RATANLAL MARADIA, MUMBAI V. ACIT CEN CIR 20, MUMBAI

ITA 3198/MUM/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9921 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 25-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S J PARMAR
• Keywords: Principle of natural justice
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI D.T. GARASIA, JUDICIAL MEMBER ITA NO.3198 /MUM/2013 (ASSESSMENT YEAR: 2007-08) SHRI RATANLAL MARADIA VS. ACIT, CENTRAL CIRCLE - 20 6/64, NAVJIVAN SOCIETY LAMINTON ROAD MUMBI CENTRAL MUMBAI 400008 MUMBAI PAN AJTPM2056N APPELLANT RESPONDENT APPELLANT BY: SHRI S.J. PARMAR RESPONDENT BY: SHRI PURUSHOTTAM KUMAR DATE OF HEARING: 05.07.2017 DATE OF PRONOUNCEMENT: 11.07.2017 O R D E R PER D.T. GARASIA, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-39, MUMBAI DATED 18.02.2011 FOR A.Y. 2007-08 . 2. THE SOLE ISSUE IN THIS APPEAL IS WITH REGARD TO THE CONFIRMATION OF PENALTY OF ` 16,87,713/- LEVIED BY THE AO UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT BY THE CIT(A). 3. THE SHORT FACTS OF THE CASE ARE THAT A SEARCH AND S EIZURE ACTION WAS CARRIED OUT ON THE NISSAN GROUP ON 16.01.2001 AND S UBSEQUENT DATES. THE ASSESSEE IS A MEMBER OF NISSAN GROUP AND HE WAS COV ERED UNDER THE SEARCH ACTION UNDER SECTION 132(1). NOTICE UNDER SE CTION 153A WAS ISSUED ON 04.08.2009 AND IN RESPONSE TO THIS NOTICE THE AS SESSEE HAS FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATI ON. THE ASSESSEE SHRI RATANLAL S. MARADIA, WHO IS MANAGING DIRECTOR OF M/ S. NISSAN COPPER LTD. WHICH IS THE MAIN GROUP. DURING THE SEARCH A STATEM ENT WAS RECORDED AND IN THE STATEMENT THE ASSESSEE HAS ADMITTED THAT HE HAS WRONGLY CLAIMED EXEMPTION UNDER SECTION 10(38) OF THE I.T. ACT AMOU NTING TO ITA NO. 3198/MUM/2013 SHRI RATANLAL MARADIA 2 ` 1,50,42,000/-. ACCORDINGLY PENALTY WAS INITIATED AN D AFTER CONSIDERING THE REPLY THE AO HAS IMPOSED PENALTY UNDER SECTION 271( 1)(C) OF THE I.T. ACT. 4. THE MATTER WAS CARRIED TO THE CIT(A) AND THE CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. DURING THE COURSE OF HEARING THE LEARNED A.R. SOUGH T FOR ADJOURNMENT BUT IT WAS REJECTED. WE HAVE HEARD THE LEARNED D.R. AT LENGTH. WE HAVE GONE THROUGH THE ORDER OF THE AO WHEREIN HE HAS INITIATED THE PENALTY BY OBSERVING AS UNDER: - 4.2 FROM THE PERUSAL OF RETURN OF INCOME FILED U/S . 153A, IT IS OBSERVED THAT THE ASSESSEE HAS INCLUDED THE INCOME FROM LONG TERM CAPITAL GAIN AMOUNTING TO RS.1,50,42,000/- AS TAXAB LE INCOME. PENALTY PROCEEDINGS U/S. 271(1)(C) IS BEING INITIAT ED SEPARATELY. 6. THE LEARNED D.R. RAISED OBJECTION ON THE GROUND THA T THE CIT(A) HAS CONSIDERED THE JUDGEMENT OF THE TRIBUNAL IN THE CAS E OF AJIT B. ZOTA VS. ACIT (2010) 40 SOT 543 7. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE OBSERVED THAT THE PENALTY HAS BEEN INITIATED ONLY UNDER SECTION 271(1)(C) AND THE PENALTY HAS BEEN FI NALLY LEVIED FOR CONCEALMENT OF INCOME ON ACCOUNT OF FURNISHING INAC CURATE PARTICULARS OF INCOME. WE OBSERVE THAT THE EXPRESSION FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME AS PER LEG AL PRONOUNCEMENTS ARE TWO DIFFERENT LIMBS CARRYING DIFFERENT CONNOTATION/ MEANING. THE SAME BECOMES CLEAR FROM THE ASSESSMENT ORDER AND THE PEN ALTY ORDER, THEREFORE THE AO WAS REQUIRED TO SATISFY THE EXACT CHARGE FOR WHICH THE ASSESSEE WAS BEING PENALISED, WHICH HE FAILED TO DO IN THIS CASE . THEREFORE THE SAME VIOLATES THE PENALTY PROCEEDINGS ITSELF. 8. OUR VIEW IS FORTIFIED BY THE JUDGEMENT OF THE HON'B LE SUPREME COURT RENDERED IN THE CASE OF DILLIP N. SHROF VS. JCIT 29 1 ITR 519 WHEREIN THE COURT OBSERVED THAT CONCEALMENT OF INCOME AND FURNI SHING OF INACCURATE PARTICULARS ARE DIFFERENT. THE HON'BLE SUPREME COUR T HAS FURTHER HELD THAT THE AO SHOULD SATISFY ON WHICH CHARGE HE WANT TO IN ITIATE PENALTY ITA NO. 3198/MUM/2013 SHRI RATANLAL MARADIA 3 PROCEEDINGS. WE FURTHER NOTED THAT IN THE JUDGEMENT OF THE APEX COURT IN THE CASE OF CIT VS. DHARMENDRA TEXTILE 306 ITR 277, IN VIEW OF ANOTHER JUDGEMENT OF THE HON'BLE SUPREME COURT IN CIT VS. R ELIANCE PETRO PRODUCTS 322 ITR 158, IT WAS OBSERVED THAT THE REA SONING GIVEN IN THE CASE OF DILIP N. SHROF (SUPRA) CANNOT BE ACCEPTED T O THE EXTENT THAT OBSERVATION REGARDING NECESSITY OF MENS REA FOR THE PURPOSE OF SECTION 271(1)(C). SIMILAR VIEW HAS BEEN EXPRESSED BY HON'B LE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (359 ITR 565) WHICH WAS LATER FOLLOWED THE COORDINATE BE NCH IN THE CASE CIT VS. SAMSON PERINCHERY IN ITA NO. 4625 TO 5630/MUM/2013 DATED 11 TH OCTOBER, 2013 AGAINST WHICH THE SLP FILED BY THE RE VENUE BEFORE THE APEX COURT NO. CC NO. 1145 DATED 05.08.2016 WAS DISMISSE D. HOWEVER, THE HON'BLE BOMBAY HIGH COURT HAS FOLLOWED THE RATIO OF THE SAME JUDGEMENT IN THE CASE OF CIT VS. SAMSON PERINCHERY. THEREFORE WE RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL PRONOUNCEMENT, ARE OF THE CONSIDERED OPINION THAT PENALTY PROCEEDINGS STOOD VIOLATED FOR WANT OF SATISFACTION AND VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. WE, THE REFORE, QUASH THE SAME. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JULY, 2017. SD/ - SD/ - (P.K. BANSAL) (D.T. GARASIA) VICE PRESIDENT JUDICIAL MEMBER MUMBAI, DATED: 11 TH JULY, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -39, MUMBAI 4. THE CIT - CENTRAL-II, MUMBAI 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.