Ashoka Foods & Dehydrates Sansthan, Kanpur V. Income Tax Officer (Exemption), Kanpur

ITA 302/LKW/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1193 (ITAT-LUCKNOW)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 05-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K VISHWAKARMA
• Keywords: Bonafide belief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHOUDHURY, JUDICIAL MEMBER ITA NO. 302 /LKW/201 7 ASSESSMENT YEAR: 20 11 - 12 ASHOKA FOODS & DEHYDRATES SANSTHAN 51/92, NAY AGANJ KANPUR V. INCOME TAX OFFICER (EXEMPTION) KANPUR T AN /PAN : AA ATA1998D (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI R. K. VISHWAKARMA, D.R. DATE OF HEARING: 15 12 201 7 DATE OF PRONOUNCEMENT: 08 01 201 8 O R D E R PER T.S. KAPOOR, A .M : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - I I, KANPUR DATED 1/3/2017 . 2 . THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE REPRODUCED HEREUNDER: - 01. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAS ARBITRARILY HELD, THAT THE ASSESSEE IS LIABLE FOR PENALTY UNDER SECTION 271(1)(C) OF THE IT. ACT, 1961, THEREBY UPHOLDING THE LEVY OF PENALTY OF RS.5,00 ,000/ - , WHICH PENALTY IS BAD IN LAW AND BE DELETED. 02. BECAUSE THERE BEING NEITHER ANY CONCEALMENT OF PARTICULARS OF INCOME, NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME, THE PENALTY OF RS.5,00,000 / - IMPOSED UNDER SECTION 271(1)(C) IS BAD IN LAW AND BE DELETED. [ ITA NO.583/LKW/2015 ] 2 03. BECAUSE THERE BEING NO SPECIFIC CHARGE EITHER FOR INITIATION OR FOR LEVY OF PENALTY, THE PENALTY IMPOSED IS BAD IN LAW AND BE DELETED. 04. BECAUSE THE ASSESSEE BEING PREVENTED BY SUFFICIENT CAUSE IN AS MUCH AS BEING UNDER BONAFIDE BELIEF THAT THE INCOME BEING E XEMPT UNDER SECTION 10(23B) OF THE ACT, AND THERE BEING 'NO LIABILITY TO PAY TAX, THE PENALTY IMPOSED IS BAD IN LAW BE DELETED. 0 5. BECAUSE THE MERE FAILURE TO ISSUE CERTIFICATE BY KVIC UNDER SECTION 10(23B) OF THE ACT S, RENEWING THE ASSESSEE'S UNIT FOR EXEMPTION CANNOT BE SADDLED UPON THE ASSESSEE AS A DELIBERATE ATTEMPT FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 06. BECAUSE THE EXEMPTION UNDER SECTION 10(23B) BEING ALLOWED FOR THE EARLIER YEARS AND SUBSEQUENT YEARS, ITSELF DEMONSTRATES T HE BONAFIDE OF THE ASSESSEE, THE PENALTY IMPOSED IS BAD IN LAW AND BE DELETED. 3 . THE SOLE GRIEVANCE OF THE ASSESSEE IS AGAINST IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT WITHOUT SPECIFYING THE LIMB UNDER WHICH PENALTY IS BEING IMPOSED, WHETHER FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. 4 . THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED WITH THE REGISTRAR OF SOCIETY AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND PROCESSING OF SPICES. TH E ASSESSEE FILED ITS RETURN OF INCOME ON 30/9/2011 DECLARING NIL INCOME WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 2/2/2012. THE ASSESSEE - SOCIETY IS ALSO REGISTERED WITH KHADI AND VILLAGE INDUSTRIES COMMISSION (KVIC) AND CLAIMING EXEMPTION UNDE R SECTION 10(23B) OF THE ACT. THE ASSESSEE - SOCIETY WAS GRANTED EXEMPTION UNDER SECTION 10(23B) OF THE ACT TILL ASSESSMENT YEAR 2010 - 11. IN THE YEAR UNDER CONSIDERATION , THE ASSESSEE HAD APPLIED FOR GRANT OF RENEWAL OF EXEMPTION CERTIFICATE FROM KVIC. SI NCE THE APPLICATION FOR RENEWAL OF EXEMPTION CERTIFICATE FROM KVIC WAS PENDING, THE BENEFIT CLAIMED BY THE ASSESSEE UNDER SECTION [ ITA NO.583/LKW/2015 ] 3 10(23B) OF THE ACT WAS DENIED BY THE ASSESSING OFFICER AND TREATED THE SAME AS MALA FIDE AND ACCORDINGLY HE HELD THAT THE ASSE SSEE HAD CONCEALED HIS INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER ACCORDINGLY IMPOSED PENALTY OF RS.5 LAKHS UNDER SECTION 271(1)(C) OF THE ACT. 5 . BEFORE THE LD. CIT(A), ASSESSEE HAS MADE THE SUBMISSIONS AS MADE BEFORE THE A SSESSING OFFICER. THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 6 . BEING FURTHER AGGRIEVED, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE US. THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT IN THE PENALTY NOTICE ISSUED BY THE DEPARTMENT IT IS WRITTEN THAT HA VE CONCEALED PARTICULARS OF INCOME & OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THEREFORE, THERE IS NO SPECIFIC LIMB UNDER WHICH PENALTY IS IMPOSED ON THE ASSESSEE. THE LD. A.R. OF THE ASSESSEE FURTHER RELIED UPON THE DECISION OF TELENGANA AND ANDHRA PRADESH HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME - TAX VS. SMT. BAISETTY REVATHI [2017] 398 ITR 88 (T&AP) WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT FOR IMPOSING PEN ALTY UNDER SECTION 271(1)(C) OF THE ACT, CHARGE MUST BE UNEQUIVOCAL AND UNAMBIGUOUS. THE SHOW CAUSE NOTICE SHOULD SPECIFY CHARGE FOR IMPOSITION OF PENALTY AND IF IT IS NOT DONE, THEN SUCH NOTICE AND IMPOSITION OF PENALTY IS INVALID. THE LD. A.R. OF THE A SSESSEE FURTHER REFERRED TO THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT & ANOTHER VS. M/S SSAS EMERALD MEADOWS IN CC NO.11485/2016 WHEREIN THE HON'BLE APEX UPHELD THE ORDER OF THE TRIBUNAL ALLOWING THE APPEAL OF THE ASSESSEE, WHICH WAS BASED UPON THE DECISION IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY [2013] 359 ITR 565 WHEREIN IT IS HELD THAT IF THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION [ ITA NO.583/LKW/2015 ] 4 274 READ WITH SECTION 271(1)(C) OF THE ACT DID NOT SPECIFY UNDER WHICH LI MB OF SECTION 271(1)(C) OF THE ACT PENALTY PROCEEDINGS IS INITIATED, THEN SUCH NOTICE SHOULD BE BAD IN LAW. 7 . THE LD. D.R., ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE SUBORDINATE AUTHORITIES. 8 . WE HAVE PERUSED THE CASE RECORD AND WE FIND THAT NOTICE UNDE R SECTION 271(1)(C) OF THE ACT IS NOT SPECIFIC AS IT DID NOT MENTION SPECIFICALLY AS TO WHICH LIMB PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS IMPOSED UPON THE ASSESSEE BY THE ASSESSING OFFICER. TAKING GUIDANCE FROM THE AFORESAID JUDICIAL PRONOUNCEMENT, WE ARE OF THE CONSIDERED VIEW THAT NOTICE FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ISSUED IN THE CASE OF THE ASSESSEE IS BAD IN LAW, INVALID AND, THEREFORE, LIABLE TO BE QUASHED. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AN D THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) UNDER SECTION 271(1)(C) OF THE ACT IS DELETED. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 / 01 / 201 8 . SD/ - SD/ - [ PARTHA SARATHI CHAUDHURY ] [ T.S. KAPOOR ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 8 TH JANUARY, 2018 JJ: 15 12 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR