Srikanta Swamy Natesh Kumar, Bangalore V. Income Tax Officer, Bangalore

ITA 1713/BANG/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4675 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 28-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1713 / BANG/201 6 ASSESSMENT YEAR : 20 06 - 07 SHRI SRIKANTA SWAMY NATESH KUMAR, NO. 43, 21 ST CROSS, BHUVANESHWARINAGAR, DASARAHALLY, BANGALORE 560 043. PAN: AJFPK1112P VS. THE INCOME TAX OFFICER, WARD 6 (3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S.V. RAVISHANKAR, ADVOCATE RESPONDENT BY : SHRI M. RAJASEKHAR, ADDL. CIT (DR) DATE OF HEARING : 0 6 .0 6 .2018 DATE OF PRONOUNCEMENT : 08 .0 6 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A) 1, BANGALORE DATED 20.06.2016 FOR A SSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE CIT (A) IN SO FAR AS IT IS AGAI NST THE APPELLANT IS OPPOSED TO LAW, EQUITY, AND WEIGHT OF EVIDENCE, PRO BABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. WHETHER CIT (A) IS JUSTIFIED IN CONFIRMING THE P ENALTY LEVIED UNDER SECTION 271 (1) (C) BY THE LEARNED ASSESSING OFFICE R ESPECIALLY WHEN THERE IS NEITHER CONCEALED INCOME NOR FILED ANY INA CCURATE PARTICULARS. 3. WHETHER MERE AGREEING TO BE ASSESSED AT A CERTAI N INCOME BASED ON PEAK CREDIT WITH AN INTENTION OF AVOIDING LITIGATIO NS AND DUE TO ILL- HEALTH OF ASSESSEE SHOULD ITSELF TO BE TAKEN AS CON CEALMENT OF INCOME, ESPECIALLY WHEN BEFORE ACCEPTING SUCH ASSESSMENT TH E APPELLANT HAS CATEGORICALLY STATED VIDE LETTER THAT HE AGREEING T O BE ASSESSED AT PEAK CREDIT SHALL NOT BE TREATED AS CONCEALMENT OF INCOM E. ITA NO.1713/BANG/2016 PAGE 2 OF 3 4. WHETHER THE CIT-(A) IS JUSTIFIED IN CONFIRMING T HE PENALTY LEVIED UNDER SECTION 271(1) (C) WHEN THE LEARNED ASSESSING OFFICER HAS NOT RECORDED THE REASONS REGARDING CONCEALMENT OR FILIN G OF INACCURATE PARTICULARS. 5. THE APPELLANT SUBMITS THAT SHOW CAUSE NOTICE ISS UED UNDER SECTION 274 READ WITH SECTION 271 OF THE ACT IS DEFECTIVE A ND AMBIGUOUS. 6. THE APPELLANT SUBMITS THAT COMPUTATION OF PENALT Y IS ERRONEOUS AND EXCESSIVE. APPELLANT DENIES HIS LIABILITY TO PAY AN Y PENALTY OF RS. 5,89,732/- UNDER SECTION 271(1) (C) OF THE ACT AS T HE PROVISIONS OF SAID SECTION IS NOT APPLICABLE IN THE PRESENT CASE. 7. IN VIEW OF THE ABOVE FACTS, I PRAY THAT PENALTY ORDER PASSED UNDER SECTION 271(1) (C) MAY BE SET ASIDE AND JUSTICE BE RENDERED. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY , DELETE OR SUBSTITUTE ANY OR ALL OF THE GROUNDS AND TO FILE A PAPER BOOK AT THE TIME OF HEARING THE APPEAL. 9. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE TAKEN AT THE TIME OF THE HEARING THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT ON P AGE NO. 25 OF THE APPEAL MEMO IS THE NOTICE ISSUED BY THE AO ON 31.12.2008 U/S. 2 74 R.W.S. 271 OF IT ACT AND AS PER THIS NOTICE, THE AO HAS NOT MADE IT CLEAR AS TO WHETHER THE ALLEGATION IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INAC CURATE PARTICULARS OF INCOME. THEREAFTER HE PLACED RELIANCE ON JUDGEMENT OF HON'B LE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. MANJUNATHA COTTON A ND GINNING FACTORY AS REPORTED IN (2013) 359 ITR 565. HE ALSO PLACED REL IANCE ON TRIBUNAL ORDER RENDERED IN THE CASE OF SRI A. NAGARAJU VS. ITO IN ITA NO. 2196/BANG/2016 DATED 06.04.2018. HE SUBMITTED A COPY OF THIS TRIB UNAL ORDER AND POINTED OUT THAT IN THIS CASE, THE TRIBUNAL HAS FOLLOWED THE SA ME JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT AND DECIDED THE ISSUE IN FAVOU R OF THE ASSESSEE. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES B ELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS PE R THE NOTICE ISSUED BY THE AO U/S. 274 R.W.S. 271 OF IT ACT WHICH IS AVAILABLE ON PAGE 25 OF APPEAL MEMO, THE AO HAS NOT MADE IT CLEAR AS TO WHETHER THE ALLEGATI ON OF THE AO IS REGARDING CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. UNDER ITA NO.1713/BANG/2016 PAGE 3 OF 3 SIMILAR FACTS, IT WAS HELD BY HON'BLE KARNATAKA HIG H COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) T HAT PENALTY ORDER IS NOT VALID. IN THE CASE OF SRI A. NAGARAJU VS. ITO (SUP RA) ALSO, UNDER SIMILAR SITUATION, THE TRIBUNAL FOLLOWED THIS JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. MANJUNATHA COTTON A ND GINNING FACTORY (SUPRA) AND HELD THAT THE ORDER IMPOSING PENALTY IS INVALID AND CONSEQUENTLY, THE PENALTY IMPOSED WAS CANCELLED. RESPECTFULLY FOLLOW ING THESE JUDICIAL PRONOUNCEMENTS, WE HOLD THAT IN THE PRESENT CASE AL SO, THE ORDER IMPOSING PENALTY IS INVALID AND CONSEQUENTLY, THE PENALTY IM POSED IS CANCELLED IN THE PRESENT CASE ALSO. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARO DIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 08 TH JUNE, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.