Rishi Kumar Agarwal, Sikkim V. DCIT, CC-XXII, KOLKATA, Kolkata

ITA 1988/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1698 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 27-10-2014
• Court: TRIBUNAL
• Assessee Lawyers: SUBASH AGARWAL LD
• Keywords: Salary income; Period of limitation; Reasonable cause; Time period of passing order
• Section: 142(1); 153A; 27; 12; 139

Judgement Text

1 ITA NOS.1988 & 1989/K/14 RISHI KUMAR AGARWAL IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA BEFORE: SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NOS. 1988 & 1989KOL/2014 ASSESSMENT YEARS: 2008-09 & 2009-10 RISHI KUMAR AGARWAL VS. DEPUTY COMMISSIONER O F PAN: ATEPA8414D INCOME-TAX, CC-XXII, KOLKATA [ APPELLANT] [ RESPONDENT ] FOR THE APPELLANT : SHRI SUBASH AGARWAL, ADVOCATE , LD.AR FOR THE RESPONDENT : NONE APPEARED FOR THE REVENU E DATE OF HEARING : 29-05-2017 DATE OF PRONOUNCEMENT : 31-05-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THESE TWO APPEALS BY ASSESSEE ARE ARISING OUT OF SE PARATE ORDERS DATED 18-08-2014 OF CIT(A),CENTRAL-III, KOLKATA FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10, WHEREIN HE CONFIRMED THE PENAL TIES OF RS.8,54,903/- AND RS.7,46,067/- IMPOSED BY THE AO U /S. 271(1)(C) OF THE ACT RESPECTIVELY. 2. NONE APPEARED ON BEHALF OF THE REVENUE NOR WAS A NY APPLICATION FILED SEEKING ADJOURNMENT. THE LD.AR SUBMITS THAT T HE ISSUE BEFORE THE BENCH IS SQUARELY COVERED BY THE DECISION OF HONBL E SUPREME COURT. THE LD.AR SUBMITS THAT A PAPER BOOK CONTAINING PAGES 1 TO 44 WAS FILED ON 29- 03-2017 AND REFERRED TO PAGE NO-7 WHERE A COPY OF T HE DECISION OF HONBLE SUPREME COURT WAS PLACED AND URGED THE BENC H TO ALLOW THE APPEAL IN TERMS OF THIS DECISION. WE FIND THAT THE ISSUE BEFORE US IS COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS SUPRA AND WE PROCEED TO HEAR THE CA SE AND DISPOSE OF THE SAME BY PERUSING THE MATERIAL ON RECORD. 2 ITA NOS.1988 & 1989/K/14 RISHI KUMAR AGARWAL 3. THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER TH E CIT-A JUSTIFIED IN CONFIRMING THE IMPUGNED PENALTIES IMPOSED BY THE AO U/S. 271(1) (C) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE BRIEF FACTS OF THE ISSUE ARE THAT A SEARCH & SEIZURE OPERATION WAS CONDUCTED AT DIFFERENT RESIDENTIAL AND BUSINESS PRE MISES OF BEGRAJ GROUP ON 22-03-2010. DURING THE SEARCH A PANCHANAMA WAS D RAWN UP IN THE NAME OF THE ASSESSEE WHO IS AN INDIVIDUAL. ACCORDIN GLY, A NOTICE U/S. 153A OF THE ACT WAS ISSUED TO ASSESSEE TO FILE THE RETUR N. IN RESPONSE TO WHICH, THE ASSESSEE FILED ITS RETURN OF INCOME ON 23-12-2 011 DECLARING TOTAL INCOME OF RS.26,85,160/- STATING THAT HE DERIVED HI S INCOME FROM SALARY, HOUSE PROPERTY AND BUSINESS. IN RESPONSE TO NOTICES ISSUED U/S. 143(2) AND 142(1) OF THE ACT, THE ASSESSEE FILED ALL THE D ETAILS AS REQUIRED BY THE AO. THE AO ACCEPTED THE SAID RETURN AS FILED IN RES PONSE TO NOTICE ISSUED U/S. 153A OF THE ACT AND TREATED THE SAME AS UNDISC LOSED INCOME AS THE ASSESSEE FAILED TO FILE THE RETURN U/S. 139 OF THE ACT WITHIN DUE DATE. 5. THEREAFTER, THE AO INITIATED THE PENALTY PROCEED INGS FOR BOTH THE A.YS UNDER CONSIDERATION BY ISSUING NOTICES U/S. 27 4 R.W.S 271(1)(C) OF THE ACT. IN THE PENALTY PROCEEDINGS THE AR OF THE A SSESSEE CONTENDED THAT THE ASSESSEE WAS BORN IN SIKKIM ON 26-04-1975 AND S INCE THEN HE HAS BEEN RESIDING IN SIKKIM. THE AR OF THE ASSESSEE ALS O CONTENDED THAT NON SIKKIMESE INDIVIDUALS ARE ENJOYING THE EXEMPTION U /S. 10(26AAA) OF THE ACT TILL A.Y 2007-08 AND A WRIT PETITION HAS BEEN F ILED BY THE OLD SETTLERS OF SIKKIM BEFORE THE HONBLE HIGH COURT OF SIKKIM Q UESTIONING THE NON AVAILABILITY OF TAX EXEMPTION GRANTED INITIALLY. TH E AO NOT SATISFIED WITH THE SUBMISSIONS IMPOSED PENALTIES OF RS.8,54,903/- AND RS.7,46,067/- U/S. 271(1)(C) OF THE ACT BY SEPARATE ORDERS DT. 31-05- 2012 FOR THE A.YS 2008-09 & 2009-10 RESPECTIVELY. 3 ITA NOS.1988 & 1989/K/14 RISHI KUMAR AGARWAL 6. IN THE FIRST APPELLATE AUTHORITY, THE CIT-A CONF IRMED THE PENALTIES AS IMPOSED BY THE AO. RELEVANT PORTION OF FINDING OF T HE CIT-A IS REPRODUCED HEREIN BELOW:- 4. DISCUSSION, AND, APPELLATE DECISION: THE SAME DISCUSSION AND REASONS IN MY APPELLATE O RDER IN THE CASE OF THE APPELLANTS BROTHER-MR. SANJAY KUMAR AGARWAL [ SUPRA]- IS APPLI ED HERE TOO. THE SIKKIM ISSUE IS JUST FOR MERE ARGUMENT SAKE-AS VIDE CBDT CIRCULAR NO. 8 OF 2008 IT WAS CRYSTAL CLEAR THAT THE APPELLANT BEING A NON-SIKKIM ESE WAS LIABLE UNDER THE INCOME TAX ACT. FURTHER HERE TOO, THE APPELLANT ONLY TOWARDS THE FA G-END OF THE LIMITATION PERIOD FOR COMPLETING THE ASSESSMENT, ONLY ON 23.12.2011 DID HE FURNISH T HE RETURNS OF INCOME CALLED FOR BY NOTICES ISSUED U/S. 153A. MOST RELEVANTLY AND IMPORTANTLY, THIS CASE IS SQUAR ELY COVERED BY THE DEEMING PENAL EXPLANATION IN EXPLANATION 5A(II) READ WITH CLAUSE (B0 THERETO TO THE SECTION 271(1)(C ), WHICH IS NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY THE ASSESSEE IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE P URPOSES OF IMPOSITION OF PENALTY UNDER CLAUSE ( C) OF SUB-SECTION (1), BE DEEMED TO HAVE CONCEALED TH E PARTICULARS OF HIS INCOME. 7. THE LD AR OF THE ASSESSEE APART FROM REITERATI NG THE FACTS ALSO BROUGHT TO THE NOTICE OF THE BENCH THAT NO SPECIFIC CHARGE WAS MENTIONED IN THE NOTICE ISSUED U/S 274 READ WITH SECTION 271( 1)(C) OF THE ACT I.E, WHETHER ASSESSEE CONCEALED THE PARTICULARS OF INCOM E OR HAD FURNISHED INACCURATE PARTICULARS OF INCOME. THE LD. AR ARGUED THAT THE SHOW CAUSE NOTICE ISSUED FOR PENALTY PROCEEDINGS WAS DEFECTIVE AND HENCE, THE PENALTY LEVIED IS BAD IN LAW AND IN SUPPORT OF THIS , HE PLACED RELIANCE ON 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 WHICH WAS LATER APPROVED BY THE HONBLE SUPREME COURT BY DISMISSAL OF SPECIAL LEAVE PETITION (SLP) FILED BY THE REVENUE IN CC NO. 11485/2016 DATED 5.8.2016. 8. WE HAVE HEARD THE LD.AR AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. WE FIND THAT THE PENALTY NOTICE DT.30-12-20 12 U/S 274 R.W.S 271(1)(C) OF THE ACT AT PAGE NO-1 DOES NOT SPECIFY THE CHARGE OF OFFENCE COMMITTED BY THE ASSESSEE I.E WHETHER THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME OR IT HAD FURNISHED INACCURAT E PARTICULARS OF INCOME. EVEN THE COLUMN HAVE WITHOUT REASONABLE CAUSE FAIL ED TO COMPLY WITH THE NOTICE U/S. 142(1)/143(2) OF INCOME-TAX ACT, 1961 I S ALSO NOT STRUCK OFF. 4 ITA NOS.1988 & 1989/K/14 RISHI KUMAR AGARWAL EXCEPT THE ADDRESS OF THE ASSESSEE, ASSESSMENT YEAR AND SIGNATURE OF THE AO, NOTHING IS STRUCK OFF IN THE NOTICE. HENCE THE SAID NOTICE IS TO BE HELD AS DEFECTIVE. NOW THE SHORT QUESTION THAT ARISES F OR CONSIDERATION IS AS TO WHETHER THE PENALTY COULD BE VALIDLY LEVIED BASED O N SUCH DEFECTIVE SHOW CAUSE NOTICE. THIS ISSUE HAS BEEN ADDRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS SSAS EMERALD MEAD OWS IN ITA NO. 380 OF 2015 DATED 23.11.2015 WHICH IN TURN PLACED RELIANCE ON ANOTHER JUDGMENT OF THE SAME COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY REPORTED IN 359 ITR 565 (KAR). IN THE SAID DECISION, THEIR LORDSHIPS OF HONBLE KARNATAKA HIGH COURT HELD THAT :- 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH S ECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C ) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E , WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSE SSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE O F COMMISSIONER OF INCOME TAX VS MANJUNATHA COTTON AND GINNING FACTORY REPORTED IN ( 2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDG EMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTI ON OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE APPEAL IS ACCORDI NGLY DISMISSED. 9. WE FIND THAT THE REVENUE HAD PREFERRED A SLP BEF ORE THE HONBLE SUPREME COURT AGAINST THIS JUDGMENT WHICH WAS DISMI SSED IN CC NO. 11485/2016 DATED 5.8.2016 BY OBSERVING AS UNDER:- UPON HEARING THE COUNSEL, THE COURT MADE THE FOLLOW ING ORDER DELAY CONDONED. WE DO NOT FIND ANY MERIT IN THIS PETITION. THE SPE CIAL LEAVE PETITION IS , ACCORDINGLY DISMISSED. PENDING APPLICATION, IF ANY, STANDS DISPOSED OF. 10. RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRECEDENTS, WE CANCEL THE PENALTIES OF RS.8,54,903/- AND RS.7,46,067/- IMPOSE D BY THE AO U/S. 271(1)(C) OF THE ACT BY ORDER DT. 30-12-2012 FOR T HE A.YS 2008-09 & 2009-10 RESPECTIVELY AND CONFIRMED BY THE CIT-A. A CCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5 ITA NOS.1988 & 1989/K/14 RISHI KUMAR AGARWAL 11. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31-05-2017 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31-05-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI RISHI KUMAR AGARWAL P.S ROAD, GANG TOK, SIKKIM-737101. 2 RESPONDENT THE DCIT, C.C-XXII,KOLKATA 110 SHANTI PALLY, E.M BYE PASS, AAYKAR BHAWAN, POORVA, KOLKATA-107. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA