SHRI BALLABHDAS UDHODHAS MOHTA, Nagpur V. ACIT, CIRCLE- 5, Nagpur

ITA 25/NAG/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8584 (ITAT-NAGPUR)
• Duration Of Justice: 4 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNESH P THOMAS
• Keywords: Principle of natural justice; Set aside
• Section: 271(1)(c)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, NAGPUR (AT E - COURT, PUNE) BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NO. 25 /NAG /20 15 / ASSESSMENT YEAR : 2009 - 10 SHRI BALLABDAS UDHODHAS MOHTA, FLAT NO.102, JAGAT PLAZA, LAW COLLEGE SQUARE, AMRAVATI ROAD, NAGPUR PAN : ABRPM7905N ....... / APPELLANT / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 5, NAGPUR. / RESPONDENT A SSESSEE BY : SHRI MAHAVIR ATAL REVENUE BY : SMT. AGNESH P. THOMAS / DATE OF HEARING : 1 7 .01.2020 / DATE OF PRONOUNCEMENT : 17 .01.2020 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(APPEALS) - II, NAGPUR DATED 25.09.2014 FOR THE ASSESSMENT YEAR 2009 - 10 AS PER THE GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 25 /NAG /20 15 A.Y. 2009 - 10 2. THE ASSESSEE HAS PREFERRED GROUNDS OF APPEAL ON MERITS IN APPEAL MEMO AS WELL AS ADMISSION OF ADDITIONAL LEGAL GROUNDS OF APPEAL RELYING ON THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF NTPC LTD. VS. CIT, 229 ITR 383 (SC) . IN THESE ADDITIONAL GROUNDS, THE ASSESSEE HAS CHALLEN GED THE VALIDITY OF PENALTY LEVIED U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) STATING THAT NO PROPER SATISFACTION WAS ARRIVED AT BY THE ASSESSING OFFICER BEFORE LEVYING PENALTY U/S.271(1)(C) OF THE ACT AND THAT THERE WAS APPARENT AMBIGUITY IN THE MIND OF ASSESSING OFFICER WHILE LEVYING PENALTY U/S.271(1)(C) OF THE ACT REGARDING THE CHARGE ON WHICH HE WANTS TO LEVY PENALTY . THUS, PENALTY LEVIED BEING VOID - AB - INITIO SHOULD BE DELETED. 3. WE HAVE PERUSED THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE BEFORE US AND FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. VS. CIT (SUPRA.), WE ADMIT THESE ADDITIONAL GROUNDS AND WE PROCEED TO ADJUDICATE THESE LEGAL GROUNDS FIRST. 4. IN THE ASSESSMENT ORDER DATED 27.12.2011, AT PARA 7, THE ASSESSING OFFICER STATES THAT IN VIEW OF THE ABOVE MENTIONED FACTS, SEPARATE PRO CEEDINGS U/S.271(1)(C) ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME. 5. IN THE PENALTY ORDER DATED 19.03.2014, THE ASSESSING OFFICER STATES THAT I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED HIS INCOME BY FILING INACCURATE PARTICULARS BY FAILING TO PROVE THE EXPENSES CLAIMED TO HAVE BEEN INCURRED, THEREFORE, PENALTY U/S.271(1)(C) OF THE I.T. ACT IS LEVIABLE ON THE ASSESSEE. 3 ITA NO. 25 /NAG /20 15 A.Y. 2009 - 10 THAT FURTHER IN THE SHOW CAUSE NOTICE DATED 27.12.2011, BEFORE IMPOSING PENALTY U/S.271( 1)(C) OF THE ACT, THE ASSESSING OFFICER STATES DURING THE COURSE OF PROCEEDING U/S.143(3) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2009 - 10, THERE HAS BEEN CONCEALMENT OF INCOME ON YOUR PART AS DISCUSSED IN THE ASSESSMENT ORDER OR FURNISHED INAC CURATE PARTICULARS OF SUCH INCOME. 6. IN THIS SORT OF EXERCISE BY THE ASSESSING OFFICER, THERE IS NO CLEAR SATISFACTION ARRIVED AT REGARDING THE CHARGE UNDER WHICH THE ASSESSING OFFICER INTENDS TO IMPOSE PENALTY ON THE ASSESSEE U/S.271(1)(C) OF THE ACT. THERE HAS BEEN PLETHORA OF DECISIONS WHEREIN IT HAS BEEN HELD THAT IF THERE IS AMBIGUITY IN THE MIND OF ASSESSING OFFICER REGARDING EXACT CHARGE ON WHICH PENALTY HAS TO BE IMPOSED OR IF HE HAS NOT SPECIFICALLY MENTIONED AS TO FOR WHICH LIMB U/S.271(1)(C) O F THE ACT PENALTY IS LEVIED, IN SUCH SCENARIO, THE ENTIRE PROCEEDINGS IMPOSING PENALTY U/S.271(1)(C) OF THE ACT BECOMES VOID - AB - INITIO AS PER LAW AND PENALTY LEVIED HAS TO BE DELETED. THAT TAKING GUIDANCE FROM THE DECISION OF THE HON'BLE BOMBAY HIGH COU RT IN THE CASE OF CIT VS. SAMSON PERINCHERY REPORTED AS 392 ITR 4 (BOM.) WHEREIN THE HON'BLE BOMBAY HIGH COURT HAS CONSIDERED THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATH COTTON AND GINNING FACTORY REPORTED AS 359 ITR 565 ( KAR.), THE LEGAL PROPOSITION THAT COMES OUT AND WHICH IS BINDING IN NATURE IS THAT THE ASSESSING OFFICER SHOULD BE CLEAR AS TO WHICH OF THE TWO LIMBS UNDER WHICH PENALTY IS IMPOSABLE, HAS BEEN CONTRAVENED OR INDICATE THAT BOTH HAVE BEEN CONTRAVENED WHILE INITIATING PENALTY PROCEEDINGS. IT CANNOT BE THAT THE INITIATION WOULD BE ONLY ON ONE LIMB I.E. FOR FURNISHING INACCURATE PARTICULARS 4 ITA NO. 25 /NAG /20 15 A.Y. 2009 - 10 OF INCOME WHILE IMPOSITION OF PENALTY ON THE OTHER LIMB I.E. CONCEALMENT OF INCOME. 7. THE SANCTITY IN TERMS OF NATURAL JUSTICE WITH REGARD TO THIS PROPOSITION IS THAT THE ASSESSEE UNDER THE SCHEME OF WELFARE LEGISLATION WHICH IS EMBEDDED IN THE INCOME TAX ACT, 1961 SHOULD GET AN OPPORTUNITY TO PREPARE HIMSELF FOR THE DEFENSE AS REGARDS TO THE EXACT CHARGE ON WHICH PENALTY IS IMPOSED UPON HIM U/S. 271(1)(C) OF THE ACT. IN THE INSTANT CASE, THE CHARGE IS VAGUE AND THEREFORE, LEVY OF PENALTY IS NOT WARRANTED. TAKING TOTALITY OF FACTS AND LEGAL SCENARIO INTO CONSIDERATION AND ON EXAMINATION OF DOCUMENTS ON RECORD ON THE VERY FACT THAT PENALTY LEVIED IS AMBIGUOUS AND THE CHARGE IS NOT SPECIFIC, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY FROM THE HANDS OF THE ASSESSEE. 8. SINCE THE ASSESSEE GETS RELIEF ON THE LEGAL GRO UND, ALL OTHER GROUNDS ON MERITS BECOMES ACADEMIC IN NATURE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED ON 17 TH DAY OF JANUARY, 2020 . SD/ - SD/ - D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 17 TH JANUARY , 20 20 . SB 5 ITA NO. 25 /NAG /20 15 A.Y. 2009 - 10 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - II, NAGPUR. 4. THE COMMISSIONER OF WEALTH TAX - III, NAGPUR. 5 . , , / DR, ITAT, NAGPUR. 6. / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 6 ITA NO. 25 /NAG /20 15 A.Y. 2009 - 10 DATE 1 DRAFT DICTATED ON 17 .01.2020 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 1 7 .01.2020 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER