NIROD KUMAR SAHOO, MEENABAZAR V. INCOME TAX OFFICER,DHENKANAL WARD,DHENKANAL, DHENKANAL

ITA 43/CTK/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8029 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 29-01-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Question of law; Set aside
• Section: 271(1)(c); 274; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE Nirod Kumar Sahoo, Bazar, Dhenkanal PAN/GIR No (Appellant This is an appeal filed by the assessee aga CIT(A), NFAC, Delhi 2/10182/019-20 2. Shri Natabar S.C.Mohanty, ld Sr DR 3. The appeal filed by the assessee is delayed by 152 days. The assessee has filed condonation petition supported by affidavit, wherein, it is stated that the first appellate order dated 7.6.2023 came to the knowledge of the assessee on 1.7.2023 and the second appeal should have been filed IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK ‘SMC’ BENCH, CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL ITA No.43/CTK/2024 Assessment Year : 2012-13 Nirod Kumar Sahoo, Meena Bazar, Dhenkanal-759001 Vs. Income Tax Officer, Ward Dhenkanal PAN/GIR No.AHUPS 4395 K (Appellant) .. ( Respondent Assessee by : Shri Natabar Panda, Adv Revenue by : Shri S.C.Mohanty, ld Sr DR Date of Hearing : 02/0 Date of Pronouncement : 02/0 O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated 7.6.2023 in Appeal No. 20 for the assessment year 2012-13 . Natabar Panda, ld AR appeared for the assessee S.C.Mohanty, ld Sr DR represented on behalf of the revenue. The appeal filed by the assessee is delayed by 152 days. The assessee has filed condonation petition supported by affidavit, wherein, it is ted that the first appellate order dated 7.6.2023 came to the knowledge of the assessee on 1.7.2023 and the second appeal should have been filed Page1 | 7 IN THE INCOME TAX APPELLATE TRIBUNAL, , CUTTACK JUDICIAL MEMBER Income Tax Officer, Ward-2, Dhenkanal Respondent) Natabar Panda, Adv : Shri S.C.Mohanty, ld Sr DR 04/2024 /04/2024 inst the order of the ld in Appeal No.CIT(A),Bhubaneswar- ld AR appeared for the assessee and Shri represented on behalf of the revenue. The appeal filed by the assessee is delayed by 152 days. The assessee has filed condonation petition supported by affidavit, wherein, it is ted that the first appellate order dated 7.6.2023 came to the knowledge of the assessee on 1.7.2023 and the second appeal should have been filed ITA No.43/CTK/2024 Assessment Year : 2012-13 Page2 | 7 on or before 31.8.2023. But as the assessee was ill and bed ridden as per the advice of the physician for the period from 18.8.03 to 9.1.2024, there was delay of 152 in filing of appeal before the Tribunal. The assessee has filed medical certificates in support of the illness. 4. After considering the condonation petition and hearing the parties, I am satisfied that the reasons given in the condonation petition have not been found to be false. Therefore, the delay of 152 days in filing the appeal is condoned and the appeal disposed of on merits. 5. It was submitted by ld AR that the appeal is against the penalty levied u/s.271(1)(c) of the Act by the Assessing Officer. It was the submission that there was survey on the premises of the assessee and consequently, assessment came to be completed, which has resulted to an addition of Rs.23,80,014/-. It was the submission that the addition came to be confirmed by the Tribunal also. It was the submission that show cause notice u/s.274 r.w. section 271 of the Income Tax Act came to be issued on 22.12.2016, wherein, the Assessing Officer has not struck-off the irrelevant portion as to whether the penalty is being levied for concealment of particulars of income or for furnishing inaccurate particulars of income. It was the submission that under similar circumstances, the Co-ordinate Bench of this Tribunal in the case of M/s. Ganapati Transport vs ITO in ITA No.161/CTK/2019 for the assessment year 2010-2011, following the decision of the Hon’ble Supreme Court in the case of SSA’s Emerald ITA No.43/CTK/2024 Assessment Year : 2012-13 Page3 | 7 Meadows, reported in 73 taxmann.com 248 (SC) had held that without striking off the irrelevant words, the penalty proceedings show a non- application of mind by the Assessing Officer and is thus unsustainable. Ld AR has placed the copy of the notice u/s.274 r.w.s 271, which is scanned as follows: ITA No.43/CTK/2024 Assessment Year : 2012-13 Page4 | 7 Ld AR also relied on the decision of the Co-ordinate Bench in the case of Ganapati Transport (supra), wherein, in paras 7 to 11, it has been held as follows: “7. We have heard the rival submissions of both the parties and perused the orders of lower authorities and materials available on record of the Tribunal. We find that the facts in the present appeal are not in dispute and the Assessing Officer in the order passed u/s.271(1)(c) of the Act dated 26.03.2018 levied penalty of Rs. Rs.62,991/-. 8. Hon'ble Apex Court vide judgment in case of M/s. SSA's Emerald Meadows, (2016) 73 taxmann.com 248(SC) dismissed the Special Leave Petition filed by the Revenue against the judgment rendered by Hon'ble High Court of Karnataka whereby identical issue was decided in favour of the assessee. Operative part of the judgment in case of M/s. SSA's Emerald Meadows (supra) decided by Hon'ble High Court of Karnataka is reproduced below :- "2. This appeal has been filed raising the following substantial questions of law: (1) Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case? (2 Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in. holding that the penalty notice under Section 274 r.w.s. 271(1)(c) is had in law and. invalid in spite the amendment of Section 271(1 B) with retrospective effect and by virtue of the amendment, the assessing officer has initiated the penalty by properly recording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued, under Section 274 without taking into consideration the assessment order when the assessing officer has specified that the assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Section 271(l)(c) of the Act, the penalty proceedings had been initiated i.e., ITA No.43/CTK/2024 Assessment Year : 2012-13 Page5 | 7 whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied 01 the derision of the Division Bench of this Court rendered In the case of COMMISSIONER or INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court, the appeal is accordingly dismissed." 9. Bare perusal of the notice issued u/s 274 r.w.s.271(1)(c) of the Act apparently goes to prove that the Assessing Officer initiated the penalty proceedings by issuing the notice u/s 274/271(1)(c) of the Act without specifying the assessee has concealed ''particulars of income" or assessee has furnished "inaccurate particulars of income", so as to provide adequate opportunity to the assessee to explain the show cause notice. Rather notice in this case has been issued in a stereotyped manner without applying any mind which is bad in law, hence is not a valid notice sufficient to impose penalty u/s 271(1)(c) of the Act. 10. The penalty provisions of section 271(1)(c) of the Act are attracted where the assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is also a wellaccepted proposition that the aforesaid two limbs of section 271(1)(c) of the Act carry different meanings. Therefore, it was imperative for the Assessing Officer to strike- off the irrelevant limb so as to make the assessee aware as to what is the charge made against him so that he can respond accordingly. The Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory, 359 ITR 565 (Kar) observed that the levy of penalty has to be clear as to the limb under which it is being levied. As per Hon'ble High Court, where the Assessing Officer proposed to invoke first limb being concealment, then the notice has to be appropriately marked. The Hon'ble High Court held that the standard proforma of notice under section 274 of the Act without striking of the irrelevant clauses would lead to an inference of non- application of mind by the Assessing Officer. The Hon'ble Supreme Court in the case of Dilip N. Shroff vs. JCIT, 291 ITR 519(SC) has also noticed that where the Assessing Officer issues notice under section 274 of the Act in the standard proforma and the inappropriate words are not deleted, the same would postulate that the Assessing Officer was not sure as to whether he was to proceed on the basis that the assessee had concealed the particulars of his income or furnished inaccurate particulars of income. According to the Hon'ble Supreme Court, in such a situation, levy of penalty suffers from non- application of mind. In the background of the aforesaid legal position and, having regard to the manner in which the Assessing Officer has issued notice under section 274 r.w.s. 271(1)(c) of the Act dated 30.06.2015 without striking off the irrelevant words, the penalty ITA No.43/CTK/2024 Assessment Year : 2012-13 Page6 | 7 proceedings show a non-application of mind by the Assessing Officer and is, thus, unsustainable. 11. The facts of the present appeal are identical to the facts of the case before the Hon'ble Supreme Court in the case of SSA's. Emerald Meadows (supra) and, therefore, the decision of Hon'ble Supreme Court squarely applies to the case of the assessee. Hence, respectfully following the same, we set aside the order passed by the CIT(A) dated 22.04.2019 and cancel the penalty order dated 26.03.2018 levying penalty of Rs.62,991/- and allow the ground of appeal of the assessee.” 6. In reply, ld Sr DR vehemently supported the order of the Assessing Officer and ld CIT(A). It was the submission that perusal of the assessment order shows that the penalty has been initiated for furnishing of inaccurate particulars as has been mentioned in the assessment order. It was the submission that the Assessing Officer is very clear about initiation of penalty proceedings and just because a show cause notice, which is ITNS had not struck off the irrelevant portion which could not lead to cancellation of penalty. He further refers to the provisions of section 92BB of the Act. 7. I have considered the rival submissions. A perusal of the assessment order admittedly shows that the penalty has been initiated for furnishing of inaccurate particulars of income. Further, the show cause notice issued u/s.274 r.w.s 271, which is the notice required to be issued along with the assessment order for the purpose of initiating penalty proceedings clearly has not struck off the irrelevant portion. This being so, respectfully following the decision of the Co-ordinate Bench of this Tribunal in the case of Ganapati transport (supra), on identical facts, the penalty as levied by the AO and confirmed by the ld CIT(A) stands deleted. ITA No.43/CTK/2024 Assessment Year : 2012-13 Page7 | 7 8. In the result, appeal of the assessee stands allowed Order dictated and pronounced in the open court on 02/04/2024. SD/- (George Mathan) JUDICIAL MEMBER Cuttack; Dated 02/04/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Nirod Kumar Sahoo, Meena Bazar, Dhenkanal-759001 2. The Respondent: Income Tax Officer, Ward- 2, Dhenkanal 3. The CIT(A)- NFAC, Delhi 4. Pr.CIT, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//