Ruvina Singh, Gurgaon V. ITO, New Delhi

ITA 1489/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3788 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: R S AHUJA
• Keywords: Question of law; Reasonable cause

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH B: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1489/DEL/2016 A.Y. : 2005-06 MS. RUVINA SINGH, VS. ITO, WARD 43(3), C/O R.S. AHUJA & CO., NEW DELHI CHARTERED ACCOUNTANTS, C-353, DEFENCE COLONY, NEW DELHI 110 0024 (PAN: ABIPS0518C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. R.S. AHUJA, CA DEPARTMENT BY : MS. ASHIMA NEB, SR. DR O R D E R PER H.S. SIDHU, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-28, NEW DELHI DAT ED 19.2.2016 PERTAINING TO ASSESSMENT YEAR 2005-06. 2. THE GROUNDS OF APPEAL RAISED IN THE ASSESSEES APPEAL READ AS UNDER:- (A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. ITO AND THE CIT(A) ERRED IN L 1. IMPOSING A PENALTY U/S. 271(1)(C). 2 (B) THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND THE GROUNDS OF APPEAL AT AND BEFORE THE HEARING. 3. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FO R THE SAKE OF BREVITY. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE HAS STATED THAT THE PENALTY IN DISPUTE HAS BEEN INITIATED BY THE AO B OTH FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS WELL AS CONCEALMENT OF I NCOME. IN SUPPORT OF HIS CONTENTION HE DRAW OUR ATTENTION TOWARD S THE NOTICE DATED 21.12.2009 ISSUED BY THE AO. HE STATED THAT THE NOTICE FOR INITIATION OF PENALTY U/S. 271(1)(C) READ WITH SECTION 274 OF THE I .T. ACT, 1961 IS AMBIGUOUS AND VAGUE BECAUSE IN THE NOTICE BOTH FURNISHIN G OF INACCURATE PARTICULARS OF INCOME AS WELL AS CONCEALMENT OF INCOME H AVE BEEN MENTIONED. HE FURTHER STATED THAT AO HAS NOT SPECIFIED UNDER WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAS B EEN INITIATED I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR F URNISHING OF INACCURATE PARTICULARS. IN VIEW OF THIS, HE REQUESTED TO DELETE TH E PENALTY IN DISPUTE AND IN SUPPORT OF HIS AFORESAID CONTENTIONS HE RELIED UPON THE FOLLOWING DECISIONS:- - HONBLE KARNATAKA HIGH COURT DECISION IN THE CASE OF C IT & ORS. VS. M/S MANJUNATHA COTTON AND GINNIG FACTORY & ORS. (2013) 359 ITR 565 3 - APEX COURT DECISION IN THE CASE OF CIT & ANR. VS. M/S SSAS EMERALD MEADOWS IN CC NO. 11485/2016 DATED 05.8.2016. 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE LEVANT RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES ALONG WITH THE PROVISIONS OF LAW AS WELL AS THE CASE LAW CITED BY THE LD. COUNSEL OF T HE ASSESSEE. WE HAVE PERUSED THE NOTICE DATED 21.12.2009 ISSUED BY THE AO FOR INITIATION OF PENALTY AND DIRECTING THE ASSESSEE TO APPEAR BEFORE HIM . FOR THE SAKE OF CONVENIENCE, SOME OF THE CONTENTS OF THE PENALTY NOTICE DATED 21.12.2009 ARE REPRODUCED AS UNDER:- ..IT APPEARS TO ME THAT YOU:- *HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WIT H A NOTICE U/S. 22(1)/22(2)/34 OF THE INCOME TAX ACT, 1 922 OR UNDER SECTION 142(1)/143(2) OF THE INCOME TAX AC T, 196. * HAVE CONCEALED THE PARTICULARS OF INCOME OR FURN ISHED INACCURATE PARTICULARS OF SUCH INCOME.. 6.1 AFTER PERUSING THE AFORESAID CONTENTS OF THE NOTICE DATED 21.12.2009, WE ARE OF THE VIEW THAT THE AO HAS INITIATED THE PEN ALTY FOR CONCEALMENT OF 4 PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTI CULARS, WHICH IS CONTRARY TO THE PROVISIONS OF LAW. WE ARE OF THE VIEW THAT NOTICE ISSUED BY THE AO U/S. 271(1) READ WITH SECTION 274 OF THE ACT I S BAD IN LAW AS IT DOES NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E. WHETHER FOR CONCEAL MENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THEREF ORE, THE PENALTY IN DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE, W E CANCEL THE PENALTY IN DISPUTE. OUR AFORESAID VIEW IS SUPPORTED BY THE FOLLO WING DECISIONS:- I) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS 2015 (11) TMI 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- KARANATAKA HIGH COURT. THUS SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION N O SUBSTANTIAL QUESTION OF LAW ARISES DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS HONBLE SUPREME COURT OF INDIA REPORTED IN 2016 5 (8) TMI 1145 SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) TMI 1620 (SUPRA) KARNATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME DECIDED IN FAVOUR OF ASSESSEE. 7. KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS, WE CANCEL THE PENALTY IN DISPUTE BY RESPECTFULLY FOLLOWING THE AFORESAID DECISION S AND ALLOW THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/02/2018. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 07/02/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR , ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES