SMT. PUJA JAIN, CHENNAI V. ITO, NCW -5 (4), CHENNAI

ITA 2719/CHNY/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6232 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 23-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Audi alteram partem
• Section: 271(1)(c)

Judgement Text

आयकर अपील सं./ITA No.2719/Chny/2019 िनधा रण वष /Assessment Year: 2014-15 Smt.Puja Jain, No.43, 3 rd Floor, Rishab Apartments, Mint Street, Sowcarpet, Chennai-600 079. v. The Income Tax Officer, Non-Corporate Ward-5(4), Chennai. [PAN: AEWPJ 9126 L] (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : None यथ क ओर से /Respondent by : Mr.Hema Bhupal, JCIT सुनवाई क तारीख/Date of Hearing : 17.08.2022 घोषणा क तारीख /Date of Pronouncement : 17.08.2022 आदेश / O R D E R PER DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-5, Chennai, dated 16.07.2019 and pertains to assessment year 2014-15. 2. The assessee has raised the following grounds of appeal: 1. On the facts and circumstances of the case, the order passed by the learned CIT (A) - 5 confirming the penalty under section 271(1)(c) is bad, both in the eye of law and on the facts. 2. The learned CIT (A) - 5 has erred, in confirming the action of the AO in levying penalty amounting to Rs.2,49,500/-. आयकर अपीलीय अिधकरण, ’सी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI ी महावीर िसंह, उपा , एवं डॉ। दीपक पी. रपोटे , लेखा सद के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA No.2719/Chny/2019 :: 2 :: 3. For that the Ld. AO has not invoked the penalty appropriately been wholly misconceived, by invoking penalty at improper nature of default of the appellant, as the notice is not in line with the provisions of the act. 4. That Ld. CIT (A) - 5 has wrongly confirmed the penalty under section 271(1) (c) of the Act despite the fact that there is neither concealment nor furnishing of inaccurate particulars. 5. For that, the learned CIT (A) has erred both on facts and in law in confirming the penalty. ignoring the fact that the penalty proceedings are independent proceedings, as such, merely on the basis of disallowances and additions made by the AO, penalty cannot be levied. 6. Further The Ld. AO and The Ld. CIT (A) - 5 has failed to appreciate the fact that the assessee had disclosed the income in the financials and also declared the income thereby paying the tax. Therefore, that the appellant has not furnished any inaccurate particular or concealment of any income to warrant levy of penalty. 7. For that, the Ld. AO had levied the penalty under sec.271(1) (c) of The Income Tax Act 1961 was based on presumption and surmise and without jurisdiction for such levy. 8. The Ld. CIT (A) - 5 is incorrect in confirming the penalty without granting an adequate opportunity for being heard in defending the case which is against Principle of Audi alteram partem. 9. The Ld. CIT (A) - 5 has erred in concluding that there is manipulation without considering the evidence filed by assessee is, completely against the principles of natural justice. 3. We have heard ld.DR and perused the case records. The only issue involved is penalty u/s.271(1)(c) of the Act, levied by the AO vide order dated 23.05.2017. At the outset, it was observed that the penalty notice u/s.274 r.w.s.271(1)(c) of the Act, is defective. The AO has not struck off the relevant portion in the notice i.e. “have concealed the particulars of income” or “furnished inaccurate particulars of income”. This defect goes to the root of the penalty proceedings. In the assessment order there is no mention whether the penalty has been initiated for filling inaccurate particulars of Income or for concealment of Income. ITA No.2719/Chny/2019 :: 3 :: 4. The Hon’ble Bombay High Court has held in the case of Ganga Iron & Steel Trading Co. v/s Commissioner of Income Tax. [2022] 135 taxmann.com 244 (Bombay) order dated December 22, 2021 as under: Quote, “10. We find that the law as laid down by the Full Bench applies on all fours to the facts of the present case as in the show cause notice dated 12-2-2008, the Assistant Commissioner of Income-tax is not clear as to whether there was concealment of particulars of income or that the Assessee had furnished inaccurate particulars of income. We therefore find that issuance of such show cause notice without specifying as to whether the Assessee had concealed particulars of his income or had furnished inaccurate particulars of the same has resulted in vitiating the show cause notice. Heavy reliance was placed by the learned counsel for the Revenue on the decision in Mak Data (P.) Ltd. (supra) to urge that the penalty contemplated by section 271 (1) (c) of the said Act was in the nature of civil liability and mens rea was not essential therein. The decision in Dilip N. Shroff (supra) having been held as not laying down good law in Dharmendra Textile Processors Ltd. (supra), it was submitted that the show cause notice issued in the present proceedings was liable to be upheld. It may be noted that all the decisions relied upon by the learned counsel for the Revenue were considered by the Full Bench while answering the issues referred to it on reference. The Full Bench having considered these decisions and having answered the question as regards defect in the notice under section 271(1)(c) of the said Act resulting in vitiating the penalty proceedings, we find ourselves bound by the answers given by the Full Bench. It would not be permissible for us to disregard this aspect and take a different view of the matter. Accordingly, substantial question of law no. III is answered by holding that since the show cause notice dated 12-2-2008 does not indicate whether there was concealment of particulars of income or furnishing of incorrect particulars of such income, the same would vitiate the penalty proceedings.” Unquote. 5. In the case under consideration also the AO has not struck the appropriate words in the penalty notice. Also as mentioned in earlier para, in the assessment order the AO has not mentioned whether the penalty is ITA No.2719/Chny/2019 :: 4 :: initiated for concealment or filling inaccurate particulars. Therefore, respectfully following Hon’ble Bombay High Court, it is held that the penalty u/s.271(1)(c) is not maintainable. Hence, the Assessing Officer is directed to delete the penalty u/s.271(1)(c) of the Act. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on the 17 th day of August, 2022, in Chennai. Sd/- (महावीर िसंह) (MAHAVIR SINGH) उपा /VICE PRESIDENT Sd/- (डॉ। दीपक पी. रपोटे) (DR. DIPAK P. RIPOTE) लेखा सद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 17 th August, 2022. TLN आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकर आयु"/CIT 2. यथ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकर आयु" (अपील)/CIT(A) 6. गाड फाईल/GF