Sh. Karan Bhalla, New Delhi V. ITO, New Delhi

ITA 4863/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3845 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 05-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SALIL AGARWAL SHAILESH GU PTA
• Keywords: Retrospective amendment; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D: NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 4863/DEL /2014 ASSESSMENT YEAR: 2008-09 SHRI KARAN BHALLA, W-3/2 LANE, WESTERN AVENUE, SAINIK FARMS, NEW DELHI-110062 (PAN: AJLPB2687C) VS ITO, WARD-9(2), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI SALIL AGARWAL, SHAILESH GU PTA, ADV. RESPONDENT BY : SHRI AMIT JAIN, SR. D R DATE OF HEARING: 24.01.2018 DATE OF PRONOUNCEMENT : 30.01.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AND IT CHALLENGES THE CONFIRMATION OF IMPOSITION OF PEN ALTY OF RS. 5,35,030/- IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED 'THE ACT'). 2. THE LD. AR DREW OUR ATTENTION TO THE NOTICE ISSUED U/S 274 R/W SECTION 271(1)(C) OF THE ACT WHI CH ITA NO. 4863/DEL/2014 ASSESSMENT YEAR 2008-09 WAS DATED 29.11.2010 AND SUBMITTED THAT THE ASSESSI NG OFFICER HAS NOT SPECIFIED THE CHARGE ON WHICH PENAL TY U/S 271(1)(C) OF THE ACT WAS SOUGHT TO BE LEVIED. THE L D. AR SUBMITTED THAT THE AO HAD SIMPLY SENT THE PRINTED F ORM OF NOTICE WITHOUT CROSSING OUT THE IRRELEVANT PORTI ONS. IT WAS FURTHER SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 271(1)(C) THERE ARE TWO LIMBS UNDER WHICH P ENALTY CAN BE IMPOSED AND THE ASSESSING OFFICER HAS TO NECESSARILY SPECIFY UNDER WHICH LIMB, THE PENALTY I S BEING SOUGHT TO BE IMPOSED I.E. WHETHER FOR CONCEAL MENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. AR FURTHER SUBMITTED THAT SINCE IN THE NOTICE, BOTH THE CHARGES WERE MENTIONED AND THE IRRELEVANT PORTIONS WERE NOT CROSSED OUT, THE NOTIC E WAS NOT AS PER THE REQUIREMENTS OF THE ACT. HE RELIED UPON THE DECISIONS OF VARIOUS HONBLE COURTS ESPECIALLY ON THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY REPORTED IN (20 13) 359 ITR 565 (KAR) WHICH WAS FOLLOWED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS REPORTED IN (2016) 73 TAXMANN.COM ITA NO. 4863/DEL/2014 ASSESSMENT YEAR 2008-09 241 (KAR) WHERE THE SLP FILED BY THE REVENUE HAS BE EN DISMISSED BY THE HONBLE SUPREME COURT. 3. IN RESPONSE, THE LEARNED DR APPEARING ON BEHALF OF THE REVENUE ARGUED THAT PENALTY PROCEEDINGS HAVE BE EN VALIDLY INITIATED IN THE NOTICE U/S 274 R.W.S. 271 OF THE ACT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT FROM THE NOTICE U/S 274 R.W.S. 271 OF THE ACT DATED 29.11.2010 FOR THE IMPU GNED YEAR THAT THE ASSESSING OFFICER HAS NOT SPECIFICALL Y SPECIFIED AS TO UNDER WHICH LIMB OF SECTION 271(L)( C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED BY HIM, I.E., WHETHER FOR CONCEALMENT OF PARTICULARS O F INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY, REPORTED I N 359 ITR 565 (KAR)HAS HELD AS UNDER: '(P) NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPECIFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(L)(C), I.E., WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. ITA NO. 4863/DEL/2014 ASSESSMENT YEAR 2008-09 (Q) SENDING PRINTED FORM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW.' 4.1 THE ABOVE-SAID JUDGMENT OF HONBLE HIGH COURT O F KARNATAKA IN THE CASE OF C IT VS. MANJUNATHA COTTON & GINNING FACTOR, REPORTED IN 359 ITR 565 (KAR) HAS BEEN FOLLOWED BY THE HONBLE HIGH COURT OF KARNATAK A IN THE CASE OF COMMISSIONER OF INCOME TAX VS SSAS EMERALD MEADOWS, REPORTED IN (2016) 73 TAXMANN.COM 241 (KAR) AND THE RELEVANT OBSERVATIONS OF THE HON BLE KARNATAKA HIGH COURT ARE AS UNDER- '2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWIN G SUBSTANTIAL QUESTIONS OF LAW, WHETHER, OMISSION IF ASSESSING OFFICER TO EXPLICITL Y MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATE D FOR FURNISHING OF INACCURATE PARTICULARS OR THAT FO R CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABL E FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYON D REASONABLE DOUBT THAT THE ASSESSEE HAD CONCEALED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLD ING THAT THE PENALTY NOTICE UNDER SECTION 274 R.W.S. 271(I)(C) IS BAD IN LAW AND INVALID DESPITE THE AMENDMENT OF SECTION 271 (1B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT, THE ASSESSIN G OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECOR DING 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 ITA NO. 4863/DEL/2014 ASSESSMENT YEAR 2008-09 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 TH E ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(L)( 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., WHETHER FOR CONCEALMENT OF PARTICUL ARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF T HE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISIO N BENCH OF THIS COURT RENDERED, IN THE CASE OF CIT V. MANJUNATHA COTTON & GINNING FACTORY [2013] 359ITR 565/218 TAXMAN 423/35 TAXMANN.COM 250 (KAR.). 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE AR E OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE AP PEAL IS ACCORDINGLY DISMISSED. 4.2 FURTHER, THE SLP FILED BY THE REVENUE AGAINST THE JUDGMENT OF THE KARNATAKA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS SSAS EMERALD MEADOWS (SUPRA) WAS DISMISSED BY THE HONBLE SUPREME COURT OF INDIA. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGME NT OF THE HONBLE KARNATAKA HIGH COURT AS ABOVE-MENTIONED WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSING OFFIC ER IS REQUIRED TO SPECIFY WHICH LIMB OF SECTION 271 (1)(C ) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED, I. E., ITA NO. 4863/DEL/2014 ASSESSMENT YEAR 2008-09 WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. FRO M THE PERUSAL OF THE NOTICE U/S.274 R.W.S. 271 OF THE ACT IN THE PRESENT APPEAL, IT IS VERY MUCH OBVIOUS THAT THE ASSESSING OFFICER HAS NOT SPECIFIED THE SAME. THE N OTICE IN FACT IS IN STANDARD PRO FORMA WITHOUT THE IRRELEVANT CLAUSES THEREIN BEING STRUCK OFF. THIS INDICATES NO N APPLICATION OF MIND ON THE PART OF THE ASSESSING OF FICER WHILE ISSUING THE PENALTY NOTICE. IN THE CIRCUMSTAN CES AND FACTS OF THE CASE, THE PENALTY PROCEEDINGS INIT IATED BY THE ASSESSING OFFICER ARE BAD IN LAW AND ACCORDINGL Y THE PENALTY SO INITIATED IS DIRECTED TO BE DELETED AND THE ORDER OF THE LEARNED CIT (A) IS SET ASIDE. 5. IN THE FINAL RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2018. SD/- SD/- (B.P. JAIN) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH JANUARY, 2018 GS ITA NO. 4863/DEL/2014 ASSESSMENT YEAR 2008-09 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR