Tribi Systems Private Limited , Bangalore V. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

ITA 2601/BANG/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2122 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 11-03-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 17-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI J
• Assessee Lawyers: SUDHEENDRA B R
• Keywords: Opportunity of being heard
• Section: 274; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER ITA NO. 2 6 01 & 2602 /BANG/201 8 ASSESSMENT YEAR : 2013 14 M/S TRIBI SYSTEMS PVT. LTD., NO. 55/B, 1 ST MAIN ROAD, ELECTRONICS CITY, BANGALORE 560100. PAN : AAACO4139M VS. DCIT CIRCLE 7 (1) (1), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : S HREE SUDHEENDRA B. R. , ADVOCATE REVENUE BY : S MT. R. PREMI , J CIT DR DATE OF HEARING : 1 1 .03.2020 DATE OF PRONOUNCEMENT : 29 . 0 4 .20 20 O R D E R PER A. K. GARODIA, A. M. : BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND T HE SAME ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LEARNED CIT(A) 7, BANGALORE DATED 20.07.2018 IN QUANTUM PROCEEDINGS AND DATED 23.07.2 018 IN PENALTY PROCEEDINGS U/S 271 (1) (C) FOR THE SAME ASSESSMENT YEAR 2013 14. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DIS POSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE QUANTUM APPEAL. IT IS SUBM ITTED BY THE LEARNED AR OF THE ASSESSEE THAT THE APPEAL WAS FILE D BEFORE CIT (A) AFTER A DELAY OF 180 DAYS AND REQUEST WAS MADE BEFORE CIT (A) TO CONDONE THE DELAY. HE SUBMITTED THAT THIS WAS EXPLAINED BEF ORE CIT (A) THAT THE DELAY WAS UNDER THESE FACTS THAT RETURNED LOSS WAS REDUCED BY THE AO BY ITA NO. 2601 & 2602/BANG/2018 PAGE 2 OF 3 MAKING SOME ADDITION U/S 56 (2) BUT STILL, THE ASSE SSED INCOME WAS NEGATIVE AND NO DEMAND WAS RAISED AND THEREFORE, T HE ASSESSEE DID NOT FILE AN APPEAL BEFORE CIT (A) BUT LATER WHEN THE AO IMPOSED PENALTY U/S 271 (1) (C), THE ASSESSEE WAS ADVISED TO FILE QUANT UM APPEAL ALSO BEFORE CIT (A) AND THE ASSESSEE DID SO. BUT LEARNED CIT (A ) DID NOT CONDONE THE DELAY. HE SUBMITTED THAT UNDER THESE FACTS, THE DELAY SHOULD BE CONDONED AND THE MATTER MAY BE RESTORED TO CIT (A) FOR A DECISION ON MERIT OF THE QUANTUM APPEAL. REGARDING PENALTY APPE AL, HE SUBMITTED THAT THE PENALTY NOTICE ISSUED BY THE AO U/S 274 R. W.S. 271 IS AVAILABLE ON PAGE 125 OF THE PAPER BOOK. HE POINTED OUT THAT IN THIS NOTICE, THE ALLEGATION OF THE AO IS VAGUE BECAUSE THE AO SAYS I N THIS NOTICE THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME. HE PLACED RELIANC E ON THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F CIT VS. MANJUNATH COTTON AND GINNING FACTORY, 359 ITR 565 A ND SUBMITTED THAT IN THE FACTS OF THE PRESENT CASE, PENALTY ORDER IS BAD IN LAW AS PER THIS JUDGMENT. LEARNED DR OF THE REVENUE SUPPORTED THE O RDERS OF THE LOWER AUTHORITIES. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT THE ASSESSMENT ORDER IS DATED 29.03.2016 RECEIVED BY TH E ASSESSEE ON 31.03.2016 AS NOTED BY CIT (A) IN PARA 4 OF HIS ORD ER IN QUANTUM PROCEEDINGS. THE PENALTY ORDER IS DATED 29.09.2016 AND QUANTUM APPEAL IS FILED BY THE ASSESSEE BEFORE CIT (A) ON 27.10.20 16 I.E. WITHIN 30 DAYS FROM THE DATE OF THE PENALTY ORDER. UNDER THESE FAC TS THAT NO QUANTUM APPEAL WAS FILED IN VIEW OF NIL DEMAND AND IT WAS F ILED LATER BECAUSE OF PENALTY ORDER APPEARS TO BE A REASONABLE EXPLANATIO N AND HENCE, WE ITA NO. 2601 & 2602/BANG/2018 PAGE 3 OF 3 CONDONE THE DELAY IN FILING QUANTUM APPEAL BEFORE C IT (A) AND RESTORE THE SAME TO CIT (A) FOR A DECISION ON MERIT. LEARNE D CIT (A) SHOULD PROVIDE ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES AND THEN DECIDE THE QUANTUM APPEAL ON MERIT. 4. ABOUT PENALTY APPEAL, WE FIND FORCE IN THE ARGUM ENT OF LEARNED AR OF THE ASSESSEE THAT THE PENALTY ORDER IS BAD IN LAW IN VIEW OF THE BINDING JUDGMENT OF HONBLE KARNATAKA HIGH COURT RE NDERED IN THE CASE OF CIT VS. MANJUNATH COTTON AND GINNING FACTORY (SU PRA). RESPECTFULLY FOLLOWING THIS JUDGMENT, WE HOLD THAT IN THE FACTS OF THE PRESENT CASE AS PER WHICH THE ALLEGATION IN THE PENALTY NOTICE ISSU ED BY THE AO IS VAGUE, PENALTY ORDER IS BAD IN LAW AND WE QUASH THE SAME A S BAD IN LAW. 5. IN THE RESULT, THE QUANTUM APPEAL OF THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES AND THE PENALTY APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (N. V. VASUDEVAN) (A.K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED: 29 TH APRIL, 2020. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.