SABAH INVESTMENT P.LTD, MUMBAI V. ITO 3(3)(2), MUMBAI

ITA 3594/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2640 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 11-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Initiation of penalty proceedings

Judgement Text

, , SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, SMC MUMBAI , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.3594/MUM/2015 ASSESSMENT YEAR: 2006-07 M/S. SABHA INVESTMENT P. LTD. 601, COSMOS COURT BHAIDAS BHUTTA CHOWK S.V. ROAD, VILE PARLE (W) MUMBAI 400056 / VS. INCOME TAX OFFICER-3(3)(2) AAYAKAR BHAVAN M.K. ROAD MUMBAI 400020 ( /ASSESSEE) ( / REVENUE) PAN. NO. AAACS7791P ! ' #$ / DATE OF HEARING : 14/07/2016 ' #$ / DATE OF ORDER: 14/07/2016 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 27/02/2015 OF LD. COMMISSIONER OF INCOME TAX, / ASSESSEE BY SHRI DEEPAK TRALSHWALA / REVENUE BY SHRI RAJESH OJHA, JCIT ITA NO.3594/MUM/2015 M/S. SABHA INVESTMENT P. LTD. 2 MUMBAI CONFIRMING PENALTY UNDER SECTION 271(1)(C) O F THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) AMOUNTIN G TO RS.23,80,373/-. 2. DURING HEARING THE LEARNED COUNSEL FOR THE ASSES SEE SHRI DEEPAK TRALSAWALA, CONTENDED THAT PENALTY NOTI CE ISSUED TO THE ASSESSEE UNDER SECTION 274 R.W.S. 271 OF THE ACT DOES NOT MAKE ANY SPECIFIC CHARGE AGAINST THE A SSESSEE WITH RESPECT TO EITHER CONCEALMENT OF INCOME OR FUR NISHING OF INACCURATE PARTICULARS OF SUCH INCOME, THUS IT WAS CLAIMED THAT PENALTY IS NOT LEVIABLE. RELIANCE WAS PLACED U PON THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI HAFEEZ S. CONTRACTOR VS. ACIT (ITA NO. 6222 & 6223/MUM/2013 O RDER DATED 02.09.2015). THIS FACTUAL MATRIX WAS NOT CONT ROVERTED BY SHRI RAJESH OJHA, LEARNED D.R. HE MERELY STATED THAT QUANTUM ADDITION HAS BEEN AFFIRMED BY THE TRIBUNAL. IN REPLY THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDE D THAT QUANTUM AND PENALTY PROCEEDINGS ARE DISTINCT AND SE PARATE AND THERE IS NO CHARGE OF CONCEALMENT OR FURNISHING INACCURATE PARTICULARS IN THE NOTICE ISSUED TO THE ASSESSEE. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE AB OVE I AM REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID ORDER OF THE TRIBUNAL DATED 02.09.2015 FO R READY REFERENCE AND ANALYSIS: - 12. THE LD A.R INVITED OUR ATTENTION TO THE COPY O F NOTICES ISSUED BY THE AO U/S 274 READ WITH SECTION 271 OF THE ACT AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS. HE SUBMITTED THAT THE ABOVE SAID NOTIC E ISSUED FOR CONCEALMENT OF PARTICULARS OF INCOME OR ITA NO.3594/MUM/2015 M/S. SABHA INVESTMENT P. LTD. 3 FURNISHING OF INACCURATE PARTICULARS OF INCOME. HE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT SPECIF IED THAT AS TO WHICH LIMB THE NOTICE WAS ISSUED, I.E., WHETHER IT IS ISSUED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD A.R CONTENDED THAT THE ASSESSING OFFICER SHOULD BE CLEAR ABOUT THE CHARGE AT THE TIM E OF ISSUING THE NOTICE AND THE ASSESSEE SHOULD BE MADE AWARE OF THE CHARGE. HE SUBMITTED THAT THE PENALTY ORDER IS LIABLE TO BE QUASHED, IF THE AO HAS NOT CORRECTLY SPECIFIED THE CHARGE. IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION DATED 11.10.2013 PASSED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE OF SHRI SAMSON PERINCHERY IN ITA NO.4625 TO 4630/M/2013, WHEREIN THE TRIBUNAL FOLLOWED THE DECISION RENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY (2013)(35 TAXMANN.COM 250)(KAR DATED 13.12.2012) AND HELD AS UNDER:- 13. FROM THE ABOVE, IT IS CLEAR THAT THE PENALTY S HOULD BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND TH E POSITION BEING UNCLEAR HERE THE PENALTY IS NOT SUSTAINABLE. THEREFORE, CONSIDERING THE SAME, WE ARE OF THE OPIN ION THAT THE GROUND RAISED BY THE ASSESSEE SHOULD BE ALLOWED ON TECHNICAL GROUNDS. ACCORDINGLY, ADJUDICA TION OF THE PENALTIES ON MERITS BECOME AN ACADEMIC EXERC ISE. THEREFORE, THE GROUNDS RAISED IN ALL THE SIX ASSESS MENT YEARS ARE ALLOWED. IN THE CASE CONSIDERED BY THE CO-ORDINATE BENCH ALS O, THE ASSESSING OFFICER ISSUED THE PENALTY NOTICE WITHOUT SPECIFYING THE CHARGE UNDER WHICH THE NOTIC E WAS ISSUED. BEFORE US, THE LD D.R COULD NOT DISTINGUISH THE ABOVE SAID DECISION. HENCE, ON THIS LEGAL GROUND ALSO, THE ASSESSEES APPEAL IS REQUIRE D TO BE ALLOWED. 13. IN VIEW OF THE FOREGOING DISCUSSIONS, WE SET ASIDE THE ORDERS PASSED BY LD CIT(A) FOR BOTH THE YEARS UNDER CONSIDERATION AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN BOTH THE YEARS. 3.1 I HAVE PERUSED THE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271 OF THE ACT TO THE ASSESSEE AND AGREED BY THE ITA NO.3594/MUM/2015 M/S. SABHA INVESTMENT P. LTD. 4 LEARNED D.R. ALSO THAT NO SPECIFIC CHARGE OF CONCEA LMENT OR FURNISHING OF INACCURATE PARTICULARS HAS BEEN MENTI ONED/ LEVELED AGAINST THE ASSESSEE. THUS THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE AFORESAID ORDER OF THE D IVISION BENCH OF THIS TRIBUNAL IN THE CASE OF HAFEEZ S. CON TRACTOR (SUPRA), WHEREIN THE UNDERSIGNED IS ALSO SIGNATORY TO THE ORDER. IN THE AFORESAID ORDER ANOTHER DECISION OF T HE COORDINATE BENCH IN THE CASE OF SHRI SAMSON PERINCH ERY (ITA NO. 4625 TO 4630/MUM/2013 ORDER DATED 11.10.20 13, WHEREIN THE TRIBUNAL FOLLOWED THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNNG FACTORY (2013) 35 TAXMANN.COM 250 (KAR.) ORDER DATED 13.12.2012 HAS B EEN RELIED UPON. THE HONBLE HIGH COURT OBSERVED AS UND ER: - 13. FROM THE ABOVE, IT IS CLEAR THAT THE PENALTY SHOULD BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEV IED AND THE POSITION BEING UNCLEAR HERE THE PENALTY IS NOT SUSTAINABLE. THEREFORE, CONSIDERING THE SAME, WE ARE OF THE OPINION THAT THE GROUND RAISED BY THE ASSESSEE SHOULD BE ALLOWED ON TECHNICAL GROUNDS. ACCORDINGLY, ADJUDICATION OF THE PENALTIES ON MERIT S BECOME AN ACADEMIC EXERCISE. THEREFORE, THE GROUNDS RAISED IN ALL THE SIX ASSESSMENT YEARS ARE ALLOWED. IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT, CONCLUSION DRAWN BY THE TRIBUNAL IN THE CASE OF HAFEEZ S. CONTRACTOR (SUPRA) AND ALSO THAT PENAL TY AND QUANTUM PROCEEDINGS ARE ALL TOGETHER DIFFERENT, WE FIND FORCE IN THE CONTENTION OF THE ASSESSEE, THEREFORE, DIRECT THE LEARNED ASSESSING OFFICER TO DELETE THE PENALTY IMP OSED UNDER SECTION 271(1)(C) OF THE ACT. ITA NO.3594/MUM/2015 M/S. SABHA INVESTMENT P. LTD. 5 4. SO FAR AS THE MERITS OF THE APPEAL IS CONCERNED THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE PENALTY WAS IMPOSED BY THE ASSESSING OFFICER BY INVOKING TH E PROVISION OF SECTION 50 OF THE ACT BEING THE DIFFER ENCE BETWEEN THE DECLARATION MADE BY THE ASSESSEE AND THE VALUAT ION MADE BY THE STAMP VALUATION AUTHORITY IS CONCERNED, SINC E ON TECHNICAL GROUND THE PENALTY HAS BEEN DELETED, THER EFORE, I AM REFRAINING MYSELF TO GO INTO THE MERITS OF THE C ASE. FINALLY THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. D.R. AT THE CONCLUSION OF THE HEARI NG ON 14/07/2016. SD/- (JOGINDER SINGH) ! /JUDICIAL MEMBER ! MUMBAI; & DATED : 14/07/2016 AA? P.S / /. . . ' #$%&%'# / COPY OF THE ORDER FORWARDED TO : 1. ()*+, / THE APPELLANT (RESPECTIVE ASSESSEE) 2. -.+, / THE RESPONDENT. 3. / / 0 ( ()* ) / THE CIT-3, MUMBAI. 4. / / 0 / CIT(A)-8, MUMBAI, 5. 23 - , / ()*# (4 , ! / DR, SMC BENCH, ITAT, MUMBAI 6. 5 6!* / GUARD FILE. / BY ORDER, .2) - //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI