Ashraf Khan, Indore V. Income Tax Officer 2 (2), Indore

ITA 535/Ind/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2723 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 07-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B J BORICHA
• Keywords: Opportunity of being heard; Principle of natural justice; Reasonable cause; Non compliance; Revised return; Set aside
• Section: 271(1)(c); 143(3); 139(5); 27

Judgement Text

ASHRAF KAHN ITA NO.535/IND/2018 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.535/IND/2018 ASSESSMENT YEAR 2011-12 REVENUE BY S HRI B.J. BORICHA , SR.DR ASSESSEE BY MISS NISHA LAHOTI , CA DATE OF HEARING 12 .0 6 .2019 DATE OF PRONOUNCEMENT 14 . 0 6 .2019 O R D E R PER MANISH BORAD, AM. THIS APPEAL IS FILED AT THE INSTANCE OF THE ASSESSE E PERTAINING TO ASSESSMENT YEAR 2011-12 AND IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-III (IN SHORT CIT(A)), INDORE DATED 26.04.2018 WHICH IS ARISING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 0 5.06.2014 FRAMED BY ITO-2(2), INDORE. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF AP PEAL; SHR I ASHRAF KHAN , 98 SHRI NAGAR EXTN, INDORE VS. INCOME TAX OFFICER - 2 ( 2 ), INDORE ( APPELLANT ) (RESPONDENT ) PAN NO. A IFPK8558E ASHRAF KAHN ITA NO.535/IND/2018 2 1. THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING PENALTY U/S 271(1)(C) ON THE INCOME WHICH IS VOLUNTARILY OF FERED BY THE APPELLANT, BEFORE COMMENCEMENT OF ASSESSMENT PROCEEDINGS, WHICH IS UNJUST, ILLEGAL AND AGAINST T HE FACTS OF THE CASE. 2. THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING PENALTY U/S 271(1)(C), IMPOSED BY LEARNED AO WITHOUT SPECIF IC CHARGE OF CONCEALMENT OF INCOME OR FILING OF INACCU RATE PARTICULARS OF INCOME ON THE APPELLANT, WHICH IS QU ITE INJUST, ILLEGAL AND AGAINST THE FACTS OF THE CASE. 3. APPELLANT CRAVES TO LEAVE, ADD, AMEND, ALTER OR MODIFY OF ANY GROUND BEFORE FINAL DATE OF HEARING. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME ON 07.12.2011 FOR ASSESSMENT YEAR 2011-12 DECLARING IN COME OF RS.2,43,750/- THAT HAS BEEN REVISED ON 30.03.2013 D ECLARING INCOME OF RS.10,51,750/-. THE CASE WAS SELECTED FO R SCRUTINY THROUGH CASS. NOTICE U/S 143(2) WAS ISSUED ON 07.0 9.2012 FOLLOWED BY ISSUANCE OF NOTICES U/S 143(2)/142(1) A LONG WITH QUESTIONNAIRE. ON THE BASIS OF AIR INFORMATION LD. A.O CAME TO KNOW THAT THE ASSESSEE HAS SOLD IMMOVEABLE PROPERTY WORTH RS.16,15,000/- ALONG WITH THE OTHER CO OWNERS DURIN G THE YEAR BUT IN THE ORIGINAL RETURN OF INCOME LONG TERM CAPITAL GAIN OF ASHRAF KAHN ITA NO.535/IND/2018 3 RS.8,07,996/- WAS NOT OFFERED TO TAX AND IT WAS SUB SEQUENTLY SHOWN IN THE REVISED RETURN OF INCOME FILED ON 30.3 .2013. THE ASSESSMENT WAS COMPLETED ASSESSING INCOME AT RS. 11 ,01,750/- AFTER MAKING ADDITION FOR LOW HOUSE HOLD WITHDRAWAL S AT RS.50,000/- TO THE INCOME AS SHOWN IN THE REVISED R ETURN AT RS.10,51,750/-. LD. A.O INITIATED THE PENALTY PROC EEDINGS U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME FOR NOT DISCLOSING THE LONG TERM CAPITAL GAIN OF RS.8,07,996/- IN THE ORIG INAL RETURN OF INCOME. BY ISSUING NOTICE U/S 274 OF THE ACT AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, L EVIED PENALTY OF RS.1,66,500/- FOR FURNISHING INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. THE INSTANT APPEAL RELATES TO THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AND AGAINST THE ORD ER OF LD. A.O LEVYING THE PENALTY, ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) BUT FAILED TO GET ANY RELIEF. 4. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE T RIBUNAL CHALLENGING THE LEGALITY OF THE PENALTY PROCEEDING S AS WELL AS RAISING GROUNDS ON MERITS AGAINST THE PENALTY LEVI ED U/S 271(1)(C) OF THE ACT. ASHRAF KAHN ITA NO.535/IND/2018 4 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS P ER PROVISIONS OF SECTION 271(1)(C) OF THE ACT THE PENALTY CAN BE INITIATED EITHER FOR CONCEALING THE PARTICULARS OF INCOME OR FOR FURNISH ING INACCURATE PARTICULARS OF INCOME, WHEREAS THE LD.A.O HAS NOT R ECORDED SPECIFIC CHARGE ON THE ASSESSEE, AS TO WHETHER PENALTY IS TO BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CON CEALING THE PARTICULARS OF INCOME. PLACING RELIANCE ON THE JU DGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT VS KU LWANT SINGH BHATIA ITA NO.9 OF 2018 DATED 9.5.2018, THE LD. COU NSEL FOR THE ASSESSEE CONTENDED THAT THE LD.A.O HAS FAILED IN CO MPLY THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT BY INITI ATING THE PENALTY PROCEEDINGS WITH NO SPECIFIC CHARGE. RELIANCE WAS ALSO PLACED ON INDORE TRIBUNAL DECISION IN THE CASE OF VARAD MEHTA ITA NO.693/IND/16 DATED 06.12.2018. 6. PER CONTRA DEPARTMENTAL REPRESENTATIVE VEHEMENTL Y ARGUED SUPPORTING THE ORDERS OF LOWER AUTHORITIES. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE ISSUES RAISED BY THE ASSESSE E REVOLVES AROUND THE LEGALITY AND QUANTUM OF LEVY OF PENALTY AT RS.1,66,500/- LEVIED BY THE LD. A.O U/S 271(1)(C) O F THE ACT LEVIED ASHRAF KAHN ITA NO.535/IND/2018 5 BY THE LD. A.O AND SUBSEQUENTLY CONFIRMED BY LD.CIT (A). 8. LD. COUNSEL FOR THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL, FIRSTLY RAISING THE LEGAL ISSUE PLEADED THAT LD. A. O HAS WRONGLY INITIATED THE PENALTY PROCEEDINGS BY NOT SPECIFYING THE CHARGE FOR LEVY OF PENALTY I.E. WHETHER THE PENALTY PROCEEDING S HAS BEEN INITIATED FOR CONCEALING PARTICULARS OF INCOME OR F OR FURNISHING THE INACCURATE PARTICULARS OF INCOME. IT WAS ALSO PLEAD ED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THOUGH THE LD. ASSESS ING OFFICER HAS MADE PROPER SATISFACTION ON RECORD IN THE ASSESSMEN T ORDER FOR INITIATING PENALTY PROCEEDINGS BUT IN THE NOTICE IS SUE U/S 274 R.W.S. 271(1)(C) OF THE ACT, LD. A.O REMAINED SILENT BY N OT SPECIFYING AS FOR WHICH CHARGE THE PENALTY PROCEEDINGS HAVE BEEN INITIATED. TO EXAMINE THIS FACT WE HAVE GONE THROUGH THE IMPUGNED NOTICE ISSUED ON 31.12.2013 FOR INITIATING THE PENALTY PROCEEDING S U/S 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR 2009-10 AND FOR REFE RENCE THE SAME IS REPRODUCE BELOW:- OFFICE OF THE INCOME TAX OFFICER-2(2), INDORE AAYAKAR BHAWAN ANNEX, ROOM NO. L08, OPP. WHITE CHURCH, INDORE I.T.N.S.29 NOTICE UNDER SECTION 271(1)(C) READ WITH SECTION 27 4 OF INCOME TAX ACT, 1961 ASHRAF KAHN ITA NO.535/IND/2018 6 PAN AIFPK8558E DATE 31.12.2013 TO, SHRI ASHRAF KHAN, 98, SHREE NAGAR EXTN INDORE(M.P) SIR/MADAM, WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2011-12, IT APPEARS TO ME THAT YOU: - X *HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH THE RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTICE GIVEN UNDER SECTION 22(1 )/22(2)/34 OF THE INDIAN INCOME- TAX ACT, 1922, OR WHICH YOU WERE REQUIRED TO FURNIS H UNDER SECTION 139(1) OR BY A NOTICE GIVEN UNDER SECTION 139(2)/148 OF THE INCOME-TAX AC T, 1961, NO , DATED , OR HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WITHIN THE TIME ALLOWED AND IN THE MANNER REQUIRED BY THE SAID SECTION 139(1) OR BY SU CH NOTICE. X *HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 22(4)/23(2) OF THE INDIA INCOME-TAX ACT, 1922, OR U NDER SECTION 142(1)/143(2) OF THE INCOME-TAX ACT, 1961 NO , DATED 06/12/2006 (ORDER SHEET ENTRY). \I '*HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR .......... , FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11.00 A. M. ON 16.01.2014 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU S HOULD NOT BE MADE UNDER SECTION 271 OF THE INCOME-TAX ACT, 1961. IF YOU DO NOT WISH TO AVA IL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH BE WILL BE CONSIDERED BEFORE ANY SU CH ORDER IS MADE UNDER SECTION 271. SD/- (DIWKER TIWARI) INCOME TAX OFFICER-2(2), INDORE ASHRAF KAHN ITA NO.535/IND/2018 7 9. FROM PERUSAL OF THE ABOVE SHOW CAUSE NOTICES WE FIND THAT THE LD.A.O HAS MERELY MENTIONED THE SECTION BUT THE SPE CIFIC CHARGE I.E. WHETHER THE PENALTY HAVE BEEN INITIATED FOR CONCEAL MENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME HAS NOT BEEN MENTIONED. NOW WHETHER SUCH TY PE OF NOTICE WHICH DOES NOT SPEAK ABOUT THE SPECIFIC CHARGE LEVE LED AGAINST THE ASSESSEE IS VALID AND TENABLE IN THE EYES OF LAW N EEDS TO BE EXAMINED. 10. WE FIND THAT SIMILAR LEGAL ISSUE CAME UP FOR AD JUDICATION BEFORE US IN THE CASE OF VARAD MEHTA ITA NO.693/IND /16 DATED 06.12.2018 (SUPRA) WHEREIN WE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, RELYING ON THE JUDGMENT IN CASE OF KULWAN T SINGH BHATIA (SUPRA ) OBSERVING AS FOLLOWS; 11. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E RECORDS PLACED BEFORE US. THE ISSUES RAISED BY THE ASSESSEE REVOL VES AROUND THE LEVY OF PENALTY AT RS.16,00,000/- LEVIED BY THE LD. A.O AND CONFIRMED BY LD.CIT(A) ON THE ADDITION OF RS.51,00,000/- FROM UN DISCLOSED SOURCES FOR PURCHASE OF IMMOVABLE PROPERTIES. PERUSAL OF RECOR DS SHOWS THAT THE ASSESSEE REMAINING NEGLIGENT AND NON COMPLIANT TO V ARIOUS OPPORTUNITIES PROVIDED BY THE LD. A.O AS WELL AS LD.CIT(A) DURING THE COURSE OF PENALTY PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS TOWARD S THE LEVY OF PENALTY. 12. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL, FIRSTLY RAISING THE LEGAL ISSUE PLEADING THAT LD. A.O HAS WRONGLY I NITIATED THE PENALTY ASHRAF KAHN ITA NO.535/IND/2018 8 PROCEEDINGS BY NOT SPECIFYING THE CHARGE FOR LEVY O F PENALTY I.E. WHETHER THE PENALTY PROCEEDINGS HAS BEEN INITIATED FOR CONC EALING OF PARTICULARS OF INCOME OR FOR FURNISHING THE INACCURATE PARTICULARS OF INCOME. IT WAS ALSO PLEADED BY THE LD. COUNSEL FOR THE ASSESSEE THAT TH OUGH THE LD. ASSESSING OFFICER HAS MADE PROPER SATISFACTION ON R ECORD IN THE ASSESSMENT ORDER FOR INITIATING PENALTY PROCEEDINGS BUT IN THE NOTICE ISSUE U/S 274 R.W.S. 271(1)(C) OF THE ACT, BUT LD. A.O REMAINED SILENT BY NOT SPECIFYING AS TO WHICH CHARGE THE PENALTY PROC EEDINGS HAVE BEEN INITIATED. TO EXAMINE THIS FACT WE HAVE GONE THROU GH THE IMPUGNED NOTICE ISSUED FOR INITIATING THE PENALTY PROCEEDING S U/S 271(1)(C) OF THE ACT WHICH IS PLACED AT PAGE-52 OF THE PAPER BOOK AN D THE RELEVANT EXTRACT IS REPRODUCED BELOW: TO SHRI VARAD MEHTA 239, SUNNY PALACE M P NAGAR ZONE-1, BHOPAL SIR / MADAM, SUB:- PENALTY PROCEEDING U/S .. 271( 1 ) ( C) .. OF THE INCOME TAX ACT 1961 FOR THE AY 2008.09 IN CONNECTION WITH THE PENALTY PROCEEDINGS U/S, 271 (1) (C) FOR THE ASSESSMENT YEAR(S) 2008-09 YOU ARE REQUESTED TO ATT END MY OFFICE ON 18.01. 2010 AT 11.00 AM TO SHOW CAUSE WHY PENALTY S HOULD NOT BE IMPOSED. HOWEVER. IF YOU DO NOT WISH TO BE HEARD IN PERSON IN THIS REGARD, YOU MAY SUBMIT YOUR WRITTEN SUBMISSIONS SO AS TO REACH ME BY THE ABOVE DATE WHICH WILL BE CONSIDERED BEFORE DISP OSAL OF THE MATTER. SD/- ( SHRLKANT NAMDEO ) DEPUTY GOMMISSFSONEROF1NCO ME TAX-1(1}, BHOPAL BHOPAL 13. FROM PERUSAL OF THE ABOVE SHOW CAUSE NOTICE WE FIND THAT THE LD.A.O HAS MERELY MENTIONED THE SECTION BUT THE SPE CIFIC CHARGE I.E. ASHRAF KAHN ITA NO.535/IND/2018 9 WHETHER THE PENALTY HAVE BEEN INITIATED FOR CONCEAL MENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME HAS NOT BEEN MENTIONED. NOW WHETHER SUCH TYPE OF NOTICE WHICH D OES NOT SPEAK ABOUT THE SPECIFIC CHARGE LEVELED AGAINST THE ASSES SEE IS VALID AND TENABLE IN THE EYES OF LAW NEEDS TO BE EXAMINED. 14. WE FIND THAT SIMILAR ISSUE CAME UP BEFORE THE J URISDICTIONAL HIGH COURT IN THE CASE OF SHRI KULWANT SINGH BHATIA (SUP RA) WHEREIN THE HON'BLE COURT DISCUSSED THE JUDGMENT OF HON'BLE HI GH COURT IN THE CASE OF CIT V/S MANJUNATHA COTTON GINNING FACTORY (SUPRA) AND CIT V/S SSAS EMERALAD MEADOWS (SUPRA) HELD THAT ON DUE CONSIDERATION OF THE ARGUMENTS OF THE LD. COUNSEL FOR THE APPELLANT, SO ALSO CONSIDERING THE FACT THAT THE GROUND MENTIONED IN SHOW CAUSE NOTICE WOUL D NOT SPECIFY THE REQUIREMENT OF LAW, AS NOTICE WAS NOT SPECIFIC, WE ARE OF THE VIEW THAT LD. TRIBUNAL HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSE SSEE AND SET ASIDE THE ORDER OF PENALTY ENFORCED BY THE AUTHORITY. 15. SIMILARLY IN THE CASE OF CIT V/S MANJUNATHA GIN NING FACTORY, HON'BLE HIGH COURT OF KARNATAKA HELD THAT THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT SHOULD SPECIFICALLY MEN TION THE GROUND IN SECTION 271(1)(C) WHETHER CONCEALMENT OF INCOME OR FOR FURN ISHING IN ACCURATE PARTICULARS OF INCOME. SENDING PRINTED FORM WHERE ALL GROUND OF SECTION 271(1)(C ) WOULD NOT MENTIONED THE SPECIFIC REQUIRE MENT OF LAW. ASSESSEE SHOULD KNOW THE GROUNDS ON WHICH HE HAS CHARGED SPE CIFIC OTHERWISE OPPORTUNITIES OF NATURAL JUSTICE DENIED. ON THE BA SIS OF SUCH PROCEEDINGS NO PENALTY COULD BE IMPOSED TO THE ASSESSEE. TAKIN G UP THE PENALTY PROCEEDINGS ON ONE LIMB AND FINDING THE ASSESSSEE I N ANOTHER LIMB IS BAD IN LAW. THOUGH IN THE INSTANT APPEAL THE LD. A.O HAS MADE PROPER SATISFACTION IN THE BODY OF THE ASSESSMENT ORDER BU T IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT HE FAILED TO ME NTION THE LIMBS FOR WHICH PENALTY PROCEEDINGS HAVE BEEN INITIATED. IT IS THE NEGLIGENCE OF THE LD. A.O IN NOT MAKING PROPER SPECIFIC CHARGE IN THE NOTICE U/S 274 ABOUT THE ADDITION FOR WHICH PENALTY PROCEEDINGS HAVE BEE N INITIATED. LD. A.O ASHRAF KAHN ITA NO.535/IND/2018 10 SHOULD BE CLEAR AS TO WHETHER THE ALLEGED ADDITION GOES UNDER THE LIMB OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHI NG INACCURATE PARTICULARS OF INCOME. MERELY ISSUING NOTICE IN G ENERAL PROFORMA WILL NEGATE THE VERY PURPOSE OF NATURAL JUSTICE AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF DILIP N SHRAF 161 TAXMANN 218 THAT THE QUASI- CRIMINAL PROCEEDINGS U/S 271(1)(C) OF THE ACT OUGHT TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE. 14. WE THEREFORE RESPECTFULLY FOLLOWING ABOVE REFER RED JUDGMENTS AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AR E OF THE CONSIDERED VIEW THAT THE ALLEGED NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 31.12.10 IS INVALID, UNTENABLE AND SUFFERS FR OM THE INFIRMITY OF NON APPLICATION OF MIND BY THE ASSESSING OFFICER. WE AC CORDINGLY DIRECT TO DELETE THE PENALTY OF RS.16,00,000/- IMPOSED U/S 27 1(1)(C) ON THIS GROUND ITSELF. WE ACCORDINGLY ALLOW THE ADDITIONAL GROUND RAISED BY THE ASSESSEE ON THE LEGALITY OF THE PENALTY PROCEEDINGS INITIATED U/S 271(1)(C) OF THE ACT. SINCE THE PENALTY U/S 271(1)(C) ALSO H AS BEEN DEALT ON THE PRELIMINARY POINTS OTHER ARGUMENTS OF THE ASSESSEE DEALING WITH THE MERITS OF THE LEVY OF PENALTY ARE NOT BEEN DEALT WI TH, AS THE SAME ARE RENDERED ACADEMIC IN NATURE AND THE APPEAL OF THE A SSESSEE FOR THE ASSESSMENT YEAR 2008-09 IS ALLOWED. 11. WE THEREFORE RESPECTFULLY FOLLOWING ABOVE REFER RED JUDGMENTS AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CAS E ARE OF THE CONSIDERED VIEW THAT THE ALLEGED NOTICE ISSUED U/S 271(1)(C) OF THE ACT DATED 31.12.2013 IS INVALID, UNTENABLE AND SUFF ERS FROM THE INFIRMITY OF NON APPLICATION OF MIND BY THE ASSESSI NG OFFICER. SINCE WE HAVE HELD THE NOTICE U/S 274 OF THE ACT AS INVA LID, THE ASHRAF KAHN ITA NO.535/IND/2018 11 SUBSEQUENT PROCEEDING U/S 271(1)(C) OF THE ACT IS T HUS HELD VOID AB INITIO. ACCORDINGLY LEGAL GROUND NO.2 RAISED BY THE ASSESS EE ON THE LEGALITY OF THE PENALTY PROCEEDINGS IS ALLOWED. AC CORDINGLY GROUND NO.2 OF THE ASSESSEE IS ALLOWED. 12. THOUGH WE HAVE ALREADY QUASHED THE PENALTY PROC EEDINGS BY HOLDING THE ISSUANCE OF NOTICES U/S 274 AS INVALID AND NOT TENABLE AND SUFFERING FROM INFIRMITY OF APPLICATION OF MIND BY LD. A.O BUT STILL FOR ACADEMIC PURPOSES WE WILL LIKE TO ADJUDIC ATE GROUND NO.1 CHALLENGING THE QUANTUM OF PENALTY LEVIED ON THE AS SESSEE. 13. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. WE FIND THAT THE ASSESSEE FILED HIS ORIGINAL RETURN ON 7.12.2011 FOR INCOME OF RS.2,43,750/-. CASE SEL ECTED FOR SCRUTINY THROUGH CASS BY ISSUANCE OF NOTICES U/S 14 3(2) OF THE ACT ON 07.09.2012 FIXING THE DATE OF HEARING ON 27.09.2 012. ON 30.03.2013 THE ASSESSEE REVISED THE RETURN OF INCOM E AFTER DISCLOSING THE LONG TERM CAPITAL GAIN OF RS.8,07,99 6/-. THE TIME LIMIT FOR FURNISHING THE RETURN OF INCOME AS PER SE CTION 139(5) OF THE ACT FOR THE ASSESSMENT YEAR 2011-12 WAS ONE YEAR FR OM THE END OF THE ASSESSMENT YEAR OR THE DATE OF COMPLETION OF TH E ASSESSMENT, WHICHEVER OCCURS EARLIER. SO AS ON 31.3.2013 ONE Y EAR FROM THE ASHRAF KAHN ITA NO.535/IND/2018 12 END OF ASSESSMENT YEAR 2011-12 DID NOT EXPIRED AND ASSESSMENT U/S 143(3) OF THE ACT WAS STILL IN THE PROCESS OF C OMPLETION. THEREFORE THE ASSESSEE WAS LEGALLY ENTITLED TO FILE THE REVISED RETURN OF INCOME. THE ASSESSMENT PROCEEDINGS U/S 143(3) O F THE ACT WERE COMPLETED ON 31.12.2013 AND THE LD. A.O HAS DULY CO NSIDERED THE REVISED RETURN. IN THESE GIVEN FACTS AND CIRCUMSTA NCES OF THE CASE HOLDING THE ASSESSEE LIABLE FOR PAYING PENALTY U/S 271(1)(C) OF THE ACT ON THE INCOME DULY DISCLOSED IN THE REVISED RET URN OF INCOME BEFORE THE COMPLETION OF THE ASSESSMENT PROCEEDINGS , IS NOT JUSTIFIED AND THE SAME DESERVES TO BE DELETED. WE A CCORDINGLY ALLOW GROUND NO.1 OF THE ASSESSEE. 14. IN THE RESULT GROUND NO.1 & 2 OF THE ASSESSEE ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 14.06.20 19. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 14 JUNE, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. ASHRAF KAHN ITA NO.535/IND/2018 13