Sri.R.Prakash, Bangalore V. Income-Tax Officer, Bangalore

ITA 1866/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7663 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 04-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH
• Assessee Lawyers: V CHANDRASHEKAR
• Keywords: Invalid notice; Assessment record
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE S HRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATH , ACCOUNTANT MEMBER SL.NO. ITA NO. & ASST. YEAR APPELLANT RESPONDENT 1. 1865/BANG/2016 2008 - 09 SHRI R. PRAKASH YELOTHODA PALY A, ANJANAPURA P.O., KANAKAPURA ROAD, BANGALORE - 560 062 INCOME TAX OFFICER, WARD 4(3), BANGALORE. 2. 1866/BANG/2016 2009 - 10 - DO - - DO - 3. 1867/BANG/2016 2008 - 09 SHRI R. CHENNAKESHAVA, YELOTHODA PALYA, BANGALORE - DO - 4. 1868/BANG/2016 2009 - 10 - DO - - DO - 5. 1869/BANG/2016 2008 - 09 SHRI R. JAYANNA, YELOTHODA PALYA, BANGALORE. - DO - 6. 1870/BANG/2016 2009 - 10 - DO - - DO - 7. 1871/BANG/2016 2008 - 09 SHRI R. MUNIYAPPA, YELOTHODA PALYA, BANGALORE. - DO - 8. 1872/BANG/2016 2009 - 10 - DO - - DO - APPELLANT BY : SHRI V. C HANDRASHEKAR, ADVOCATE. R E SPONDENT BY : SHRI B.R. RAMESH, JCIT (D.R) DATE OF H EARING : 22.08.2017. DATE OF P RONOUNCEMENT : 31 .08 .201 7 . 2 IT A NO S . 1865 TO 1872 /BANG/201 6 O R D E R PER BENCH : THE S E FOUR SETS OF TWO APPEALS BY EACH ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) - 3, BANGALORE ARISING FROM PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ( IN SHORT 'THE ACT') ALL DT.31.08.2016 FOR THE ASSESSMENT YEARS 2008 - 09 & 2009 - 10. 2. COMMON GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN ALL THESE APPEALS AS UNDER : 3 IT A NO S . 1865 TO 1872 /BANG/201 6 3. THE ASSESSEE S HAVE ALSO RAISED ADDITIONAL GROUNDS IN THESE APPEALS VIDE LETTER DT.28.10.2016. THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE QUESTION THE VALIDITY OF NOTICE ISSUED UNDER SECTION 274 OF THE ACT AND CONSEQUENTLY THE VALIDITY OF PENALTY ORDER UNDER SECTION 271(1)(C) OF THE ACT AS UNDER : 4 IT A NO S . 1865 TO 1872 /BANG/201 6 5 IT A NO S . 1865 TO 1872 /BANG/201 6 4. WE HAVE H EARD THE LEARNED A.R. AS WELL AS LEARNED D.R. AND CONSIDERED THE RELEVANT MATERIAL ON RECORD FOR ADMISSION OF THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE. THE FIRST ISSUE RAISED BY THE ASSESSEE IN THE ADDITIONAL GROUND IS THE VALIDITY OF PENALTY ORDER U NDER SECTION 271(1)(C) OF THE ACT DUE TO INVALID NOTICE ISSUED UNDER SECTION 274 WHICH IS DEFECTIVE AND THEREFORE IN VIEW OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 THE PEN ALTY ORDER UNDER SECTION 271(1)(C) OF THE ACT IS NOT SUSTAINABLE IN LAW . THE LEARNED AUTHORISED REPRESENTATIVE HAS ALSO RELIED UPON THE HON'BLE SUPREME COURT DECISION IN THE CASE OF NTPC VS. CIT 229 ITR 383 AND SUBMITTED THAT THE 6 IT A NO S . 1865 TO 1872 /BANG/201 6 ADDITIONAL GROUNDS RAISE D BY THE ASSESSEE IS PURELY LEGAL IN NATURE AND DOES NOT REQUIRE ANY INVESTIGATION OF FACTS. THEREFORE HE HAS PLEADED THAT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE MAY BE ADMITTED FOR ADJUDICATION ON MERITS. 5. ON THE OTHER HAND, THE LEARNED D EPARTMENTAL REPRESENTATIVE HAS OPPOSED VEHEMENTLY TO THE ADMISSION OF THE ADDITIONAL GROUNDS AND SUBMITTED THAT THE ASSESSEE DID NOT RAISE ANY OBJECTION AGAINST THE NOTICE ISSUED UNDER SECTION 274 OF THE IT ACT EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT (APPEALS). EVEN OTHERWISE THE MISTAKE IN THE NOTICE FOR NOT STRIKING OFF THE RELEVANT PART FALLS UNDER THE PROVISIONS OF SECTION 292B AND HENCE NO ORDER CAN BE DECLARED INVALID DUE TO THE MISTAKE OR OMISSION IN THE NOTICE ISSUED UNDER SECTION 274 OF THE ACT. HE HAS RELIED UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SRI DURGA ENTERPRISES 231 TAXMANN 886 AND SUBMITTED THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SRI P.M.ABDULLA VS. ITO IN ITA NOS.1223 & 1224/BANG/2012 VIDE ORDER DT.17.10.2016 WHILE FOLLOWING THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE 7 IT A NO S . 1865 TO 1872 /BANG/201 6 CASE OF CIT VS. SRI DURGA ENTERPRISES (SUPRA) HAS DECIDED AN IDENTICAL ISSUE IN FAVOUR OF THE REVENUE. 6. WE HAVE CONSIDERED THE RIVAL S UBMISSIONS AND RELEVANT MATERIAL ON RECORD. THE OBJECTION RAISED BY THE ASSESSEE REGARDING VALIDITY OF PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT DUE TO THE INVALID NOTICE UNDER SECTION 274 OF THE ACT IS PURELY LEGAL ISSUE WHICH DOES NOT R EQUIRE THE INVESTIGATION OF NEW FACTS. HOWEVER, IT DO REQUIRE VERIFICATION OF THE ASSESSMENT RECORD INCLUDING THE PENALTY PROCEEDINGS RECORD ON THIS POINT. ACCORDINGLY WE ADMIT THE ADDL. GROUNDS RAISED BY THE ASSESSEES. FURTHER THIS ISSUE GOES TO THE RO OT OF THE MATTER THEREFORE WE SET ASIDE THIS MATTER TO THE RECORD OF THE CIT (APPEALS) FOR CONSIDERATION AND ADJUDICATION OF THE SAME AS PER LAW AFTER EXAMINATION AND VERIFICATION OF THE RELEVANT ASSESSMENT RECORD ON THIS POINT. SINCE THE ISSUE OF VALIDIT Y OF ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT HAS BEEN SET ASIDE TO THE RECORD OF THE CIT (APPEALS) THEREFORE WE DO NOT PROPOSE TO GO INTO THE MERITS OF THE ISSUE OF LEVY OF PENALTY AT THIS STAGE. THE SAME IS KEPT OPEN. 8 IT A NO S . 1865 TO 1872 /BANG/201 6 7. IN THE RESULT, THE APPE ALS OF ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 31ST DAY OF AUG., 201 7 . SD/ - ( G. MANJUNATH ) ACCOUNTANT MEMBER SD/ - ( VIJAY PAL RAO ) JUDICIAL MEMBER BANGALORE, DT. 31 .08.2017. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE SENIOR PRIVATE SECRETARY I NCOME TAX APPELLATE TRIBUNAL BANGALORE.