Bimal Kumar Gupta , Kolkata V. ITO, Ward - 45(1) , Kolkata

ITA 2481/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8210 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 28-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH TIWARI FCA SH SU
• Section: 271(1)(c); 250; 274; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA [BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI ABY. T. VARKEY, JUDICIAL MEMBER] I.T.A. NO. 2481/KOL/2018 ASSESSMENT YEAR: 2009-10 BIMAL KUMAR GUPTA...........................................................................................................APPELLANT [PAN: AGTPG 2435 N] VS. ITO, WARD-45(1), KOLKATA..............................................RESPONDENT APPEARANCES BY: SH. MANISH TIWARI, FCA, APPEARED ON BEHALF OF THE ASSESSEE. SH. SUPRIYO PAL, JCIT, SR. DR APPEARED ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JANUARY 13 TH , 2020 DATE OF PRONOUNCING THE ORDER : JANUARY 22 ND , 2020 ORDER PER J. SUDHAKAR REDDY, AM :- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-13, KOLKATA [CIT(A) FOR SHORT] DATED 14.09.2018 U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT FOR SHORT) FOR AY 2009-10. 2. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS. 3. THE LD. COUNSEL FOR THE ASSESSEE HAS RAISED A PRELIMINARY OBJECTION CHALLENGING THE PENALTY IMPOSED U/S 271(1)(C) ON THE GROUND THAT THE NOTICE ISSUED INITIATING THE PENALTY PROCEEDINGS BEING DEFECTIVE, THE PENALTY IMPOSED IN PURSUANCE OF SUCH DEFECTIVE NOTICE IS NOT SUSTAINABLE IN LAW. HE HAS PLACED ON RECORD, A COPY OF THE SAID NOTICE ISSUED BY THE A.O. U/S 271(1)(C) OF THE ACT, DATED 17.11.2017. IN SUPPORT OF HIS CONTENTION, THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE DECISION OF THE COORDINATE BENCH IN THE CASE OF JEETMAL CHORARIA VS ACIT RENDERED VIDE ITS ORDER DATED 01.12.2017 PASSED IN ITA NO. 956/KOL/2016 WHEREIN A SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL AFTER TAKING INTO CONSIDERATION, THE RELEVANT DECISION OF THE DIFFERENT HIGH COURTS VIDE PARAGRAPH NO. 14 AND 15 OF ITS ORDER WHICH READ AS UNDER: 2 I.T.A. NO. 2481/KOL/2018 ASSESSMENT YEAR: 2009-10 BIMAL KUMAR GUPTA. FROM THE AFORESAID DISCUSSION IT CAN BE SEEN THAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIGH COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON- STRIKING OF THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHES AT BANGALORE HAVE TO FOLLOW THE DECISION OF THE HONBLE KARNATAKA HIGH COURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) AND OTHER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA. IT IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE, THEREFORE, PREFER TO FOLLOW THE VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). 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 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 SUSTAINED. 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. 4. IN OUR OPINION, THE DECISION RENDERED BY THE COORDINATE BENCH IN THE CASE OF JEETMAL CHORARIA VS ACIT (SUPRA) IS SQUARELY APPLICABLE IN THE PRESENT CASE AND EVEN THE LD. DR HAS NOT DISPUTED THIS ASPECT OF THE MATTER. WE, THEREFORE, RESPECTFULLY FOLLOWING THE SAID DECISION OF THE COORDINATE BENCH QUASH THE IMPUGNED PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT AND CONFIRMED BY THE LD. CIT(A). 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 22 ND JANUARY, 2020. SD/- SD/- [ABY T. VARKEY] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22.01.2020 BIDHAN 3 I.T.A. NO. 2481/KOL/2018 ASSESSMENT YEAR: 2009-10 BIMAL KUMAR GUPTA. COPY OF THE ORDER FORWARDED TO: 1. BIMAL KUMAR GUPTA, 28/Y, RAMAKRISHNA SAMADHI ROAD, KOLKATA-700 054. 2. ITO, WARD-45(1), KOLKATA. 3. CIT(A)-13, KOLKATA. (SENT THROUGH E-MAIL) 4. CIT- 5. CIT(DR), KOLKATA BENCHES, KOLKATA. (SENT THROUGH E-MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES