Balbir Singh (HUF), Chandigarh V. DCIT, C-1(1), Chandigarh

ITA 1661/CHANDI/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5018 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-07-2019
• Assessment Year: 2004-2005
• Appeal Filed On: 11-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B M MONGA
• Section: 271(1)(c); 250

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH , ! ' # $ % & ' , ' BEFORE SMT.DIVA SINGH, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.1661/CHD/2017 / ASSESSMENT YEAR : 2004-05 M/S BALBIR SINGH (HUF), PROP.M/S SOHI BANQUET HALL, H.NO.10, SECTOR 3, CHANDIGARH. THE D.C.I.T., CIRCLE-1(1), CHANDIGARH. ./PAN NO: AADHB4674A /APPELLANT /RESPONDENT /ASSESSEE BY: SHRI B.M.MONGA, ADV. & SHRI ROHIT KAURA, ADV. ! / REVENUE BY: SHRI HEMANT GUPTA, SR.DR ' # $ /DATE OF HEARING : 30.07.2019 %&'( $ /DATE OF PRONOUNCEMENT: 20.08.2019 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-I, CHANDIGARH [(IN SHORT CIT(A)] DATED 29.9.2017 REL ATING TO ASSESSMENT YEAR 2004-05, UPHOLDING PENALTY LEVIED U/S ITA NO.1661/CHD/2017 A.Y. 2004-05 2 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 2. THE LD.COUNSEL FOR THE ASSESSEE FIRST TOOK UP GR OUND NO.1 BEFORE US, WHICH READS AS UNDER: 1. THAT THE LD. CIT-(A), HAS GROSSLY ERRED IN UPHO LDING THE PENALTY LEVIED BY THE AO WHICH ITSELF HAS BEEN LEVI ED ON THE BASIS OF ILLEGAL SHOW CAUSE NOTICE ISSUED U/S 274 R .W.S. 271(L)(C) AS IT DID NOT SPECIFY ON WHICH LIMB OF SE CTION 271(L)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD B EEN INITIATED, I.E., WHETHER THE CONCEALMENT OF PARTICULARS OF INC OME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 3. IT WAS POINTED OUT THAT THIS GROUND HAD BEEN RAI SED BEFORE US FOR THE FIRST TIME AND WAS A LEGAL GROUND CHALLENGING THE VALIDITY OF THE ORDER PASSED IMPOSI NG PENALTY U/S 271(1)(C) OF THE ACT. LD.COUNSEL FOR TH E ASSESSEE PLEADED ADMITTANCE OF THE SAME BEFORE US, CONTENDIN G THAT ALL RELEVANT FACTS FOR ADJUDICATING THE GROUND WERE ALREADY ON RECORD AND NO NEW /FRESH FACTS WERE REQUIRED TO BE BROUGHT ON RECORD AND BEING A LEGAL GROUND CHALLENG ING THE VALIDITY OF THE ORDER PASSED , THE SAME OUGHT TO BE ADMITTED.RELIANCE WAS PLACED ON THE DECISION OF THE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LT D. VS COMMISSIONER OF INCOME TAX 229 ITR 383 (SC) THE LD. DR OBJECTED TO THE ADMISSION OF THE SAME. ITA NO.1661/CHD/2017 A.Y. 2004-05 3 4. WE FIND MERIT IN THE CONTENTION OF THE LD.COUNS EL FOR THE ASSESSEE. UNDENIABLY THE PRESENT GROUND, IS A L EGAL GROUND, CHALLENGING THE LEVY OF PENALTY BASIS AN I LLEGALITY IN THE NOTICE ISSUED BY THE DEPARTMENT FOR INITIATING PENALTY PROCEEDINGS. IT EFFECTS THE VERY FOUNDATION/ BASIS OF LEVY OF PENALTY AND CAN BE ADJUDICATED ON THE BASIS OF FAC TS ON RECORD SINCE IT REFERS TO ILLEGALITY IN THE NOTIC E ISSUED BY THE DEPARTMENT WHICH IS PART OF ITS RECORD. AS P ER THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD.(SUPRA) THE TRIBUNAL IS WELL WITHIN ITS POWERS TO ADMIT SUCH ADDITIONAL GROUNDS NOT RAISED EARLIER. THE SAID GROUND WAS ACCORDINGLY ADMITTED FOR HEARI NG AND THE OBJECTION OF THE LD. DR OVERRULED. 5. THEREAFTER, MAKING ARGUMENTS ON THE MERITS OF TH E ISSUE, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED, T HAT THE VALIDITY OF THE ORDER HAS BEEN CHALLENGED ON THE GR OUND THAT THE NOTICE ISSUED FOR LEVY OF PENALTY WAS ILLEGAL S INCE IT DID NOT SPECIFY THE ACT OF THE ASSESSEE FOR WHICH PENAL TY WAS LEVIED, WHETHER FOR CONCEALMENT OF PARTICULARS OF I NCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO A COPY OF THE NOTICE ISSUED U/S 274 OF THE ACT IN THE PRESENT CASE ITA NO.1661/CHD/2017 A.Y. 2004-05 4 PLACED AT PAPER BOOK PAGE NO.2 TO POINT OUT THE AFO RESAID FACT. THE LD.COUNSEL FOR THE ASSESSEE FURTHER RELIE D UPON VARIOUS DECISIONS OF THE TRIBUNAL AND THE HON'BLE H IGH COURT AND HON'BLE APEX COURT, IN SUPPORT OF ITS CON TENTION THAT IN VIEW OF THE ILLEGALITY IN THE NOTICE ISSUED ,THE PENALTY ORDER PASSED WAS BAD IN LAW. THE CASE LAWS REFERR ED TO BEFORE US BY WAY OF FILING COPIES OF THE SAME IN THE FORM OF A PAPER BOOK, ARE AS UNDER: 1. ITO VS. SH. RAJESH KUMAR, ITA NO. 866/ CHD/2017, DATED 01.11.2017. 2. SH. NITIN CHAUHAN VS. ITO, ITA NO. 1312/ CHD/20 18, DATED 20.02.2019. 3. HARPREET KAUR VS. ITO, ITA NO. 709/ASR/2017, DAT ED 17.01.2019. 4. CIT VS. MANJUNATHA COTTON & GINNING FACTORY, [20 13] 35 TAXMANN.COM 250 (KARNATAKA HC). 5. CIT VS. SSA'S EMERALD MEADOWS, [2016] 73 TAXMANN.COM 241 (KARNATAKA HC). 6. CIT VS. SSA'S EMERALD MEADOWS, [2016] 73 TAXMANN.COM 248 (SUPREME COURT). 7. CIT VS. SAMSON PERINCHERY, [2017] 88 TAXMANN.COM 413 (BOMBAY HC). 8. PR. CIT VS. SMT. BAISETTY REVATHI, [2017] 398 IT R 88 (ANDHARA PRADESH & TELENGANA HC). 9. JEETMAL CHORARIA VS. ACIT, [2018] 91 TAXMANN.COM 311 (KOLKATA TRIB.).\ 10. ASHOK SAHAKARI SAKHAR KARKHANA LTD. VS. ACIT, [ 2017] 59 ITR(T) 171 (PUNE TRIB.). ITA NO.1661/CHD/2017 A.Y. 2004-05 5 6. THE LD. DR ON THE OTHER HAND PLEADED THAT SINCE THE ISSUE WAS NOT RAISED BEFORE THE LD.CIT(A),IT WOULD BE APPROPRIATE TO RESTORE THE MATTER BACK TO THE CIT(A ) TO VERIFY THE CONTENTIONS OF THE ASSESSEE AND THEREAFTER ADJU DICATE THE ISSUE IN ACCORDANCE WITH LAW. THE LD. DR ALSO POINTED OUT THAT THE HON'BLE MADRAS HIGH COURT HAD RULED IN FAVOUR OF THE REVENUE ON THIS ISSUE IN THE CASE OF SUNDRAM FINANCE LTD. VS ASSISSTANT COMMISSIONER OF INCOME TAX IN TC APPEAL NO. 876 AND 877 OF 2008 DATED 23-04-2018. THE LD.COUNSEL FOR THE ASSESSEE DID NOT OBJECT TO THE SAME. 7. IN VIEW OF THE ABOVE, SINCE UNDOUBTEDLY, THE ASS ESSEE HAS RAISED A LEGAL GROUND BEFORE US FOR THE FIRST T IME, CHALLENGING THE VALIDITY OF THE ORDER PASSED LEVYIN G PENALTY, REFERRING TO ILLEGALITY IN THE NOTICE ISSUED FOR IN ITIATING THE PROCEEDINGS TO LEVY PENALTY BY THE AO, WE CONSIDER IT FIT TO RESTORE THE MATTER BACK TO THE CIT(A) TO VERIFY THE CONTENTION OF THE ASSESSEE AND THEREAFTER ADJUDICATE THE ISSU E IN ACCORDANCE WITH LAW AFTER TAKING NOTE OF THE VARIO US DECISIONS CITIED BY BOTH THE PARTIES. ITA NO.1661/CHD/2017 A.Y. 2004-05 6 8. FURTHER SINCE IT IS A LEGAL ISSUE CHALLENGING TH E VALIDITY OF THE ORDER PASSED ITSELF, THE SAME NEEDS TO BE AD JUDICATED FIRST BEFORE DECIDING THE ISSUE ON MERITS. THEREFOR E, THE ENTIRE APPEAL IS RESTORED BACK TO THE LD. CIT(A), T O DECIDE AND PASS AN ORDER AFRESH ON THE LEGAL ISSUE AS WELL AS ON MERITS OF THE CASE. NEEDLESS TO ADD THAT THE ASSESS EE BE GIVEN DUE OPPORTUNITY OF HEARING. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- # $ % & ' (DIVA SINGH) (ANNAPURNA GUPTA) ! ' /JUDICIAL MEMBER ' /ACCOUNTANT MEMBER # /DATED: 20 TH AUGUST, 2019 * * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, / ASSISTANT REGISTRAR