The Thrikkakkara Service Co-op Bank Ltd, Ernakulam V. The Jt DIT ( I & CI), Kochi

ITA 449/COCH/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5755 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-09-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 07-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Keywords: Initiation of penalty proceedings; Reasonable cause
• Section: 133(6); 201; 274

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO. 4 49/ COCH/ 201 9 ASSESSMENT YEAR : 20 11 - 12 M/S. THRIKKAKKARA SERVICE CO - OP BANK LTD., NO. E 148, VADACODE P.O., KANGARAPPADY, ERNAKULAM, KOCHI - 682 021. [PAN:AAC AT 5505E] ] . VS. THE JOINT DIRECTOR OF INCOME - TAX (INTELLIGENCE & CI), COCHIN ( ASSES SEE - APPELLANT) ( REVENU E - RESPONDENT) ASSESSEE BY SMT. SWATHY S, ADV. REVENUE BY SMT. A.S. BINDHU, SR. DR D ATE OF HEARING 2 5 /09/2019 DATE OF PRONOUNCEMENT 01 ST /10/ 2019 O R D E R PER GEOR GE GEORGE K. JM : THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - I, KOCHI DATED 26.02.2019 . THE RELEVANT ASSESSMENT YEAR IS 2011 - 2012. THE ORDER OF THE CIT(A) ARISES OUT OF THE ORDER PASSED U/S 272A(2)(C) R. W.S. 274 OF THE INCOME - TAX ACT, 1961. 2 . THE BRIEF FACTS OF THE CASE ARE AS FOLLOW: THE ASSESSEE IS A CO - OPERATIVE SOCIETY REGISTERED UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT, 1969. THE ASSESSEE WAS SERVED WITH NOTICE U/S 133(6) OF THE INCOME - TAX A CT. THE ASSESSEE WAS DIRECTED TO FURNISH DETAILS OF THE PERSONS I.T.A. NO . 4 4 9 /COCH/201 9 2 WHO HAD DEPOSITED ABOVE RS.5 LAKHS DURING THE F.Y.S 2010 - 11, 2011 - 12 AND 2012 - 13. THE ASSESSEE WAS ALSO DIRECTED TO GIVE DETAILS OF THE PERSONS, WHO HAD RECEIVED INTEREST INCOME EXCEEDING RS.1 0,000 DURING THE ABOVE MENTIONED FINANCIAL YEARS. THE ASSESSEE DID NOT FURNISH THE DETAILS CALLED FOR UNDER THE NOTICE ISSUED U/S 133(6) OF THE I.T. A CT. THE ASSESSING OFFICER, THEREFORE, INITIATED PENALTY PROCEEDINGS U/S 272A(2)(C) R.W.S. 274 AND IMPOSED PENALTY OF RS . 51,900 / - @RS.100 PER DAY FOR THE PERIOD FRO M 25/09/2013 TILL THE DATE OF ORDER IMPOSING PENALTY. 4. AGGRIEVED BY THE ORDER OF THE IMPOSITION OF PENALTY, THE ASSESSEE PREFERRED APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE HAS FILED THE PRESENT A PPEAL. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE, HOWEVER, WE PROCEEDED TO D ISPOSE OF THIS APPEAL ON MERITS AFTER HEARING THE LEARNED DE PARTMENTAL REPRESENTATIVE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF THE KAKOOR SERVICE CO - OPERATIVE BANK LTD. IN ITA I.T.A. NO . 4 4 9 /COCH/201 9 3 NO.473/COCH/2015 & OTHERS (21 APPEALS) ORDER DATED 23.08.2017 HAD ADJ UDICATED AN IDENTICAL ISSUE IN FAVOUR OF THE REVENUE. 7. WE HAVE HEARD THE LEARNED DR AND PERUSED MATERIAL THE RECORD. ON IDENTICAL FACTS THE COCHIN BENCH OF THE TRIBUNAL IN THE CASES OF KAKOOR SERVICE CO - OPERATIVE BANK LTD. (SUPRA) HAD HELD THAT THE PE NALTY IMPOSED U/S 272A(2)(C) OF THE ACT IS VALID. THE RELEVANT FINDING OF THE TRIBUNAL READS AS FOLLOW: - ''8. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. FROM THE GROUNDS RAISED AND THE ARGUMENT NOTE SUBMITTED BY THE ASSESSEE, I AM OF THE VIEW THAT THREE CONTENTIONS ARE RAISED BY THE ASSESSEE IN THIS APPEAL; NAMELY; (I) ITO (INTELLIGENCE) DOES NOT HAVE JURISDICTION TO ISSUE NOTICE U/S 133(6) OF THE I T ACT; (II) THE ORDER PASSED U/S 272A(2)(C) IS BARRED BY LIMITATION; (III) THE RE WAS REASONABLE CAUSE, AS MENTIONED IN SECTION 2738 OF THE ACT FOR NON FURNISHING INFORMATION SOUGHT U/S 133(6); THEREFORE, PENALTY U/S 272A(2) ( C) OF THE I T ACT IS TO BE QUASHED. 8.1 I SHALL TAKE UP FOR ADJUDICATION EACH OF THE ABOVE THREE CONTENTION S AS UNDER: I) ITO (INTELLIGENCE) DOES NOT HAVE JURISDICTION TO ISSUE NOTICE U/S 133(6) OF THE I T ACT: SECTION 133(6) OF THE I T ACT 1961 IS UNAMBIGUOUS AND CLEAR. THE DEPARTMENT UNDER THE SAID SECTION HAS POWER TO CALL FOR INFORMATION IN RELATION TO SU CH POINTS OR MATTERS WHICH WOULD BE USEFUL FOR, OR RELEVANT TO ANY PROCEEDING UNDER THE ACT FROM 'ANY PERSON' INCLUDING A 'BANKING COMPANY' OR 'ANY OFFICER' THEREON. LATER, AN AMENDMENT WAS INTRODUCED AS PER THE FINANCE ACT 1995 WHEREBY, THE WORDS ''ENQUIR Y OR' WERE INSERTED BEFORE THE WORD ''PROCEEDING'' IN SECTION 133(6), ALSO ADDING THE '2ND PROVISO' TO THE SAID PROVISION, WITH EFFECT FROM 1.7.1995. THE EFFECT OF THE SAID AMENDMENT IS THAT, THE POWER TO CALL FOR INFORMATION UNDER THE UN - AMENDED ACT WHICH WAS CONFINED ONLY IN RELATION TO A 'PENDING PROCEEDING' CAME TO BE WIDENED, AND EVEN IN A CASE WHERE NO PROCEEDING WAS PENDING, SUCH INFORMATION COULD BE CALLED FOR AS PART OF THE ENQUIRY, SUBJECT TO THE RIDER THAT, SUCH POWER I.T.A. NO . 4 4 9 /COCH/201 9 4 WAS NOT TO BE EXERCISED BY A NY INCOME TAX AUTHORITY BELOW THE RANK OF DIRECTOR OR COMMISSIONER WITHOUT THE PRIOR APPROVAL OF THE DIRECTOR OR THE COMMISSIONER, AS THE CASE MAY BE. THE SAID AMENDMENT WAS BROUGHT ABOUT AS A MEASURE TO TACKLE TAX EVASION EFFECTIVELY, AS CLARIFIED BY THE CENTRAL BOARD OF DIRECTTAXES (CBDT) VIDE CIRCULAR NO. 717 DATED 14.8.1995, WHICH READS AS FOLLOWS: 'POWER TO CALL FOR INFORMATION WHEN NO PROCEEDING IS PENDING. - ... 41.2 AT PRESENT THE PROVISIONS OF SUB - SECTION (6) OF SECTION 133 EMPOWER INCOME - TAX AUTH ORITIES TO CALL FOR INFORMATION WHICH IS USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THE ACT WHICH MEANS THAT THESE PROVISIONS CAN BE INVOKED ONLY IN CASES M WHERE THE PROCEEDINGS ARE PENDING AND NOT OTHERWISE. THIS ACTS AS A LIMITATION OR A RESTRAINT ON THE CAPABILITY OF THE DEPARTMENT TO TACKLE EVASION EFFECTIVELY. IT IS, THEREFORE, THOUGHT NECESSARY TO HAVE THE POWER TO GATHER INFORMATION WHICH AFTER PROPER ENQUIRY, WILL RESULT IN INITIATION OF PROCEEDINGS UNDER THE ACT. 41.3 WITH A VIEW TO HAVING A CLEAR LEGAL SANCTION, THE EXISTING PROVISIONS TO CALL FOR INFORMATION HAVE BEEN AMENDED. NOW,THE INCOME - TAX AUTHORITIES HAVE BEEN EMPOWERED TO REQUISITION INFORMATION WHICH WILL BE USEFUL FOR OR RELEVANT TO ANY ENQUIRY OR PROCEEDINGS UNDER THE INCOME - TAX ACT IN THE CASE OF ANY PERSON. THE ASSESSING OFFICER WOULD, HOWEVER, CONTINUE TO HAVE THE POWER TO REQUISITION INFORMATION IN SPECIFIC CASES IN RESPECT OF WHICH ANY PROCEEDING IS PENDING AS AT PRESENT. HOWEVER, AN INCOME - TAX AUTHORITY BELOW THE RANK OF TH E DIRECTOR OR COMMISSIONER CAN EXERCISE THIS POWER IN RESPECT OF AN INQUIRY IN A CASE WHERE NO PROCEEDING IS PENDING, ONLY WITH THE PRIOR APPROVAL OF THE DIRECTOR OR THE COMMISSIONER.' 8.2 IN THE INSTANT CASE, NOTICE U/S 133(6) OF THE ACT WAS ISSUED BY T HE ITO (INTELLIGENCE) AFTER OBTAINING NECESSARY APPROVAL FROM THE DIRECTOR OF INCOME TAX (INTELLIGENCE). THE HON'BLE SUPREME COURT IN THE CASE OF KATHIROOR SERVICE CO - OP BANK LTD VS C I T (CIB) & OTHERS, REPORTED IN 360 ITR 243 HAVE CONSIDERED AN IDENTICAL C ASE AND DECIDED THAT THE ITO(CIB) HAS POWER TO ISSUE NOTICE U/S 133(6) OF THE IT ACT THE RELEVANT FINDINGS OF THE HON'BLE SUPREME COURT, READ AS FOLLOWS: '19. IN VIEW OF THE AFORESAID, WE ARE OF THE VIEW THAT THE POWERS UNDER SECTION 133(6) ARE IN THE NAT URE OF SURVEY AND A GENERAL ENQUIRY TO IDENTIFY PERSONS WHO ARE LIKELY TO HAVE TAXABLE INCOME AND WHETHER THEY ARE IN COMPLIANCE WITH THE PROVISIONS OF THE ACT. IT WOULD NOT FALL UNDER THE RESTRICTED DOMAINS OF BEING 'AREA SPECIFIC' OR 'CASE SPECIFIC'. SEC TION 133(6) DOES NOT REFER TO ANY ENQUIRY ABOUT ANY PARTICULAR PERSON OR ASSESSEE, BUT PERTAINS TO INFORMATION IN RELATION TO 'SUCH POINTS OR MATTERS' WHICH THE ASSESSING AUTHORITY ISSUING NOTICES REQUIRES. THIS CLEARLY ILLUSTRATES THAT THE INFORMATION OF GENERAL NATURE I.T.A. NO . 4 4 9 /COCH/201 9 5 CAN BE CALLED FOR AND NAMES AND ADDRESSES OF DEPOSITORS WHO HOLD DEPOSITS ABOVE A PARTICULAR SUM IS CERTAINLY PERMISSIBLE. 20. IN THE INSTANT CASE, BY THE IMPUGNED NOTICE THE ASSESSING AUTHORITY SOUGHT FOR INFORMATION IN RESPECT OF ITS CUST OMERS WHICH HAVE CASH TRANSACTIONS OR DEPOSITS OF RS. 1,00,000 OR ABOVE FOR A PERIOD OF THREE YEARS, WITHOUT REFERENCE TO ANY PROCEEDING OR ENQUIRY PENDING BEFORE ANY AUTHORITY UNDER THE ACT. ADMITTEDLY, IN THE PRESENT CASE, NOTICE WAS ISSUED ONLY AFTER OB TAINING APPROVAL OF THE COMMISSIONER OF INCOME - TAX, COCHIN. IN THE LIGHT OF THE AFORESAID, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSING AUTHORITY HAS NOT ERRED IN ISSUING THE NOTICE TO THE ASSESSEE - FINANCIAL INSTITUTION REQUIRING IT TO FURNISH INFOR MATION REGARDING THE ACCOUNT HOLDER WITH CASH TRANSACTIONS OR DEPOSITS OF MORE THAN RS.1,00,000. 21. THEREFORE, WE HOLD THAT THE DIVISION BENCH OF THE HIGH COURT WAS JUSTIFIED IN ITS CONCLUSION THAT FOR SUCH ENQUIRY UNDER SECTION 133(6) THE NOTICE COULD B E VALIDLY ISSUED BY THE ASSESSING AUTHORITY. 22. IN VIEW OF THE ABOVE, THE APPEAL REQUIRES TO BE DISMISSED AND ACCORDINGLY, STANDS DISMISSED. ' 8.3 IN THE LIGHT OF THE JUDGMENT OF THE HON'BLE APEX COURT (SUPRA) AND THE AFORESAID REASONING, I AM OF THE V IEW THAT THE ITO (INTELLIGENCE) HAS JURISDICTION TO ISSUE NOTICE U/S 133(6) OF THE I T ACT . (II) THE ORDER PASSED U/S 272A(2)(C) IS BARRED BY LIMITATION: 8.4 SECTION 275(1)(C) OF THE ACT PRESCRIBED THE TIME LIMIT FOR IMPOSITION OF PENALTY U/S 272A(2)(C) OF THE I T ACT SECTION 275(1)(C) OF THE I T ACT, READS AS FOLLOWS: '275(1) . (C) IN ANY OTHER CASE AFTER THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLET ED, OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES LATER. ' 8.5 ADMITTEDLY, PENALTY PROCEEDINGS U/S 272A(2)(C) WAS INITIATED ON 12.8.2014 BY ISSUANCE OF NOTICE U/S 274 OF THE I T AC T AND THE ORDER IMPOSING PENALTY U/S 272A(2)(C) WAS PASSED ON 19.9.2014. THEREFORE, THE PENALTY ORDER IS WELL WITHIN THE TIME LIMIT PRESCRIBED U/S 275(1)(C) OF THE ACT THE JUDGMENT OF THE HON'BLE RAJASTHAN HIGH COURT, RELIED ON BY THE ID AR OF THE ASSESSEE , IN THE CASE OF CIT VS SRI JITHENDRA SINGH RATHORE, IS NOT APPLICABLE TO THE FACTS OF THE INSTANCE CASE. IN THE CASE CONSIDERED BY THE HON'BLE RAJASTHAN HIGH COURT THE PENALTY I.T.A. NO . 4 4 9 /COCH/201 9 6 PROCEEDINGS U/S 2710 WAS INITIATED BY ISSUING NOTICE ON 25.3.2003 AND THE PENAL TY ORDER WAS PASSED ONLY ON 30.9.2003 BY WHICH TIME, SIX MONTHS PERIOD MENTIONED U/S 275(L)(C) HAD ALREADY EXPIRED. THE CONTENTION OF THE ID AR THAT NOTICE ISSUED U/S 133(6) SHOULD BE RECKONED FOR CONSIDERING THE TIME LIMIT U/S 275(1)( C) OF THE ACT IS DE - VOID OF ANY MERITS; BECAUSE SECTION 275(1)( C) PRESCRIBES THE TIME LIMIT ONLY FROM THE DATE OF INITIATION OF PENALTY PROCEEDINGS; NAMELY ISSUANCE OF NOTICE U/S 274 OF THE ACT FOR THE AFORESAID REASONS, I HOLD THAT THE ORDER PASSED BY THE JT DIRECTOR OF INC OME TAX (INTELLIGENCE) IS A VALID ORDER. (III) THERE WAS REASONABLE CAUSE, AS MENTIONED IN SECTION 273 B OF THE ACT FOR NON FURNISHING INFORMATION SOUGHT U/S 133(6); THEREFORE, PENALTY U/S 272A(2) (C) OF THE I T ACT IS TO BE QUASHED: 8.6 THE ASSESSEE HAS NOT OFFERED ANY VALID REASON FOR NOT FURNISHING THE INFORMATION CALLED FOR U/S 133(6) OF THE ACT. MANY OF THE NOTICES ISSUED BY THE ITO (INTELLIGENCE) WERE NEVER RESPONDED TO BY THE ASSESSEE. IN MANY INSTANCES THE ASSESSING OFFICER HAS MENTIONED THAT WHEN THEY HAD APPROACHED, THE ASSESSEE SOCIETY, FOR SEEKING INFORMATION U/S 133(6) OF THE ACT THERE WAS TOTAL LACK OF CO - OPERATION ON THE PART OF THE ASSESSEE SOCIETY AS WELL AS THREAT (REFERENCE ORDER IMPOSING PENALTY U/S 272A(2)(C) IN APPEALS ITA NO.202/C/201 7 AND ITA N0.217/C/ 2017). SINCE THERE IS NO REASONABLE CAUSE FURNISHED BY THE ASSESSEE AS MENTIONED U/S 2738 OF THE I T ACT FOR NON FURNISHING OF INFORMATION SOUGHT BY THE ITO(INTELLIGENCE) U/S 133(6) OF THE ACT I AM OF THE VIEW THAT THE ORDER IMPOSING PE NALTY CANNOT BE QUASHED. IT IS ORDERED ACCORDINGLY. 9 IN THE RESULT, THE APPEAL IN ITA NO.473/COCH/ 2015 IS DISMISSED. 10. BOTH THE PARTIES HAVE AGREED THAT THE FACTS CONSIDERED BY THE TRIBUNAL IN ITA NO 473/C/2015 ARE IDENTICAL TO THE FACTS OF THE OTHER APPEALS. THEREFORE, FOR THE REASONS STATED IN PARA 8 TO 8.6, THE APPEALS IN ITA NOS. 243/COCH/2013, 544/COCH/2015, 190/COCH/2016, 126/COCH/2017, 158/COCH/ 2017, 153/COCH/2017, 146/C/2017, 194/C/2017, 159/C/2017, 197/C/2017, 196/C/2017, 195/C/ 2017, 152/C/ 2017, 204/C/2017, 206/C/2017, 200/C/2017, 198/C/2017, 202/C/2017, 201/C/ 2017 AND 217/C/2017 ARE DISMISSED. 11 TO SUM - UP ALL THE 21 APPEALS FILED BY THE DIFFERENT ASSESSEES ARE DISMISSED.' I.T.A. NO . 4 4 9 /COCH/201 9 7 5. IN VIEW OF THE ABOVE ORDER OF THE TRIBUNAL WHICH IS IDENTIC AL TO THE FACTS OF THE PRESENT CASE, WE HOLD THAT THE CIT(A) IS JUSTIFIED IN UPHOLDING THE ORDER PASSED U/S 272A(2)(C) OF THE INCOME - TAX ACT. IT IS ORDERED ACCORDINGLY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONO UNCED IN THE OPEN COURT ON THIS 01 ST OCTOBER, 2 019 SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: KOCHI DATED: 01 ST OCTOBER, 2019 GJ COPY TO: 1 . M/S. THRIKKAKKARA S ERVICE CO - OP BANK LTD., NO. E 148, VADACODE P.O., KANGARAPPADY, ERNAKULAM, KOCHI - 682 021. 2. THE JT. DIRECTOR OF INCOME TAX (INTELLIGENCE & CI), KOCHI. 3. THE COMMISSIONER OF INCOME - TAX (AP P EALS) - I , KOCHI , 4. THE PR. COMMISSIONER OF INCOME - TAX, KOCHI. 5. D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN