Sri Ramesh Mysore Anantha Swamy , Bangalore V. Income Tax Officer Ward-13(1), Bangalore

ITA 3175/BANG/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0730 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 28-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI JT C IT BENGALURU
• Section: 271(1)(c); 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN , ACCOUNTANT MEMBER IT A NO. 3175/BANG/2018 ASSESSMENT YEAR: 2011 - 12 SHRI RAMESH MYSORE ANANTHA SWAMY, 31, 2 ND CROSS, MARUTHI LAYOUT, RMV 2 ND STAGE, BENGALURU 560 094. PAN: AGVPA 0378 A VS. THE INCOME TAX OFFICER, WARD 13(1), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : S MT. PRAT IBHA R., ADVOCATE RESPONDENT BY : SMT. R . PREMI, JT.C IT(DR)(ITAT ), BENGALUR U. DATE OF HEARING : 09 .0 6 .2020 DATE OF PRONOUNCEMENT : 10 .0 6 .2020 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER DATED 19- 092018 OF CIT(A)-2, BENGALURU, RELATING TO AY 2011- 12. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) WHE REBY THE CIT(A) CONFIRMED THE ORDER OF THE AO IMPOSING PENALTY ON T HE ASSESSEE U/S.271(1)( C ) OF THE INCOME TAX ACT, 1961 (ACT). 2. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY WAS IMPOSED ON THE ASSESSEE BY THE AO ARE THAT THE ASSESSEE WHO IS A SALARIED EMPLOYEE AND WORKED WITH TWO DIFFERENT COMPANIES IN THE FY 2 010-11 RELEVANT TO THE AY 2011-12 AS PER THE FOLLOWING DETAILS:- ITA NO.3175/BANG/2018 PAGE 2 OF 6 1) HONEYWELL AUTOMATION INDIA LTD. 2) SCHNEIDER ELECTRIC INDIA PVT. LTD. SL NO. NAME AND ADDRESS OF THE COMPANY PERIOD WORKED EMOLUMENTS RECEIVED (RS .) 1 HONEYWELL AUTOMATION INDIA LTD. 01.40.2010 TO 30.09.20 10 6,51,344 2 SCHNEIDER ELECTRIC INDIA PVT. LTD. 01.10.2010 TO 31.03.2011 13,27,103 TOTAL EMOLUMENTS RECEIVED 19,78,447 3. THE ASSESSEE WHILE FILING HIS RETURN OF INCOME H AS DECLARED THE SALARY OF RS.7,84,124. HOWEVER, HE DID NOT DECLARE THE FULL AND CORRECT SALARY RECEIVED FROM BOTH THE COMPANIES. THE AO CO MPLETED THE ASSESSMENT BY TAKING THE SALARY OF RS.19,78,447 REC EIVED BY THE ASSESSEE FROM BOTH THE COMPANIES. 4. IN RESPECT OF THE ADDITION MADE AS AFORESAID, TH E AO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE INCOME-TAX ACT, 19 61 [THE ACT] BY OBSERVING IN THE ORDER OF ASSESSMENT BY OBSERVING A S FOLLOWS:- THIS ATTRACTS PENALTY UNDER SEC.271(1)( C) OF INCO ME TAX ACT. EVEN IN THE ORDER OF ASSESSMENT, THE AO DID NOT SPE CIFY AS TO WHETHER THE ASSESSEE IS GUILTY OF CONCEALING PARTICULARS OF INC OME OR FURNISHING INACCURATE PARTICULARS OF INCOME. 5. THE AO ISSUED A SHOW CAUSE NOTICE U/S.274 OF THE ACT (COPY OF THE SAME IS AT PAGE-4 OF THE PAPER BOOK FILED BY THE AS SESSEE). IN THE SAID SHOW CAUSE NOTICE ALSO THE AO HAS NOT MENTIONED THE SPECIFIC CHARGE AND THE RELEVANT COLUMN IN THE SHOW CAUSE NOTICE DOES N OT STRIKE OFF OR DELETE THE IRRELEVANT PORTION AS TO WHETHER THE CHARGE AGA INST THE ASSESSEE IS CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. ITA NO.3175/BANG/2018 PAGE 3 OF 6 6. IN REPLY TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT HE HAD GIVEN TWO FORM NO.16 FROM TWO EMPLOYERS TO THE REPRESENTATIVE WHO FILED THE RETURN OF INCOME, BUT THE REPRESENTATIVE DECLARED INCOME ONLY ONE ON THE BASIS OF ONE FORM NO.16 AND HE IGNORED TO ME NTIONED THE PARTICULARS OF INCOME FROM EMPLOYER SCHNEIDER ELECT RIC INDIA PVT.LTD. THE ASSESSEE PLEADED THAT THE NON-DISCLOSURE WAS UNINTE NTIONAL AND THAT IN THE ASSESSMENT PROCEEDINGS WHEN THE MISTAKE WAS REALIZE D, THE SAME WAS CORRECTED WITHOUT ANY DEMUR. IT WAS NOT A CASE OF EITHER CONCEALMENT OR FURNISHING INACCURATE PARTICULARS, BUT DUE TO BONAF IDE MISTAKE. 7. THE AO PROCEEDED TO IMPOSE PENALTY ON THE ASSESS EE WHICH WAS CONFIRMED BY THE CIT(APPEALS). AGAINST THE ORDER O F CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED CO UNSEL FOR THE ASSESSEE WHO SUBMITTED THAT THE SHOW CAUSE NOTICE I SSUED U/S.274 OF THE ACT BEFORE IMPOSING PENALTY DOES NOT SPECIFY AS TO WHETHER THE ASSESSEE IS GUILTY OF HAVING FURNISHED INACCURATE PARTICULARS OF INCOME OR OF HAVING CONCEALED PARTICULARS OF SUCH INCOME. HE POINTED OUT THAT THE PRINTED SHOW CAUSE NOTICE DOES NOT STRIKE OUT THE IRRELEVAN T PORTION VIZ., FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED PAR TICULARS OF SUCH INCOME. HE DREW OUR ATTENTION TO A DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY (2013) 218 TAXMAN 423 (KAR.) WHEREIN IT WAS HELD THAT IF THE SHOW CAUSE NOTICE U/S.274 OF THE ACT DOES NOT SPECIFY AS TO THE EXACT CHARGE VIZ., WHETHER THE CHARGE IS THAT THE ASSESSEE HAS FURNISHED INACCURA TE PARTICULARS OF INCOME OR CONCEALED PARTICULARS OF INCOME BY S TRIKING OUT THE IRRELEVANT PORTION OF PRINTED SHOW CAUSE NOTICE, THEN THE IMPO SITION OF PENALTY ON THE BASIS OF SUCH INVALID SHOW CAUSE NOTICE CANNOT BE S USTAINED. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A). ITA NO.3175/BANG/2018 PAGE 4 OF 6 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ARGUMENT OF THE ASSESSEE IS THAT THE SHOW CAUSE NOTICE U/S.274 OF T HE ACT WHICH IS IN A PRINTED FORM DOES NOT STRIKE OUT AS TO WHETHER THE PENALTY IS SOUGHT TO BE LEVIED ON THE ASSESSEE FOR FURNISHING INACCURATE P ARTICULARS OF INCOME OR CONCEALING PARTICULARS OF SUCH INCOME. ON THIS A SPECT, WE FIND THAT IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT, THE AO HAS NO T STRUCK OUT THE IRRELEVANT PART. IT IS THEREFORE NOT SPELT OUT IN THE SHOW CAUSE NOTICE AS TO WHETHER THE PENALTY PROCEEDINGS ARE SOUGHT TO BE LE VIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING PA RTICULARS OF SUCH INCOME. THE HONBLE KARNATAKA HIGH COURT IN THE C ASE OF CIT & ANR. V. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 (KARN) , HAS HELD THAT NOTICE U/S. 274 OF THE ACT SHOULD SPECIFICALLY STAT E AS TO WHETHER PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEALMENT OF PAR TICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. T HE HONBLE HIGH COURT HAS FURTHER LAID DOWN THAT CERTAIN PRINTED FORM WHERE A LL THE GROUNDS GIVEN IN SECTION 271 ARE GIVEN WOULD NOT SATISFY THE REQUIRE MENT OF LAW. THE COURT HAS ALSO HELD THAT INITIATING PENALTY PROCEEDINGS O N ONE LIMB AND FIND THE ASSESSEE GUILTY IN ANOTHER LIMB IS BAD IN LAW. IT WAS SUBMITTED THAT IN THE PRESENT CASE, THE AFORESAID DECISION WILL SQUARELY APPLY AND THE ORDER IMPOSING PENALTY HAS TO BE HELD AS BAD IN LAW AND L IABLE TO BE QUASHED. 9. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PENALTY U/S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON TH AT THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAI NST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INC OME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD. COUNSEL F URTHER BROUGHT TO OUR NOTICE THAT AS AGAINST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT THE ITA NO.3175/BANG/2018 PAGE 5 OF 6 REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPARTMENT. 10. AS FAR AS THE DECISION OF THE HONBLE SUPREME C OURT IN THE CASE OF AMITABH BACHCHAN 384 ITR 200 (SC) REFERRED TO BY THE LEARNED CIT(A) IN THE IMPUGNED ORDER IS CONCERNED, WE ARE OF THE VIEW THAT THE OBSERVATIONS OF THE HONBLE SUPREME COURT WERE IN THE CONTEXT OF PROCEEDINGS U/S.263 OF THE ACT, WHICH CANNOT BE COMPARED TO OR EQUATED WIT H PENALTY PROCEEDINGS U/S.271(1)( C) OF THE ACT. 11. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NO TICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY TH E CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICU LARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SH OW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WO RDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION O F PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSE SSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF TH IS 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 DELETED. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ACC ORDINGLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JUNE, 2020. SD/- SD/- ( B R BASKARAN ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 10 TH JUNE, 2020. / DESAI S MURTHY / ITA NO.3175/BANG/2018 PAGE 6 OF 6 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.