Paras Collins Distilleries, Hyderabad V. ITO, Ward 6(3), Hyderabad

ITA 391/HYD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6042 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 26-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 391/HYD/2013 ASSESSMENT YEAR: 2006-07 PARAS COLLINS DISTILLERIES, HYDERABAD. PAN AABCP 2155M VS. INCOME-TAX OFFICER, WARD 6(3), HYDERABAD (APPELLANT) (RESPONDENT) ITA NO. 471/HYD/2013 ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER, WARD 6(3), HYDERABAD VS. PARAS COLLINS DISTILLERIES, HYDERABAD. PAN AABCP 2155M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SHRI K.J. RAO DATE OF HEARING 20-10-2016 DATE OF PRONOUNCEMENT 11-11-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: BOTH THESE ARE CROSS APPEALS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - IV, HYDERAB AD, DATED 11/01/2013, FOR AY 2006-07. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE, M/S PARAS COLLINS & DISTILLERIES, A FIRM CARRYING ON THE BUSI NESS OF MANUFACTURING INDIAN MADE LIQUOR, FILED RETURN OF INCOME FOR THE A.Y. 2006-07 ON 31.10.2006 ADMITTING THEREIN THE INCOME OF RS. 3,45 ,790/-. THE RETURN 2 ITA NO. 391 & 471/H/13 PARAS COLLINS DISTILLERIES PVT. LTD. WAS PROCESSED U/S 143(1) ON 31.05.2007. LATER ON, T HE RETURN WAS TAKEN UP FOR SCRUTINY BY ISSUING NOTICE U/S 143(2) AND ASSESSMENT ORDER U/S, 143(3) WAS PASSED ON 31-12-2008 ASSESSIN G TOTAL INCOME AT RS. 4,25,23,985/-. THE QUANTUM APPEAL WAS UPHELD BY THE CIT(A) AND ITAT. PENALTY PROCEEDINGS U/S. 271(1)(C) WERE I NITIATED BY ISSUING NOTICE U/S 274 ON 31-12-2008. 3. BEFORE US, THE ASSESSEE FILED PETITION REQUESTI NG FOR ADMISSION OF THE ADDITIONAL GROUND, WHICH IS AS UNDER: THE INITIATION OF PROCEEDINGS U/S 271(1)(C) OF THE INCOME-TAX ACT, IS NOT VALID AS THE AO DID NOT STRIKE OFF THE INAPPROPRIATE PORTION OF THE NOTICE. THE AO OUGHT TO HAVE STRUCK OFF THE INAPPROPRIATE PORTION AND INDICATED TO THE APPELLA NT THE APPLICABLE PORTION IN THE NOTICE. 4. AS THE SAID ADDITIONAL GROUND IS A LEGAL GROUND, WHEREIN, THE FACTS ARE ON RECORD AND FACTS DO NOT REQUIRE FRESH INVESTIGATION, FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO., LIMITED VS. CIT 229 ITR 383 (SC), WE ADMIT THE SAID ADDITIONAL GROUND OF ASSESSEE. 5. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS BY ISSUE OF A NOTICE U/S 274 R.W.S. 271 ON 29.12.2010. HE SUBMITTED THAT WHILE I SSUING THE SAID NOTICE, THE ASSESSING OFFICER DID NOT MENTION WHETH ER THE NOTICE IS ISSUED FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, THE NOTICE IS NOT VALIDLY ISSUED. CONSEQUENTLY, THE ORDER PASSED U/S 271(1)(C) ALSO I S NOT VALID. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS, [2016] 73 TAXMANN.COM 248 (SC). 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 3 ITA NO. 391 & 471/H/13 PARAS COLLINS DISTILLERIES PVT. LTD. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SS AS EMERALD MEADOWS, [2016] 73 TAXMANN.COM 248 (SC) WHEREIN THE APEX COURT UPHELD THE DECISION OF THE HONBLE HIGH COURT, IN W HICH, THE HONBLE HIGH COURT CONFIRMED THE ORDER OF THE TRIBUNAL AND DISMISSED THE APPEAL OF THE REVENUE, WHO CAME IN APPEAL AGAINST T HE ORDER OF THE TRIBUNAL. THE TRIBUNAL RELYING ON A DECISION OF KA RNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACT ORY, [2013] 359 ITR 565/210 ALLOWED THE APPEAL OF THE ASSESSEE HOLD ING THAT NOTICE ISSUED BY ASSESSING OFFICER U/S 274 READ WITH SECTI ON 271(1)(C) WAS BAD IN LAW, AS IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) PENALTY PROCEEDINGS HAD BEEN INITIATED, I.E. WHETHE R FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS OF INCOME. 7.1 IN THE CASE UNDER CONSIDERATION, ON PERUSAL OF THE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W. S. 271 OF THE IT ACT, 1961, DATED 31/12/2008, IT IS SEEN THAT THE A SSESSING OFFICER DID NOT MENTION WHETHER THE NOTICE IS ISSUED FOR CONCEA LMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, AS PER THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS, THE NOTICE ISSUED BY THE ASS ESSING OFFICER IS NOT VALID AND CONSEQUENTLY, THE ORDER PASSED U/S 271(1)(C) IS ALSO NOT VALID. HENCE, WE SET ASIDE THE ORDER OF THE CIT (A) AND QUASH THE ORDER PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. AS WE HAVE QUASHED THE ORDER PASSED BY THE AO U/ S 271(1)(C) IN THE ASSESSEES APPEAL, THE APPEAL OF THE REVENUE BECOMES INFRUCTUOUS AND, THEREFORE, THE SAME IS DISMISSED A S INFRUCTUOUS. 4 ITA NO. 391 & 471/H/13 PARAS COLLINS DISTILLERIES PVT. LTD. 10. IN THE RESULT, ASSESSEES APPEAL IN ITA NO. 391 /H/13 IS ALLOWED AND THE REVENUES APPEAL IN ITA NO. 471/H/13 IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON 11 TH NOVEMBER, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 11 TH NOVEMBER, 2016 KV COPY TO:- 1) PARAS COLLINS DISTILLERIES, C/O B. NARSING RAO & CO., CAS PLOT NO. 554, ROAD NO. 92, JUBILEE HILLS, HYD. - 56 2) ITO, WARD 6(3), HYD. 3) CIT(A) - IV, HYDERABAD 4 CIT - III, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE