Assistant Commissioner of Income Tax, Circle-3(1), , Visakhapatnam V. Meka Kasi Visweswarudu , Visakhapatnam

ITA 383/VIZ/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2062 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 13-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: Y ANIL KUMAR
• Keywords: Question of law
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 3 83 /VIZ/ 201 8 ( / ASSESSMENT YEAR: 20 12 - 20 1 3 ) ACIT, CIRCLE - 3(1) VISAKHAPATNAM VS. SHRI MEKA KASI VISWESWARUDU ROWE &PAL CHARTERED ACCOUNTANTS D.NO.14 - 36 - 1, KRISHNA NAGAR VISAKHAPATNAM [PAN : A BVPM2320H ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : S MT SUMAN MALIK, DR / RESPONDENT BY : SHRI Y ANIL KUMAR, AR / DATE OF HEARING : 14 . 1 1 . 2018 / DATE OF PRONOUNCEMENT : 16 . 1 1 .2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: TH IS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)], VISAKHAPATNAM VIDE I.T.A.NO.0177/2015 - 16/ITO - W - 1, VZM/2017 - 18 DATED 20.04.2018 FOR THE ASSESSMENT YEAR 2012 - 13 . 2 I.T.A. NO .3 83 /VIZ/201 8 S HRI MEKA KASI VISWESWARUDU, VISAKHAPATNAM 2. IN THIS CASE, THE ASSESSEE FILED RETURN OF INCOME ON 31.03.2014 ADMITTING TOTAL INCOME OF RS.2,48 ,000/ - AFTER CLAIMING DEDUCTION UNDER CHAPTER VIA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS ACT). SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED U/S 143(3) ON TOTAL INCOME OF RS.1,18,37,382/ - AND THE AO INITIATED PENALTY U/S 271(1)(C) AMOUNTING TO R S.23,17,876/ - . 3. AGAINST THE PENALTY ORDER U/S 271(1)(C), THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND RAISED THE GROUND WITH REGARD TO THE DEFECT IN THE NOTICE ISSUED BY THE AO U/S 271(1)(C). THE ASSESSEE SUBMITTED BEFORE THE LD.CIT(A) THAT THE AO DID NOT EXPLICITLY SPECIF Y IN THE PENALTY NOTICE AS TO WHETHER THE PENALTY PROCEEDINGS WERE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR FOR CONCEALMENT OF INCOME. THE LD.CIT(A) CANCELLED THE PENALTY PLACING RELIANCE ON THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT OF TELANGANA AND A.P. IN THE CASE OF PR.CIT VS. BAISETTY REVATHI IN ITTA 684/2016 IN 30.07.2017. 4. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 3 I.T.A. NO .3 83 /VIZ/201 8 S HRI MEKA KASI VISWESWARUDU, VISAKHAPATNAM 5. WE HAVE HEARD BOTH THE PARTIES A ND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, THERE IS NO DISPUTE THAT THE AO HAS ISSUED THE NOTICE U/S 271(1)(C) WITHOUT STRIKING IRRELEVANT COLUMNS TO SPECIFY WHETHER THE PENALTY WAS INITIATED FOR FURNISHING INACCURATE PARTICULARS OF IN COME OR FOR CONCEALMENT OF INCOME. THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT NON SPECIFYING THE ISSUE WITH REGARD TO FURNISHING THE INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME, RENDERS THE NOTICE INVALID. THE LD.CIT(A) FOLLOWED THE ORD ER OF THIS TRIBUNAL IN THE CASE OF KONCHADA SREERAM IN I.T.A. NO.388/VIZ/2015 WHILE CANCELLING THE PENALTY. FOR READY REFERENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THE LD.CIT(A) IN PAGE NO.6 TO 6.3. WHICH READS AS UNDER : 6. I HAVE CONSIDERED THE SU BMISSIONS MADE AND ALSO GONE THROUGH THE INFORMATION FURNISHED DURING APPEAL PROCEEDINGS THE AO INITIATED THE PENALTY PROCEEDINGS AS THE ASSESSEE FAILED TO FURNISH THE SOURCES FOR THE INVESTMENT MADE. THE PENALTY NOTICE ISSUED BY THE AO READS AS UNDER : WHEREAS IN THE COURSE OF PROCEEDING BEFORE ME FOR THE ASST. YEAR 2012 - 13 IT APPEARS TO ME THAT YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCU RATE PARTICULARS OF SUCH INCOME 6.1. F ROM THE NOTICE ISSUED, ITS SEEN THAT AO ISSUED NOTIC E FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS, WHICH PROVES THAT THE ASSESSING OFFICER WAS NOT SURE OF WHICH OF THE OFFENCE HE SOUGHT THE EXPLANATION. IN THI S REG AR D, IT IS RELEVANT TO REFER TO THE - DECISION RENDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SMT.BAISETTY REVATHI WHEREIN THE HON BLE COURT HAS HELD AS UNDER : ON PRINCIPLE, WHICH PENALTY PROCEEDINGS ARE SOUGHT TO BE INITIATED BY THE REVENUE UNDER SECTION 271(1)(C) OF THE ACT OF 1961, THE SPECIFIC GROUND W HICH FORMS THE FOUNDATION THEREFORE HAS TO BE SPELT OUT IN CL EAR TERMS. OTHERWISE, AN ASSESSEE WOULD NOT HAVE PROPER OPPORTUNITY TO PUT FORTH HIS DEFENSE. WHEN THE PROCEEDINGS ARE PENAL IN NATURE RESULTING IN IMPOSITION 4 I.T.A. NO .3 83 /VIZ/201 8 S HRI MEKA KASI VISWESWARUDU, VISAKHAPATNAM OF PENALTY RANGING FROM 100 % TO 300 % 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 PARTICULARS THEREOF, THE REVENUE MUST SPECIFY AS TO WHICH ONE OF THE TWO IS SOUGHT TO BE PRES SED INTO SERVICE AND CANNOT BE PERMITTED TO CL UB BOTH BY INTERJECTING AN 'OR BETWEEN THE TWO, AS IN THE PRESENT CASE. THIS AMBIGUITY IN THE SHOW - CAUSE NOTICE IS FURTHER COMPOUNDED PRESENTLY BY THE CONFUSED FINDING OF THE ASSESSING OFFICER THAT HE WAS SATI SFIED THAT THE ASSESSEE WAS GUILTY OF BOTH . 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 . 6.2. ON THE SIMILAR FACTS, THE HON'BLE IT AT, VISAKHAPATNAM IN THE CASE OF KONCHADA SREERAM (ITA NO.388/VIZ/2015) FOLLOWING THE DECISION OF THE HON'BLE ANDHRA PRADESH H IGH COURT CITED SUPRA AN D ITS OWN DECISION IN TH E 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. 6.3. RES PECTFULLY FOLLOWING THE DECISION CITED SUPRA, IT IS HELD THAT THE NOTICE ISSUED U/S 271 IS INVALID AND CONSEQUENT PENALTY IMPOSED BY THE AO IS CANCELLED. 6. SINCE THE LD.CIT(A) HAS FOLLOWED THE ORDER OF THIS TRIBUNAL AND THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . 5 I.T.A. NO .3 83 /VIZ/201 8 S HRI MEKA KASI VISWESWARUDU, VISAKHAPATNAM O RDER PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 201 8 . S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 16 . 1 1 .2018 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT ACIT, CIRCLE - 3(1), VISAKHAPATNAM 2 . / THE RESPONDENT SHRI MEKA KASI VISWESWARUDU ROWE &PAL CHARTERED ACCOUNTANTS, D.NO.14 - 36 - 1, KRISHNA NAGAR, VISAKHAPATNAM 3 . THE PR. COMMISSIONER OF INCOME TAX - 1, VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM