Ghaziabad Container P.Ltd, Delhi V. DCIT, Circle-10(1), New Delhi

ITA 5249/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3827 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 14-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Question of law
• Section: 271(1)(c); 274; 73

Judgement Text

1 ITA NO. 5249/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER I.T.A. NO. 5249/DEL/20 17 (A.Y 2013-14) (THROUGH VIDEO CON FERENCING) GHAZIABAD CONTAINER P. LTD. F-409, ASHISH CORPORATE TOWER, COMMUNITY CENTRE, KARKARDOOMA, DELHI AAACG3070F (APPELLANT) VS DCIT CIRCLE-10(1) NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 12.06.2017 PASSED BY CIT (A)-35, NEW DELHI FOR ASSESSMENT YEAR 2013-14. 2. AT THE TIME OF HEARING NONE APPEARED FOR THE ASS ESSEE DESPITE GIVING NOTICE. THEREFORE, WE ARE PROCEEDING ON THE BASIS OF THE ORDER OF THE CIT(A) AND SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT(A). 3. THE LD. DR SUBMITTED THAT THE PENALTY IS AS PER THE LAW AND RELIED UPON THE ORDER OF THE CIT(A). 4. WE HAVE HEARD LD. DR AND PERUSED ALL THE RELEVAN T MATERIALS AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE CIT(A) H AS CATEGORICALLY MENTIONED IN APPELLANT BY NONE RESPONDENT BY SH. VIVEK VARDHAN, SR. DR DATE OF HEARING 05.10.2021 DATE OF PRONOUNCEMENT 11.10.2021 2 ITA NO. 5249/DEL/2017 PARA 4.15 THAT THE PENALTY NOTICE U/274 READ WITH S ECTION 271 DATED 8/3/2016 IS A FORMAT NOTICE AND THUS IT HAS NOT STRIKE OFF T HE PARTICULAR LIMBS OF SECTION 271(1)(C) OF THE ACT. THE CIT(A) HAS NOT DEALT WI TH THE DECISIONS OF THE HON'BLE SUPREME COURT IN CASE OF CIT VS. RELIANCE PETRO PR ODUCTS PVT. LTD. 322 ITR 158 AS WELL AS CIT VS. SSA EMERALD MEADOWS (2016) 7 3 TAXMAN.COM 248 (SC) AND CIT V. MANJUNATHA COTTON & GINNING FACTORY (201 3) 359 ITR 565 (KAR). THUS, THE NOTICE ITSELF IS DEFECTIVE IN NATURE AND THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF SSA EMERALD MEADOWS (SUPRA ) IS SQUARELY APPLICABLE IN THE PRESENT CASE. THUS, THERE IS NO PARTICULAR LIMB MENTIONED IN THE NOTICE ISSUED UNDER SECTION 271(1)(C) R.W.S. 274 OF THE AC T. THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COUR T IN CASE OF M/S SSA EMERALD MEADOW. THE EXTRACT OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN M/S SSA EMERALD MEADOWS ARE AS UNDER WHIC H WAS CONFIRMED BY THE HONBLE APEX COURT: '3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY TH E ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTIO N 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'T HE ACT') TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CO NCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE ITA NO. 4913/DEL/2015 DECISION OF THE DIVISION BENCH OF THI S COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDG MENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIA L QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE AP PEAL IS ACCORDINGLY DISMISSED.' THUS, ADDITIONAL GROUND NO. (II) OF THE ASSESSEE'S APPEAL IS ALLOWED. SINCE THE INCEPTION OF THE NOTICE ISSUED U/S 271(1)(C) HAS BE COME NULL AND VOID, THERE IS NO NEED TO COMMENT ON MERIT OF THE CASE. THE PENALT Y U/S 271(1)(C) OF THE ACT IS QUASHED. 3 ITA NO. 5249/DEL/2017 SINCE IN THE INSTANT CASE ALSO THE INAPPROPRIATE W ORDS IN THE PENALTY NOTICE HAS NOT BEEN STRUCK OFF AND THE NOTICE DOES NOT SPECIFY AS TO UNDER WHICH LIMB OF THE PROVISIONS, THE PENALTY U/S 271(1 )(C) HAS BEEN INITIATED, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT TH E PENALTY LEVIED U/S 271(1)(C) IS NOT SUSTAINABLE AND HAS TO BE DELETED. ALTHOUGH THE LD. DR SUBMITTED THAT MERE NON-STRIKING OFF OF THE INAPPROPRIATE WORDS WI LL NOT INVALIDATE THE PENALTY PROCEEDINGS, HOWEVER, THE DECISION OF THE HONBLE K ARNATAKA HIGH COURT IN THE CASE OF SSAS EMERALD MEADOWS (SUPRA) WHERE THE SLP FILED BY THE REVENUE HAS BEEN DISMISSED IS DIRECTLY ON THE ISSUE CONTEST ED HEREIN BY THE ASSESSEE. FURTHER, WHEN THE NOTICE IS NOT MENTIONING THE CONC EALMENT OR THE FURNISHING OF INACCURATE PARTICULARS, THE RATIO LAID DOWN BY T HE HONBLE HIGH COURT IN CASE OF M/S. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (S UPRA) WILL BE APPLICABLE IN THE PRESENT CASE. THE HONBLE DELHI HIGH COURT HELD AS UNDER: 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT, WHICH W AS ACCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA HIGH COURT I N CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) AND OBSE RVED THAT THE NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) THE PENALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIG H COURT HAD FOLLOWED THE ABOVE JUDGMENT IN THE SUBSEQUENT ORDER IN COMMISSIO NER OF INCOME TAX V. SSAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 241(KAR) , THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF INDIA I N SLP NO. 11485 OF 2016 BY ORDER DATED 5 TH AUGUST, 2016. 22. ON THIS ISSUE AGAIN THIS COURT IS UNABLE TO FIN D ANY ERROR HAVING BEEN COMMITTED BY THE ITAT. NO SUBSTANTIAL QUESTION OF LAW ARISES. THUS, NOTICE UNDER SECTION 271(1)(C) R.W.S. 274 OF THE ACT ITSELF IS BAD IN LAW. WE, THEREFORE, SET-ASIDE THE ORDER OF THE CIT(A) AN D DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY SO LEVIED. THE APPEAL OF THE ASSESSEE IS ALLOWED. 4 ITA NO. 5249/DEL/2017 5. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF OCTOBER, 2021 SD/- SD/- (PRASHANT MAHARISHI) (SUCH ITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11/10/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI