M/s. Laxmi Trading Company, Baroda V. The Income tax Officer,Ward-5(4), Baroda

ITA 3976/AHD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60316 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-04-2012
• Assessment Year: 1994-1995
• Appeal Filed On: 08-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: J P SHAH
• Keywords: Opportunity of cross examination

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER I.T.A. NOS. 3975, 3976 & 3977/AHD/2008 (ASSESSMENT YEAR 1993-94, 1994-05 & 1995-96 RESPECTIVELY) M/S. LAXMI TRADING CO., A-27, SARDAR PATEL MARKET, HATHIKHANA, BARODA VS. ITO, WARD 5(4), BARODA PAN/GIR NO. : AAAFL9217A (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI J. P. SHAH, AR RESPONDENT BY: SHRI B. L. YADAV, SR. DR DATE OF HEARING: 04.05.2012 DATE OF PRONOUNCEMENT: 04. 05.2012 O R D E R PER SHRI G. C. GUPTA, VP:- THESE THREE APPEALS BY THE ASSESSEE FOR THE ASSESS MENT YEARS 1993- 94, 1994-95 AND 1995-96 ARE DIRECTED AGAINST THE OR DER DATED 11.09.2008 OF LD. CIT(A)-V, BARODA. SINCE IDENTICAL ISSUE IS INVOLVED IN ALL THESE THREE APPEALS, THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. 2. THE ONLY ISSUE IN THESE APPEALS IS REGARDING VAL IDITY OF PENALTY IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE OF VALIDITY O F ADDITION ITSELF WAS ADMITTED BY THE HONBLE JURISDICTIONAL HIGH COURT A ND IS PENDING BEFORE IT. HE SUBMITTED THAT SINCE THE HONBLE HIGH COURT HAD ADMITTED THE APPEAL OF THE ASSESSEE REGARDING VALIDITY OF ADDITI ON MADE ON ACCOUNT OF I.T.A.NOS.3975, 3976 & 3977 /AHD/2008 2 INVESTMENT IN PURCHASE OF DD, THE ISSUE WAS DEFINIT ELY A DEBATABLE ISSUE AND THE RATIO OF THE DECISION OF HONBLE CALCUTTA H IGH COURT RENDERED IN THE CASE OF CIT VS OFF SHORE INDIA LTD. AS REPORTED IN 209 ITR 473 (CAL.) APPLIES TO THE CASE OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAS REQUESTED FOR SUPPLY OF COPY OF SOME IMPORTANT DOCU MENTS AND THE SAME WERE NEVER ISSUED TO THE ASSESSEE. THE A.O. VIDE H IS LETTER DATED 11.03.2003, STATED THAT HE DID NOT SEE ANY REASON T O AFFORD THE ASSESSEE OPPORTUNITY OF CROSS EXAMINATION OF THE BANK OFFICI ALS. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE ASSESSEES APPEAL BEFORE THE HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO.521/2004 WHEREI N THE ABOVE FACTS ARE DETAILED BY THE ASSESSEE. HE SUBMITTED THAT TH E PENALTY U/S 271(1)(C) CANNOT BE IMPOSED SINCE THE ISSUE OF ADDITION ITSEL F WAS A DEBATABLE ISSUE AND THE ASSESSEE WAS NEVER ALLOWED TO CROSS EXAMINE THE BANK OFFICIALS AND WAS NOT ISSUED COPIES OF VARIOUS IMPORTANT DOCU MENTS BY THE A.O. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN PARA 8 OF THE PENALTY ORDER, THE A.O. HAS FAILED TO RECORD SPECIFIC CHARG E ON THE ASSESSEE THAT WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTI CULARS OF INCOME OR HAS MADE CONCEALMENT OF INCOME AND THE LEVY OF PENALTY U/S 271(1)(C) WAS BAD IN LAW AS HELD BY HONBLE GUJARAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. VS CIT AS REPORTED IN 282 ITR 642 (GUJ.). 3. LD. D.R. OF THE REVENUE HAS OPPOSED THE SUBMISSI ONS OF THE LD. COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THE MA TTER OF ADDITION IS PENDING BEFORE THE HONBLE HIGH COURT AND THEREFORE , THESE PENALTY APPEALS SHOULD ALSO BE KEPT PENDING TILL THE DECISI ON OF THE APPEALS PREFERRED BY THE ASSESSEE IN THE QUANTUM CASE BEFOR E THE HONBLE HIGH COURT. HE SUBMITTED THAT ON PAGE 4 OF THE APPELLAT E ORDER PASSED BY LD. CIT(A) IN PARA 4.2 HE HAS CLEARLY RECORDED THE FIND ING THAT THE ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME OR THE INCOME R EPRESENTED IN RESPECT I.T.A.NOS.3975, 3976 & 3977 /AHD/2008 3 OF WHICH, PARTICULARS HAVE BEEN CONCEALED. HE RELI ED ON THE ORDER OF THE A.O. AND THE CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND HAVE PERUSED THE ORDERS OF THE A.O. AND LD. CIT(A). WE FIND THAT THE PENALTY PROCEEDINGS ARE INDEPENDENT OF THE ASSESSMENT PROCE EDINGS AND, THEREFORE, THERE IS NO NECESSITY OF KEEPING THESE A PPEALS WITH REGARD TO THE VALIDITY OF PENALTY IMPOSED, PENDING BEFORE THE TRI BUNAL. WITH REGARD TO THE MERIT OF THE CASE, WE FIND THAT THE ISSUE OF VA LIDITY OF ADDITION MADE BY THE REVENUE IS PENDING BEFORE THE HONBLE JURISD ICTIONAL HIGH COURT IN TAX APPEALS NO.520/521/522 OF 2004 AND THE APPEAL W ITH REGARD TO THE ISSUE HAVING BEEN ADMITTED BY THE HONBLE JURISDICT IONAL HIGH COURT, THE SAME IS A DEBATABLE ISSUE TO BE DECIDED BY THE HIGH ER COURT. THE REVENUE COULD NOT CONTROVERT THE SUBMISSIONS OF THE LD. COU NSEL FOR THE ASSESSEE THAT THE A.O. VIDE HIS LETTER DATED 11.03.2003 HAS REFUSED TO AFFORD THE ASSESSEE THE OPPORTUNITY OF CROSS EXAMINATION OF TH E BANK OFFICIALS, WHO HAVE GIVEN THE INFORMATION REGARDING PURCHASE OF DD BY THE ASSESSEE DURING THE RELEVANT PERIOD. THE A.O. HAS ALSO NOT SUPPLIED THE COPIES OF VARIOUS IMPORTANT DOCUMENTS ON THE BASIS OF WHICH T HE STATEMENTS HAVE BEEN PREPARED BY THE BANK OFFICIALS, TO THE ASSESSE E. IN THE ABSENCE OF COPIES OF VARIOUS DOCUMENTS FORMING THE BASIS ON WH ICH THE STATEMENTS HAVE BEEN PREPARED BY THE BANK OFFICIALS AND IN THE ABSENCE OF OPPORTUNITY TO CROSS EXAMINE THE BANK OFFICIALS ISS UING THE RELEVANT INFORMATION REGARDING PURCHASE OF DD BY THE ASSESSE E, THE FACTS OF THE CASE MAY OR MAY NOT JUSTIFY THE ADDITION MADE IN TH E QUANTUM CASE OF THE ASSESSEE, BUT SHALL NOT JUSTIFY THE IMPOSITION OF P ENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE ASSESSEE. IT IS WE LL SETTLED THAT STRICTER LEVEL OF EVIDENCE IS REQUIRED TO IMPOSE PENALTY FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME U/S 271(1)(C) OF I.T.A.NOS.3975, 3976 & 3977 /AHD/2008 4 THE ACT, WHICH THE REVENUE IN THIS CASE HAS FAILED TO BRING ON RECORD. IN THIS CASE, IN PARA 8 OF THE PENALTY ORDER PASSED BY THE A.O., HE HAS NOT RECORDED THE DEFINITE AND SPECIFIC CHARGE THAT WHET HER THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR FILING OF INACCU RATE PARTICULAR OF INCOME. IN THESE FACTS OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE REVENUE COULD NOT MAKE OUT ANY CASE FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT, WHICH IS ACCORDINGLY CANCELLE D FOR ALL THE THREE ASSESSMENT YEARS IN THE APPEALS BEFORE US AND THE G ROUNDS OF THE ASSESSEE FOR ALL THE THREE ASSESSMENT YEARS ARE ALLOWED. 5. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEE ARE ALLOWED. 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (ANIL CHATURVEDI) (G. C. GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 04/05/2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04/05/2012. OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 04/5/12 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.4/5 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 04/0 5/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER .