Prakash Homes, CHENNAI V. ITO Non Corporate Ward 3(2), CHENNAI

ITA 2262/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4007 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 31-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: M KARUNAKARAN
• Keywords: Competent authority; Revised return
• Section: 148; 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.2262/CHNY/2018 ) *) / ASSESSMENT YEAR : 2013-14 M/S PRAKASH HOMES, 36, ELDAMS ROAD, ALWARPET, CHENNAI - 600 018. PAN : AAMFP 2572 N V. THE INCOME TAX OFFICER, NON CORPORATE WARD 3(2), CHENNAI - 600 034. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI M. KARUNAKARAN, ADVOCATE ./,- 0 1 / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT 2 0 3% / DATE OF HEARING : 09.01.2019 45* 0 3% / DATE OF PRONOUNCEMENT : 06.02.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -4, CHENNA I, DATED 05.07.2018, CONFIRMING THE PENALTY LEVIED BY THE AS SESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.2262/CHNY/18 2. AT THE OUTSET, SHRI M. KARUNAKARAN, THE LD.COUNS EL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER HAS NOT INDICATED IN THE SHOW CAUSE NOTICE WHETHER HE IS LEVYING PENALTY FOR CONCEALING ANY PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. PLACING RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN CIT V. ORIGINAL KERALA JEWELLERS IN T.C.A. NO.717 O F 2018 DATED 18.12.2018, THE LD.COUNSEL SUBMITTED THAT ON IDENTI CAL CIRCUMSTANCE, THE MADRAS HIGH COURT BY PLACING RELI ANCE ON THE JUDGMENT OF KARNATAKA HIGH COURT IN CIT V. MANJUNAT HA COTTON AND GINNING FACTORY (2013) 359 ITR 565, FOUND THAT THER E CANNOT BE ANY LEVY OF PENALTY. THEREFORE, ACCORDING TO THE LD. C OUNSEL, THE CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE PEN ALTY LEVIED BY THE ASSESSING OFFICER. PLACING RELIANCE ON ANOTHER JUD GMENT OF MADRAS HIGH COURT IN SUNDARAM FINANCE LTD. V. ACIT (2018) 93 TAXMANN.COM 250, THE LD.COUNSEL SUBMITTED THAT IN T HIS CASE THE GROUND WITH REGARD TO THE ISSUE OF LEVY OF PENALTY IN THE SHOW CAUSE NOTICE WAS NOT RAISED BEFORE THIS TRIBUNAL AND IT W AS RAISED BEFORE THE HIGH COURT FOR THE FIRST TIME. IN THOSE CIRCUM STANCES, ACCORDING TO THE LD. COUNSEL, THE MADRAS HIGH COURT FOUND THA T THE COMPANY WAS PRECLUDED FROM RAISING SUCH A PLEA AT THE BELAT ED STAGE. 3 I.T.A. NO.2262/CHNY/18 THEREFORE, ACCORDING TO THE LD. COUNSEL, THE JUDGME NT OF MADRAS HIGH COURT IN ORIGINAL KERALA JEWELERS (SUPRA) HAS TO BE FOLLOWED. 3. WE HEARD SHRI B. SAGADEVAN, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. ACCORDING TO THE LD. D.R., TH E ASSESSEE ORIGINALLY CLAIMED EXEMPTION UNDER SECTION 35(1)(II ) OF THE ACT WITH REGARD TO DONATIONS SAID TO BE GIVEN TO SOME OF THE INSTITUTIONS AT KOLKATA. SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN AND THE CLAIM WAS WITHDRAWN. ACCORDING TO THE LD. D.R., EV EN THOUGH THERE WAS NO ADDITION IN THE REVISED RETURN, THE ASSESSEE HAD CONCEALED ITS INCOME IN THE ORIGINAL RETURN FROM CLAIMING EXE MPTION. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIG HTLY CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 35(1)(II) OF THE AC T IN THE ORIGINAL RETURN WITH REGARD TO DONATIONS SAID TO BE MADE TO CERTAIN INSTITUTIONS AT KOLKATA. THE APPROVAL GRANTED BY T HE COMPETENT AUTHORITY APPEARS TO HAVE BEEN WITHDRAWN. THE ASSE SSEE CLAIMED EXEMPTION BEFORE THE ASSESSING OFFICER MUCH BEFORE WITHDRAWAL OF APPROVAL BY COMPETENT AUTHORITY. THE ASSESSEE HAS FILED REVISED 4 I.T.A. NO.2262/CHNY/18 RETURN WITHDRAWING THE CLAIM OF EXEMPTION. THE FAC T REMAINS THAT THE ASSESSING OFFICER HAS ALSO ISSUED NOTICE UNDER SECTION 148 OF THE ACT TO REGULARIZE THE RETURN FILED BY THE ASSES SEE WITHDRAWING THE EXEMPTION CLAIMED UNDER SECTION 35(1)(II) OF TH E ACT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IT IS OBVIOUS THAT WHEN THE APPROVAL OF COMPETENT AUTHORITY WAS IN EXISTENC E, THE ASSESSEE CLAIMED EXEMPTION. WHEN THE APPROVAL WAS WITHDRAWN , THE ASSESSEE HAS FILED REVISED RETURN WITHDRAWING THE C LAIM MADE UNDER SECTION 35(1)(II) OF THE ACT. MOREOVER, THE ASSES SING OFFICER HAS NOT INDICATED IN SHOW CAUSE NOTICE WHETHER HE IS LE VYING PENALTY FOR CONCEALING OF ANY PART OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. ON IDENTICAL CIRCUMSTANCE, THE MADRAS H IGH COURT IN THE CASE OF ORIGINAL KERALA JEWELLERS (SUPRA) FOUND THA T THE JUDGMENT OF KARNATAKA HIGH COURT IN MANJUNATHA COTTON AND GINNI NG FACTORY (SUPRA) ATTAINED FINALITY, THEREFORE, THERE CANNOT BE ANY LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON SUCH SITUATION. IN FACT, THE MADRAS HIGH COURT OBSERVED AS FOLLOWS:- 4. THE TRIBUNAL REFERRED TO AND RELIED UPON THE DECI SION OF THE DIVISION BENCH OF THE HIGH COURT OF KARNATAKA IN CIT V. MANJUNATHA COTTON AND GINNING FACTORY [REPORTED IN (2013) 359 ITR 565]. THE DIVISION BENCH AFTER ANALYSING THE SUBJECT IN AN ELABORATE MANNER AND RELATING TO SEVERAL DECISIONS OF THE HON'BLE SUPREME COURT HELD THAT ME RELY BECAUSE THE ASSESSEE AGREED FOR ADDITION AND ACCORD INGLY, 5 I.T.A. NO.2262/CHNY/18 ASSESSMENT ORDER WAS PASSED ON THE BASIS OF ADDITIO N AND WHEN THE ASSESSEE PAID THE TAX AND THE INTEREST THRE OF IN THE ABSENCE OF ANY MATERIAL ON RECORD TO SHOW THE CONCEALMENT OF INCOME, IT CANNOT BE INFERRED THAT T HE SAID ADDITION IS ON ACCOUNT OF CONCEALMENT, SO AS TO LEV Y PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 5. IN ANOTHER JUDGMENT OF MADRAS HIGH COURT IN SUND ARAM FINANCE LTD. (SUPRA), WHEN IT WAS EXAMINED IN AN ID ENTICAL SITUATION, THE HIGH COURT FOUND THAT THE ASSESSEE, BEING A COM PANY, WAS PRECLUDED FROM RAISING SUCH PLEA AT THE BELATED STA GE BEFORE THE HIGH COURT. IN OTHER WORDS, BEFORE THE TRIBUNAL, T HE ASSESSEE IN SUNDARAM FINANCE LTD. (SUPRA) HAD NOT RAISED THIS I SSUE. THIS TRIBUNAL BEING THE FIRST APPELLATE AUTHORITY, THE A SSESSEE IN THE PRESENT APPEAL HAS RAISED THIS ISSUE, THEREFORE, TH IS TRIBUNAL IS EXPECTED TO ADJUDICATE THE SAME. THIS TRIBUNAL BEI NG THE SECOND APPELLATE AUTHORITY CANNOT IGNORE THE FACT THAT THE ASSESSING OFFICER FAILED TO STRUCK DOWN THE RELEVANT PLEA INDICATING WHETHER HE INITIATED PENALTY PROCEEDING FOR CONCEALING ANY PAR T OF INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. IN VIEW OF THE ABOVE, BY RESPECTFULLY FOLLOWING THE JUDGMENT OF MA DRAS HIGH COURT IN ORIGINAL KERALA JEWELLERS (SUPRA), THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE PENALTY LEV IED BY THE ASSESSING OFFICER AS CONFIRMED BY THE CIT(APPEALS) IS DELETED. 6 I.T.A. NO.2262/CHNY/18 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 6 TH FEBRUARY, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 6 TH FEBRUARY, 2019. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-4, CHENNAI 4. PRINCIPAL CIT-5, CHENNAI 5. 9< .3 /DR 6. =) > /GF.