Shri Sunil Kumar Manchanda, Bareilly V. Deputy Commissioner of Income Tax,Cirlcle-II, Bareilly

ITA 179/LKW/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7625 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 08-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHINAV MEHROTRA S HRI C K
• Keywords: Opportunity of being heard; Reasonable cause; Condonation of delay
• Section: 271(1)(c); 148

Judgement Text

I.T.A. NO.179 & 180/LKW/2018 ASSESSMENT YEAR:2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.179 & 180/LKW/2018 ASSESSMENT YEAR:2014-15 SHRI SUNIL KUMAR MANCHANDA, 230A, MECANAIR ROAD, PREM NAGAR, BAREILLY. PAN:ADQPM 7110 E VS. DY.C.I.T., CIRCLE-II, BAREILLY. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF LEARNED CIT(A), BAREILLY BOTH DA TED 13/12/2017. THE APPEAL IN I.T.A. NO.179 IS AGAINST THE PENALTY WHIC H THE ASSESSING OFFICER HAD IMPOSED U/S 271(1)(C) OF THE ACT AND THE APPEAL IN I.T.A. NO.180 IS AGAINST THE QUANTUM ADDITION. 2. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT ASSE SSING OFFICER HAD MADE AN ADDITION OF RS.5,00,000/- AND ON APPEAL BEF ORE LEARNED CIT(A) THE LEARNED CIT(A) HAS DISMISSED THE SAME AS THERE WAS DELAY IN FILING THE APPEAL BEFORE HIM. LEARNED A. R. SUBMITTED THAT IF THE LEARNED CIT(A) APPELLANT BY SHRI ABHINAV MEHROTRA, ADVOCATE RESPONDENT BY SHRI C. K. SINGH, D.R. DATE OF HEARING 09/01/2019 DATE OF PRONOUNCEMENT 11 / 01 /201 9 I.T.A. NO.179 & 180/LKW/2018 ASSESSMENT YEAR:2014-15 2 WANTED TO DENY THE CONDONATION OF DELAY IN FILING T HE APPEAL, HE SHOULD HAVE GIVEN NOTICE TO THE ASSESSEE IN THIS RESPECT A ND THEN, AFTER HEARING THE ASSESSEE, COULD HAVE DISMISSED THE APPEAL OF THE AS SESSEE. IN THIS RESPECT RELIANCE WAS PLACED ON A JUDGMENT OF HON'BLE ALLAHA BAD HIGH COURT IN THE CASE OF NAUSAEE AND ORS. VS. LYAKAT AND ORS. IN CIV IL MISC. WRIT PETITION NO. 41764 OF 1999. THEREFORE, IT WAS PRAYED THAT THE M ATTER MAY BE REMANDED BACK TO LEARNED CIT(A) FOR ADJUDICATION ON MERITS. 3. ARGUING THE APPEAL IN I.T.A. NO.180, LEARNED A. R. SUBMITTED THAT THE ASSESSING OFFICER HAD ISSUED SHOW CAUSE NOTICE FOR IMPOSITION OF PENALTY WITHOUT STRIKING OUT THE RELEVANT CHARGE AGAINST TH E ASSESSEE AND IN THIS RESPECT FILED A COPY OF SHOW CAUSE NOTICE. LEARNED A. R. SUBMITTED THAT IN A NUMBER OF CASES, VARIOUS BENCHES OF THE TRIBUNAL AN D HON'BLE SUPREME COURT HAS HELD THAT WITHOUT SPECIFYING THE CHARGE A GAINST THE ASSESSEE, THE IMPOSITION OF PENALTY IS NOT LEGAL AND RELIANCE IN THIS RESPECT WAS PLACED ON AN ORDER OF HON'BLE LUCKNOW BENCH OF THE TRIBUNAL D ATED 31/01/2018 IN I.T.A. NO.652 TO 654/LKW/2016. 4. LEARNED D. R., ON THE OTHER HAND, SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. FIRST WE TAKE UP THE APPEAL IN I .T.A. NO.179. WE FIND THAT THE NOTICE ISSUED U/S 271(1)(C) DOES NOT SPECI FY THE LIMB OF SECTION 271(1)(C) UNDER WHICH THE ASSESSEE WAS CHARGED. TH E NOTICE SIMPLY STATES THAT YOU HAVE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED PARTICULARS OF SUCH INCOME. FOR THE SAKE OF COMPLETENESS, THE NOTICE ISSUED BY DCIT, CIRCLE-II, BAREILLY IS REPRODUCED BELOW: GOVERNMENT OF INDIA OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2, BAREILLY I.T.A. NO.179 & 180/LKW/2018 ASSESSMENT YEAR:2014-15 3 NOTICE UNDER SECTION 271(L)(C) OF THE INCOME TAX ACT, 1961. PAN- ADQPM7110E DATED:30.03.2016 TO, SHRI SUNIL KUMAR MANCHANDA 230A, MACNAIR ROAD, PREM NAGAR, BAREILLY. WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2014-15 IT APPEARS TO ME THAT YOU- * HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH M E RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNI SH BY A NOTICE GIVEN U/S 22(L)/22(2)/34 OF THE INDIAN INC OME TAX ACT, 1922 OR WHICH YOU WERE REQUIRED TO FUR NISH U/S 139(2)/ 148 OF THE INCOME TAX ACT, 1961 DATED OR HA VE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WI THIN THE TIME ALLOWED AND IN THE MANNER REQUIRED BY THE SAID SECTION 139(1) OR BY SUCH NOTICE. * HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WI TH A NOTICE UNDER SECTION 22(4)723(2) OF THE INDIAN INCOME TAX ACT, 1922 OR UNDER SECTION 142(0/143(2) OF THE INCOME TAX ACT, 1961 NO. * HAVE CONCEALED THE PARTICULARS OF YOUR INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, YOU ARE, HEREBY REQUESTED TO APPEAR BEFORE ME AT 11 -30 A.M. ON 05-05-2016 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT B E MADE UNDER SECTION 271(L)(C) OF THE INCOME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL Y OURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271(1 )(C). SD/. (RAM SINGH) DY.C.I.T., CIRCLE-II, BAREILLY. WE FIND THAT THE CONTENTION OF THE ASSESSEE IS CORR ECT AS THE RELEVANT CHARGE HAS NOT BEEN SPECIFIED AND THE ASSESSING OFFICER IN A STEREOTYPED MANNER HAS ISSUED THE NOTICE. THE LUCKNOW BENCH OF THE TR IBUNAL IN I.T.A. NO.652 TO 654, VIDE ORDER DATED 31/01/2018, RELYING ON THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNA THA COTTON & GINNING FACTORY [2013] 359 ITR 565, HAS ALLOWED RELIEF TO T HE ASSESSEE AND HAS DELETED THE PENALTY. THE RELEVANT FINDINGS OF THE TRIBUNAL, AS RECORDED IN PARA 8 ONWARDS, ARE REPRODUCED BELOW: 8. WE HAVE PERUSED THE CASE RECORDS, CONSIDERED TH E JUDICIAL PRONOUNCEMENTS PLACED BEFORE US, ANALYSED THE FACTS & I.T.A. NO.179 & 180/LKW/2018 ASSESSMENT YEAR:2014-15 4 CIRCUMSTANCES AND WE FIND THAT NOTICE UNDER SECTION 274 READ WITH 271(1)(C) OF THE ACT IS NOT SPECIFIC AND IS AM BIGUOUS AS TO THE CHARGE UNDER WHICH PENALTY UNDER SECTION 271(1) (C) OF THE ACT IS LEVIED; WHETHER FOR CONCEALMENT OF PARTICULA RS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE TAKE GUIDANCE FROM THE JUDGMENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS (SUPRA) WHEREIN THE HON'BLE HIGH COURT HAS UPHELD THE DECIS ION OF THE TRIBUNAL ALLOWING THE APPEAL OF THE ASSESSEE HOLDIN G THAT NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 R EAD WITH SECTION 271(1)(C) OF THE ACT WAS BAD IN LAW AS IT D ID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) OF THE ACT PE NALTY PROCEEDINGS HAVE BEEN INITIATED I.E. WHETHER FOR CO NCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. IN THAT CASE, THE TRIBUNAL HAD RELIED UPON THE JUDGMENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY [2013], 359 ITR 565. FURTHER, WE FIND THAT IDENTICAL ISSUE HAS COM E UP FOR CONSIDERATION BEFORE THE LUCKNOW BENCH OF THE TRIBU NAL IN THE CASE OF ASHOKA FOODS & DEHYDRATES SANSTHAN, KANPUR VS. INCOME TAX OFFICER (EXEMPTION), KANPUR (SUPRA) WHER EIN THE TRIBUNAL HAS HELD AS UNDER:- 8. WE HAVE PERUSED THE CASE RECORD AND WE FIND THA T NOTICE UNDER SECTION 271(1)(C) OF THE ACT IS NOT SP ECIFIC AS IT DID NOT MENTION SPECIFICALLY AS TO WHICH LIMB PE NALTY UNDER SECTION 271(1)(C) OF THE ACT IS IMPOSED UPON THE ASSESSEE BY THE ASSESSING OFFICER. TAKING GUIDANCE FROM THE AFORESAID JUDICIAL PRONOUNCEMENT, WE ARE OF THE CONSIDERED VIEW THAT NOTICE FOR IMPOSITION OF PENAL TY UNDER SECTION 271(1)(C) OF THE ACT ISSUED IN THE CA SE OF THE ASSESSEE IS BAD IN LAW, INVALID AND, THEREFORE, LIABLE TO BE QUASHED. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND THE PENALTY IMPOSED BY THE ASSESSING OFF ICER AND CONFIRMED BY THE LD. CIT(A) UNDER SECTION 271(1 )(C) OF THE ACT IS DELETED. 9. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON'BLE KARNATAKA HIGH COURT (SUPRA) AND THE ORDER OF THE TRIBUNAL (SUPRA), WE HOLD THAT THE NOTICE FOR IMPOS ITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ISSUED I N THE CASE OF THE ASSESSEE IS BAD IN LAW, INVALID AND, TH EREFORE, LIABLE TO BE QUASHED. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE PENALTY LEVIED BY THE I.T.A. NO.179 & 180/LKW/2018 ASSESSMENT YEAR:2014-15 5 ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) U NDER SECTION 271(1)(C) OF THE ACT. 10. SINCE THE FACTS AND THE ISSUE INVOLVED IN ITA N OS.653 & 654/LKW/2016 ARE IDENTICAL, FOLLOWING OUR VIEW TAKE N IN ITA NO.652/LKW/2016, WE DELETE THE PENALTY LEVIED BY TH E ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) U NDER SECTION 271(1)(C) OF THE ACT IN ITA NOS.653 & 654/LKW/2016 ALSO. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE, WE ALS O DELETE THE PENALTY SUSTAINED BY LEARNED CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE IN I.T.A. NO.179. 6. NOW COMING TO APPEAL IN I.T.A. NO.180, WE FIND T HAT THERE WAS A DELAY IN FILING THE APPEAL BEFORE LEARNED CIT(A) AN D CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE AS HE HELD THAT THERE WA S NO REASON FOR CONDONATION OF DELAY. HOWEVER, BEFORE DISMISSING T HE CONDONATION OF DELAY HE SHOULD HAVE HEARD THE ASSESSEE WHICH HE HAS NOT DONE THEREFORE, WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE BACK TO THE FILE OF LEARNED CIT(A) WHO SHOULD PASS THE ORDER AFTER HEARING THE ASSESSEE RE GARDING THE REASONS FOR DELAY AND SHOULD ALSO PASS ORDER ON MERITS. IN VIE W OF THE ABOVE, THIS APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL IN I.T.A. NO.179 IS AL LOWED AND THE APPEAL IN I.T.A. NO.180 IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 11/01/2019) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:11/01/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW