Sh. Vikram Sood, Manali V. Addl. CIT, Mandi Range, Mandi

ITA 1487/CHANDI/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7904 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 23-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Keywords: Principle of natural justice; Reasonable cause
• Section: 271(1)(c); 143(3); 143(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH .. , !' BEFORE SHRI N.K.SAINI, VICE PRESIDENT ./ ITA NO. 1487/CHD/2017 / ASSESSMENT YEAR : 2011-12 SH. VIKRAM SOOD, #23, DANA BAZAR, MANALI DISTT. KULLU (HP) VS. THE ADDL. CIT, MANDI RANGE, MANDI (HP) ./PAN NO: AYPPS3521B / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. TEJ MOHAN SINGH, ADVOCATE ' ! / REVENUE BY : SMT.CHANDRAKANTA, SR. DR # $ % /DATE OF HEARING : 03.01.2019 &'() % / DATE OF PRONOUNCEMENT : 03 .01.2019 #/ ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 24.8.2017 OF THE COMMISSIONER OF INCOME TAX (APPEALS), PALAMPUR 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THAT THE ASSES SING OFFICER IS NOT REQUIRED TO RECORD SATISFACTION DURING THE COUR SE OF ASSESSMENT PROCEEDINGS WHICH IS ILLEGAL, ARBITRARY AND UNJUSTI FIED. 2. THAT WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMIS SIONER OF INCOME TAX APPEALS) HAS ERRED IN UPHOLDING THE IMPOSITION OF PENALTY OF RS.12,05,000/- UNDER SECTION 271D OF THE ACT WHICH IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE IMPOSITION OF PENALTY UNDER SECTION 271D OF THE ACT EVEN IN RESPECT OF ON E SH. RAKESH ITA NO. 1487-CHD-2017- SH. VIKRAM SOOD, DISTT. KULLU 2 THAKUR FOR WHICH NO SHOW CAUSE NOTICE WAS ISSUED AN D AS SUCH LEVY OF PENALTY ON THIS AMOUNT IS AGAINST THE PRINCIPALS OF NATURAL JUSTICE WHICH RENDERS IT ARBITRARY AND UNJUSTIFIED. 4. THAT IN ANY CASE, THE LD. COMMISSIONER OF INCOME TA X (APPEALS) HAS FAILED TO APPRECIATE THE REASONABLE CAUSE PLEAD ED BEFORE HER IN THE CORRECT PERSPECTIVE AND AS SUCH THE ORDER PASSE D BY HIM IS ARBITRARY AND UNJUSTIFIED. 5. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE . 3. FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE SUSTENANCE OF THE PENAL TY OF RS. 12,05,000/- LEVIED BY THE ASSESSING OFFICER U/S 271D OF THE IN COME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASS ESSEE FILED RETURN OF INCOME ON 6.12.2011 DECLARING AN INCOME OF RS. 4,46 ,020/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT. LATER ON, THE CAS E WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER FRAMED THE ASSESSME NT AT AN INCOME OF RS. 4,50,224/- BY MAKING AN ADDITION OF RS. 4,204/- . THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IN THE ASSESSMENT ORDER. THEREAFTER, THE ASSESSING OFFICER SEPARATELY INITIATED PENALTY PROCEEDINGS U/S 271D OF THE ACT BY OBSERVIN G THAT THE ASSESSEE HAD RECEIVED LOAN / DEPOSIT AGGREGATED TO RS. 12,05 ,000/- FROM 08 PERSONS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SHOW CAUSE AND EXPLAIN AS TO WHY PENALTY FOR VIOLATING THE PROVISI ONS OF SECTION 269SS OF THE ACT MAY NOT BE IMPOSED UPON THE ASSESSEE FO R ACCEPTING THE LOAN / DEPOSITS EXCEEDING RS. 20,000/- OTHERWISE BY THE ACCOUNT PAYEE CHEQUES OR ACCOUNT PAYEE DRAFTS. THE ASSESSING OFFI CER DID NOT FIND ITA NO. 1487-CHD-2017- SH. VIKRAM SOOD, DISTT. KULLU 3 MERIT IN THE EXPLANATION OF THE ASSESSEE AND LEVIED THE IMPUGNED PENALTY. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MA TTER TO THE LD. CIT(A) AND SUBMITTED THAT THE PENALTY CANNOT BE LEVIED BE CAUSE THE ASSESSING OFFICER HAS NOT INITIATED PENALTY PROCEEDINGS WHILE COMPLETING ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT. THE L D. CIT(A), HOWEVER, DID NOT FIND MERIT IN THE SAID SUBMISSIONS AND SUSTAINED THE PENALTY LEVIED BY THE ASSESSING OFFICER. 6. NOW THE ASSESSEE HAS COME IN APPEAL. THE LD. C OUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSING OFFICER HAD NOT R ECORDED ANY SATISFACTION IN THE ASSESSMENT ORDER REGARDING INIT IATION OF THE PENALTY PROCEEDINGS U/S 271D OF THE ACT, THEREFORE, THE PE NALTY LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) U /S 271D OF THE ACT WAS NOT JUSTIFIED. RELIANCE WAS PLACED ON THE FOLL OWING CASE LAWS:- 1. CIT VS. SAINI MEDICAL STORE, 277 ITR 420 (P&H) 2. CIT VS. SUNIL KUMAR GOES, 315 ITR 163 (P&H) 3. CIT VS. JAI LAXMI RICE MILLS, 379 ITR 521 (SC) 4. MOHINDER PAL SINGH, RAMNEEK SEHGAL & PARAMJEET KAUR VS. THE ADDL. CIT, ITA NOS. 192 TO 197/CHD/2018, ORDER DATED 8.6.2018. 5. BINOD KUMAR AGARWAL VS. JCIT, ITA NOS. 238 & 238/KOL./2013 ORDER DATED 4.2.2016 6. SMT. S.B. PATIL VS. JCIT, ITA NOS.1053 & 1054/BNG./2014ORDER DATED 10.2.2016 7. IN HER RIVAL SUBMISSIONS, THE LD. SR DR STRONGL Y SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 1487-CHD-2017- SH. VIKRAM SOOD, DISTT. KULLU 4 8. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CA SE IT IS NOTICED THAT THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER D ATED 14.3.2014 U/S 143(3) OF THE ACT AND MADE THE ADDITION OF RS. 4,20 4/- . THE ASSESSING OFFICER NOWHERE INITIATED PENALTY PROCEEDINGS U/S 2 71D OF THE ACT ALTHOUGH PENALTY PROCEEDINGS U/S 271(1)(C) OF THE A CT WERE INITIATED. THE RELEVANT FINDINGS GIVEN BY THE ASSESSING OFFICE R IN THE SAID ASSESSMENT ORDER DATED 14.3.2014 READS AS UNDER:- THE ASSESSEE HAS SHOWN BANK INTEREST IN HIS RETURN OF INCOME AT RS. 11428/- THUS THE ASSESSEE NOT DECALED INTEREST TO THE EXTENT OF RS. 4204/- (15635-11428). HENCE, INTEREST AT RS. 4204/- IS TREATED AS INCOME OF THE ASSESSEE AND THE SAME IS ADDED TO HIS TOTAL INCOME. FROM THE ABOVE I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED HIS INCOME AND FURNISHED INACCURATE PARTICULARS OF HIS INCOME TO THE EXTENT OF RS. 4204 /- AS MENTIONED ABOVE. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT HAS BEEN INITIATED SEPARATELY. 9. ON A SIMILAR ISSUE, THE HON'BLE SUPREME COURT IN THE CASE OF CIT V JAI LAXMI RICE MILLS (SUPRA) HELD AS UNDER;- THAT IN THE FRESH ASSESSMENT ORDER THERE WAS NO SATISFACTION RECORDED REGARDING PENALTY PROCEEDINGS U/S 271D OF THE ACT THOUGH IN THAT ORDER THE ASSESSING OFFICER WANTED PENALTY PROCEEDINGS TO BE INITIATED U/S 271(1)(C) OF THE ACT. THUS, THE PENALTY UNDER SECITON271D WAS WITHOUT ANY SATISFACTION AND, THEREFORE, NO SUCH PENALTY COULD BE LEVIED . 10. IN THE PRESENT CASE, AS I HAVE ALREADY POINTED OUT THAT THE ASSESSING OFFICER HAD NOT RECORDED ANY SATISFACTION REGARDING THE PENALTY PROCEEDINGS U/S 271D OF THE ACT IN THE ASSE SSMENT ORDER PASSED U/S 143(3) OF THE ACT. I, THEREFORE, KEEPING IN VIE W THE RATIO LAID DOWN ITA NO. 1487-CHD-2017- SH. VIKRAM SOOD, DISTT. KULLU 5 BY THE HON'BLE SUPREME COURT IN THE AFORESAID REFER RED TO CASE OF CIT V JAI LAXMI RICE MILLS DELETE THE IMPUGNED PENALTY LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A). 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.01.2019 SD/- ( .. / N.K. SAINI) !'/ VICE PRESIDENT DATED : 03.1.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR