Deputy Commissioner of Income Tax Circle Itarsi, Bhopal V. Shri Amit Kumar Agrawal , Hoshangabad

ITA 513/Ind/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5986 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 04-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Tax effect; Set aside
• Section: 271(1)(c); 143(3); 133A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.513/IND/2018 ASSESSMENT YEAR: 2011-12 DCIT, CIRCLE- ITARSI / VS. SHRI AMIT KUMAR AGRAWAL C/O PROP. M/S ASHIRWAD JEWELLERS, SARAFA BAZAR, HOSHANGABAD ( REVENUT ) ( RESPONDENT ) PAN: ADSPA1284H CO NO.28/IND/2019 (ARISING OUT OF ITA NO.513/IND/2018) ASSESSMENT YEAR: 2011-12 SHRI AMIT KUMAR AGRAWAL C/O PROP. M/S ASHIRWAD JEWELLERS, SARAFA BAZAR, HOSHANGABAD / VS. DCIT, CIRCLE-ITARSI ( APPELLANT ) ( RE VENUE ) PAN: ADSPA1284H APPELLANT BY SHRI PRAKASH JAIN CA RE VENUE BY SHRI AMIT KUMAR SONI, SR. DR DATE OF HEARING: 17.07.2019 DATE OF PRONOUNCEMENT: 31.07.2019 / O R D E R SHRIAMIT KUMAR AGARWAL ITANO.513/IND/2018 & CONO. NO.28/IND/2019 2 PER MANISH BORAD, A.M: THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF REVENUE AND THE CROSS OBJECTION HAS BEEN FILED BY THE ASSES SEE FOR A.Y. 2011-12 ARE DIRECTED AGAINST THE ORDER OF LD. COMMI SSIONER OF INCOME TAX(APPEALS)-1, BHOPAL, (IN SHORT CIT(A)), DATED 27.03.2018 WHICH ARE ARISING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 27.08.2014 BY DCIT-(CENTRAL)-1(1), BHOPAL. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1.WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S 271(1) (C) OF RS.34,00,000/- IGNORING THE DECISION OF THE APEX CO URT IN THE CASE OF MAK DATA PVT. LTD. VS. CIT (2013) 358 ITR 5 93 (HON'BLE SUPREME COURT) DATED 30.10.2013. 2.WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CAS E3, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S 271(1) (C) OF THE ACT RS.34,00,000/- IGNORING THE DECISION OF THE HON'BLE HIGH COURT DELHI IN THE CASE OF PR. CIT-21 VS. DR. VANDANA GUP TA IN ITANO.218/2017 DATED 20.02.2018. 3. IN ITS CROSS OBJECTION THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD AO ERRED IN LAW AND FACT BY LEVYING PENALTY U/S 271(1) (C). THE ABOVE GROUND WAS TAKEN BY THE ASSESSEE AS NEITH ER IN THE ASSESSMENT ORDER NOT IN THE PENALTY ORDER IT IS SPE CIFIED BY THE LD. AO THAT PENALTY U/S 271(1)(C) IS LEVIABLE FOR C ONCEALMENT OF INCOME FOR FURNISHING OF INACCURATE PARTICULAR OF I NCOME. TAX EFFECT OF RS.34,00,000/- 4. WE WILL FIRST TAKE THE CROSS OBJECTION IN CO NO. 28/IND/2019 FILED BY THE ASSESSEE RAISING A LEGAL ISSUE CHALLENGING T HE LEGALITY OF THE PROCEEDINGS CARRIED OUT U/S 271(1)(C) OF THE ACT. SHRIAMIT KUMAR AGARWAL ITANO.513/IND/2018 & CONO. NO.28/IND/2019 3 5. BRIEF FACTS AS CULLED OUT FROM THE RECORDS ARE T HAT THE ASSESSEE IS AN INDIVIDUAL, CARRYING BUSINESS OF GOLD, SILVER AN D DIAMOND JEWELLERY UNDER THE NAME OF M/S ASHIRWAD JEWELLER. A SURVEY U/S 133A OF THE ACT WAS CONDUCTED ON 26.10.2010. SURREN DER TOWARD EXCESS STOCK AND EXCESS CASH, TOTALLING TO RS.1,08, 00,736/- WAS MADE DURING THE COURSE OF SURVEY. THE SAME WAS DECL ARED AS UNDISCLOSED INCOME IN THE INCOME TAX RETURN FILED O N 25.09.2011. ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 2 8.02.2014, ACCEPTING THE INCOME SHOWN BY THE ASSESSEE AT RS.1, 23,17,140/-. LEARNED ASSESSING OFFICER (IN SHORT LD. AO) INITIAT ED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR THE AMOUNT ACCEPTED AS UNDISCLOSED INCOME. THEREAFTER, NOTICE U/S 274 R.W. S 271(1)(C) OF THE ACT WAS ISSUED ON 28.02.2014 BUT THE LD. AO FAI LED TO LEVY THE SPECIFIC CHARGE IN THE NOTICE AGAINST THE ASSESSEE. PENALTY ORDER WAS FRAMED ON 27.08.2014 LEVYING PENALTY OF RS.34,00,00 0/-. 6. AGGRIEVED AGAINST THE ORDER OF LD. AO LEVYING PE NALTY U/S 271(1((C) OF THE ACT, APPEAL WAS PREFERRED BEFORE T HE LD. CIT(A) AND THE LD. CIT(A) DELETED THE PENALTY OBSERVING THAT T HE SURVEY WAS CONDUCTED BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME FOR F.Y. 2010-11 AND THE ASSESSEE HAS OFFERED UNDISCLOSED IN COME IN THE INCOME TAX RETURN FILED SUBSEQUENT TO THE DATE OF S URVEY AND PAIDTHE DUE TAXES THEREON. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE ASSESSEE BEING GUILTY OF CONCEALING OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. SHRIAMIT KUMAR AGARWAL ITANO.513/IND/2018 & CONO. NO.28/IND/2019 4 7. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 8. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE RELY ING ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF NA TIONAL THERMAL POWER CO. LTD. VS COMMISSIONER OF INCOME TAX 229 IT R 383(SC) RAISED THE LEGAL ISSUE FOR THE FIRST TIME BEFORE US , SUBMITTING THAT THE ALLEGED NOTICE ISSUED BY THE LD. AO U/S 274 R.W .S 271(1)(C) OF THE ACT IS LAIBLE TO BE QUASHED, AS IT HAS BEEN ISS UED WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE AS TO WH ETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHING IN ACCURATE PARTICULARS OF INCOME. 9. IN SUPPORT OF THIS CONTENTION RELIANCE WAS PLACE D ON THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE O F PCIT VS KULWANT SINGH BHATIA 33 ITJ 777 (MP). 10. ON THE OTHER HAND DEPARTMENTAL REPRESENTATIVE ( LD. DR) SUPPORTED THE ORDER OF THE LD. AO CONTENDING THAT T HE PENALTY HAS BEEN RIGHTLY LEVIED ON THE ASSESSEE. 11. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. THE REVENUE IS AGGRIEVED WITH THE DELETI ON OF PENALTY U/S 271(1)(C) OF THE ACT AT RS.34,00,000/- BY THE LD. C IT(A) WHICH WAS LEVIED BY THE LD. AO ON THE UNDISCLOSED INCOME SURR ENDERED BY THE ASSESSEE DURING THE COURSE OF SURVEY BUT SUBSEQUENT LY OFFERED TO TAX IN THE INCOME TAX RETURN. THERE IS NO DISPUTE T O THIS FACT THAT SURVEY WAS CARRIED OUT ON 26.10.2010 I.E. DURING F. Y. 2010-11. DUE SHRIAMIT KUMAR AGARWAL ITANO.513/IND/2018 & CONO. NO.28/IND/2019 5 DATE FOR FILING OF THE RETURN OF INCOME FOR A.Y. 20 11-12 WAS ON 30 TH SEPTEMBER 2011. THE ASSESSEE FILED THE RETURN ON 25 .09.2011 DULY INCORPORATING THE SURRENDERED INCOME AND PAID TAXES THEREON. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS ON THE UNDISCLOSED INCOME OFFERED TO TAX IN INCOME TAX RET URN. 12. DURING THE COURSE OF HEARING LD. COUNSEL FOR TH E ASSESSEE REFERRING TO THE GROUNDS IN CROSS OBJECTION RAISED A LEGAL ISSUE CONTENDING THAT THE NOTICE U/S 274 OF THE ACT IS IN VALID AND SUFFERED FROM INFIRMITY. THIS ISSUE HAS BEEN RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL. HOWEVER, WE ARE BOUND TO ADMIT THIS L EGAL GROUND, IN VIEW OF JUDGMENT OF HON'BLE SUPREME COURT IN THE CA SE OF NATIONAL THERMAL POWER CO. LTD. VS COMMISSIONER OF INCOME TA X(SUPRA) WHEREIN HON'BLE SUPREME COURT HELD THAT THE TRIBUNAL HAS JURISDICTION TO EXAMINE THE QUESTION OF LAW WHICH A RISES FROM THE FACTS AS FOUND BY THE AUTHORITIES BELOW AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. 13. IN ORDER TO ADJUDICATE THE LEGAL ISSUE CHALLENG ING THE LEGALITY OF THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE A CT WE REPRODUCE BELOW THE COPY OF NOTICE DATED 28.02.2014: OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX- 1(1) AAYAKARBHAWAN, HOSHANGABAD ROAD, BHOPAL PENALTY NOTICE UNDER SECTION 271(1)(C) OF INCOME TA X ACT, 1961 BHOPAL DA TED 128/02/2014 SHRIAMIT KUMAR AGARWAL ITANO.513/IND/2018 & CONO. NO.28/IND/2019 6 PAN ADSPA1284H TO SHRI AMIT, AGRAWAL, PRO. M/S ASHIRWAD JEWELLERS, SARAFA BAZAR, HOSHANGABAD SIR/MADAM SUB:- PENALTY PROCEEDINGS U/S 271(1)(C) OF THE IN COME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2011-12 IN CONNECTION WITH THE PENALTY PROCEEDINGS U/S 271( 1)(C ) FOR THE ASSESSMENT YEAR(S) 2011-12 YOU ARE REQUESTED TO ATTEND MY OFFI CE ON OR BEFORE 15/04/2014 AT 11.00 AM TO SHOW CAUSE WHY PENALTY SHOULD NOT BE IMPOSED. HOWEVER, IF YOU DO NOT WISH TO BE HEARD IN PERSON IN THIS REGARD, YOU MAY SUBMIT Y OUR WRITTEN SUBMISSIONS SO AS TO REACH ME BY THE ABOVE DATE WHICH WILL BE CONSIDERED BEFOR E DISPOSAL OF THE MATTER. SD/- (POONAM RAI) DEPUTY COMMISSIONER OF 1NCOME TAX, RANGE-1(1), BHO PAL 14. FROM GOING THROUGH THE ABOVE NOTICE WE FIND THA T THE ASSESSING OFFICER HAS ISSUED THE NOTICE WITHOUT SPECIFYING TH E CHARGE AGAINST THE ASSESSEE AS REQUIRED AS PER THE PROVISIONS OF S ECTION 271(1)(C) OF THE ACT WHICH PROVIDES THAT THE PENALTY MAY BE LEVI ED ON THE ASSESSEE IF THE ASSESSEE CONCEALS THE PARTICULARS O F INCOME OR FURNISHES INACCURATE PARTICULARS OF INCOME. IN THE ABOVE NOTICE BOTH THE LIMBS/CHARGE ARE MISSING. SIMILAR SET OF FACTS AND ISSUE CAME UP FOR ADJUDICATION BEFORE THE JURISDICTIONAL HIGH COURT IN THE CASE OF KULWANT SINGH BHATIA (SUPRA) WHEREIN JURISDICTIO NAL HIGH COURT AFTER CONSIDERING THE JUDGMENT OF HON'BLE HIGH COUR T OF KARNATAKA IN THE CASE OF CIT VS. MANJUNATHA GINNING FACTORY, 359 ITR 565 (KAR) AND CIT V/S SSAS EMERALAD MEADOWS ITA 380/2015 DATED 2 3.11.2015 HELD THAT ON DUE CONSIDERATION OF THE ARGUMENTS OF THE LD. C OUNSEL FOR THE APPELLANT, SO ALSO CONSIDERING THE FACT THA T THE GROUND SHRIAMIT KUMAR AGARWAL ITANO.513/IND/2018 & CONO. NO.28/IND/2019 7 MENTIONED IN SHOW CAUSE NOTICE WOULD NOT SPECIFY TH E REQUIREMENT OF LAW, AS NOTICE WAS NOT SPECIFIC, WE ARE OF THE VIEW THAT LD. TRIBUNAL HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND SET ASIDE THE ORDER OF PENALTY ENFORCED BY THE AUTHORITY. 15. THE ABOVE STATED JUDGMENT OF HON'BLE HIGH COURT WAS ALSO FOLLOWED BY US ADJUDICATING SIMILAR FACTS AND THE I SSUE IN THE CASE OF VIJAY HARIRAMANI IN ITANO.161/IND/2018 DATED 16. 05.2019. 16.WE, THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTAN CES OF THE CASE AND IN THE LIGHT OF THE RATIO LAID DOWN BY THE HON' BLE JURISDICTIONAL HIGH COURT IN THE CASE OF KULWANT SINGH BHATIA (SUP RA), ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED NOTICE U/S 274 R. W.S. 271(1)(C) OF THE ACT ISSUED BY THE LD. AO ON 28.02.2018 IS INVAL ID, UNTENABLE AND SUFFERS FROM THE INFIRMITY OF NON APPLICATION O F MIND BY THE LD. AO AS NO SPECIFIC CHARGE HAS BEEN LEVELED AGAINST T HE ASSESSEE AS REQUIRED BY SECTION 271(1)(C) OF THE ACT. SINCE NOT ICE U/S 274 OF THE ACT IS HELD BY US TO BE INVALID SUBSEQUENT PROCEEDI NGS CARRIED OUT U/S 271(1)(C) OF THE ACT ARE HELD TO BE VOID AB INITIO. WE, ACCORDINGLY ALLOW THE SOLE LEGAL GROUND RAISED IN THE CROSS OBJ ECTION BY THE ASSESSEE. 17. APROPOS THE REVENUES APPEAL CHALLENGING THE QU ANTUM OF PENALTY DELETED BY THE LD. CIT(A), WE ARE OF THE VI EW THAT SINCE WE HAVE ALREADY ALLOWED LEGAL GROUND RAISED BY THE ASS ESSEE, AND DELETED THE LEVY OF PENALTY U/S 271(1)(C) OF THE AC T AT RS.34,00,000/- ADJUDICATION OF THE ISSUE ON MERIT R AISED BY REVENUE SHRIAMIT KUMAR AGARWAL ITANO.513/IND/2018 & CONO. NO.28/IND/2019 8 WILL BE MERELY ACADEMIC IN NATURE AND THEREFORE, RE VENUES GROUNDS ARE DISMISSED AS INFRUCTUOUS. 18. IN THE RESULT, LEGAL GROUND RAISED IN CROSS OBJ ECTION BY THE ASSESSEE IS ALLOWED AND THE APPEAL OF THE REVENUE I S DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31.07.20 19. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 31 /07/2019 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR