SRI SAURABH TIWARY, JAMSHEDPUR V. ACIT CIR-3 , JAMSHEDPUR

ITA 284/RAN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0477 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 13-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MOHANTY
• Assessee Lawyers: DEVASIS SANIGRAHI
• Keywords: Retrospective amendment; Question of law
• Section: 271(1)(c)

Judgement Text

P A G E 1 | 7 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.284 / RAN /201 6 ASSESSMENT YEAR: 2013 - 14 SRI SAURABH TIWARY, BUNGLOW NO.9999/287, VIJAYA GARDEN, 5 TH PHASE, BARIDIH, JAMSHEDPUR VS. ACIT, CIRCLE - 3, JAMSHEDPUR PAN/GIR NO. AGFPT 6115 J (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI DEVASIS SANIGRAHI, CA REVENUE BY : SHRI A.K.MOHANTY, JCIT DATE OF HEARING : 27 / 11 / 2018 DATE OF PRONOUNCEMENT : 28 / 11 / 2018 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL F ILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (A) - JAMSHEDPUR D ATED 14.8.2017 FOR THE ASSESSMENT YEAR 2013 - 14. 2. THE SOLE ISSUE INVOLVED IN THESE APPEAL S IS THAT THE CIT(A) ERRED IN CONFIRMING THE PENALTY OF 2,25,165/ - LEVIED U/S.271(1)(C) OF THE ACT BY THE ASSESSING OFFICER. ITA NO .284 . / RAN/ 2017 ASSESSMENT YEAR : 2013 - 14 P A G E 2 | 7 3 . AT THE OUTSET, LD A.R. OF THE ASSESSEE REFERRED TO PAGE 2 OF THE CIT(A)S ORDER AND SUBMITTED THAT SINCE THE ASSESSEE FAILED COMPLY WITH THE NOTICE DATED 29.1.2016 ISSUED U/S.271(1)(C) OF THE ACT BEFORE THE ASSESSING OFFICER , THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HE AL SO REFERRED TO THE CONTENT OF THE PENALTY NOTICE AND SUBMITTED THAT THE ASSESSING OFFICER IN THE SAID NOTICE HAS STATED AS UNDER: IT APPEARS THAT YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 4 . THUS, IT IS NOT CLEAR FROM THE SAID NOTICE ISSUED U/S.271(1)(C) OF THE ACT BY THE ASSESSING OFFICER WHETHER THE SHOW CAUSE IS ISSUED TO THE ASSESSEE FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 5 . ON THE O THER HAND, LD D.R RELIED ON THE ORDERS OF LOWER AUTHORITIES. 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. T HE CONTENTS OF THE N OTICE ISSUED BY THE AO U/S 271(1 )(C) FOR THE ASSESSMENT YEAR 2013 - 14 IS AS UNDER : - ITA NO .284 . / RAN/ 2017 ASSESSMENT YEAR : 2013 - 14 P A G E 3 | 7 .. IT APPEARS THAT YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED IN ACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEF ORE ME ON 4.3.2016 AT 11.30 AM ON AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE U/S 271 (1)(C) OF THE INCOME - TAX ACT, 1961. IF NO ONE ATTENDS THIS OFFICE ON THE SAID DATE OF HEARING THE CASE SHALL BE DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORDS. ' 7 . HON'BLE APEX COURT VIDE JUDGMENT IN CASE OF M/S. SSA'S EMERALD MEADOWS, (2016) 73 TAXMANN.COM 248(SC) DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE JUDGMENT RENDERED BY HON'BLE HIGH COURT OF KARNATAKA WHEREBY IDENTICAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF THE JUDGMENT IN CASE OF M/S. SSA'S EMERALD MEADOWS (SUPRA) DECID ED BY HON'BLE HIGH COURT OF KARNATAKA IS REPRODUCED BELOW : - '2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW: (1) WHETHER, OMISSION IF ASSESSING OFFICER TO EXPLICITLY MENTION THAT PENALTY PROCEEDINGS A RE BEING INITIATED FOR FURNISHING OJ INACCURATE PARTICULARS OR THAT FOR CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYOND REASONA BLE DOUBT THAT THE ASSESSEE HAD CONCEALED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? (2 WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN. HOLDING THAT THE PENALTY NOTICE UNDER SECTION 274 R.W.S. 271(L)(C) IS HAD IN LAW AND. INVALID INSPITE THE A MENDMENT OF SECTION 271(1 B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT, THE ASSESSING OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECORDING THE SATISFACTION FOR THE SAME? ITA NO .284 . / RAN/ 2017 ASSESSMENT YEAR : 2013 - 14 P A G E 4 | 7 (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE T RIBUNAL WAS JUSTIFIED IN DECIDING THE APPEALS AGAINST THE REVENUE ON THE BASIS OF NOTICE ISSUED, UNDER SECTION 274 WITHOUT TAKING INTO CONSIDERATION THE ASSESSMENT ORDER WHEN THE ASSESSING OFFICER HAS SPECIFIED THAT THE ASSESSEE HAS CONCEALED PARTICULARS O F INCOME? 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(L)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT') TO BE BAD IN LAW AS IT DID NOT SPEC IFY WHICH LIMB OF SECTION 271(L)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. .THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, H AS RELIED 01 THE DERISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OR INCOME T AX - VS - MANJUNATHA C OTTON AND G INNING F ACTORY (2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT, THE APPEAL IS ACCORDINGLY DISMISSED.' 8 . BARE PERUSAL OF THE NOTICE ISSUED U/S 271(1)( C) APPARENTLY GO TO PROVE THAT THE ASSESSI NG OFFICER INITIATED THE PENALTY PROCEEDIN GS BY ISSUING THE NOTICE U/S 271 R.W.S 271(1)(C) OF THE ACT WITHOUT SPECIFYING WHETHER THE ASSESSEE HAS CONCEALED ''PARTICULARS OF INCOME' OR ASSESSEE HAS FURNISHED 'INACCURATE PARTICULARS OF INCOME', SO AS TO PROVIDE ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SHOW CAUSE NOTICE. RATHER NOTICE IN THIS CASE HAS BEEN ISSUED IN A STEREOTYPED MANNER WITHOUT APPLYING ANY MIND WHICH IS BAD IN LAW, HENCE IS NOT A VALID NOTICE SUFFICIENT TO IMPOSE PENALTY U/S 27 1(1 )(C) OF THE ACT. ITA NO .284 . / RAN/ 2017 ASSESSMENT YEAR : 2013 - 14 P A G E 5 | 7 9 . THE PENALTY PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE ATTRACTED WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS ALSO A WELL - ACCEPTED PROPOSITION THAT THE AFOR ESAID TWO LIMBS OF SECTION 271(1)(C) OF THE ACT CARRY DIFFERENT MEANINGS. THEREFORE, IT WAS IMPERATIVE FOR THE ASSESSING OFFICER TO STRIKE - OFF THE IRRELEVANT LIMB SO AS TO MAKE THE ASSESSEE AWARE AS TO WHAT IS THE CHARGE MADE AGAINST HIM SO THAT HE CAN RE SPOND ACCORDINGLY. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR) OBSERVED THAT THE LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEING LEVIED. AS PER HON'BLE HIGH COURT, WHERE T HE ASSESSING OFFICER PROPOSED TO INVOKE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. THE HON'BLE HIGH COURT HELD THAT THE STANDARD PROFORMA OF NOTICE UNDER SECTION 274 OF THE ACT WITHOUT STRIKING OF THE IRRELEVANT CLAUSES W OULD LEAD TO AN INFERENCE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF VS. JCIT, 291 ITR 519(SC) HAS ALSO NOTICED THAT WHERE THE ASSESSING OFFICER ISSUES NOTICE UNDER SECTION 274 OF THE ACT I N THE STANDARD PROFORMA AND THE INAPPROPRIATE WORDS ARE NOT DELETED, THE SAME WOULD POSTULATE THAT THE ASSESSING OFFICER WAS NOT SURE AS TO ITA NO .284 . / RAN/ 2017 ASSESSMENT YEAR : 2013 - 14 P A G E 6 | 7 WHETHER HE WAS TO PROCEED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED IN ACCURATE PARTICULARS OF INCOME. ACCORDING TO THE HON'BLE SUPREME COURT, IN SUCH A SITUATION, LEVY OF PENALTY SUFFERS FROM NON - APPLICATION OF MIND. IN THE BACKGROUND OF THE AFORESAID LEGAL POSITION AND, HAVING REGARD TO THE MANNER IN WHICH THE ASSESSING OFF ICER HAS ISSUED NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT DATED 29.1.2016 FOR THE ASSESSMENT YEAR 2013 - 14 , WITHOUT STRIKING OFF THE IRRELEVANT WORDS, THE PENALTY PROCEEDINGS SHOW A NON - APPLICATION OF MIND BY THE ASSESSING OFFICER AND IS, TH US, UNSUSTAINABLE. WE HOLD SO. 10 . THEREFORE, IN OUR CONSIDERED VIEW, THE CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY OF RS.2,25,165 / - FOR THE ASSESSMENT YEAR 2013 - 14 AND, THEREFORE, WE DELETE THE SAME AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSE. 11 . IN THE RESULT, A PPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 28 / 11 /2018 SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER RANCHI ; DATED 28 / 11 /2018 B.K.PARIDA, SPS ITA NO .284 . / RAN/ 2017 ASSESSMENT YEAR : 2013 - 14 P A G E 7 | 7 COPY OF THE ORDER FORWARDED TO : BY ORDER SR. PVT. SECRETARY, ITAT, RANCHI ON TOUR 1. THE APPELLANT : SRI SAURABH TIWARY, BUNGLOW NO.9999/287, VIJAYA GARDEN, 5 TH PHASE, BARIDIH, JAMSHEDPUR 2. THE RESPONDENT. ACIT, CIRCLE - 3, JAMSHEDPUR 3. THE CIT(A) - JAMSHEDPUR 4. PR.CIT - JAMSHEDPUR 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//