DCIT, Circle-8, Kolkata, Kolkata V. M/s Ambo Exports Ltd., Kolkata

ITA 1818/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1827 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 22-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K TIBREWAL
• Section: 69C; 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1818 / KOL / 2014 ASSESSMENT YEAR :2010-11 DCIT, CIRCLE-8, AAYAKA BHAWAN, 5 TH FLOOR, P- 7, CHOWRINGHEE SQUARE, KOLKATA-69 V/S . M/S AMBO EXPORTS LTD., CHANDRAKUNJ, 2 ND FLOOR, 3 PRETORAI STREET, SHAKESPEARE SARANI, KOLKATA-700 071 [ PAN NO.AACCA 5668 B ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SALLONG YADEN, ADDL. CIT-DR /BY RESPONDENT SHRI A.K. TIBREWAL, FCA /DATE OF HEARING 30-03-2017 /DATE OF PRONOUNCEMENT 03-05-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-III, KOLKATA D ATED 04.06.2014. PENALTY LEVIED BY DCIT, CENTRAL CIRCLE-XXV, KOLKATA U/S 271 (1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VI DE HIS ORDER DATED 25.07.2013 FOR ASSESSMENT YEAR 2010-11. SHRI SALLONG YADEN, LD. DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF REVENUE AND SHRI A.K. TIBREWAL, LD. AUTHORIZED R EPRESENTATIVE APPEARED ON BEHALF OF ASSESSEE. ITA NO.1818/KOL/2014 A.Y. 2010-11 DCIT CIR-8, KOL. VS. M/S AMBO EXPOR TS LTD. PAGE 2 2. IN THIS APPEAL THE REVENUE HAS CHALLENGED THE OR DER OF LD. CIT(A) WHEREBY THE CIT(A) DELETED THE PENALTY IMPOSED BY T HE ASSESSING OFFICER ON THE ASSESSEE U/S 271(1)(C) OF THE ACT. 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED ON THE ASSESSEE BY THE AO ARE AS FOL LOWS :- THE ASSESSEE IS A LIMITED COMPANY. IT IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF TEA AND COFFEE. THE BUSINESS PREMI SE OF THE ASSESSEE WAS COVERED UNDER SURVEY OPERATION UNDER S ECTION 133A OF THE ACT DATED 23-07-2009. THE ASSESSEE FILED RETURN OF INCOME FOR A.Y. 2008-09 DECLARING TOTAL INCOME OF RS.5,98,92,283/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VARIOUS UNDISCLOSED INCOM E INTER ALIA U/S 69A AND 69C OF THE ACT WERE UNEARTHED AMOUNTING TO RS.46,14,892/-. IN RESPECT OF THE AFORESAID ADDITION MADE IN THE CO URSE OF ASSESSMENT PROCEEDINGS THE AO INITIATED PENALTY PROCEEDINGS U/ S 271(1)(C) OF THE ACT. THE AO IMPOSED PENALTY HOLDING THAT THE ASSESS EE HAS VIOLATED THE PROVISION OF LAW ENUMERATED IN SECTION 271(1)(C ) OF THE ACT AND LD. CIT(A) REVERSED THE PENALTY ORDER IMPOSED BY AO. HE NCE THIS APPEAL BY THE REVENUE IS FILED BEFORE THE TRIBUNAL. 4. THE LD. DR RELIED ON THE ORDER OF AO WHEREAS THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE SHOW CAUSE NO TICE ISSUED U/S 274 OF THE ACT BEFORE IMPOSING PENALTY DOES NOT CONTAIN TH E SPECIFIC CHARGE AGAINST THE ASSESSEE NAMELY AS TO WHETHER THE ASSESSEE WAS GUILTY OF HAVING CONCEALED PARTICULARS OF INCOME OR HAVING FURNISHED INACCURATE PARTICULARS OF INCOME. A COPY OF THE SHOW CAUSE NOTICE U/S 274 OF THE ACT IS PLACED ON RECORD IN THE FILE. PERUSAL OF THE NOTICE REVEALS T HAT AO HAS NOT STRUCK OUT THE IRRELEVANT PORTION IN THE SHOW CAUSE NOTICE AND THE REFORE THE SHOW CAUSE NOTICE DOES NOT SPECIFY THE CHARGE AGAINST THE ASSE SSEE AS TO WHETHER THE CHARGE IS OF CONCEALMENT OF PARTICULARS OF INCOME O R FURNISHING OF INACCURATE PARTICULARS OF INCOME. LD. AR FOR THE ASSESSEE FILE D A INDEED OF CASE LAWS WHICH ARE KEPT WITH THE RECORD. ITA NO.1818/KOL/2014 A.Y. 2010-11 DCIT CIR-8, KOL. VS. M/S AMBO EXPOR TS LTD. PAGE 3 THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 (KAR) TOOK A VIEW THAT IMPOSING OF PENALTY U/S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAUSE NOTICE U/S 274 O F THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE LD. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAIN ST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT BY I TS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPAR TMENT. THE LD. COUNSEL ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HONBLE BOMBAY HIGH COURT FO LLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALS O DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. 5. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NOT ICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY TH E CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICU LARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NO TICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THE SE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTA INED. THE PLEA OF THE LD. ITA NO.1818/KOL/2014 A.Y. 2010-11 DCIT CIR-8, KOL. VS. M/S AMBO EXPOR TS LTD. PAGE 4 COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECI SIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE T HEREFORE HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 6. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 03/ 05/2017 SD/- SD/- ( !') ( !') (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S $!% &- 03 / 05 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CIRCLE-8, AAYAKAR BHAWAN, 5 TH FL, P-7 CHOWRINGHEE SQ. KOL-69 2. /RESPONDENT-M/S AMBO EXPORTS LTD., CHANDRAKUNJ, 2 ND FLOOR, 3 PRETORIA STREET, SHAKESPEARE SA RANI, KOLKATA-71 3. %.%/0 1 1 2 / CONCERNED CIT KOLKATA 4. 1 1 2- / CIT (A) KOLKATA 5. 567 /0, 1 /0 , / DR, ITAT, KOLKATA 6. 7:; <= / GUARD FILE. BY ORDER/ 1! , /TRUE COPY/ / % 1 /0 ,