Madan Kumar Jha, Kolkata V. DCIT, CC-XIII, Kolkata, Kolkata

ITA 1998/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1918 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-10-2014
• Court: TRIBUNAL
• Department Lawyers: S ALLONG YADEN CIT LD
• Assessee Lawyers: NIRAV SHETH ACA LD
• Keywords: Unexplained cash credit

Judgement Text

1 ITA NO. 1998/KOL/2014 MADAN KUMAR JHA IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 1998/KOL/2014 ASSESSMENT YEAR: 2009-10 MADAN KUMAR JHA VS. DEPUTY COMMISSIONER OF PAN: AGDPJ 3874A INCOME-TAX, CC-XIII, KOLKATA [ APPELLANT] [ RESPONDENT ] FOR THE APPELLANT : SHRI NIRAV SHETH, ACA, LD.AR FOR THE RESPONDENT : SHRI SALLONG YADEN, ADDL.CIT , LD.DR DATE OF HEARING : 05-04-2017 DATE OF PRONOUNCEMENT : 05-04-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER DAT ED 21-08-2014 OF CIT(A), CENTRAL-II, KOLKATA FOR THE ASSESSMENT YEAR 2009-10, WHEREIN HE CONFIRMED THE PENALTY OF RS.11,04,686/- IMPOSED BY THE AO U/S. 271(1)( C) OF THE ACT. 2. THE BRIEF FACTS OF THE ISSUE ARE THAT THE A SEAR CH AND SEIZURE OPERATION US/ 132 OF THE ACT WAS CONDUCTED ON 08-12 -2009 AND SUBSEQUENT DATES IN THE CASE OF SHASHI KANT KHETAN GROUP, IN WHICH UNDISCLOSED BANK ACCOUNT NO. 33105147097 WITH STAN DARD CHARTERED BANK WAS FOUND AND BY ALLEGING THE SAID BANK ACCOU NT BELONGED TO ASSESSEE THE AO ASSESSED THE TOTAL INCOME AT RS.39, 12,550/- U/S. 153C/143(3) BY TREATING THE CREDITS IN THE SAID BAN K ACCOUNT OF RS.37,00,000/- AS UNEXPLAINED CASH CREDIT. 3. THE CIT(A) DISMISSED THE APPEAL OF ASSESSEE BY C ONFIRMING THE SAID ADDITION AS MADE BY THE AO. THEREAFTER, THE AO INIT IATED PENALTY 2 ITA NO. 1998/KOL/2014 MADAN KUMAR JHA PROCEEDINGS BY ISSUING A NOTICE DT. 17-10-2011 U/S. 274 R.W.S 271(1) ( C) OF THE ACT IMPOSED PENALTY OF RS.11,04,686/- AS THE ASSESSEE DID NOT DISCLOSE THE SAID AMOUNT VOLUNTARILY. THIS ACTION O F THE AO IN IMPOSING THE IMPUGNED PENALTY WAS CONFIRMED BY THE SAID ORDER OF THE CIT(A). 4. THE LD AR APART FROM REITERATING THE FACTS ALSO BROUGHT TO THE NOTICE OF THE BENCH THAT THE PENALTY NOTICE ISSUED U/S 274 READ WITH SECTION 271(1)(C ) OF THE ACT HAD NOT STRUCK OFF THE RELEVA NT PORTION BY SPECIFICALLY MENTIONING THE CHARGE OF OFFENCE COMMITTED BY THE A SSESSEE VIZ., WHETHER IT HAD CONCEALED THE PARTICULARS OF INCOME OR IT HA D FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDINGLY HE STATED THE SH OW CAUSE NOTICE FOR PENALTY PROCEEDINGS WAS DEFECTIVE AND IN SUPPORT OF THIS, HE PLACED RELIANCE ON THE DECISION OF THE HONBLE KARNATAKA H IGH 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 COU RT BY DISMISSAL OF SPECIAL LEAVE PETITION (SLP) BY THE REVENUE IN CC N O. 11485/2016 DATED 5.8.2016. IN RESPONSE TO THIS, THE LD DR VEHEMENTL Y RELIED ON THE ORDER OF THE LD AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE PENALTY NOTICE DT. 17-10-2011 U/S 274 R.W.S 271(1)(C ) OF THE ACT DOES NOT SPECIFY THE CHARGE OF OFFENCE COMMITTED BY THE ASSESSEE VIZ WHE THER IT HAD CONCEALED THE PARTICULARS OF INCOME OR IT HAD FURNISHED INACC URATE PARTICULARS OF INCOME. HENCE THE SAID NOTICE IS TO BE HELD AS DEF ECTIVE. NOW THE SHORT QUESTION THAT ARISES FOR CONSIDERATION IS AS TO WHE THER THE PENALTY COULD BE VALIDLY LEVIED BASED ON THE DEFECTIVE SHOW CAUSE NO TICE. THIS ISSUE HAS BEEN ADDRESSED BY 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 IN TURN PLACED RELIANCE ON ANOTHER JUDGMENT OF THE SAME COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY REPORT ED IN 359 ITR 565 (KAR). IN THE SAID DECISION, THEIR LORDSHIPS OF HONBLE KARNATAKA HIGH COURT HELD THAT :- 3 ITA NO. 1998/KOL/2014 MADAN KUMAR JHA 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. 5.1. WE FIND THAT THE REVENUE HAD PREFERRED A SLP B EFORE 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. 5.2. RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRECEDENTS, WE CANCEL THE LEVY OF PENALTY IN THE FACTS AND CIRCUMSTANCES OF T HE CASE. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 05-04-2017 SD/- SD/- M.BALAGANESH S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :05-04-2017 4 ITA NO. 1998/KOL/2014 MADAN KUMAR JHA PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI MADAN KUMAR JHA C/O CHHAPARIA & AS SOCIATES, CHARTERED ACCOUNTANTS, 8 CAMAC STREET, SHANTINIKETA N BUILDING, 5 TH FLOOR, ROOM NO.2, KOLKATA-17. 2 RESPONDENT THE DCIT, CC-XIII, KOLKATA/CIT(A), CEN TRAL-II, AAYKAR BHAWAN PURVA, 8 TH FLOOR, 110 SHANTI PALLY, E M BYE PASS, KOLKATA-107 . 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .