Asst. Commissioner of Income Tax, Central Circle-1(3), Hyderabad V. Rajesh Naidu Munirathnam , Hyderabad

ITA 1934/Hyd/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7227 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2012-2013
• Appeal Filed On: 20-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reasonable cause; Set aside
• Section: 271(1)(c); 153A; 274; 132; 144

Judgement Text

ITA NOS 1933 AND 1934 OF 2018 RAJESH NAIDU MUNIRATN AM.. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ITA NOS.1934 & 1933/HYD/2018 ASSESSMENT YEAR: 2012-13 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1(3) HYDERABAD VS. SHRI RAJESH NAIDU MUNIRATHNAM, HYDERABAD PAN:ADMPM6749F (APPELLANT) (RESPONDENT) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1(3) HYDERABAD VS. SMT. KALPANA RAJ MUNIRATHNAM, HYDERABAD PAN:AFXPM1529A (APPELLANT) (RESPONDENT) REVENUE BY: SMT. N SWAPNA, DR ASSESSEE BY: SHRI A.V. RAGHU RAM DATE OF HEARING: 02/09/2020 DATE OF PRONOUNCEMENT: 04/09/2020 ORDER PER D.S. SUNDER SINGH, AM. BOTH THE ABOVE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT (A)-11 HYDERAB AD, DATED 22.06.2018. 2. ALL THE GROUNDS IN BOTH THE APPEALS ARE RELATED TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. SINCE THE FACT S ARE IDENTICAL BOTH THE APPEALS ARE CLUBBED AND A COMMON ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE. ITA NOS 1933 AND 1934 OF 2018 RAJESH NAIDU MUNIRATN AM.. PAGE 2 OF 4 3. FOR THE SAKE OF CONVENIENCE THE FACTS ARE EXTRAC TED FROM THE APPEAL OF SHRI RAJESH NAIDU IN ITA NO.1934 /HYD/18 AND THE SAME ARE APPLICABLE TO BOTH THE APPEALS EXCEPT THE DIFFERENCE IN QUANTUM OF AMOUNT. IN THIS CASE, THE AO COMPLETE D THE ASSESSMENT U/S 144 R.W.S. 153A OF THE I.T. ACT ON T OTAL INCOME OF RS.5,90,47,689/- FOR THE A.Y.2012-13 AGAINST THE A DMITTED INCOME OF RS.5,87,51,350/- AND INITIATED THE PENALT Y PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE RETURN WAS FILED SUBS EQUENT TO THE SEARCH CONDUCTED BY THE DEPARTMENT U/S 132 OF THE I .T. ACT. THE AO IMPOSED THE PENALTY OF RS.1,35,00,000/- U/S 271( 1)(C). AGAINST WHICH THE ASSESSEE WENT ON APPEAL BEFORE TH E CIT (A). THE LEARNED CIT (A) DISMISSED THE APPEAL ON THE GROUND OF INVALID U/S 271(1)(C) OF THE ACT, DUE TO NON STRIKING OF IRRELE VANT COLUMN IN PREPRINTED NOTICE, RELYING ON THE DECISION OF JURIS DICTIONAL HIGH COURT. HENCE, THE REVENUE IS IN APPEAL BEFORE THE T RIBUNAL. 4. DURING THE APPEAL HEARING, THE LEARNED DR ARGUE D THAT THE AO RIGHTLY LEVIED THE PENALTY U/S 271(1)(C ) OF THE ACT AND BUT FOR THE SEARCH CONDUCTED U/S 132, THE ASSESSEE OUGHT NOT TO HAVE ADMITTED THE UNDISCLOSED INCOMES. THE LONG-TER M CAPITAL GAIN INCOME WOULD NOT HAVE COME TO THE NOTICE OF TH E DEPARTMENT WITHOUT HAVING CONDUCTED THE SEARCH. THE CIT (A) ER RED IN DELETING THE PENALTY MERELY ON THE GROUND OF NON-STRIKING OF THE IRRELEVANT PORTION IN THE NOTICE U/S 271(1)(C). THE DR FURTHER , SUBMITTED THAT WHILE DECIDING THE APPEAL IN THE CASE OF PR. CIT VS . SMT. BAISETTY REVATHI (398 ITR 88), THE HON'BLE JURISDICTIONAL HI GH COURT HAD NOT CONSIDERED THE CASE OF CHANDULAL. THEREFORE, SU BMITTED THAT THE CIT (A) ERRED IN QUASHING THE NOTICE, HENCE, RE QUESTED TO SET ASIDE THE ORDER OF THE LD.CIT (A) AND RESTORE THE O RDER OF THE AO. ITA NOS 1933 AND 1934 OF 2018 RAJESH NAIDU MUNIRATN AM.. PAGE 3 OF 4 5. PER CONTRA, THE LEARNED AR SUBMITTED THAT THE AS SESSEE IS HAVING A GOOD CASE ON MERITS AS WELL AS ON TECHNICA L GROUNDS FOR RELIEF. HE FURTHER SUBMITTED THAT THE TRANSACTIONS WERE THROUGH BANKING CHANNEL AND THE ASSESSEE WAS FILING THE RET URNS REGULARLY FOR THE EARLIER YEARS. FOR THE YEAR UNDER CONSIDERA TION, THOUGH THE ASSESSEE HAD ADMITTED THE INCOME AND FILED THE RET URN OF INCOME IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT, THE SAME WAS TREATED AS INVALID SINCE, THE ASSESSEE HAD FAILED T O PAY THE TAXES DUE. THE ASSESSEE WAS FACING FINANCIAL PROBLEMS, TH US HE COULD NOT PAY THE SELF-ASSESSMENT TAX. THEREFORE, ARGUED THAT AS RIGHTLY POINTED OUT BY THE LD.CIT (A), THE ASSESSEE IS HAVI NG REASONABLE CAUSE FOR NON-PAYMENT OF TAXES. THEREFORE, ARGUED T HAT ON MERITS ALSO THAT THE PENALTY REQUIRED TO BE CANCELLED. REG ARDING THE DEFECTIVE NOTICE ISSUED U/S 271(1)(C), THE LEARNED AR RELIED ON THE ORDER OF THE CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THERE IS NO DISPUTE THAT THE NOTICE U/S 271(1)(C) WAS DEFECTIVE IN AS MUCH AS NON-STRIKING OFF OF IRRELEVANT COLUMN I.E. WHETHER THE PENALTY WAS INITIATED FOR C ONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. EVE N THE ASSESSMENT ORDER PASSED U/S 144 R.W.S.153A ALSO SIL ENT ON THIS ISSUE AND THERE WAS NO MENTION OF REASONS FOR WHICH FAILURE OF THE ASSESSEE THE PENALTY WAS INITIATED. THE CIT (A) HAS DELETED THE PENALTY FOLLOWING THE DECISION OF THE HON'BLE JURIS DICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. BAISETTY REVATHI ( 398 ITR 88). THE ORDER OF THE CIT (A) READS AS UNDER: 7 I HAVE CONSIDERED THE ASSESSMENT ORDER, NOTIC E ISSUED U/S 274 FOR INITIATION OF PENALTY ORDER, THE PENALTY ORDER, SUBMISSION OF THE ASSESSEE AND MATERIAL PLAC ED BEFORE ME. IT IS SEEN FROM THE PENALTY NOTICE ISSUE D THAT THE INAPPLICABLE/INAPPROPRIATE PORTION OF THE NOTIC E IS NOT ITA NOS 1933 AND 1934 OF 2018 RAJESH NAIDU MUNIRATN AM.. PAGE 4 OF 4 STRUCK OFF BY THE AO. IT IS NOT ASCERTAINABLE FROM THE NOTICE WHETHER THE PENALTY PROCEEDINGS ARE INITIATE D FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS. THE SAME RENDERS THE PENALTY PROCEEDIN GS INVALID AS HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. BAISETTY REVATHY (SUPRA). ACCOR DINGLY, IT IS HELD THAT THE PENALTY PROCEEDINGS ARE NOT VAL IDLY INITIATED AND THE PENALTY LEVIED IS CANCELLED . 7. SINCE THE LD.CIT(A) FOLLOWED THE ORDER OF THE HO N'BLE JURISDICTIONAL HIGH COURT WHICH IS BINDING ON US, W E DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARN ED CIT (A). HENCE THE APPEALS FILED BY THE REVENUE ARE DISMISSE D ON THE ISSUE OF NOTICE U/S 271(1)(C) OF THE ACT AS INVALID AND A CCORDINGLY, WE UPHOLD THE ORDER OF THE LEARNED CIT (A). SINCE, WE HAVE UPHELD THE ORDER OF THE LD.CIT(A) ON THE ISSUE OF THE NOTICE U /S 271(1)(C), WE CONSIDER IT NOT NECESSARY TO ADJUDICATE THE GROUNDS ON MERITS. 8. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2020. SD/- SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER (D.S. SUNDER SINGH) ACCOUNTANT MEMBER ]HYDERABAD, DATED 4 TH SEPTEMBER, 2020. VINODAN/SPS COPY TO: 1 ACIT, CENTRAL CIRCLE 1(3), 7 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 2 3 SHRI RAJESH NAIDU MUNIRATHNAM, B-18 ROLLING HILLS, OPP: RAMKY TOWERS GACFHIBOWLI, HYDERABAD 500032 SMT.KALPANA RAJ MUNIRATHNAM, B-18 ROLLING HILLS, OP P: RAMKY TOWERS GACFHIBOWLI, HYDERABAD 500032 4 CIT (A)-11 HYDERABAD 5 PR. CIT CENTRAL, HYDERABAD 6 THE DR, ITAT HYDERABAD 7 GUARD FILE BY ORDER