K.Vijay, Erode V. ITO, Erode

ITA 387/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5899 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 19-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN JCIT D R
• Assessee Lawyers: S SRIDHAR
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

, B/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL B/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.387 /MDS./2016 ( ASSESSMENT YEAR : 2009-10 ) MR.K.VIJAY , PROP.K.VIJAY, NO.3, NACHIAPPA II STREET, ERODE 638 001. VS. THE INCOME TAX OFFICER, WARD -1(2), ERODE. PAN ABBPV 9125 H ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.S.SRIDHAR, ADVOCATE / RESPONDENT BY : MR.B.SAGADEVAN, JCIT, D.R ! ' / DATE OF HEARING : 07.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 07.11.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-3, CHENNA I DATED27.11.2015 PERTAINING TO ASSESSMENT YEAR 2009 -10. ITA NO. 387/MDS/2016 2 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS FOR A DJUDICATION. 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS)-3,COIMBATORE DATED 27-1 1-20 15 IN I.T.A.NO 169/14- 15(A)-I FOR THE ABOVE ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS AND IN TH E CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX (APPEALS)-3, COIM BATORE ERRED IN SUSTAINING THE PENALTY OF RS.20,00,400/- U/S. 271 ( 1) (C). 3 THE COMMISSIONER OF INCOME TAX (APPEALS)-3, COIMB ATORE ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLANT HAS NOT CO NSCIOUSLY AND DELIBERATELY CONCEALED THE TRUE PARTICULARS OF INCO ME. 4. FOR THE ABOVE REASONS AND FOR ANY OTHER REASONS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE PENALTY OF RS.20,00,400/- LEVIED U/S 271 (1) (C) MAY KINDLY BE CANCELLED. 3. THE FACTS OF THE CASE ARE THAT A SURVEY U/S 133 A OF THE INCOME TAX ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF S HRI T P KATHIRVEL & GROUP OF CASES ON 21/12/2009 AND THE ASSESSEE IS ONE OF THE GROUP CASES. THE ASSESSING OFFICER IN HIS PENALTY ORDER S TATED THAT SHRI KATHIRVEL AND HIS TWO SONS, SHRI K. VIJAY AND SHRI K GOKUL ALSO FILED AN AFFIDAVIT DATED 4.12.2009 JOINTLY SOLEMNLY AFFIR MING AND STATING THAT BASED ON THE DOCUMENTS FOUND DURING THE COURSE OF S URVEY ON 02.12.2009 THEY DISCLOSED A TOTAL SUM OF ` 2,84,22,370/- FOR ASSESSMENT YEAR 2009-10 AND ` 1,90,97,255 FOR THE ASSESSMENT YEAR 2010-11. SUBSEQUENTLY THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ITA NO. 387/MDS/2016 3 ASSESSMENT YEAR 2009-10 ON 30/312010 DECLARING AN I NCOME OF ` 1,65,110/- AND DID NOT ADMIT THE UNDISCLOSED INCOME OF ` 43,29,009/- AS OFFERED DURING THE COURSE OF SURVEY. THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) ON 29/12/2011 ON A TOTAL INCOME OF ` 44,94,119/-. THE ASSESSING OFFICER IN HIS PENALTY O RDER FURTHER STATED THAT WHEN PENALTY PROCEEDINGS WERE I NITIATED THE ASSESSEE REQUIRED TO KEEP THE PROCEEDINGS IN ABEYAN CE SINCE HE HAS FILED THE APPEAL BEFORE COMMISSIONER OF INCOME TAX (APPEALS). IT WAS STATED IN THE PENALTY ORDER THAT THE APPEAL FIL ED BY THE ASSESSEE WAS DISMISSED BOTH BY COMMISSIONER OF INCOME TAX (A PPEALS) AND INCOME TAX APPELLATE TRIBUNAL VIDE ORDERS DATED 9/1 1/2012 AND 26/9/2013 RESPECTIVELY. THEREFORE, THE ASSESSING OF FICER HELD THAT THE ASSESSEE HAS CONSCIOUSLY AND DELIBERATELY CONCEALED THE TRUE PARTICULARS OF HIS INCOME AND HE IMPOSED A PENALTY OF ` 20,00,400/- U/S 271 (1) (C) OF THE INCOME TAX ACT 1961. THE ASS ESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A) . ON APPEAL, LD.CIT(A ) OBSERVED THAT THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT AMOUNTI NG TO 20,00,400/- BY THE AO HOLDING THAT THE ASSESSEE HAS CONCEALED T HE TRUE PARTICULARS OF HIS INCOME, IS SUSTAINABLE AND NEED NOT BE INTERFERED ITA NO. 387/MDS/2016 4 WITH. AGAINST THE ORDER OF LD.CIT(A), NOW THE ASSE SSEE IS IN APPEAL BEFORE US. 4. AT THE OUTSET, LD.A.R SUBMITTED THAT A COPY OF NOTICE U/S.271 READ WITH SECTION 274 OF THE INCOME TAX ACT READS A S FOLLOWS:- NOTICE UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME-TAX ACT, 1961 PAN NO: ABBPV9125H OFFICE OF THE INCOME TAX OFF ICER, WARD- 1(2). NO.15, GANDHIJI ROAD ERODE - 638001. DATE: 29.12.2011 TO K.VIJAY, PROP: K.VIJAY 3, NACHIAPPA II STREET, ERODE-638001. WHEREAS DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143 (3) OF THE INCOME TAX ACT , 1961 BEFORE ME FOR THE ASSESSMENT YEAR 20 09- 2010, IT APPEARS TO ME THAT YOU HAVE CONCEALED THE PARTICULARS OF YOUR INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME ON 10. 01.2012 AT 10.30 A.M. AND SHOW BECAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE PASSED UNDER SECTION 271 (1) (C) OF THE INCOME-TAX ACT, 19 61. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERS ON OR THROUGH AUTHORIZED REPRESENTATIVE, YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UN DER SECTION 271 (1) (C) OF SUCH ACT. YOURS FAITHFULLY, SD/- (DINESH BHAGAT) INCOME TAX OFFICER WARD -1(2), ERODE ACCORDINGLY, IT WAS SUBMITTED THAT WHILE ISSUING TH E NOTICE U/S.274 OF THE ACT, THE LD. ASSESSING OFFICER SHOULD SATISFY T HE SAID GROUNDS ON ITA NO. 387/MDS/2016 5 WHICH THE PENALTY U/S.271(1)(C) OF THE ACT WOULD BE LEVIED. IN OTHER WORDS, HE SUBMITTED THAT WHETHER IT IS FOR CONCEALM ENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. ACCORDING TO HIM, SENDING PRINTED FORM WHERE ALL THE GROUNDS MENTIONE D IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY THE REQUIREMENT OF LAW. ACCORDINGLY, HE SUBMITTED THAT PENALTY LEVIED U/S.271(1)(C) OF T HE ACT UNDER SUCH NOTICE IS BAD IN LAW. LD.A.R PLACED RELIANCE ON THE FOLLOWING CASES. I) IN THE CASE OF CIT VS.MANJUNATHA COTTON AND GINN ING FACOTRY IN (2013) 359 ITR 565 II) IN THE CASE OF CIT VS. M/S.SSAS EMERALD MEADO WS IN SLA NO.11485/2016 DATED 23.11.2015 5. ON THE OTHER HAND, LD.D.R SUBMITTED THAT THE ER ROR COULD BE RECTIFIED, IF THE ISSUE MAY BE REMITTED TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDERATION. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. AS RIGHTLY POINTED OUT BY THE LD.A.R, U/S. 274 OF THE ACT, THE AO SHOULD SATISFY THE SAID GROUNDS MENTIONED IN SEC .271(1)(C) OF THE ACT WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. SENDING THE PRINT ED FORM WITHOUT ITA NO. 387/MDS/2016 6 STRIKING DOWN THE IRRELEVANT COLUMNS THEREIN, COULD NOT SATISFY THE REQUIREMENT OF THE LAW. IN THE PRESENT CASE, AS SE EN FROM THE COPY OF NOTICE REPRODUCED IN EARLIER PARA OF THE ORDER TO S HOW THAT THE AO FAILED TO STRIKE UP THE IRRELEVANT PORTION THEREIN , WHICH IS NOT APPLICABLE TO THE ASSESSEE. IN VIEW OF THIS, BY PL ACING RELIANCE ON THE JUDGMENT OF SUPREME COURT IN THE CASE OF CIT VS. M/ S.SSAS EMERALD MEADOWS CITED SUPRA, I AM INCLINED TO DELET E THAT PENALTY ORDER PASSED CONSEQUENT TO DEFECTIVE NOTICE ISSUED U/S.274 OF THE ACT IS BAD IN LAW. ACCORDINGLY, THE PENALTY ORDER IS QU ASHED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 07 TH NOVEMBER, 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 07 TH NOVEMBER, 2017 . K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF