS A ND CIRCUMSTANCES OF THE CASE. 13. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBST ITUTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED ABOVE. 14. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DUR ING THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE A LLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT NOTICE ISSUED BY THE AO U/S. 274 R.W.S. 271 OF IT ACT ON 29.12.20 11 IS AVAILABLE ON PAGE NO. 41 OF THE APPEAL MEMO AND AS PER THE SAME, IT C AN BE SEEN THAT THE AO HAS NOT PINPOINTED WHAT IS HIS ALLEGATION AS TO WHE THER IT IS REGARDING CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURA TE PARTICULARS OF INCOME. ITA NO. 1383/BANG/2017 PAGE 3 OF 4 THEREAFTER HE PLACED RELIANCE ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF SRI A. NAGARAJU VS. ITO IN ITA NO. 2196/BANG/2016 D ATED 06.04.2018. HE SUBMITTED A COPY OF THIS TRIBUNAL ORDER AND POINTED OUT THAT IN THIS CASE, THE TRIBUNAL HAS ALSO CONSIDERED THE TRIBUNAL ORDER REN DERED IN THE CASE OF P.M. ABDULLAH VS. ITO IN ITA NOS. 1223 & 1224/BANG/ 2012 DATED 17.10.2016. IN SPITE OF THAT, THE TRIBUNAL HAS FOL LOWED THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F CIT VS. MANJUNATHA COTTON AND GINNING FACTORY AS REPORTED IN (2013) 35 9 ITR 565 AND HELD THAT THE ORDER IMPOSING PENALTY IS INVALID AND THE SAME WAS CANCELLED. HE FURTHER SUBMITTED THAT ON PAGE NO. 3 OF THIS TRIBUN AL ORDER, THE TRIBUNAL HAS REPRODUCED THE ALLEGATION OF THE AO IN THE NOTICE I SSUED BY THE AO IN THAT CASE U/S. 274 WHICH SAYS THAT THE ASSESSEE HAS CONC EALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. HE SUBMITTED THAT THEREFORE, THE FACTS ARE IDENTICAL AND HENCE, THIS TRIBUNAL ORDER SHOULD BE FOLLOWED AND THE ISSUE SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THIS IS TRUE THAT AS PER THE NOTICE ISSUED BY THE AO U/S. 274 R.W.S. 271 OF IT ACT, THE AO HAS STATED THAT IT APPEARS TO HIM THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF IN COME. HENCE, IT IS CLEAR THAT THE FACTS OF THE PRESENT CASE AND IN THE CASE OF SRI A. NAGARAJU VS. ITO (SUPRA) ARE IDENTICAL. IN THAT CASE, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY RESPECTFULLY FOLLOWING TH E BINDING JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA). THE TRIBUNAL I N THAT CASE HAS ALSO CONSIDERED THE TRIBUNAL ORDER RENDERED IN THE CASE OF P.M. ABDULLAH VS. ITO (SUPRA) WHICH WAS RENDERED IN FAVOUR OF THE REVENUE AND REGARDING THIS TRIBUNAL ORDER, IT WAS STATED BY THE TRIBUNAL IN PA RA 9 OF THIS TRIBUNAL ORDER THAT THIS TRIBUNAL ORDER IS CONTRARY TO THE DECISIO N OF THE HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. MANJUNAT HA COTTON AND GINNING FACTORY (SUPRA) AND THE TRIBUNAL FOLLOWED THE SAME JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT. IN THE PRESENT CASE ALSO, WE RESPECTFULLY FOLLOW THIS TRIBUNAL ORDER AND IN CONSEQUENCE, WE FOLLOW THIS J UDGEMENT OF HON'BLE ITA NO. 1383/BANG/2017 PAGE 4 OF 4 KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS . MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) AND HOLD THAT THE PENAL TY ORDER IS 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/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 07 TH DECEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.