N.Baskar, CHENNAI V. ACIT Non Corporate Circle 16, CHENNAI

ITA 2104/CHNY/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5007 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-01-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 29-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARV SREENIVASAN JCIT
• Assessee Lawyers: K M MOHANDASSC A
• Keywords: Salary income; Question of law
• Section: 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI, M. BALAGANESH ACCOUNTANT MEMBER ./ I.T.A.NO.2104/MDS/2017 / ASSESSMENT YEAR :2011-12 MR.N.BASKAR , NO.11,(OLD NO.12) KANNIAMMAN KOIL STREET, SHENOY NAGAR, CHENNAI 600 030. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-19, CHENNAI. [PAN AFVPB 3345 K] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : MR.K.M.MOHANDASS,C.A /RESPONDENT BY : MR.AR.V.SREENIVASAN,JCIT, DR /DATE OF HEARING : 18-01-2018 /DATE OF PRONOUNCEMENT : 25-01-2018 /O R D E R PER M. BALAGANESH, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-4, CHENNA I DATED 20.06.2017 PERTAINING TO ASSESSMENT YEAR 2011-12 CO NFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. ITA NO.2104/MDS./2017 :- 2 -: 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE C ASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE IS A SALARIED EMPLOYEE WORKING WITH M/S VGN ENTERPRISES PVT LTD AND THE SA LARY INCOME WAS BELOW THE BASIC EXEMPTION LIMIT AND HENCE NOT OBLIGED TO FILE ANY RETURN OF INCOME. A NOTICE U/S 148 OF THE ACT WAS ISSUED ON THE ASSES SEE IN VIEW OF THE FACT THAT THE ASSESSEE HAD NOT REPORTED THE CAPITAL GAIN S IN RESPECT OF SALE OF LAND SITUATED AT MUGALIVAKKAM VILLAGE FOR A TOTAL C ONSIDERATION OF ` 1,80,73,292/-. THE ASSESSEE HAD EXECUTED THE SALE D EED IN THE CAPACITY OF POWER OF ATTORNEY HOLDER IN FAVOUR OF M/S VGN HOMES PVT LTD VIDE REGISTERED SALE DEED ON 7.12.2010. IN THE SAID SALE DEED, UNDE R THE CONSIDERATION COLUMN, IT WAS MENTIONED THAT THE CONSIDERATION HAD BEEN DULY PAID BY THE BUYER OF THE LAND. BUT ASSESSEE PLEADED THAT IT HAD NOT RECEIVED ANY CONSIDERATION AND HENCE DID NOT BOTHER TO OFFER THE LONG TERM CAPITAL GAINS ON SALE OF LAND. IN RESPONSE TO NOTICE ISSUED U/S 1 48 OF THE ACT, THE ASSESSEE OFFERED THE SALARY INCOME TOGETHER WITH THE LONG TE RM CAPITAL GAINS ON SALE OF THE ABOVEMENTIONED LAND AND PAID THE DUE TAXES T HEREON. THE SAID RETURN WAS DULY ACCEPTED BY THE LD AO AND ASSESSMENT WAS C OMPLETED ACCORDINGLY. THE LD AO LEVIED PENALTY U/S 271(1)( C) OF THE ACT ON THE ADDITION MADE TOWARDS LONG TERM CAPITAL GAINS IN THE SUM OF ` 22,00,998/- ON THE GROUND THAT THE ASSESSEE WOULD BE ELIGIBLE FOR THE PENALTY IN TERMS OF EXPLANATION 3 ITA NO.2104/MDS./2017 :- 3 -: TO SECTION 271(1)( C) OF THE ACT. THIS ACTION OF TH E LD AO WAS UPHELD BY THE LD CITA. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFOR E US ON THE FOLLOWING GROUNDS:- 1.1 THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E-TAX (APPEALS) 4, CHENNAI, IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 1.2 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) 4, CHENNAI, ERRED IN NOT CONSIDERING GROUND NOS.1O AND 11 OF THE GROUNDS OF APPEAL, IN RESPECT OF ISSUING A NOTICE W HICH IS INVALID IN LAW, AS THE SPECIFIC GROUND UNDER WHICH THE PENALTY PROCEEDINGS WERE INITIATED WAS NOT MENTIONED IN THE SAID NOTICE . 1.3 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) 4, CHENNAI, ERRED IN NOT CONSIDERING GROUND NO. 12 OF THE GROUNDS OF APPEAL, IN RESPECT OF NOT AFFORDING AN OPPORTUNITY TO THE APPELLANT BY THE INCUMBENT ASSESSING OFFICER BEFORE PASSING T HE PENALTY ORDER. 1.4 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) 4, CHENNAI, ERRED IN NOT CONSIDERING THE WRITTEN SUBMI SSIONS FILED BEFORE HIM BY THE APPELLANT. 1.5 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) 4, CHENNAI, ERRED IN NOT ADDUCING TO THE FACT THAT THE APPELLANT HAS NOT DELIBERATELY AVOIDED PAYMENT OF TAX ON SALE OF PLOTS. 1.6 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) 4, CHENNAI, ERRED IN NOT CONSIDERING THE SUBMISSION TH AT THE APPELLANT WAS NOT LIABLE TO FILE RETURN AS THE APPE LLANT WAS IN RECEIPT OF SALARY INCOME WHICH HAS NOT EXCEEDED THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX. 1.7 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) 4, CHENNAI, ERRED AT PARA 7 OF THE ORDER IN STATING TH AT THE APPELLANT HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE THAT THE APPELLANT WAS NOT IN RECEIPT OF THE SALE CONSIDERATION, EVEN THOUGH THE SAID FACT WAS NOT CONTROVERTED BY THE ASSESSING OFFICER, MORE SO, WHEN AN ORDER OF ATTACHMENT WAS PASSED BY THE ASSESSING OFFICER UNDER SECTION 28LB OF THE ACT ON THE BUYER OF THE PLOTS. ITA NO.2104/MDS./2017 :- 4 -: 1.8 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) 4, CHENNAI, ERRED IN MERELY FOLLOWING THE OBSERVATIONS OF THE ASSESSING OFFICER AND NOT ANALYSING INDEPENDENTLY W HETHER THE APPELLANT HAS CONSCIOUSLY CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 1.9 THE FACTS IN THE CASE LAWS RELIED ON BY THE LEA RNED COMMISSIONER OF INCOME-TAX (APPEALS) 4, CHENNAI ARE AGAINST THE FACTS IN THE CASE OF THE APPELLANT. 2. THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND OR A LTER THE ABOVE GROUNDS OF APPEAL AS MAY BE DEEMED NECESSARY. 3. RELIEF CLAIMED IN APPEAL: THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) 4, CHENNAI, IN RESPECT OF THE ABOVE MATTERS MAYBE S ET ASIDE AND PASS SUCH ORDERS AS THE HONBLE MEMBERS OF THE BENC H, MAY DEEM FIT ON PROPER APPRECIATION OF THE FACTS AND CIRCUMS TANCES OF THE CASE. 4. THE LD AR ARGUED THAT THE SHOW CAUSE NOTICE ISS UED BY THE LD AO U/S. 274 READ WITH SECTION 271(1)(C) OF THE ACT WAS DEFECTIVE IN AS MUCH AS IT DID NOT CONTAIN THE OFFENCE COMMITTED BY THE ASSESSEE IE. WHETHER THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THERE WAS NO SPECIFIC CHARGE MADE OUT BY THE LD. AO IN THIS REGA RD ON THE ASSESSEE IN THE SAID SHOW CAUSE NOTICE. ACCORDINGLY, THE LD AR PRAYED FOR CANCELLATION OF THE PENALTY BY PLACING 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 WHI CH WAS LATER ITA NO.2104/MDS./2017 :- 5 -: APPROVED BY THE HONBLE SUPREME COURT BY DISMISSAL OF SPECIAL LEAVE PETITION (SLP) BY THE REVENUE IN CC NO. 11485/2016 DATED 5.8.2016. IN RESPONSE TO THIS, THE LD DR VEHEMENTLY RELIED ON THE ORDER OF THE LD. AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND TH AT THE PENALTY NOTICE U/S 274 R.W.S 271(1)(C ) OF THE ACT DOES NOT SPECIFY THE CHARGE OF OFFENCE COMMITTED BY THE ASSESSEE VIZ. WH ETHER IT HAD CONCEALED THE PARTICULARS OF INCOME OR IT HAD FURNI SHED INACCURATE PARTICULARS OF INCOME. HENCE THE SAID NOTICE IS TO BE HELD AS DEFECTIVE. NOW THE SHORT QUESTION THAT ARISES FOR CONSIDERATIO N IS AS TO WHETHER THE PENALTY COULD BE VALIDLY LEVIED BASED ON THE DE FECTIVE SHOW CAUSE NOTICE. THIS ISSUE HAS BEEN ADDRESSED BY THE HONBL E KARNATAKA HIGH COURT IN THE CASE OF CIT VS SSAS EMERALD MEADOWS I N ITA NO. 380 OF 2015 DATED 23.11.2015 WHICH IN TURN PLACED RELIANCE ON ANOTHER JUDGEMENT OF THE SAME COURT IN THE CASE OF CIT VS M ANJUNATHA 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 SECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) TO BE BAD IN LAW AS IT DID NOT SPE CIFY WHICH LIMB OF SECTION 271(1)(C ) OF THE ACT, THE PENALTY PROCEEDI NGS HAD BEEN ITA NO.2104/MDS./2017 :- 6 -: INITIATED I.E , WHETHER FOR CONCEALMENT OF PARTICUL ARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CA SE OF 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 QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINA TION BY THIS COURT. THE APPEAL IS ACCORDINGLY DISMISSED. 5.1. WE FIND THAT THE REVENUE HAD PREFERRED A SLP BEFORE THE HONBLE SUPREME COURT AGAINST THIS JUDGEMENT WHICH WAS DIMSISED IN CC NO. 11485/2016 DATED 5.8.2016 BY OBSERVING AS UN DER:- UPON HEARING THE COUNSEL, THE COURT MADE THE FOLLO WING ORDER DELAY CONDONED. WE DO NOT FIND ANY MERIT IN THIS PETITION. THE SPEC IAL 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 CIRCUMS TANCES OF THE CASE. ITA NO.2104/MDS./2017 :- 7 -: SINCE THE LEVY OF PENALTY HAS BEEN CANCELLED ON THI S TECHNICAL ISSUE, NO DECISION IS HEREBY RENDERED ON MERITS OF THE ADDITI ON. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON 25 TH JANUARY, 2018 AT CHENNAI. SD/- SD/- ( ! . . ! . '# ) ( N.R.S. GANESAN) / JUDICIAL MEMBER ( !$ % & '# ) (M. BALAGANESH) ' / ACCOUNTANT MEMBER '( /CHENNAI, )* /DATED: 25 TH JANUARY, 2018 K S SUNDARAM *# +, -, /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. . ( ) /CIT(A) 4. . /CIT 5. ,/' 0 /DR 6. '1 2 /GF