HIMANSHU MEDICARE PVT. LTD., NEW DELHI V. ACIT, CENTRAL CIRCLE- 6, NEW DELHI

ITA 5113/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8094 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 08-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 274; 73; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI E BEN CH, NEW DELHI (THROUGH VIDEO CONFERENCING] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI KULDIP SINGH, JUDICIAL MEM BER ITA NO. 5110/DEL/2017 [A.Y 2009-10] ITA NO. 5111/DEL/2017 [A.Y 2010-11] ITA NO. 5112/DEL/2017 [A.Y 2011-12] ITA NO. 5113/DEL/2017 [A.Y 2012-13] HIMANSHU MEDICARE PVT LTD. VS. THE A.C.I.T. C 30, PANCHSHEEL ENCLAVE CENTRAL CIRCLE 6 NEW DELHI NEW DELHI PAN : AACCH 0983 J [APPELLANT] [RESPONDENT] DATE OF HEARING : 02.09.2021 DATE OF PRONOUNCEMENT : 02.09.2021 ASSESSEE BY : SHRI P.C. YADAV, ADV REVENUE BY : SHRI RAJESH KUMAR, SR . DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THE ABOVE FOUR SEPARATE APPEALS BY THE ASSESSEE ARE PREFERRED AGAINST FOUR SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX [APPEALS] - 24, NEW DELHI DATED 29.06.2017 PERTAINI NG TO ASSESSMENT YEARS 2009-10 TO 2012-13. 2 2. SINCE COMMON GRIEVANCE IS INVOLVED IN ALL THE AB OVE CAPTIONED FOUR APPEALS, THEY WERE HEARD TOGETHER AND ARE DISP OSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVIT Y. 3. THE COMMON GRIEVANCE IN ALL THESE APPEALS RELATE S TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 [ HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT], THOUGH THE QUANTUM OF P ENALTY DIFFERS IN THE CAPTIONED APPEALS. 4. IN THE CAPTIONED APPEALS, THE ASSESSEE HAS RAISE D AN ADDITIONAL GROUND WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IS VOID AS THE NOTI CE U/S 271(1)(C) IS BAD AND DEFECTIVE AS IT IS ISSUED WITHOUT DELETING THE APPROPRIATE CLAUSE UNDER WHICH THE PENALTY PROPOSED TO BE IMPOS ED EITHER FOR FILING OF INACCURATE PARTICULARS OF INCOME OR FOR C ONCEALMENT OF PARTICULARS OF INCOME, AND AS SUCH, THE NOTICE IS N OT SUSTAINABLE AND NOT CURABLE. 5. THE LD. DR STRONGLY OBJECTED TO THE ADMISSION OF THE ADDITIONAL GROUND. IT IS THE SAY OF THE LD. DR THAT THE PENAL TY HAS BEEN LEVIED FOR EARNING COMMISSION IN PROVIDING ACCOMMODATION ENTRI ES AND THE LD. 3 CIT(A) CONFIRMED THE PENALTY HOLDING THAT THE ASSES SEE HAS CONCEALED THE INCOME BEING ENGAGED IN CLANDESTINE ACTIVITIES . 6. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE STA TED THAT THE LD. CIT(A) HAS CONSIDERED THIS ISSUE WHILE DISMISSING T HE APPEAL OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT TO THE RELEVANT PARAS FROM THE ORDER OF THE LD. CIT(A) AND STATED T HAT THE LD. CIT(A) HAS, IN FACT, CONSIDERED THIS ISSUE AT PARA 4.2.9 O F HIS ORDER. 7. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE SU BMISSIONS MADE BY THE LD. DR. WE HAVE CAREFULLY PERUSED THE ORDE R OF THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) AT PARA 4.2.9 OF HIS OR DER HAS CONSIDERED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF SSAS EMERALD MEADOWS - (2016) 73 TAXMANN.COM 248 (SC) AND DECISI ON OF THE KARNATAKA HIGH COURT IN CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR), WE, THEREFORE, DO NOT FIND ANY SUBSTANCE IN THE SUBMISSIONS MADE BY THE LD. DR. 8. WE WILL NOW PROCEED TO ADDRESS THE ADDITIONAL GR OUND RAISED BY THE ASSESSEE. 4 9. THE RELEVANT NOTICE FOR ASSESSMENT YEAR 2010-11, WHICH IS SIMILAR IN ALL THE OTHER ASSESSMENT YEARS, READS AS UNDER: NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 DATED: 20/06/2014I TO, M/S HIMA N SHU MEDICARE PVT . C-30, PANCHSHEEL ENCLAVE, NEW DE LHI -17 WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2010-11, IT APPEARS TO ME THAT YOU * HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT ROO M NO. 364,3RD FLOOR, ARA CENTRE, JHANDEWALNN EXTENTION, N EW DELHI AT 11 A.M. /P.M. ON 23/07/2014 AND SHOW CAUSE WHY AN O RDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE U/S 27 1 OF THE INCOME-AX ACT: 1961. IF YOU DO HOT WITH TO AVAIL Y OURSELF OF THIS OPPORTUNITY, OR BEING HEARD IN PERSON OR THROUGH AU THORISED PERSON, YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY/SEARCH ORDER IS MADE U/S 2 71(1)(C). D.C.I.T. C.C.-11, NEW DELHI DY. CIT CENTRAL CIRCLE 11, NEW DELHI - 55 5 10. A BARE PERUSAL OF THE AFOREMENTIONED NOTICES SH OW THAT THE ASSESSING OFFICER HIMSELF WAS NOT AWARE/CERTAIN AS TO WHETHER HE IS ISSUING NOTICE TO INITIATE PENALTY PROCEEDINGS EITH ER FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 11. IN OUR CONSIDERED OPINION, THE EXTRACTED NOT ICES ARE VAGUE AND AMBIGUOUS, AS THE CHARGE FRAMED BY THE ASSESSING OF FICER IS NOT CLEAR AND IT IS NOT POSSIBLE FOR THE PERSON TO EXPLAIN TH E CHARGE WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FIL ING INACCURATE PARTICULARS OF INCOME. 12. THE HONBLE APEX COURT IN CASE OF CIT VS. SSA S EMERALD MEADOWS - (2016) 73 TAXMANN.COM 248 (SC), WHILE DISMISSING THE SLP FILED BY THE REVENUE QUASHING THE PENALTY BY THE TRIBUNAL AS WELL AS HONBLE HIGH COURT ON THE GROUND OF UNSPECIFIED NOTICE HAS HELD AS UNDER:- SECTION 274, READ WITH SECTION 271(L)(C), OF THE I NCOME-TAX ACT, 1961 - PENALTY - PROCEDURE FOR IMPOSITION OF (CONDI TIONS PRECEDENT) - ASSESSMENT YEAR 2009-10 - TRIBUNAL, RELYING ON DE CISION OF DIVISION BENCH OF KARNATAKA HIGH COURT RENDERED IN CASE OF CIT V. MANJUNATHA COTTON X GINNING FACTORY [2013] 359 1TR 565/218 TAXMAN 423/35 TAXMANN.COM 250, ALLOWED APPEAL OF AS SESSES HOLDING THAT NOTICE ISSUED BY ASSESSING OFFICER UND ER SECTION 274 6 READ WITH SECTION 271 (1)(C) WAS BAD IN LAW, AS IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271 (1)(C) PENALTY PROC EEDINGS HAD BEEN INITIATED, I.E., WHETHER FOR CONCEALMENT OF PARTICU LARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME - HI GH COURT HELD THAT MATTER WAS COVERED BY AFORESAID DECISION OF DI VISION BENCH AND, THEREFORE, THERE WAS NO SUBSTANTIAL QUESTION O F LAW ARISING FOR DETERMINATION - WHETHER SINCE THERE WAS NO MERIT IN SLP FILED BY REVENUE, SAME WAS LIABLE TO BE DISMISSED - HELD, YE S [PARA 2] [IN FAVOUR OF ASSESSEE. 13. HONBLE DELHI HIGH COURT IN CASE OF PR. CIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LTD. ITA NO. 475/2019 ORDER DATED 02.08.2019 WHILE DECIDING THE IDENTICAL ISSUE HELD AS UNDER: 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF THE PENALTY IMPOSED UNDER SEC. 271(1)(C) OF THE ACT, WHICH WAS ACCEPTED BY THE IT AT. IT FOLLOWED THE DECISION OF THE KARNATAK A HIGH COURT IN CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) AND OBSERVED THAT THE NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) (C) TH E PENALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER F OR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACC URATE PARTICULARS OF INCOME. THE KARNATAKA HIGH COURT HAD FOLLOWED TH E ABOVE JUDGMENT IN THE SUBSEQUENT ORDER IN COMMISSIONER OF INCOME TAX V. SSA'S EMERALD MEADOWS -73 TAXMANN.COM 241 (KAR), THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT O F INDIA IN SLP NO. 11485 BY ORDER DATED 5 TH AUGUST 2016. 7 14. FOLLOWING THE DECISIONS RENDERED IN THE CASES OF CIT VS. MANJUNATHA FACTORY, CIT VS. SSAS EMERALD MEADOWS AND PR. CIT VS SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA), W E ARE OF THE CONSIDERED VIEW THAT WHEN THE NOTICES ISSUED BY THE AO ARE BAD IN LAW BEING VAGUE AND AMBIGUOUS HAVING NOT SPECIFIED UNDE R WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDIN GS INITIATED U/S 271(1)(C) ARE NOT SUSTAINABLE. 15. ON IDENTICAL SET OF FACTS, THIS TRIBUNAL IN TH E CASE OF HITESH CONSTRUCTION PVT LTD IN ITA NOS. 5105 TO 5109/DEL/2 017 ORDER DATED 25.08.2021 HAS CONSIDERED A SIMILAR GRIEVANCE AND HAS ALLOWED THE APPEAL AFTER DRAWING SUPPORT FROM THE D ECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF SAHARA INDI A LIFE INSURANCE COMPANY LTD [SUPRA] AND SSA EMERALD MEADOWS [SUPRA] . 16. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, FOLLO WING THE DECISIONS RENDERED BY HONBLE HIGH COURTS DISCUSSED IN THE PR ECEDING PARAS AND WITHOUT ENTERING INTO THE OTHER ASPECTS OF THE CASE , WE ARE OF THE CONSIDERED VIEW THAT WHEN THE VERY INITIATION OF TH E PENALTY BY WAY OF ISSUANCE OF VAGUE AND AMBIGUOUS NOTICES U/S 271(1)( C) READ WITH SECTION 274 OF THE ACT WITHOUT SPECIFICALLY CHARGIN G THE ASSESSEE IF HE 8 HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURN ISHED INACCURATE PARTICULARS OF SUCH INCOME, SUBSEQUENT PENALTY PROC EEDINGS ARE NOT SUSTAINABLE, HENCE PENALTY LEVIED BY THE AO AND CON FIRMED BY THE ID. CIT (A) IS NOT SUSTAINABLE AND AS SUCH, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 17. RESPECTFULLY FOLLOWING THE DECISIONS [SUPRA] WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN ALL THE A.YS UNDER CONSIDERATION. 18. IN THE RESULT, ALL THE FOUR APPEALS FILED BY TH E ASSESSEE IN ITA NOS. 5110 TO 5113/DEL/2017 ARE ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 02.09. 2021 IN THE PRESENCE OF BOTH THE RIVAL REPRESENTATIVES. SD/- SD/- [ KULDIP SINGH ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 02 ND SEPTEMBER, 2021 VL/ 9 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE B ENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER