Shiva Kumar K, Hyderabad, Hyderabad V. ITO, Ward-10(3), Hyderabad, Hyderabad

ITA 504/HYD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0632 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 17-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVAS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 5 04 / HYD/201 7 ASSESSMENT YEAR: 20 12 - 13 SHIVA KUMAR .K , HYD ERABAD . PAN APKPK 1463N VS. INCOME - TAX OFFICER, WARD 10 ( 3 ), HYDERABAD. APPELLANT RESPONDENT A SSESSEE BY: SHRI V. SRINIVAS RE VENUE BY: SHRI PRABHAT KUMAR GUPTA DATE OF HEARING: 0 6 / 0 9 / 201 8 DATE OF PRONOUNCEMENT: 1 2 / 0 9 /201 8 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL IS FILED BY THE A SSESSEE AGAINST ORDER OF C IT (A) - 6 , HYDERABAD , DATED 2 7 / 12 /201 6 WHEREBY CIT(A) CONFIRMED THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY 2012 - 13 ON 28/09/2012 DECLARING TOTAL INCOME OF RS. 3,16,650/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD RECEIVED MONEY FROM 8 CONCERNS AMOUNTING TO RS. 15,63,01,13 0/ - , WHICH WAS NOT DISCLOSED IN GROSS RECEIPTS ADMITTED FOR THE AY UNDER CONSIDERATION. WHEN CONFRONTED WITH THIS FACT, THE ASSESSEE DENIED ANY KNOWLEDGE OF THE SAID TRANSACTION BUT REQUESTED THE AO TO ADOPT THE PROFIT @ 5% ON THE SAME. REJECTING THE REQU EST OF THE ASSESSEE, THE AO COMPLETED THE ASSESSMENT BY ADOPTING A PROFIT @ 12.5% ON I.T.A. NO. 504 /HYD/201 7 SHIVA KUMAR K, HYD. 2 THE UNDISCLOSED RECEIPTS AND ADDED AN AMOUNT OF RS. 19,53,801/ - AS UNDISCLOSED INCOME. 3. LATER, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) ON THE GROUND THAT TH E ASSESSEE HAD CONCEALED HIS INCOME BY NOT DISCLOSING THE CONTRACT RECEIPTS AND , ACCORDINGLY, IMPOSED A MINIMUM PENALTY OF RS. 5,34,676/ - U/S 271(1)(C) OF THE ACT. 4. ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY LEVIED BY THE AO. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDER OF THE LEARNED CIT ( A ) IS ERRONEOUS AND BAD IN LAW. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE LEVY OF PENALTY OF RS. 5 ,34,676 / - UJS.271(1) (C) OF I.T. ACT 1961. 3) ) ANY OTHER GROUND OR GROUNDS YOUR APPELLANT MAY URGE AT THE TIME OF HEARING. 5.1 THE ASSE SSEE FILED A PETITION DATED 05/09/2018 FOR ADMISSION OF THE FOLLOWING ADDITIONAL GROUND: O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE NOTICE ISSUED U/S . 274 RWS 271(1)(C) OF THE I.T ACT, 1961, IS BAD IN LAW AS IT DID NOT SPECIFY IF THE PR OCEEDIN GS HAD BEEN INITIATED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNI SHING OF INACCURATE PARTICULARS OF INCOME' 6 . AS THE SAID A DDITIONAL GROUND IS A LEGAL GROUND, WHEREIN, THE FACTS ARE ON RECORD AND FACTS D O NOT REQUIRE FRESH INVESTIGATION, FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO., LIMITED VS. CIT 229 ITR 38 3 (SC), WE ADMIT THE SAID ADDITIONAL GROUND OF ASSESSEE. I.T.A. NO. 504 /HYD/201 7 SHIVA KUMAR K, HYD. 3 7 . THE LD. AR OF THE ASSESSEE SUBMIT TED THAT THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS BY ISSUE OF A NOTICE U / S 274 R.W.S . 271 (1)(C) ON 05 . 03 .20 1 5 . HE SUBMITTED THAT W HILE ISSUING THE SAID NOTICE, THE ASSESSING OFFICER DID NOT MENTION WHETHER THE NOTICE IS ISSUED FOR CONCEALMENT O F INCOME OR FOR FURNISHING OF IN ACCURATE PARTICULARS OF INCOME. THEREFORE, THE NOTICE IS NOT VALIDLY ISSUED. CONSEQUENTLY, THE ORDER PASSED U / S 271(1)(C) ALSO IS NOT VALID. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS, [2016] 73 TAXMANN.COM 248 (SC). 8 . THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 9. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD . THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS, [2016] 73 TAXMANN.COM 248 (SC) WHEREIN THE APEX COURT UPHELD THE DECISION OF THE HONBLE HIGH COURT, IN WHICH, THE HONBLE HIGH COURT CONFIRMED THE ORDER OF THE TRIBUNAL AND DISMISSED THE APPEAL OF THE REVENUE, WHO CAME IN APPEAL AGAINST THE ORDER OF THE TRIBUNAL. THE TRIBUNAL RELYING ON A DECISION OF KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTOR Y, [2013] 359 ITR 565/210 ALLOWED THE APPEAL OF THE ASSESSEE HOLDING THAT NOTICE ISSUED BY ASSESSING OFFICER U/S 274 READ WITH SECTION 271(1)(C) WAS BAD IN LAW, AS IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) PENALTY PROCEEDINGS HAD BEEN INITIA TED, I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. I.T.A. NO. 504 /HYD/201 7 SHIVA KUMAR K, HYD. 4 9 .1 IN THE CASE UNDER CONSIDERATION, ON PERUSAL OF THE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W.S. 271 OF THE IT ACT, 1961, DATED 05 / 03 /20 1 5 , WHICH IS PLACED ON RECORD, IT IS SEEN THAT THE ASSESSING OFFICER DID NOT MENTION WHETHER THE NOTI CE IS ISSUED FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, AS PER THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS, THE NOTICE ISSUED BY THE ASSESSING OFFICER IS NOT VALID AND CONSEQUENTLY, THE ORDER PASSED U/S 271(1)(C) IS ALSO NOT VALID. HENCE, WE SET ASIDE THE ORDER OF THE CIT(A) AND QUASH THE ORDER PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 10. IN THE RE SULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER , 2018. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 12 TH SEPTEMBER , 2018 KV COPY FORWARDED TO: 1. SRI KMALALA SHIVA KUMAR, PROP. OF TRINETRA ELECTRICALS, H. NO. 5 - 14 TO 17/B, OPP. JABBAR COMPLEX, BIBLE HOUSE ROAD, HYDERBASTI, HYDERABAD 500 007. 2 . IT O , WARD 10 ( 3 ), HYDERABAD 3 . CIT (A) - 6 , HYDERABAD 4. PR. CIT - 6 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE