Ritu Malik, New Delhi V. ITO, Ward- 62(5), New Delhi

ITA 3778/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7432 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Retrospective amendment; Question of law
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE SHRI N.S. SAINI , ACCOUNTANT MEMBER ITA NO. 3778 / DEL/201 8 ASSESSMENT YEAR: 200 8 - 0 9 SMT. RITU MALIK T - 236, DB GUPTA ROAD, PHARA GANJ, NEW DELHI 110055 PAN NO. AALPM2130Q VS ITO, WARD 62 (5) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. VED JAIN , ADVOCATE RESPONDENT BY SH. S. L. ANURAGI, SR. DR DATE OF HEARING: 1 6 /0 1 /201 9 DATE OF PRONOUNCEMENT: 16 / 0 1/201 9 ORDER PER N. S . SAINI AM: 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 20 DATED 16.03.2018 FOR THE A. Y. 2008 - 09 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE LEVY O F PENALTY OF RS.676642/ - U/S 271 (1) (C) OF THE ACT. 3. AT THE OUTSET, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE FILED BEFORE US COPY OF NOTICE ISSUED U/S 271 (1) OF THE ACT DATED 29.02.2016, COPY OF WHICH IS PLACED ON RECORD AND POINTED OUT THERE F ROM THAT IN THE SAID NOTICE, THE ASSESSING OFFICER HAS STATED AS UNDER : - WHERE IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2008 - 09, IT APPEARS TO ME THAT YOU : - 2 . HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED IN ACCURATE PARTICULARS OF SUCH INCOME. 4. HE SUBMITTED THAT IT IS NOT CLEAR FROM THE SAID NOTICE ISSUED U/S 271 (1) (C) OF THE ACT BY THE ASSESSING OFFICER WHETHER THE SHOW CAUSE IS ISSUED TO THE ASSESSEE FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FUR NISHING INACCURATE PARTICULARS OF INCOME. 5. HE SUBMITTED THAT THE ISSUE STANDS COVERED BY THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ASHOK KUMAR CHAUHAN PROP M/S. GURUCHARAN JEWELLERS VS. ITO REPORTED IN 2018 ( 12) TMI 1386 ITAT DELHI AND THEREFORE, FOLLOWING THE SAME THE LEVY OF PENALTY SHOULD BE DELETED. 6. THE LD. DR ON THE OTHER HAND SUBMITTED THAT THE LD. CIT(A) AT PAGE 10 PARA 6.7 OF HIS ORDER HAS STATED THAT IN THE PHOTOCOPY OF THE PENALTY NOTICE SUBMITTED BY THE APPELLANT THE WO RD CONCEALED PARTICULARS HAS BEEN STRIKE OFF. 7. THE LD. AR OF THE ASSESSEE FILED XEROX COPY OF THE NOTICE DATED 29.02.2016 ISSUED U/S 274 R/W SECTION 271 OF THE ACT 1961 TOGETHER WITH THE ORIGINAL COPY OF THE SAID NOTICE AND DEMONSTRATED THAT THE OBSER VATION OF THE CIT(A) IN HIS ORDER THE WORD CONCEALED PARTICULARS HAS BEEN STRIKE OFF IS F ACTUALLY INCORRECT. 8. THE LD. DR COULD NOT CONTROVERT THE ABOVE SUBMISSIONS OF THE AR OF THE ASSESSEE BY PRODUCING ANY EVIDENCE OR MATERIAL BEFORE ME. 9. IN THE A BOVE BACKGROUND OF THE CASE I FIND THAT THE TRIBUNAL IN THE CASE OF ASHOK KUMAR CHAUHAN PROP M/S. GURUCHARAN JEWELLERS VS. ITO REPORTED IN 2018 (12) TMI 1386 ITAT DELHI HAS HELD AS UNDER : - 4 . WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. 3 WE FIND THAT THE FACTS IN THE PRESENT APPEAL ARE NOT IN DISPUTE AND THE ASSESSING OFFICER IN THE ORDER PASSED U/S.271(1)(C) DATED 26.07.2012 LEVIED PENALTY OF RS.RS.8,36,592/ - . 5 . HON'BLE APEX COURT VIDE JUDGMEN T IN CASE OF M/S. SSA'S EMERALD MEADOWS, (2016) 73 TAXMANN.COM 248(SC) DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE JUDGMENT RENDERED BY HON'BLE HIGH COURT OF KARNATAKA WHEREBY IDENTICAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF THE JUDGMENT IN CASE OF M/S. SSA'S EMERALD MEADOWS (SUPRA) DECIDED BY HON'BLE HIGH COURT OF KARNATAKA IS REPRODUCED BELOW 2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW: (1) WHETHER, OMISSION IF ASSESSI NG OFFICER TO EXPLICITLY MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISHING OJ INACCURATE PARTICULARS OR THAT FOR CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYOND REASONABLE DOUBT TH AT THE ASSESSEE HAD CONCEALED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? (2 WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN. HOLDING THAT THE PENALTY NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) IS HAD IN LAW AND. INVALID INSPITE THE AMENDMENT OF SECTION 271(1 B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT, THE ASSESSING OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECORDING THE SATISFACTION FOR THE SAME? (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN DECIDING THE APPEALS AGAINST THE REVENUE ON THE BASIS OF NOTICE ISSUED, UNDER SECTION 274 WITHOUT TAKING INTO CONSIDERATION THE ASSESSMENT ORDER WHEN THE ASSESSING OFFICER HAS SPECIFIED THAT THE ASS ESSEE HAS CONCEALED PARTICULARS OF INCOME? 3 . THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT') TO BE B AD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. .THE TRIBUNAL, WHILE ALLOWING T HE APPEAL OF THE ASSESSEE, HAS RELIED 01 THE DERISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OR INCOME TAX - VS - MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4 . IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMEN T OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT, THE APPEAL IS ACCORDINGLY DISMISSED. 4 6 . BARE PERUSAL OF THE NOTICE ISSUED U/S 271(1 )(C) APPARENTLY GOES TO PROVE THAT THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS BY ISSUING THE NOTICE U/S 274/271 (1)(C) OF THE ACT WITHOUT SPECIFYING WHETHER THE ASSESSEE HAS CONCEALED 'PARTICULARS OF INCOME OR ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME , SO AS TO PROVIDE ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SHOW CAUSE NOTICE. RATHER NOTICE IN THIS CASE HAS BEEN ISSUED IN A STEREOTYPED MANNER WITHOUT APPLYING ANY MIND WHICH IS BAD IN LAW, HENCE IS NOT A VALID NOTICE SUFFICIENT TO IMPOSE PE NALTY U/S 271(1)(C) OF THE ACT. 7 . THE PENALTY PROVISIONS OF SECTION 271(1 )(C) OF THE ACT ARE ATTRACTED WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS ALSO A WELL - ACCEPTED PROPOSITION THA T THE AFORESAID TWO LIMBS OF SECTION 271(1)(C) OF THE ACT CARRY DIFFERENT MEANINGS. THEREFORE, IT WAS IMPERATIVE FOR THE ASSESSING OFFICER TO STRIKE - OFF THE IRRELEVANT LIMB SO AS TO MAKE THE ASSESSEE AWARE AS TO WHAT IS THE CHARGE MADE AGAINST HIM SO THAT HE CAN RESPOND ACCORDINGLY. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR) OBSERVED THAT THE LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEING LEVIED. AS PER HON'BLE HIGH COURT, WHERE THE ASSESSING OFFICER PROPOSED TO INVOKE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. THE HON'BLE HIGH COURT HELD THAT THE STANDARD PROFORMA OF NOTICE UNDER SECTION 274 OF THE ACT WITHOUT STRIKING OF THE IRRELEVANT CL AUSES WOULD LEAD TO AN INFERENCE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF VS. JCIT, 291 ITR 519(SC) HAS ALSO NOTICED THAT WHERE THE ASSESSING OFFICER ISSUES NOTICE UNDER SECTION 274 OF TH E ACT IN THE STANDARD PROFORMA AND THE INAPPROPRIATE WORDS ARE NOT DELETED, THE SAME WOULD POSTULATE THAT THE ASSESSING OFFICER WAS NOT SURE AS TO WHETHER HE WAS TO PROCEED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME OR FURNI SHED INACCURATE PARTICULARS OF INCOME. ACCORDING TO THE HON'BLE SUPREME COURT, IN SUCH A SITUATION, LEVY OF PENALTY SUFFERS FROM NON APPLICATION OF MIND. IN THE BACKGROUND OF THE AFORESAID LEGAL POSITION AND, HAVING REGARD TO THE MANNER IN WHICH THE ASSESS ING OFFICER HAS ISSUED NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT DATED 15.1.2014 WITHOUT STRIKING OFF THE IRRELEVANT WORDS, THE PENALTY PROCEEDINGS SHOW A NON - APPLICATION OF MIND BY THE ASSESSING OFFICER AND IS, THUS, UNSUSTAINABLE. 8 . THE FACTS O F THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS OF THE CASE BEFORE THE HON BLE SUPREME COURT IN THE CASE 5 OF SSA S. EMARLD MEADOWS(SUPRA) AND, THEREFORE, THE DECISION OF HON BLE SUPREME COURT SQUARELY APPLIES TO THE CASE OF THE ASSESSEE. HENCE, RESPECTFULLY FOLLOWING THE SAME, WE CANCEL THE ORDER OF THE ASSESSING OFFICER DATED 26.07.2012 OF RS.8,36,592/ - AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 10 . FACTS BEING IDENTICAL RESPECTFULLY FOLLOWI NG PRECEDENT I DELETE THE LEVY OF PENALTY U/S 271 (1) (C) OF THE ACT OF RS.676646/ - A ND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 .01.2019 SD/ - ( N. S . SAINI) ACCOUNTANT MEMBER DATED: 16 .0 1 . 201 9 . *NEHA* COPY OF ORDER TO : - 1 ) THE APPELLANT 2 ) THE RESPONDENT 3 ) THE CIT 4 ) THE CIT(A) 5 ) THE DR, I.T.A.T., NEW DELHI ASSISTANT REGISTRAR ITAT , NEW DELHI 6 DATE OF DICT ATION 1 6 .01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FO R SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER