A.C.I.T.,Circle-7(1), Kolkata V. M/s Ambuja Neotia Holdings Pvt. Ltd., Kolkata

ITA 1691/KOL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1693 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 17-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 250; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA [BEFORE SHRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER & SHRI ABY T. VARKEY, HONBLE JUDICIAL MEMBER] I.T.A. NO. 1691/KOL/2019 ASSESSMENT YEAR: 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-7(1), KOLKATA.........................APPELLANT VS. M/S. AMBUJA NEOTIA HOLDINGS PVT. LTD...........................RESPONDENT BLOCK 3B, ECOSPACE BUSINESS PARK NEW TOWN, RAJARHAT KOLKATA 700 156 [PAN: AABCR 5623 E] APPEARANCES BY: NONE, APPEARED ON BEHALF OF THE ASSESSEE. SHRI SUPRIYO PAL, JCIT, SR. D/R, APPEARING ON BEHALF OF THE REVENUE DATE OF CONCLUDING THE HEARING : OCTOBER 31 ST , 2019 DATE OF PRONOUNCING THE ORDER : NOVEMBER 27 TH , 2019 O R D E R PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 19, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 10/04/2019, FOR THE ASSESSMENT YEAR 2009-10. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. THERE IS NO PETITION FOR ADJOURNMENT EITHER. UNDER THESE CIRCUMSTANCES, WE DISPOSE OFF THE CASE EX-PARTE QUA THE ASSESSEE AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 3. THE LD. CIT(A), IN THIS CASE HAS CANCELLED THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON THE GROUND THAT, IN THE NOTICE ISSUED FOR LEVY OF PENALTY U/S 274 OF THE ACT, IT WAS NOT MENTIONED WHETHER THE PENALTY IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. HE APPLIED THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASES OF PCIT VS. BASANTI PROPERTIES PVT. LTD. (ITA NO. 14 OF 2019, DATED 26.02.2019) AND PCIT V. SRMB SRIJAN LTD. (ITAT NO. 8 OF 2019, DATED 26.02.2019). 4. THE KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF JEETMAL CHORARIA VS ACIT RENDERED VIDE ITS ORDER DATED 01.12.2017 PASSED IN ITA NO. 956/KOL/2016 WHEREIN A SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL AFTER TAKING INTO CONSIDERATION, THE RELEVANT DECISION OF THE DIFFERENT HIGH COURTS VIDE PARAGRAPH NO. 14 AND 15 OF ITS ORDER WHICH READ AS UNDER: FROM THE AFORESAID DISCUSSION IT CAN BE SEEN THAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIGH COURT IS NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHES AT BANGALORE HAVE TO FOLLOW THE DEC ISION OF THE HONBLE KARNATAKA HIGH COURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & G HIGH COURT IN THE CASE OF SMT. KAUSHALYA. IT IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE, THEREFORE, PREFER TO FOLLOW TH KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). 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 AGAINST THE ASSESSEE AS T IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE, THEREFORE, HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 4. IN OUR OPINION, THE DECISION RENDERED BY THE COORDINATE BENCH IN THE CASE OF JEETMAL CHORARIA VS ACIT (SUPRA) THEREFORE, RESPECTFULLY FOLLOW THE IMPUGNED PENALTY IMPOSED BY THE THE ACT AND UPHOLD THE ORDER OF THE 6. IN THE RESULT, APPEAL OF THE KOLKATA, THE SD/- [ABY T. VARKEY] JUDICIAL MEMBER DATED : 27.11.2019 {SC SPS} 2 THE RELEVANT DECISION OF THE DIFFERENT HIGH COURTS VIDE PARAGRAPH NO. 14 AND 15 OF ITS ORDER WHICH READ AS UNDER: FROM THE AFORESAID DISCUSSION IT CAN BE SEEN THAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIGH COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON - STRIKING OF THE INACCURATE P CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHES AT BANGALORE HAVE TO ISION OF THE HONBLE KARNATAKA HIGH COURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & G INNING (SUPRA) AND OTHER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA. IT IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE, THEREFORE, PREFER TO FOLLOW TH E VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). 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 AGAINST THE ASSESSEE AS T O 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 STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE, THEREFORE, HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT THE SAME IS DIRECTED TO BE CANCELLED. IN OUR OPINION, THE DECISION RENDERED BY THE COORDINATE BENCH IN THE CASE OF JEETMAL CHORARIA VS ACIT (SUPRA) IS SQUARELY APPLICABLE IN THE PRESENT CASE. WE, THEREFORE, RESPECTFULLY FOLLOW ING THE SAID DECISION OF T HE COORDINATE BENCH PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) UPHOLD THE ORDER OF THE LD. CIT(A). IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE 27 TH DAY OF NOVEMBER, 2019. [ J. SUDHAKAR REDDY] ACCOUNTANT MEMBER I.T.A. NO. 1691/KOL/2019 ASSESSMENT YEAR: 2009-10 M/S. AMBUJA NEOTIA HOLDINGS PVT. LTD THE RELEVANT DECISION OF THE DIFFERENT HIGH COURTS VIDE PARAGRAPH NO. 14 AND 15 OF FROM THE AFORESAID DISCUSSION IT CAN BE SEEN THAT THE LINE OF REASONING OF THE THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. STRIKING OF THE INACCURATE P ORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHES AT BANGALORE HAVE TO ISION OF THE HONBLE KARNATAKA HIGH COURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE INNING (SUPRA) AND OTHER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA. IT IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE E VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NOTICE ISSUED IN THE PRESENT CASE O 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 STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE, THEREFORE, HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT IN OUR OPINION, THE DECISION RENDERED BY THE COORDINATE BENCH IN THE CASE OF IS SQUARELY APPLICABLE IN THE PRESENT CASE. WE, HE COORDINATE BENCH QUASH UNDER SECTION 271(1)(C) OF SD/- J. SUDHAKAR REDDY] ACCOUNTANT MEMBER C OPY OF THE ORDER FORWARDED TO: 1. M/S. AMBUJA NEOTIA HOLDINGS PVT. LTD BLOCK 3B, ECOSPACE BUSINESS PARK NEW TOWN, RAJARHAT KOLKATA 700 156 2. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 3 OPY OF THE ORDER FORWARDED TO: HOLDINGS PVT. LTD BLOCK 3B, ECOSPACE BUSINESS PARK ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE -7(1), KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, K OLKATA BENCHES I.T.A. NO. 1691/KOL/2019 ASSESSMENT YEAR: 2009-10 M/S. AMBUJA NEOTIA HOLDINGS PVT. LTD TRUE COPY BY ORDER ASSISTANT REGISTRAR OLKATA BENCHES