M/s. Kashish Enterprise, Bhuj V. The Commissioner of Income Tax-I, RAJKOT-GUJARAT

ITA 504/RJT/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6624 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 25-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARGOVIND SINGH
• Assessee Lawyers: MJ RANPURA
• Keywords: Initiation of penalty proceedings; Revised return
• Section: 143(3); 263

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI K. NAR ASIMHA CHA RY , JUDICIAL MEMBER ./ ITA NO . 504 /RJT/201 4 / ASSESSMENT YEAR : 2010 - 1 1 M/S.KASHISH ENTERPRISES, SHOP NO.1 , POONAM APARTMENT, NEW STATION ROAD, BHUJ PAN : AA IFK4195N VS COMMISSIONER OF INCOME TAX - I RAJKOT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M. J. RANPURA , C.A REVENUE BY : SHRI HARGOVIND SINGH , D.R / DATE OF HEARING : 21 / 03/2017 / DATE OF PRONOUNCEMENT: 2 4 / 03/2017 / O R D E R PER SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT, RAJKOT DATED 4.8.2014 FOR ASSESSMENT YEAR 20 1 0 - 1 1 PASSED U/S 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ). 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND S OF APPEAL 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER 2.0 THE LD.COMMISSIONER OF INCOME - TAX - I, RAJKOT [HEREINAFTER REFERRED AS TO THE ACT ] ERRED IN NOT CONSIDERING THE APPELLANT S SUBMISSION THAT THE ORDER PASSED BY THE AO WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE AND PROVISIONS OF SEC. 263 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED AS TO THE ACT ] WERE NOT APPLICABLE TO THE THE FACTS OF THE APPELLANT S CASE. THE ORDER U/S 263 PASSED BY THE LD. CIT SUPPLEMENTING THE INITIATION OF PENALTY PROCEEDING U/S.271(1)(C) OF THE ACT IS TOTALLY INVALID AND BAD ON FACTS AS ALSO IN LAW AND MAY KINDLY BE QUASHED. 2 ITA NO. 5 04/RJT/2014 A.Y. 2010 - 11 3.0 THE LEARNED CIT FURTHER ERRED ON FACTS AS ALSO IN LAW IN INITIATING PENALTY PROCEEDING U/S.271(1)(C) OF THE ACT OF O N ALLEGED CONCEALMENT OF 18,25,680/ - AND FOR FILING INACCURATE PARTICULARS OF INCOME IN ORIGINAL RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE PENALTY PROCEEDING INITIATED U/S.271(1)(C) OF THE ACT MAY KINDLY BE DIRECTED TO BE DROP PED. 3 . THE BRIEF FACT OF THE CASE ARE TH AT ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 21.3.2013 ACCEPTING THE RETURN OF INCOME OF RS.18,25,680/ - WHICH WAS AS PER THE REVISED RETURN FILED BY THE ASSESSEE AS A CONSEQUENCE TO THE SURVEY ACTION CAR RIED ON 28/29 - 10 - 2010. AFTER EXAMINING THE RECORDS, LD.CIT OBSERVED THAT SINCE ASSESSEE HAD ALREADY FILED ITS RETURN OF INCOME WELL BEFORE THE SURVE Y PROCEEDINGS, PENALTY OUGHT TO HAVE BEEN INITIATED AND IMPOSED ON THE INCOME REFLECTED IN THE REVISED RETU RN OF INCOME. HE POINTED OUT THAT NON - INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT HAD CAUSED REVENUE LOSS AND AS A RESULT, THE ORDER PASSED BY THE ACIT U/S 143(3) OF THE ACT ON 21.3.2013 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH CALLED FOR INVOKING POWER CONFERRED U/S 263 OF THE ACT. BEFORE THE LD. CIT, THE MAIN OBJECTION RAISED BY THE ASSESSEE WAS THAT THE PROVISIONS OF SEC. 271 OF THE ACT CONFER DISCRETION ON THE ASSESSING OFFICER TO LEVY THE PENALTY. THE ASSESSI NG OFFICER HAS TO RECORD HIS SATISFACTION FOR LEVYING THE PENALTY. THE LD. CIT IN PARA 5.1 OF HIS ORDER HAS OBSERVED AS UNDER : - 5.1 I HAVE GONE THROUGH THE SUBMISSIONS AND THE VARIOUS DECISIONS RELIED UPON BY THE ASSESSEE. ASSESSEE HAS MAINLY RELIED O N THE DECISION OF H'BLE GUJARAT HIGH COURT IN CASE OF CIT V. PARMANAND M. PATEL:(2005) 278 ITR 3. THIS JUDGEMENT OF H'BLE GUJARAT HIGH COURT IS APPLICABLE IN CASES WHERE PROCEEDING U/S 263 WAS INITIATED BY THE CIT BEFORE 01 - 06 - 2002 IN RESPECT OF NON LEVY O F PENALTY BY THE ASSESSING OFFICER. CIT WAS NOT EMPOWERED TO LEVY PENALTY U/S 271(1) OF THE I.T.ACT PRIOR TO 1 - 6 - 2002. THE ABOVE JUDGMENT OF H'BLE GUJARAT HIGH COURT WAS BASED ON THE FACT THAT COMMISSIONER WAS NOT EMPOWERED TO RECORD SATISFACTION BY INVOK ING SECTION 271(1) OF THE ACT PRIOR TO 1 - 6 - 2002 AND IF HE IS NOT ENTITLED TO DO SO, ON HIS OWN, HE CANNOT DO IT BY DIRECTING THE ASSESSING AUTHORITY. THE SECTION 271(1) WAS AMENDED FROM 1 - 6 - 2002 AND THEREFORE CIT IS NOW EMPOWERED TO LEVY PENALTY U/S 271(1) IN THE COURSE OF 'ANY PROCEEDING' UNDER THE I.T.ACT. THEREFORE, THE DECISION OF H'BLE GUJARAT HIGH COURT IS NOT RELEVANT FOR THE PRESENT CASE. IN A SIMILAR CASE, WHERE PROCEEDING U/S 263 WAS INITIATED AFTER 1 - 6 - 2002, IE, IN CASE OF SMT. S. ANITHA V. CIT 3 ITA NO. 5 04/RJT/2014 A.Y. 2010 - 11 ( 2012) 048 (II) ITCL 220, H'BLE ITAT - BANGALORE DECIDED THAT CIT SHOULD INITIATE AND LEVY PENALTY U/S 271(1) HIMSELF WITHOUT SETTING ASIDE THE ENTIRE ASSESSMENT, IF THE REASON FOR INITIATING THE REVISIONARY PROCEEDINGS U/S 263 WAS NON INITIATION OF PENALTY U /S 271(1) BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. ALL THE OTHER DECISIONS RELIED UPON BY THE ASSESSEE PERTAINS TO THE PERIOD PRIOR TO THE AMENDMENT IN SECTION 271(1) VIDE FINANCE ACT, 2002 AND ARE THEREFORE NOT RELEVANT. 4 . AFTER HEARING THE SUBMISSIONS OF BOTH THE PARTIES AND KEEPING IN VIEW THE AMENDMENT MADE U/S 271(1) OF THE ACT W.E.F. 1.6.2002, WE FIND THAT THE DIRECTION GIVEN BY THE LD. CIT FOR INITIATION O F PENALTY WAS FULLY JUSTIFIED. CONCURRING WITH THE VIEW OF LD. C IT, WE DISMISS THE ASSESSEE S APPEAL. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 2 4 T H MARCH, 2017. S D / - S D / - ( K. NAR ASIMHA CHA RY ) JUDICIAL MEMBER ( S.V. MEHROTRA ) ACCOUNTANT MEMBER R A J K O T , DATED 2 4 /03 /20 17 *MANISH / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - 2 . / RESPONDENT - 3 . / CONCERNED CIT /DIT 4 . - / CIT (A) - IV, RAJKOT 5 . , , / DR, ITAT, RAJKOT 6 . / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) / ITAT, RAJKOT