CTS Industries Ltd., Kolkata V. DCIT, CIR-7, KOLKATA, Kolkata

ITA 449/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1012 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU ADD L CIT LD
• Assessee Lawyers: VINO KR JAIN FCA L D

Judgement Text

1 ITA NO.499/KOL/16 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA BEFORE: SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER, AND SHRI DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER I.T.A NO. 449/KO L/2016 A.Y: 2009 -10 M/S. CTS INDUSTRIES LTD. VS. D.C.I.T, CIR-7, KOLKA TA PAN: AACCC 1634R [APPELLANT] [RESPONDEN T] FOR THE APPELLANT : SHRI VINO KR. JAIN, FCA, L D.AR FOR THE RESPONDENT : SHRI DAVID Z. CHAWNGTHU, AD DL.CIT, LD.SR.DR DATE OF HEARING : 17-10-2017 DATE OF PRONOUNCEMENT : 15-11-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), 16, KOLKATA DT. 22-12-2015 FOR THE A.Y 2009-10, WHEREIN HE CONFIRMED THE PENAL TY OF RS. 3,60,012/- IMPOSED U/S. 271(1)( C) OF THE ACT BY T HE AO. 2. THE LD.AR SUBMITS THAT THE ISSUE RAISED IN THE A PPEAL IS COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS . HE ALSO SUBMITS THAT THE AO IMPOSED PENALTY ON DEFECTIVE NOTICE ISSUED U/S. 274 R.W.S 271(1) ( C) OF THE ACT ON 31- 12-2011 AND IN VIEW OF THE DECISION SUPRA THE IMPOSITION OF PENALTY IS NOT MAINTAINABLE. 3. THE LD.AR OF THE ASSESSEE FURTHER SUBMITS THAT T HE STATUTORY NOTICE DT. 31-12-2011 ISSUED BY THE AO [DY. COMMISS IONER OF INCOME TAX, CIR-7, KOLKATA] U/S. 274 R.W.S 271 OF THE ACT IS DEFECTIVE. HE FURTHER ARGUED THAT THE ISSUE IN HAND AS RAISED BY THE ASSESSEE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE DECIS ION OF THE HONBLE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS. IN SUPPORT OF THIS CONTENTION, HE PLACED RELIANCE ON THE DECISION OF THE HONBLE 2 ITA NO.499/KOL/16 KARNATAKA HIGH COURT IN THE CASE OF CIT VS SSAS EM ERALD MEADOWS SUPRA IN ITA NO. 380 OF 2015 DATED 23.11.2015 WHICH WAS L ATER APPROVED BY THE HONBLE SUPREME COURT BY DISMISSAL OF SPECIAL LEAVE PETITION (SLP) FILED BY THE REVENUE IN CC NO. 11485 /2016 DATED 5.8.2016. IN RESPONSE TO THIS, THE LD DR VEHEMENTL Y RELIED ON THE ORDER OF THE LD AO. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE NOTICE DT. 31-12-2011 ISSUED U/S 274 R.W.S 271 OF THE ACT DOES NOT SPECIFY THE CHARGE OF OFFENCE COMMITTED BY THE ASSESSEE VIZ WHETHER HAD CONCEALED THE PARTICULARS OF INCOME OR HAD FURNISHE D INACCURATE PARTICULARS OF INCOME. HENCE THE SAID NOTICE IS TO BE HELD AS DEFECTIVE. THIS ISSUE HAS BEEN DECIDED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS SSAS EMERALD MEADOWS I N ITA NO. 380 OF 2015 DATED 23.11.2015 WHICH IN TURN PLACED RELIANCE ON ANOTHER JUDGMENT OF THE SAME COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY REPORTED IN 359 ITR 565 (KAR). IN THE SAID DECISION, THEIR LORDSHIPS OF HONBLE KARNATAKA HIGH COURT HELD THAT :- 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH S ECTION 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(1)(C ) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E , WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSE SSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE O F COMMISSIONER OF INCOME TAX VS MANJUNATHA COTTON AND GINNING FACTORY REPORTED IN ( 2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDG EMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTI ON OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE APPEAL IS ACCORDI NGLY DISMISSED. 5. WE FIND THAT THE REVENUE HAD PREFERRED A SLP B EFORE THE HONBLE SUPREME COURT AGAINST THIS JUDGMENT WHICH WAS DISMI SSED IN CC NO. 11485/2016 DATED 5.8.2016 BY OBSERVING AS UNDER:- UPON HEARING THE COUNSEL, THE COURT MADE THE FOLLOW ING ORDER DELAY CONDONED. WE DO NOT FIND ANY MERIT IN THIS PETITION. THE SPE CIAL LEAVE PETITION IS , ACCORDINGLY DISMISSED. PENDING APPLICATION, IF ANY, STANDS DISPOSED OF. 6. RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL P RECEDENTS, WE CANCEL THE PENALTY LEVIED OF RS. RS.3,60,012/- BY THE AO U/SEC.271 (1) ( C) 3 ITA NO.499/KOL/16 OF THE ACT AND CONFIRMED BY THE CIT-A. ACCORDINGLY , THE GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL FOR THE A.Y UN DER CONSIDERATION ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-1 1-2017 SD/- SD/- ARJUN LAL SAINI S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :15-11-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE: M/S. CTS INDUSTRIES LIMITED C/O RSVPC & COMPANY, 41A, A.J.C BOSE ROAD, SUITE NO. 613, KOLKATA-700 01 4. 2 RESPONDENT/DEPARTMENT :THE DEPUTY COMMISSIONER OF I NCOME [DCIT], CIRCLE-7, P-7 CHOWRINGHEE SQUARE, 5 TH FLOOR, ROOM NO. 15, KOLKATA-700 069. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA