PRASHANT THOLIA, Jaipur V. ITO, Jaipur

ITA 391/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5214 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 24-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G R PAREEK JCIT DHK
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH VH-VKJ-EHUK ] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 391/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08. SHRI PRASHANT THOLIA, THOLIA HOUSE, M.I. ROAD, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 2(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABBPT 1928 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI G.R. PAREEK (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07.06.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 13/06/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-I, JAIPUR DATED 02.02.2015 PERTAINING TO A.Y. 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE IMPUGNED PENALTY ORDER U/S 271(1)(C) OF THE ACT DATED 27.03.2012 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE, T HE SAME KINDLY BE QUASHED. 2. THE IMPUGNED PENALTY ORDER U/S 271(1)(C) OF THE ACT IS BARRED BY LIMITATION HENCE, PLEASE BE QUASHED. 3. RS. 1,49,160/-: THE LD. CIT (A) ERRED IN LAW AS WEL L AS ON THE FACTS OF THE CASE IN CONFIRMING THE IMPUGNED PENALTY U/S 271(1)(C) OF THE ACT OF RS. 1,49,160/-. THE PENALTY SO IMPOSED & CON FIRMED BEING TOTALLY CONTRARY TO THE PROVISIONS F LAW AND FACTS KINDLY BE DELETED IN FULL. 2 ITA NO. 391/JP/2015 SHRI PRASHANT THOLIA VS. ITO 4. THE APPELLANT PRAYS YOUR HONOUR INDULGENCES TO ADD, AMEND OR ALTER OF OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE THE DATE OF HEARING. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT HE DOES NOT WISH TO PRESS GROUND NO. 2 OF THE APPEAL. ON THIS, THE LD. D/R STATED THAT HE HAS NO OBJECTION. ACCORDINGLY GROUND NO. 2 IS DISMISSED A S NOT PRESSED. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E AO FRAMED THE ASSESSMENT UNDER SECTION 143(3) OF THE IT ACT, 1961 (HEREINAFT ER REFERRED TO AS THE ACT) VIDE ORDER DATED 30 TH NOVEMBER, 2009. WHILE FRAMING THE ASSESSMENT, THE AO INITIATED PENALTY PROCEEDINGS IN RESPECT OF THE ADDITIONS MAD E BY HIM. SUBSEQUENTLY, THE AO PASSED AN ORDER UNDER SECTION 271(1)(C) OF THE ACT IMPOSING PENALTY OF RS. 1,65,000/- ON THE TRADING ADDITIONS MADE ON ACCOUNT OF CESSATION OF LIABILITY BY INVOKING PROVISIONS OF SECTION 41(1) OF THE ACT. 4. APROPOS GROUND NO. 1, LD. COUNSEL FOR THE ASSESS EE VEHEMENTLY ARGUED THAT THE PENALTY ORDER IS BAD IN LAW IN VIEW OF THE FACT THAT NOTICE AS ISSUED BY THE AO FOR IMPOSING PENALTY DOES NOT SPECIFY THE SPECIFIC CHAR GE. THE LD. COUNSEL SUBMITTED THAT THE AO OUGHT TO HAVE GIVEN A SPECIFIC REASON F OR IMPOSING THE PENALTY. HE DREW OUR ATTENTION TO THE PAPER BOOK PAGE 69 WHEREIN COP Y OF NOTICE HAS BEEN ENCLOSED. THE LD. COUNSEL REITERATED THE SUBMISSION AS MADE I N THE WRITTEN BRIEF. 4.1. ON THE CONTRARY, THE LD. D/R STRONGLY SUPPORTE D THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE PENALTY ORDER AS PASSE D HAS GIVEN A SPECIFIC CHARGE I.E. FURNISHING OF INACCURATE PARTICULARS AND CONCE ALMENT OF INCOME TO THE EXTENT OF RS. 5,39,186/-. THE LD. D/R SUBMITTED THAT MERELY BECAUSE THE SHOW CAUSE READS AS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED I NACCURATE PARTICULARS OF SUCH 3 ITA NO. 391/JP/2015 SHRI PRASHANT THOLIA VS. ITO INCOME, WOULD NOT VITIATE THE ORDER PASSED UNDER S ECTION 271(1)(C) OF THE ACT. THE LD. D/R REITERATED THE SUBMISSIONS AS ARE MADE IN T HE WRITTEN SUBMISSION FILED ON 07.06.2016. 4.2. IN RE-JOINDER, THE LD. COUNSEL FOR THE ASSESSE E REITERATED THE SUBMISSION AS ARE MADE IN THE WRITTEN SUBMISSION DATED 6 TH JUNE, 2016. 4.3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. D URING THE COURSE OF HEARING, THE LD. D/R HAS CONCEDED THE FACT THAT IN THE NOTICE DA TED 30 TH NOVEMBER, 2009 ON PRINTED FORM WHEREIN THE WORDS CONCEALED THE PART ICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME IS PRINTED AND TICK MARKED BY THE AO. THEREFORE, WHEN THE NOTICE WAS ISSUED, THERE W AS NO SPECIFIC CHARGE. HOWEVER, WHILE FRAMING THE PENALTY ORDER, THE AO HA S RECORDED IN PARA 9 OF HIS ORDER AS UNDER :- 9. IN VIEW OF TOTALITY OF THE FACTS AND KEEPING IN VIEW THE PROVISIONS OF SECTION 271(1)(C) AS WELL AS JUDICIAL PRONOUNCEMENTS DISCUSSED ABOVE, IT IS ESTABLISHED THAT THE ASSESSE E HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND CONCEALED ITS INCOME TO THE EXTENT OF RS. 5,39,186/- [RS.50,000/- ON ACCOUNT OF TRADIN G AND RS. 4,89,186/- ON ACCOUNT OF ADDITION U/S 41(1)] WITHIN THE MEANING OF SECTION 271(1)(C) AND, THEREFORE, A PENALTY OF RS. 1,65,000/- IS IMPOSED ON THE ASSESSEE U/S 271(1)(C) ON THE CONCEA LED INCOME AS PER WORKING GIVEN BELOW :- RETURNED INCOME RS. 2,44,230/- CONCEALED INCOME RS. 5,39,186/- TAX SOUGHT TO BE EVADED ON ACCOUNT OF CONCEALED INCOME RS. 1,64,403/- MINIMUM PENALTY LEVIABLE (BEING 100% OF TAX EVADED) RS 1,64,403/- MAXIMUM PENALTY LEVIABLE (BEING 300% OF TAX EVADED RS. 4,93,209/- PENALTY IMPOSED RS. 1,65,000/- 4 ITA NO. 391/JP/2015 SHRI PRASHANT THOLIA VS. ITO IT IS SETTLED PROPOSITION OF LAW THAT THE PENALTY P ROCEEDINGS AND QUANTUM PROCEEDINGS ARE TWO DIFFERENT AND DISTINCT PROCEEDI NGS. BY WAY OF PENALTY PROCEEDINGS, THE REVENUE IS FORCING THE TAX PAYER T O PAY ADDITIONAL AMOUNT OF TAX IN ADDITION TO THE TAX ASSESSED AND INTEREST CHARGED I N THE FORM OF PENALTY FOR CONCEALMENT OF PARTICULARS OF HIS INCOME OR FURNISH ING OF INACCURATE PARTICULARS OF SUCH INCOME. IT IS SETTLED POSITION OF LAW THAT THE ASSESSEE IS TO BE PUT TO NOTICE FOR THE SPECIFIC CHARGE. THE HONBLE KARNATAKA HIGH CO URT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 (KAR.) HAS HELD THAT THE NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPECIFICALLY STATE TH E GROUNDS MENTIONED IN SECTION 271(1)(C) AS TO WHETHER IT IS FOR CONCEALMENT OR FU RNISHING INACCURATE PARTICULARS OF INCOME. SENDING PRINTED FORM WHERE ALL THE GROUNDS AS MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY THE REQUIREMENT OF LAW. THIS JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT WAS FOLLOWED BY THE COORDINATE BENCH IN ITA NO. 1303/KOL/10 IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS. ACIT. IN THE CASE IN HAND ALSO, AS ADMITTED BY THE REVENUE, THE NOTICE UNDER SECTION 2 74 WAS ON THE PRINTED FORMAT. THE AO HAS NOT GIVEN ANY SPECIFIC CHARGE. THEREFORE , THE PENALTY PROCEEDINGS AS INITIATED ARE VITIATED FOR WANT OF PROCEDURAL COMPL IANCE. THUS THE PENALTY ORDER IS QUASHED BEING BAD IN LAW. THIS GROUND OF THE ASSESS EE IS ALLOWED. 5. GROUND NO. 3 RELATES TO IMPOSITION OF PENALTY. SINCE WE HAVE ALREADY QUASHED THE PENALTY ORDER, THEREFORE, THE AO IS DIR ECTED TO DELETE THE PENALTY. 6. GROUND NO. 4 IS GENERAL IN NATURE AND NEEDS NO S EPARATE ADJUDICATION. 5 ITA NO. 391/JP/2015 SHRI PRASHANT THOLIA VS. ITO 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/06/201 6. SD/- SD/- VH-VKJ-EHUK] ( DQY HKKJR ) ( T.R. MEENA) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 13/06/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI PRASHANT THOLIA, JAIPUR. 2. THE RESPONDENT- THE ITO, WARD 2(2), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 391/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 391/JP/2015 SHRI PRASHANT THOLIA VS. ITO