B.Nageswari, Visakhapatnam V. THE Dy CIT, Visakhapatnam

ITA 338/VIZ/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9253 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 24-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Question of law; Set aside; Capital Gains
• Section: 271(1)(c); 143(3); 201; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NOS. 338 /VIZ/2015 (ASST. YEAR : 2005 - 06) B. NAGESWARI, D.NO. 48 - 3 - 3, SRINAGAR, VISAKHAPATNAM. VS. ITO, WARD - 1(4), VISAKHAPATNAM. PAN NO. ABLPB 6665 J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI I. KAMASASTRY FCA . DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 05 / 0 9 /201 9 . DATE OF PRONOUNCEMENT : 25 / 0 9 /201 9 . O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM , DATED 10 /0 6 /201 5 FOR THE ASSESSMENT YEARS 200 5 - 0 6. 2. IN THE INSTANT CASE, THE ASSESSMENT WAS COMPLETED U/SEC. 143(3) R.W.S. 148 BY ORDER DATED 25/11/2011. T HE ASSESSEE FILED HER RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 96,720/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER MADE THE ADDITION OF RS. 84,81, 602/ - REL A TING TO THE S A LE 2 ITA NO. 338/VIZ/2015 ( SMT. B. NAGESWARI) CONSIDERATION OF VACANT SITE APPLYING THE CONSIDERATION AS PER THE AGREEMENT FOUND . AGAINST THE DECLARED SALE CONSIDERATION OF RS. 9.80 LAKHS , THE ASSESSING OFFICER TAKEN A CONSIDERATION AT RS. 1,08,90,000/ - AND THE ASSESSEES SHARE WORKED OUT TO RS.85,89,400/ - . THUS, TAXABLE CAPITAL GAINS WAS WORKED OUT TO 84,81,602/ - AND WAS BROUGHT TO TAX. THE ASSESSING OFFICER HAD INITIATED THE P ENALTY PROCEEDINGS U/SEC. 271(1)(C) OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER COMPLETED THE PENALTY PROCEEDINGS BY IMPOSING PENALTY U/SEC. 271(1)(C) OF THE ACT AT RS. 16 , 14 , 660/ - BY ORDER DATED 30/01/2014 . 3 . AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A). DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE HAS TAKEN A GROUND REGARDING DEFECTIVE NOTICE ISSUED BY THE ASSESSING OFFICER WHICH RENDERS THE PENALTY ORDER INVALID, HOWEVER, NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AND UPHELD THE VALIDITY OF THE PENALTY ORDER. 4 . AGAINST THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 5. DURING THE APPEAL HEARING, LD.AR ARGUED THAT THE PENALTY NOTICE ISSUED BY THE ASSESSING OFFICER IS VAGUE AND DEFECTIVE. LD.AR FURTHER SUBMITTED TH A T THE ASSESSING OFFICER HAS NOT STR UCK 3 ITA NO. 338/VIZ/2015 ( SMT. B. NAGESWARI) OFF THE IRRELEVANT COLUMNS IN THE PENALTY NOTICE THER E BY CREATING CONFUSION TO THE ASSESSEE WH E THER ASSESSEE REQUIRED TO FURNISH EXPLANATION FOR CONCEALMENT OF INCOME OR FOR FURNISHING THE INACCURATE PARTICULARS OF INCOME. THUS, ARGUED THAT SINCE PENALTY NOTICE ISSUED BY THE ASSESSING OFFICER IS DEFECTIVE, THE PENALTY IS UNSUSTAINABLE. ACCORDINGLY, REQUESTED TO CANCEL THE PENALTY AND SET ASIDE THE ORDER OF THE LD. CIT(A). 6 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL PLACED ON RECORD. 7 . IN THIS CASE, THE AS SESSING OFFICER HAD ISSUED THE PENALTY NOTICE DATED 29/11/2011 WITHOUT STRIKING THE IRRELEVANT COLUMNS IN THE NOTICE. THE RELEVANT PART OF THE PENALTY NOTICE ISSUED BY THE ASSESSING OFFICER IS AS UNDER: - WHEREAS IN THE COURSE OF THE PROCEEDING BEFORE ME FOR THE ASST. YEAR 2005 - 06 IT APPEARS TO ME THAT YOU. X X X X X X X X X X X X * HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 8 . FROM THE PERUSAL OF THE NOTICE ISSUED U/SEC. 271(1)(C) , THE ASSESSING OFFICER IS NOT CLEAR WH E THER PENALTY IS INITIATED FOR CONCEALMENT OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER DID NOT STRIKE OUT THE IRRELEVANT COLUMNS THEREB Y CAUSING CONFUSION IN THE MIND OF THE ASSESSEE, FOR 4 ITA NO. 338/VIZ/2015 ( SMT. B. NAGESWARI) WHICH A CT OF OMISSION/COMMISSION , THE ASSESSEE REQUIRE D TO FURNISH THE EXPLANATION. ON A SIMILAR FACTS AND CIRCUMSTANCES , THE HON'BLE ANDHRA PRADESH & TELANGANA HIGH COURT IN THE CASE OF BAISETTY REVATHI ( 398 ITR 88 ) QUASHED THE NOTICE ISSUED U/SEC. 271(1)(C) AS INVALID . FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT THE RELEVANT PART OF THE ORDER OF HONBLE HIGH COURT WHICH READS AS UNDER: 17. ON PRINCIPLE, WHEN PENALTY PROCEEDINGS ARE SOUGHT TO BE INITIATED BY THE REVENU E UNDER SECTION 271(1)(C) OF THE ACT OF 1961, THE SPECIFIC GROUND WHICH FORMS THE FOUNDATION THEREFORE HAS TO BE SPELT OUT IN CLEAR TERMS. OTHERWISE, AN ASSESSEE WOULD NOT HAVE PROPER OPPORTUNITY TO PUT FORTH HIS DEFENCE. WHEN THE PROCEEDINGS ARE PENAL IN NATURE, RESULTING IN IMPOSITION OF PENALTY RANGING FROM 100 PER CENT. TO 300 PER CENT. OF THE TAX LIABILITY, THE CHARGE MUST BE UNEQUIVOCAL AND UNAMBIGUOUS. WHEN THE CHARGE IS EITHER CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICUL ARS THEREOF, THE REVENUE MUST SPECIFY AS TO WHICH ONE OF THE TWO IS SOUGHT TO BE PRESSED INTO SERVICE AND CANNOT BE PERMITTED TO CLUB BOTH BY INTERJECTING ONE OR BETWEEN THE TWO, AS IN THE PRESENT CASE. THIS AMBIGUITY IN THE SHOW - CAUSE NOTICE IS FURTHER CO MPOUNDED PRESENTLY BY THE CONFUSED FINDING OF THE ASSESSING OFFICER THAT HE WAS SATISFIED THAT THE ASSESSEE WAS GUILTY OF BOTH. 18. WE ARE THEREFORE OF THE OPINION THAT THE ORDER UNDER APPEAL DOES NOT BROOK INTERFERENCE ON ANY GROUND. WE FIND NO QUESTION OF LAW, MUCH LESS A SUBSTANTIAL ONE, ARISING FOR CONSIDERATION WARRANTING ADMISSION OF THIS APPEAL. 9 . ON THE SIMILAR FACTS, THE COORDINATE BENCH OF ITAT, VISAKHAPATNAM IN THE CASE OF KONCHADA SREERAM (ITA NO.388/ VIZ /2015) FOLLOWING THE DECISION OF THE HON'BLE ANDHRA 5 ITA NO. 338/VIZ/2015 ( SMT. B. NAGESWARI) PRADESH HIGH COURT CITED SUPRA AND ITS OWN DECISION IN THE CASES OF NARAYANA REDDY ENTERPRISES (229/ VIZ /2015) AND SMT.MAKINA ANNAPURNA (ITA NOS.604 & 605/VIZAG/2014) HELD THAT NON - STRIKING OF THE IRRELEVANT COLUMN RENDERS THE NOTICE ISSUED U /S 271 AS INVALID. 10 . SINCE THE FACTS ARE IDENTICAL AND THE AO DID NOT SPECIFY FOR WHICH ACT OF CHARGE OR OFFENCE, THE PENALTY WAS INITIATED, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE HIGH COURT, THE NOTICE ISSUED U/S 271(1)(C) IS TO BE HELD AS INVAL ID. ACCORDINGLY, WE QUASH THE NOTICE ISSUED U/S 271(1)(C) AND CANCEL THE ORDERS OF THE LOWER AUTHORITIES AND ALLOW THE APPEAL OF THE ASSESSEE. SINCE WE HAVE QUASHED THE NOTICE AND CANCELLED THE CONSEQUENT ORDERS OF LOWER AUTHORITIES, WE CONSIDER IT IS NO T NECESSARY TO ADJUDICATE THE OTHER GROUNDS RAISED BY THE ASSESSEE. 1 1 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 5 T H DAY OF SEPT . , 201 9 . S D / - S D / - (V. DURGA RAO) ( D.S. SUNDER SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2 5 T H SEPTEMBER , 201 9 . VR/ - 6 ITA NO. 338/VIZ/2015 ( SMT. B. NAGESWARI) COPY TO: 1. THE ASSESSEE B. NAGESWARI, D.NO. 48 - 3 - 3, SRINAGAR, VISAKHAPATNAM. 2. THE REVENUE ITO, WARD - 1(4), VISAKHAPATNAM. 3. THE CIT - 1, VISAKHAPATNAM. 4. THE CIT(A) - 1, VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.