Shri Jatin M. Shah, Ahmedabad V. The Income Tax Officer, Ward-5(3)(4), Ahmedabad

ITA 499/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1141 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 28-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PF JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.499/AHD/2017 (ASSESSMENT YEAR : 2011-12) SHRI JATIN M. SHAH SHREE KRISHNA CARGO M-7, SHREE GHATAKARAN MAHAVIR MARKET NEW DLOTH MARKET,AHMEDABAD-380002 VS. THE INCOME TAX OFFICER WARD-5(3)(4) NARAYAN CHAMERS ASHRAM ROAD,AHMEDABAD [PAN NO.APZPS 2196 H ] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI P.F. JAIN, AR RESPONDENT BY : SHRI ALOK KUMAR, SR.DR DATE OF HEARING 02/07/2018 DATE OF PRONOUNCEMENT 17/09/2018 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL HAS BEEN FILED BY THE ASSESSEE BEFORE US AGAINST THE ORDER DATED 20.01.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-AHMEDABAD-5 [LD.CIT(A) IN SHORT] FOR ASSESSMENT YEAR (AY) 2011 -12 ARISING OUT OF THE PENALTY ORDER DATED 18.03.2016 PASSED BY THE ITO, WARD-5(3 )(4), AHMEDABAD U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S 'THE ACT'). 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST TH E ORDER PASSED BY THE LD. CIT(A) IN CONFIRMING THE ORDER OF PENALTY OF RS.11,17,324/ - LEVIED BY THE ASSESSING OFFICER (AO) ON THE GROUND OF CONSCIOUS CONCEALMENT OF INC OME BY CLAIMING NON-GENUINE EXPENSES WITHOUT ANY EVIDENCE AND WITHOUT APPRECIA TING THE STATEMENT OF FACTS NEITHER SPECIFYING THE DEFAULT FOR LEVY OF PENALTY AS REQUI RED UNDER THE PROVISION OF LAW PARTICULARLY WHEN THE NOTICE OF PENALTY WAS ISSUED AFTER THE ASSESSMENT ORDER PASSED. - 2 - ITA NO.499/AHD/2017 SHRI JATIN M. SHAH VS. ITO ASST.YEAR 2011-12 3. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT THE ASSESSEE FILED RETURN OF INCOME ON 31.03.2012 DECLARING TOTAL INCOME OF RS.2,23,450 /-. UPON SCRUTINY, THE LD.AO MADE ADDITIONS OF RS.39,00,300/-AND DETERMINED INCOME AT RS.41,23,750/- BEING DISSATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE EXPLAINI NG THE CASH DEPOSIT IN HIS SAVING ACCOUNT AS RECEIPT OF THE FIRM SINCE HE BEING A TH E PARTNER, ADDITION AS UNEXPLAINED INCOME HAS BEEN MADE BY THE LD.AO. THE LD. CIT(A) DISMISSED THE APPEAL PREFERRED BY THE ASSESSEE. IN THE ASSESSMENT ORDER, THE LD.AO I NITIATED PENALTY PROCEEDING AGAINST THE ASSESSEE FOR CONCEALMENT OF PARTICULARS OF INCOME A ND FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF ADDITION OF RS.39,00,000/-. 4. BUT THE MAIN GRIEVANCE OF THE ASSESSEE IS THIS T HAT THE ASSESSMENT ORDER WAS THOUGH PASSED ON 16.1.2014, THE NOTICE FOR PENALTY WAS ISSUED MUCH AFTER THAT ON 20.02.2014 AND THUS THE ENTIRE PENALTY PROCEEDINGS IS VITIATED AND LIABLE TO BE QUASHED. 5. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LD.REPRESENTATIVE OF THE ASSESSEE VEHEMENTLY ARGUED THAT IN THIS PARTICULAR CASE WHEN THE ASSESSMENT ORDER WAS PASSED ON 16.01.2014 NO SATISFACTION, HOWEVER, WAS FOUND BY T HE LD. AO FOR INITIATION OF PENALTY PROCEEDING DURING THE SAID ASSESSMENT PROCEEDING AN D THUS THE PENALTY NOTICE ON 28.01.2014 IS AN AFTERTHOUGHT. HE FURTHER ARGUED THAT IT IS SETTLED PRINCIPLE OF LAW THAT SATISFACTION IS REQUIRED TO BE RECORDED DURING THE ASSESSMENT PROCEEDING OR ON THE DATE OF ASSESSMENT ORDER WHICH IS CONDITION PRECEDENT FOR I NITIATION OF PENALTY PROCEEDING. IN ABSENCE OF SAME THE ENTIRE PROCEEDING WITHOUT COMPL YING THE PROVISION OF LAW IS ARBITRARY, ERRONEOUS AND BAD IN LAW. 6. ON THE OTHER HAND, THE LD.REPRESENTATIVE OF THE REVENUE RELIES UPON THE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY IN THE PENA LTY PROCEEDING U/S.271(1)(C) OF THE ACT. - 3 - ITA NO.499/AHD/2017 SHRI JATIN M. SHAH VS. ITO ASST.YEAR 2011-12 7. WE HAVE HEARD THE LD.REPRESENTATIVES APPEARING F OR THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND FRO M PAGE NO.15 OF THE PAPER-BOOK FILED BY THE ASSESSEE DEALS WITH THE NOTICE U/S.274 R.W.S .271(1)(C) OF THE ACT ISSUED BY THE ITO, WARD-3(2), AHMEDABAD ADMITTEDLY ISSUED ON 28.01.201 4 THOUGH THE LD.AO OPINED THAT IN THE COURSE ASSESSMENT PROCEEDINGS BEFORE HIM FOR THE AY 2011-12 IT APPEARED THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND THE SAME HAS BEEN RECORDED ONLY ON 28.01.2014 MUCH ADMITTEDLY AFTER ASSESSMENT ORDER DATED 16.01.2014 WHICH IS NOT IN T ERMS OF PROVISIONS OF LAW AND ON THE SOLE GROUND THE ENTIRE PENALTY PROCEEDING IS VITIAT ED. FAILURE ON THE PART OF THE LD.AO TO FOLLOW THE PROCEDURAL COMPLIANCE IN ISSUING THE NOT ICE OF PENALTY UPON RECORDING SATISFACTION BEFORE OR ON COMPLETION OF THE ASSESSM ENT PROCEEDING MAKES THE PENALTY PROCEEDING BAD IN LAW. WE, THEREFORE, ON THIS GROU ND QUASH THE ORDER OF PENALTY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 17/09/2018 SD/- SD/- ( PRADIP KUMAR KEDIA ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 17/ 09 /2018 .., . ../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-AHMEDABAD-5 5. !'# , $ , / DR, ITAT, AHMEDABAD 6. #() *+ / GUARD FILE. / BY ORDER, ! //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, / ITAT, AHMEDABAD