Delta Tower Constructions Pvt. Ltd., Kolkata V. I.T.O.,Ward-1(1), Kolkata

ITA 2599/KOL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5858 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 16-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Initiation of penalty proceedings
• Section: 143(3); 201; 274; 13

Judgement Text

1 . ITA NO. 2599/KOL/2019 A.Y 2012 - 13 DELTA TOWER CONSTRUCTIONS P.LTD IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B KOLKATA BEFORE SHRI A BY T . VARKEY , JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER . / ITA NO. 2599/KOL/2019 ASSESSMENT YEAR: 201 2 - 13 DELTA TOWER CONSTRUCTIONS PVT. LTD 35 C R AVENUE, GR FL., ROOM NO. 6/6B, KOLKATA - 700 012. PAN: AADCD3266F V/S. I.T.O., WARD - 1(1), AAYKAR BHAWAN, P - 7 CHOWRINGHEE SQUARE, 7 TH FL., KOLKATA - 700 069 /APPELLANT .. /RESPONDENT HEARING THROUGH VIDEO CONFERENCING / BY APPELLANT SHRI SAUMITRA CHOUDHURY, ADVOCATE,LD.AR / BY RESPONDENT SMT. RANU BISWAS, ADDL. CIT, LD.DR / DATE OF HEARING 15 - 09 - 2021 / DATE OF PRONOUNCEMENT 1 7 - 09 - 2021 /O R D E R PER MANISH BORAD, AM : THIS APPEAL FILED BY THE ASSESSEE PERTAINING TO THE A.Y. 201 2 - 13 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME - TAX (APPEALS) - 17 , KOLKATA DATED 10 - 04 - 2019 VIDE APPEAL N O. 28/ CIT(A) - 2 . ITA NO. 2599/KOL/2019 A.Y 2012 - 13 DELTA TOWER CONSTRUCTIONS P.LTD 17/KOL/17 - 18 WHICH IS ARISING OUT OF THE PENALTY ORDER PASSE D U/S. 271(1) ( C) OF THE INCOME TAX ACT DATED 30 - 09 - 2015 BY ITO, WD - 1(1), KOL . 2. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE ORDER OF THE LD. CIT(A) CONFIRMING THE ERRONEOUS ORDER OF THE AO IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW IN CONFIRMING PENALTY OF RS.55,40,370/ - UNDER SECTION 271 (1 )(C) LEVIED BY THE AO WHICH IS ARBITRARY AND CONTRARY TO THE PROVISIONS OF LAW AS PENALTY PROCEEDINGS U/S 271 (1 )(C) WAS INITIATED WITHOUT GIVEN ANY OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 3. THAT THE ORDER OF THE LD. CIT(A) CONFIRMING THE ACTION OF THE LD. AO IN LEVYING PENALT Y OF RS.55,40,370/ U/S. 271 (1 )(C) IS AGAINST THE PROVISIONS OF LAW, FACTS & CIRCUMSTANCES OF THE CASE AND DESERVES TO BE QUASHED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD AND/OR MODIFY ANY GROUND(S) OF THIS APPEAL AT THE TIME OR BEFORE HEARING. 3. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE RAISED A LEGAL ISSUE CONT ENDING THAT THE S HOW CAUSE NOTICE (S.C.N) ISSUED U/S. 274 R.W.S 271(1) ( C ) OF THE I.T. ACT, 1961 IS CRYPTIC AS SPECIFIC CHARGE HAS NOT BEEN LEV ELLED AGAINST THE ASSESSEE. HE ALSO SUB MITTED THAT THIS LEGAL ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA IN THE CASE OF DR. MURARI MOHAN KOLEY, I . T . A .T NO. 306 OF 2017 /GA NO. 2968 OF 2017 DT. 1 8 - 07 - 2018 AND ALSO BY TH E DECISION OF THE HONBLE KOLKATA BENCHES IN THE CASE OF M/S. FLOW & FLUID CONTROL CENTRE VS. ITO, W - 34(4), KOL., ITA NO. 1051/KOL/2016 FOR THE A.Y 2010 - 11, ORDER DT. 09 - 12 - 2016. 3 . ITA NO. 2599/KOL/2019 A.Y 2012 - 13 DELTA TOWER CONSTRUCTIONS P.LTD 4 . PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTI NG THE ORDERS OF THE LOWER AUTHORITIES AND ALSO SUBMITTED THAT THE NOTICE DT. 15 - 03 - 2021 U/S. 274 R.W.S 271(1) ( C) OF THE ACT IS NOT CRYPTIC AS CHARGES HAVE BEEN RIGHTLY LEVELLED AGAINST THE ASSESSEE. 5 . W E HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS AS PLACED BEFORE US. THE LEGAL ISSUE HAS BEEN RAISED BY THE ASSESSEE BEFORE US FOR THE FIRST TIME CHALLENGING THE VALIDITY OF THE PROCEEDINGS CARRIED OUT FOR LEVYING OF PENALTY U/S. 271(1) ( C ) O F THE ACT. THOUGH THIS LEGAL ISSUE HAS BEEN RAISED FOR THE FIRST TIME, BUT IN VIEW OF THE SETTLED JUDICIAL PRECEDENTS, THIS LEGAL ISSUE GOES TO THE RO OT OF THE MATTER . WE , THEREFORE, ADMIT THIS LEGAL ISSUE. 6 . WE FIND THAT PENALTY PROCEEDINGS AGAINST THE ASSESSEE WAS INITIATED BY THE NOTICE ISSUED ON 1 5 - 03 - 2015, PLACED AT PAGE - 20 O F THE P.B. IN THIS NOTICE BOTH THE CHARGES ARE LEVIED AGAINST THE ASSESSEE FOR HAVING CONCEALED PARTICULARS OF INCOME AND ALSO FOR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. WE ALSO FIND THAT IN THE ASSESSMENT FRAMED U/S. 143(3) OF THE ACT PENALTY PROCEEDINGS WAS INITIATED BOTH FOR CONCEALMENT OF INCOME AND FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME, BUT IN THE PENALTY ORDER DT. 30 - 09 - 2015 T HE LD. AO STATED TO H AVE LEVIED THE PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 7 . WE FURTHER FIND THAT SINCE SPECIFIC CHARGE HAS NOT BEEN LEVIED AGAINST THE ASSESSEE FOR INITIATION OF PENALTY PROCEEDINGS , S UCH PENALTY PROCEEDINGS ARE HELD TO BE VOID AB INITIO IN VIEW OF THE RATIO 4 . ITA NO. 2599/KOL/2019 A.Y 2012 - 13 DELTA TOWER CONSTRUCTIONS P.LTD LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA IN THE CASE OF DR. MURARI MOHAN KOLEY (SUPRA) . THE FINDING OF THE HONBLE HIGH COURT IS REPRODUCED BELOW: -- 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 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 ID. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS R EFERRED 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 T HE 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 TRIBU NAL 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 ASSESSEE 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 REASON BEST JUDGMENT ASSESSMENT HAS BEEN MADE AND THE INCOME, WHICH HAD ESCAPED ASSE SSMENT 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 FAILED. 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, STAY PETITION IS ALSO DISMISSED. 5 . ITA NO. 2599/KOL/2019 A.Y 2012 - 13 DELTA TOWER CONSTRUCTIONS P.LTD 8 . FROM PERUSAL OF THE ABOVE FINDING OF THE HONBLE JURISDICTIONAL HIGH COURT AT CALCUTTA, WE FIND THAT THIS LEGAL ISSUE RAISED BY THE ASSESSEE BEFORE US DESERVES TO BE ALLOWED AND ALSO THE LEARNED DEPARTMENTAL REPRESENTATIVE FAILED TO PLACE ANY BINDING PRECEDEN CE IN ITS FAVOUR. W E , THUS, RESPECTFUL LY FOLLOWING THE SAID JUDGMENT OF THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT IN THE CASE OF DR. MURARI MOHAN KOLEY (SUPRA) ALLOW THE LEGAL ISSUE RAISED BY THE ASSESSEE AND HOLD THAT PROCEEDINGS FOR INITIATION OF PENALTY U/S. 271(1)( C) OF THE ACT ARE VOID AB INIT I O . ACCORDINGLY, PENALTY LEVIED U/S. 271(1) ( C) OF THE ACT IS DELETED. 9 . SINCE LEGAL ISSUE HAS ALREADY BEEN DECIDED IN FAVOUF OF THE ASSESSEE ADJUDICATING THE GROUNDS ON MERITS, WILL BE MERELY ACADEMIC IN NATURE AND THUS BECOMES INFRUCTUOUS . 10 . IN THE RESULT , THE APPEAL OF THE ASSESSEE STANDS ALLOWED ON LEGAL ISSUE . THE ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 . 09.2021. S D / - S D / - ( ABY T. VARKEY ) ( MANISHB ORAD) JUDICIALMEMBER ACCOUNTANT MEMBER / DATED : SEPTEMBER 1 7 , 2021 **PP/SPS 6 . ITA NO. 2599/KOL/2019 A.Y 2012 - 13 DELTA TOWER CONSTRUCTIONS P.LTD / COPY OF ORDER FORWARDED TO: - 1. /APPELLANT/ ASSESSEE: DELTA TOWER CONSTRUCTIONS PVT. LTD . 35 C R AVENUE, GR FL., ROOM NO. 6/6B, KOLKATA - 700 012. 2. /RESPONDENT/ DEPARTMENT: ITO, WARD 1(1), KOLKATA AAYKARBHAWAN, P - 7 CHOWRINGHEE SQUARE, 7 TH FL., KOLKATA - 700 069. 3. / CONCERNED CIT 4. - / CIT (A) 5. , / DR, ITAT, KOLKATA 6. / GUARD FILE. BY ORDER/ , /TRUE COPY/ SENIOR PRIVATE SECRETARY/D.D.O ITAT, KOLKATA