Abdul Salam, Kanhandad V. ITO, Kasargode

ITA 322/COCH/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58310 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 03-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T J VINCENT
• Assessee Lawyers: V K SHAMSUDEEN
• Section: 263

Judgement Text

1 ITA NO. 322/COCH/2009 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.TA NO. 322/COCH/2009 (ASSESSMENT YEAR 2006-07) SHRI ABDUL SALAM M.P. VS ITO, KASARGOD H.E. ENTERPRISES, GROCERY DEALER HOSDURG KANHANGAD PAN : AENPA0106L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.K. SHAMSUDEEN RESPONDENT BY : SHRI T.J. VINCENT DATE OF HEARING : 06-03-2012 DATE OF PRONOUNCEMENT : 09-03-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER IN EXERCISE OF HIS POWE RS U/S 263 OF THE INCOME-TAX ACT. 2. SHRI V.K. SHAMSUDEEN, THE LD.COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271B OF THE ACT. HOWEVER, THE SAME WAS DROPPED AFTER ACCEPTING THE EXPLANATION FI LED BY THE ASSESSEE. HOWEVER, THE ADMINISTRATIVE COMMISSIONER FOUND FAUL T WITH THE ASSESSING OFFICER FOR DROPPING THE PROCEEDINGS AND DIRECTED THE ASSES SING OFFICER TO LEVY PENALTY 2 ITA NO. 322/COCH/2009 U/S 271B OF THE ACT. ACCORDING TO THE LD COUNSEL, THE ASSESSING OFFICER HAS RIGHTLY DROPPED THE PROCEEDINGS. THEREFORE, EXERCISE OF JU RISDICTION U/S 263 IS NOT JUSTIFIED. ON A QUERY FROM THE BENCH REGARDING THE COPIES OF THE ORDER PASSED BY THE ASSESSING OFFICER, THE LD.COUNSEL SUBMITTED THA T THE ASSESSING OFFICER HAS NOT PASSED ANY ORDER. IT WAS ALSO NOT COMMUNICATED TO THE ASSESSEE. 3. WE HAVE HEARD SHJRI T.J. VINCENT, THE LD.DR ALSO . 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OF FICER INITIATED PROCEEDINGS U/S 271B OF THE ACT FOR LEVY OF PENALTY. HOWEVER, AFTE R RECEIVING THE EXPLANATION FROM THE ASSESSEE, THE ASSESSING OFFICER DROPPED TH E PROCEEDINGS WITHOUT PASSING ANY SPEAKING ORDER. WHEN THE PROCEEDINGS WERE INITI ATED IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO PASS A SPEAKING ORDER BY GI VING REASONS FOR DROPPING THE PROCEEDINGS. IN THE ABSENCE OF ANY REASONS RECORDE D FOR DROPPING THE PROCEEDINGS, IN OUR OPINION, THE ADMINISTRATIVE COM MISSIONER CAN EXERCISE HIS JURISDICTION U/S 263 OF THE ACT TO REVISE THE ORDER . IN OTHER WORDS, DROPPING OF PENALTY PROCEEDINGS U/S 271B WITHOUT PASSING A SPEA KING ORDER WOULD TANTAMOUNT TO THE ORDER BECOMING ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, THE ADMINISTRATIVE COMMISS IONER HAS RIGHTLY EXERCISED HIS POWERS U/S 263 OF THE ACT. 5. IN THIS CASE, THE ADMINISTRATIVE COMMISSIONER HA S LEVIED PENALTY U/S 271B OF THE ACT. WHEN THE ADMINISTRATIVE COMMISSIONER C AME TO THE CONCLUSION THAT THE ASSESSING OFFICER HAS DROPPED THE PROCEEDINGS W ITHOUT GIVING ANY REASONS, THE MATTER WOULD HAVE BEEN REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO PASS A SPEAKING ORDER IN EXERCISE OF HIS DISCRETION. WITHOUT DOING SO, THE 3 ITA NO. 322/COCH/2009 ADMINISTRATIVE COMMISSIONER IS NOT CORRECT IN LEVYI NG PENALTY U/S 271B OF THE ACT. ACCORDINGLY, WHILE CONFIRMING THE EXERCISE OF POWER U/S 263, WE ARE UNABLE TO UPHOLD THE LEVY OF PENALTY U/S 271B BY THE ADMINIST RATIVE COMMISSIONER. ACCORDINGLY, THE ORDER OF THE ADMINISTRATIVE COMMIS SIONER IS MODIFIED AND THE ISSUE OF LEVY OF PENALTY U/S 271B OF THE ACT IS RES TORED TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO EXAM INE THE EXPLANATION OF THE ASSESSEE AND PASS A SPEAKING ORDER EITHER BY LEVYING PENALTY OR OTHERWISE. IT IS MADE CLEAR THAT THE ASSESSING OFFICER SHALL INDEPEN DENTLY EXAMINE THE EXPLANATION OF THE ASSESSEE AND OTHER MATERIAL WITH OUT BEING INFLUENCED BY ANY OF THE OBSERVATION MADE BY THE ADMINISTRATIVE COMMI SSIONER IN THE IMPUGNED ORDER OR BY THIS TRIBUNAL WHILE DECIDING THE MATTER AFRESH. 6. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH DAY OF MARCH, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 09 TH MARCH, 2012 PK/- COPY TO: 1. ABDUL SALAM M.P., H.E. ENTERPRISES, GROCERY DEALER, HOSDURG, MANHANGAD 2. THE ITO, KASARGOD 3. THE COMMISSIONER OF INCOME-TAX, KANNUR 4. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH