Bhag Chand Chhabra HUF, Kolkata V. ITO, Ward 34(3), Kolkata, Kolkata

ITA 211/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8809 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 06-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 271(1)(c); 250; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER & SRI ABY T. VARKEY, HONBLE JUDICIAL MEMBER) [VIRTUAL COURT HEARING] ITA NO. 211/KOL/2019 ASSESSMENT YEARS: 2013-14 M/S. BHAG CHAND CHHABRA HUF..............................................................................APPELLANT 4A, GOKHALE ROAD KOLKATA - 700020 [PAN : AAEHB 3652 H] VS. INCOME TAX OFFICER, WARD-34(3), KOLKATA............................... RESPONDENT APPEARANCES BY: NONE, APPEARED ON BEHALF OF THE ASSESSEE. SHRI SUPRIYO PAL, JCIT D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JULY 20 TH , 2020 DATE OF PRONOUNCING THE ORDER : JULY 24 TH , 2020 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 10, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 31/12/2018, FOR THE ASSESSMENT YEAR 2013-14, WHEREIN, HE CONFIRMED THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT, BY THE ASSESSING OFFICER . 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. THERE IS NO APPLICATION FOR ADJOURNMENT EITHER. UNDER THESE CIRCUMSTANCES, WE DISPOSE OFF THE CASE EX-PARTE ON MERITS QUA THE ASSESSEE AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 3. HEARD THE LD. D/R. WE FIND THAT THE ASSESSEE HAD RAISED THE FOLLOWING GROUND BEFORE THE LD. CIT(A):- 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. ITO ERRED IN IMPOSING PENALTY ALTHOUGH THE SHOW CAUSE NOTICE FOR PENALTY DID NOT CLARIFY FOR WHAT DEFAULT THE PENALTY HAS BEEN INITIATED WHETHER IT IS FOR FURNISHING INACCURATE PARTICULARS. 3.1. THE LD. CIT(A) HAS NOT CONTRADICTED THE CLAIM OF THE ASSESSEE THAT, THE NOTICE ISSUED U/S 271(1)(C) OF THE ACT, DID NOT SPECIFY THE CHARGES AGAINST WHICH THE PENALTY WAS SOUGHT TO BE IMPOSED. THE PENALTY IMPOSED IN PURSUANCE OF SUCH DEFECTIVE NOTICE IS NOT SUSTAINABLE IN LAW. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. DR. MURARI MOHAN KOLEY IN ITAT NO. 306 OF 2017, G.A. NO. 2968 OF 2017 , JUDGMENT DT. 18 TH JULY, 2018, HELD AS FOLLOWS:- 10. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSA 'S EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HON'BLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING THAT IMPOSING OF PENALTY U/S THAT THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICUL ARS OF INCOME. THE LD. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAINST THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HON'BLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 DISMISSE D THE SLP PREFERRED BY THE DEPARTMENT. THE LD. COUNSEL ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HON'BLE BOMBAY HIGH COURT FOLLO THE DECISION OF THE THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF OF COTTON AND GINNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE N OTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO 1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS B EEN FOLLOWED BY THE TRIBUNAL. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A). 11. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NOTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINE THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED MR. CHOWDHURY IN COURSE OF ARGUMENT HAS URGED US TO REMAND THE MATTER BEFORE THE ASSESSING OFFICER. ACCORDING TO HIM, THIS WAS A TECHNICAL FLAW, WHICH THE REVENUE MUST BE GIVEN A CHANCE TO CURE. THE REASON WHY THE PENALTY ORDER WAS NOT APPEARS FROM THE PASSAGES OF THE DECISION OF THE TRIBUNAL QUOTED EARLIER IN THIS JUDGEMENT. WE FIND THAT THERE WAS NO SPECIFIC CHARGE AGAINST THE ASSESSEE IN THE NOTICE. REVENUE HAS MISSED OUT THEIR OPPORTUNITY TO SUBJECT THE ASS A PROPER NOTICE. NO SPECIFIC CASE HAS BEEN MADE OUT BY THE REVENUE AS TO WHY THE MATTER SHOULD BE REMANDED EXCEPT THAT THE ASSESSEE HAD NOT PARTICIPATED PROPERLY IN THE ASSESSMENT PROCEEDINGS BUT FOR THAT REAS THE INCOME, WHICH HAD ESCAPED ASSESSMENT HAS BEEN ADDED TO THE INCOME OF THE ASSESSEE. IT WAS INCUMBENT UPON THE REVENUE TO MAKE OUT A SPECIFIC CASE FOR IMPOSITION OF PENALTY, ON WHICH COUNT THE REVENUE HAS FAI UNDER SUCH CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE TRIBUNAL'S ORDER. THE TRIBUNAL'S ORDER DOES NOT SUFFER FROM ANY ERROR OF LAW. NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. HENCE, THE SAME IS DISMISSED. HENCE, ST THERE SHALL BE NO ORDER AS TO COSTS. 4. THE PROPOSITION OF LAW LAID DOWN IN THE ABOVE CASE THE PRESENT CASE. WE, THEREFORE, RESPECTFULLY FOLLOW 2 M/S. BHAG CHAND CHHABRA HUF DATED 23.11.2015 WHEREIN THE HON'BLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN CIT VS MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PENALTY U/S . 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF ARS OF INCOME. THE LD. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAINST THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HON'BLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 D THE SLP PREFERRED BY THE DEPARTMENT. THE LD. COUNSEL ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HON'BLE BOMBAY HIGH COURT FOLLO THE DECISION OF THE THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF OF CIT VS MANJUNATHA FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON OTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO 1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL EEN FOLLOWED BY THE TRIBUNAL. THE LEARNED DR RELIED ON THE ORDER OF THE 11. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NOTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINE THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. ' MR. CHOWDHURY IN COURSE OF ARGUMENT HAS URGED US TO REMAND THE MATTER BEFORE THE ASSESSING OFFICER. ACCORDING TO HIM, THIS WAS A TECHNICAL FLAW, WHICH THE REVENUE MUST BE GIVEN A CHANCE TO CURE. THE REASON WHY THE PENALTY ORDER WAS NOT SUSTAINED BY THE TRIBUNAL APPEARS FROM THE PASSAGES OF THE DECISION OF THE TRIBUNAL QUOTED EARLIER IN THIS JUDGEMENT. WE FIND THAT THERE WAS NO SPECIFIC CHARGE AGAINST THE ASSESSEE IN THE NOTICE. REVENUE HAS MISSED OUT THEIR OPPORTUNITY TO SUBJECT THE ASS ESSEE TO THE PENALTY PROCEEDING BY NOT ISSUING A PROPER NOTICE. NO SPECIFIC CASE HAS BEEN MADE OUT BY THE REVENUE AS TO WHY THE MATTER SHOULD BE REMANDED EXCEPT THAT THE ASSESSEE HAD NOT PARTICIPATED PROPERLY IN THE ASSESSMENT PROCEEDINGS BUT FOR THAT REAS ON BEST JUDGMENT ASSESSMENT HAS BEEN MADE AND THE INCOME, WHICH HAD ESCAPED ASSESSMENT HAS BEEN ADDED TO THE INCOME OF THE ASSESSEE. IT WAS INCUMBENT UPON THE REVENUE TO MAKE OUT A SPECIFIC CASE FOR IMPOSITION OF PENALTY, ON WHICH COUNT THE REVENUE HAS FAI LED. UNDER SUCH CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE TRIBUNAL'S ORDER. THE TRIBUNAL'S ORDER DOES NOT SUFFER FROM ANY ERROR OF LAW. NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. HENCE, THE SAME IS DISMISSED. HENCE, ST AY PETITION IS ALSO DISMISSED. THERE SHALL BE NO ORDER AS TO COSTS. THE PROPOSITION OF LAW LAID DOWN IN THE ABOVE CASE -LAW IS SQUARELY APPLICABLE IN THE PRESENT CASE. WE, THEREFORE, RESPECTFULLY FOLLOW ING THE SAID DECISION OF THE ITA NO. 211/KOL/2019 ASSESSMENT YEARS: 2013-14 M/S. BHAG CHAND CHHABRA HUF DATED 23.11.2015 WHEREIN THE HON'BLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN FACTORY (2013) 359 ITR 565 TOOK A VIEW . 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF ARS OF INCOME. THE LD. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAINST THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HON'BLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 D THE SLP PREFERRED BY THE DEPARTMENT. THE LD. COUNSEL ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HON'BLE BOMBAY HIGH COURT FOLLO WING CIT VS MANJUNATHA FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON OTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO 1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL EEN FOLLOWED BY THE TRIBUNAL. THE LEARNED DR RELIED ON THE ORDER OF THE 11. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NOTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINE D. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENALTY IN TO BE CANCELLED. ' MR. CHOWDHURY IN COURSE OF ARGUMENT HAS URGED US TO REMAND THE MATTER BEFORE THE ASSESSING OFFICER. ACCORDING TO HIM, THIS WAS A TECHNICAL FLAW, WHICH THE REVENUE MUST BE SUSTAINED BY THE TRIBUNAL APPEARS FROM THE PASSAGES OF THE DECISION OF THE TRIBUNAL QUOTED EARLIER IN THIS JUDGEMENT. WE FIND THAT THERE WAS NO SPECIFIC CHARGE AGAINST THE ASSESSEE IN THE NOTICE. REVENUE HAS ESSEE TO THE PENALTY PROCEEDING BY NOT ISSUING A PROPER NOTICE. NO SPECIFIC CASE HAS BEEN MADE OUT BY THE REVENUE AS TO WHY THE MATTER SHOULD BE REMANDED EXCEPT THAT THE ASSESSEE HAD NOT PARTICIPATED PROPERLY IN THE ON BEST JUDGMENT ASSESSMENT HAS BEEN MADE AND THE INCOME, WHICH HAD ESCAPED ASSESSMENT HAS BEEN ADDED TO THE INCOME OF THE ASSESSEE. IT WAS INCUMBENT UPON THE REVENUE TO MAKE OUT A SPECIFIC CASE FOR IMPOSITION OF PENALTY, ON UNDER SUCH CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE TRIBUNAL'S ORDER. THE TRIBUNAL'S ORDER DOES NOT SUFFER FROM ANY ERROR OF LAW. NO SUBSTANTIAL QUESTION OF LAW IS AY PETITION IS ALSO DISMISSED. SQUARELY APPLICABLE IN THE SAID DECISION OF THE HONBLE JURISDICTIONA L HIGH COURT, QUASH UNDER SECTION 271(1)(C) OF THE ACT 5. IN THE RESULT, APPEAL OF THE ASSESSEE KOLKATA, THE SD/- [ ABY T. VARKEY] JUDICIAL MEMBER DATED : 24.07.2020 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. M/S. BHAG CHAND CHHABRA HUF 4A, GOKHALE ROAD KOLKATA - 700020 2. INCOME TAX OFFICER, WARD- 34(3), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 3 M/S. BHAG CHAND CHHABRA HUF L HIGH COURT, QUASH THE IMPUGNED PENALTY IMPOSED BY THE OF THE ACT AND CONFIRMED BY THE LD. CIT(A). IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 24 TH DAY OF JULY, 2020. [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER M/S. BHAG CHAND CHHABRA HUF 34(3), KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES ITA NO. 211/KOL/2019 ASSESSMENT YEARS: 2013-14 M/S. BHAG CHAND CHHABRA HUF PENALTY IMPOSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A). SD/- J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES