Bidrohi Sur, Kolkata V. CIT(A)-XXIV, KOLKATA, Kolkata

ITA 1390/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1910 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 19-06-2014
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Assessee Lawyers: K K BISWAS

Judgement Text

ITA NO.1390/KOL/2014- BIDROHI SUR A.Y.2005-06 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NO.1390/KOL/2014 ASSESSMENT YEAR : 2005-06 BIDROHI SUR -VERSUS- C.I.T.(A)- XXIV, KOLKATA KOLKATA (PAN:AKXPS 3296 B) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI K.K.BISWAS, ADVOCATE FOR THE RESPONDENT: SHRI RAJAT KUMAR KUREEL, JCIT, SR.DR DATE OF HEARING : 23.03.2017. DATE OF PRONOUNCEMENT : 05.04.2017. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 06.3.2014 OF CIT(A)- XXIV, KOLKATA, RELATING TO AY 2005-06. 2. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) WHEREBY THE CIT(A) CONFIRMED THE ORDER OF THE AO IMPOSING PENAL TY ON THE ASSESSEE U/S.271(1)( C ) OF THE INCOME TAX ACT, 1961 (ACT). 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY U/S.271(1)( C) OF THE ACT WAS IMPOSED ON THE ASSESSEE BY THE AO ARE AS FOLLOWS: THE ASSESSEE IS AN INDIVIDUAL. IN THE RETURN OF I NCOME FILED FOR A.Y.2005-06 THE ASSESSEE DECLARED CAPITAL GAIN OF RS.5,77,423/- . THE SAME WAS CLAIMED AS EXEMPT BECAUSE THE ASSESSEE INVESTED A SUM OF RS.6,00,000/ - IN CAPITAL GAIN SCHEME AND ACCORDINGLY CLAIMED DEDUCTION U/S 54EC OF THE INCOM E TAX ACT, 1961 (ACT). SINCE THE CAPITAL GAIN IN QUESTION WAS NOT THE LONG TERM CAPI TAL GAIN THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 54EC OF THE ACT WAS REJECTED BY THE A O AS THE CLAIM FOR DEDUCTION U/S.54EC OF THE ACT CAN BE MADE ONLY WHEN THE CAPIT AL GAIN IN QUESTION IS A LONG TERM CAPITAL AGAIN. ACCORDINGLY DEDUCTION U/S 54EC OF TH E ACT WAS REFUSED. IN RESPECT OF THE CLAIM FOR DEDUCTION MADE U/S 54EC OF THE ACT WH ICH WAS REJECTED, THE AO IMPOSED PENALTY U/S 271(1)(C) OF THE ACT. THE SAME WAS CONFIRMED BY CIT(A). ITA NO.1390/KOL/2014- BIDROHI SUR A.Y.2005-06 2 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. FAR AS THE MERITS OF T HE ORDER OF CIT(A) CONFIRMING THE ORDER OF THE AO IMPOSING PENALTY ON THE ASSESSEE U/ S.271(1)( C) OF THE ACT IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITT ED BEFORE US THAT THE SHOW CAUSE NOTICE ISSUED U/S 274 OF THE ACT BEFORE IMPOSING PE NALTY DOES NOT CONTAIN THE SPECIFIC CHARGE AGAINST THE ASSESSEE NAMELY AS TO WHETHER TH E ASSESSEE WAS GUILTY OF HAVING CONCEALED PARTICULARS OF INCOME OR HAVING FURNISHED INACCURATE PARTICULARS OF INCOME. COPY OF THE SHOW CAUSE NOTICE U/S 274 OF THE ACT WA S FILED BEFORE US. PERUSAL OF THE SAME REVEALS THAT AO HAS NOT STRUCK OUT THE IRRELEV ANT PORTION IN THE SHOW CAUSE NOTICE AND THEREFORE THE SHOW CAUSE NOTICE DOES NOT SPECIF Y THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER THE CHARGE IS OF CONCEALMENT OF PARTICUL ARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 5. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTEN TION TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS E MERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNAT AKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTO N AND GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PENALTY U/ S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETH ER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE LD. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAIN ST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEA L IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT BY ITS ORDER DAT ED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPARTMENT. THE LD. COUNSEL ALSO B ROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HONBL E BOMBAY HIGH COURT FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIG H COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTIC E WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTEN TION WAS ALSO DRAWN TO THE DECISION ITA NO.1390/KOL/2014- BIDROHI SUR A.Y.2005-06 3 OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A). 6. 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 AGAI NST 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 S TRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMP OSITION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSE SSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS T O BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED. O RDER PRONOUNCED IN THE COURT ON 05.04.2017. SD/- SD/- [M.BALAGANESH] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 05.04.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.BIDROHI SUR, 136, BRAHMO SAMAJ ROAD, BEHALA, KOLK ATA-700034. 2. A.C.I.T. CIRCLE-21, KOLKATA. 3. C.I.T.(A)- XXIV, KOLKATA 4. C.I.T-VIII, KO LKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, ASST. REGISTRAR, ITAT, KOLKATA BENCHES