Samapika Jena, Angul V. DCIT, Central Circle, Cuttack

ITA 54/CTK/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9579 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 01-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Assessee Lawyers: J M PATTNAIK
• Keywords: Search and seizure; Retrospective amendment; Question of law; Set aside
• Section: 271(1)(c); 153A; 201; 274; 73; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK . . , . . , BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM . / ITA NO S . 53 TO 57 /CTK/ 2019 ( / A YS. : 20 1 0 - 2011 & 2012 - 2013 TO 2016 - 2017 ) SAMAPIKA JENA, AT - PLOT NO. 3(P), SECTOR - 1, CDA, BIDANASI, CUTTACK - 751014 VS. ACIT, CENTRAL CIRCLE, CUTTACK ./ PAN NO. : A KEPJ 7080 P ( / APPELLANT ) .. ( / RES PONDENT ) /ASSESSEE BY : SHRI J.M.PATTNAIK, ADVOCATE /REVENUE BY : SHRI PIYUSH KOLHE , CIT - DR / DATE OF HEARING : 17 / 1 2 /2019 / DATE OF PRONOUNCEMENT : 08 / 01 /20 20 / O R D E R PER BENCH : TH ESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF CIT(A) - 2 , BHUBANESWAR , ALL DATED 30 .1 1 .2018 FOR THE ASSESSMENT YEAR S 2010 - 2011 TO 201 3 - 201 4 AND 2015 - 2016. 2 . SINCE THE ISSUES INVOLVED IN ALL THE APPEALS ARE ID ENTICAL TO EACH OTHER, EXCEPT DIFFERENT IN FIGURE, THEREFORE, WITH THE CONSENT OF BOTH THE PARTIES, ALL THE APPEALS ARE HEARD ANALOGOUSLY AND DISPOSED OFF BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF CONVENIENCE, WE SHALL TAKE INTO CONSIDERATION THE FACTS A ND GROUNDS MENTIONED IN ITA NO. 53 /CTK/2019 FOR THE ASSESSMENT YEAR 2010 - 2011 FOR DECIDING ALL ITA NO S . 53 - 57 /CTK/201 9 2 THE APPEALS. GROUNDS TAKEN BY THE ASSESSEE IN THE SAID APPEAL FOR ASSESSMENT YEAR 2010 - 2011 ARE AS UNDER : - A. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. A.O AND CIT(A) ARE ERRED IN LAW IN IMPOSING PENALTY, AMOUNTING TO RS.24,792/ - , U/S.271(L)(C) OF THE I.T. ACT 1961; B. FOR THAT THE LD. AO AND CIT(A) ARE ERRED IN IMPOSING AFORESAID PENALTY IN ABSENCE OF ANY UNDISCLOSED INCOME BEING FOUND DU RING THE COURSE OF ASSESSMENT VIS - A - VIS THE RETURN FILED U/S. 153A OF THE I.T. ACT CONSTRUED AS RETURN U/S. 139 (1) OF THE IT ACT, 1961; C. FOR THAT THE LD. AO AND CIT(A) ARE ERRED IN LAW IMPOSING AFORESAID PENALTY IN ABSENCE OF ANY CONCEALMENT OF INCOM E BASED ON SUSPICION AND SURMISES WHICH IN NO CIRCUMSTANCES CAN HAVE ANY EVIDENTIARY VALUE. D. FOR THAT THE DECISIONS WERE RELIED UPON TO SUBSTANTIATE THAT AS THERE WAS NO POSITIVE FINDING OF CONCEALMENT OF INCOME THE IMPOSITION OF PENALTY WAS BAD IN. THE LEARNED AO AS WELL AS CIT (A) MISUNDERSTOOD THE DOCTRINE OF RATIO DECIDENDI BY HOLDING THAT THE DECISIONS HAVE NO APPLICATION WHICH IS BAD IN LAW; E. FOR THAT, ANY OTHER GROUNDS INCIDENTAL TO THE GROUNDS OF THIS CASE MAY KINDLY BE PERMITTED TO URGE AT THE TIME OF HEARING OF THE CASE. F. FOR THAT, ANY OTHER EVIDENCES INCIDENTAL TO THE GROUNDS OF THIS CASE MAY KINDLY BE PERMITTED TO ADDUCE AT THE TIME OF HEARING OF THE CASE. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVED INCOME FROM CON SULTANCY FEES AND OTHER SOURCES AND FILED HER ORIGINAL RETURN OF INCOME ON 17.08.2010 DECLARING TOTAL INCOME AT RS. 2,38,540/ - . A SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT WAS CONDUCTED ON 03.09.2015 IN THE BUSINESS PREMISES OF COMPANIES AT CUTTACK AND R ESIDENTIAL PREMISES OF THE DIRECTORS AT CUTTACK AND BHUBANESWAR AND TALCHER . DURING THE COURSE OF SEARCH , CERTAIN DOCUMENTS WERE FOUND IN THE NAME OF THE ASSESSEE AND THERE WAS A SATISFACTION TO THE AO THAT THESE DOCUMENTS ARE RELATED TO THE ASSESSEE. SUBS EQUENTLY, THE AO ISSUED ITA NO S . 53 - 57 /CTK/201 9 3 NOTICE U/S.153C OF THE ACT TO FURNISH THE RETURN AND IN PURSUANCE TO WHICH THE ASSESSEE FILED HER RETURN OF INCOME ON 27.09.2017 DECLARING TOTAL INCOME AT RS.3,89,622/ - . THEREAFTER ON ISSUANCE OF STATUTORY NOTICES U/S.143(2) & 142( 1) OF THE ACT, THE ASSESSMENT WAS FRAMED BY THE AO U/S.153C OF THE ACT ASSESSING TOTAL INCOME AT RS.3,89,620/ - . CONSEQUENTLY, THE AO INITIATED PENALTY U/S.271 (1)(C) OF THE ACT AND PENALTY ORDER U/S.271(1)(C) OF THE ACT WAS PASSED ON 25.04.2018 LEVYING PENA LTY OF RS. 24,792/ - FOR A.Y.2010 - 2011 . SIMILARLY, THE AO LEVIED PENALTY OF RS. 8,050/ - FOR A.Y.2011 - 2012, RS.13,143/ - FOR A.Y.2012 - 2013, RS. 14,210/ - FOR A.Y.2013 - 2014 AND RS.14,476/ - FOR A.Y.2015 - 2016, RESPECTIVELY. 4 . FEELING AGGRIEVED WITH THE PENALTY OR DER, THE ASSESSEE PREFERRED APPEAL S BEFORE THE CIT(A), HOWEVER, THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FINDINGS OF AO, UPHELD THE PENALTY SO LEVIED BY THE AO U/S.271 (1)(C) OF THE ACT IN ALL THE ASSESSMENT YEARS UNDER CONSIDERATION . 5 . FURTHER FEELING AGGRIEVED WITH THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEALS BEFORE THE INCOME TAX APPELLATE TRIBUNAL. 6 . AT THE OUTSET, LD. ASSESSEE REPRESENTATIVE (AR) PLACING RELIANCE ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR) SUBMITTED THAT THE AO ISSUED NOTICE U/S.274 R.W.S.271(1)(C) OF THE ACT ON ITA NO S . 53 - 57 /CTK/201 9 4 31. 10 .201 7 , WHEREIN BOTH THE ALLEGATIONS HAVE BEEN NOTED AND THE AO HAS NOT SHOWN ANY CLEAR INDICATION TO THE ASSESSEE THAT ON WHICH ALLEGATION HE INTENDS TO IMPOSE PENALTY U/S.271(1)(C) OF THE ACT. LD. AR CONTENDED THAT EVEN IN THE ASSESSMENT ORDER THERE IS NO IOTA THAT ON WHICH ALLEGATION THE AO INTENDS TO IMPOSE THE PENALTY ON THE ASSESSEE EITHER ON THE ALLEGATION ON CONCEALME NT OF INCOME OR ON THE ALLEGATION OF FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE, ON BOTH THE COUNTS PENALTY IMPOSED BY THE AO U/S.271(1)(C) OF THE ACT AND CONFIRMED BY THE CIT(A) CANNOT BE HELD AS SUSTAINABLE. 7 . ON THE OTHER HAND, LD. DR RELIE D ON THE ORDERS OF LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE HAS NOT DECLARED THE INCOME RECEIVED FROM CONSULTANCY FEES AND INCOME FROM OTHER SOURCES IN HER RETURN OF INCOME FURNISHED BEFORE THE DATE OF SEARCH WHICH MEANS THE ASSESSEE HAS CONCEALED HIS INCOME AND, THEREFORE, ATTRACTS PENALTY U/S.271(1)(C) OF THE ACT. 8 . AFTER CONSIDERING THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AS WELL AS ORDERS OF LOWER AUTHORITIES, WE FIND THAT THE NOTICE ISSU ED U/S 274 R.W.S.271 (1)(C) OF THE ACT APPARENTLY GOES TO PROVE THAT THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS BY ISSUING THE NOTICE U/S.274/271 (1)(C) OF THE ACT WITHOUT SPECIFYING THE ASSESSEE HAS CONCEALED ''PARTICULARS OF INCOME' OR ASSESSE E HAS FURNISHED ITA NO S . 53 - 57 /CTK/201 9 5 'INACCURATE PARTICULARS OF INCOME', SO AS TO PROVIDE ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SHOW CAUSE NOTICE. RATHER NOTICE IN THIS CASE HAS BEEN ISSUED IN A STEREOTYPED MANNER WITHOUT APPLYING ANY MIND WHICH IS BAD IN LAW, HE NCE IS NOT A VALID NOTICE SUFFICIENT TO IMPOSE PENALTY U/S 271(1)(C) OF THE ACT. THE HON'BLE APEX COURT VIDE JUDGMENT IN CASE OF M/S. SSA'S EMERALD MEADOWS, (2016) 73 TAXMANN.COM 248(SC) DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE JUDGMENT RENDERED BY HON'BLE HIGH COURT OF KARNATAKA WHEREBY IDENTICAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF THE JUDGMENT IN CASE OF M/S. SSA'S EMERALD MEADOWS (SUPRA) DECIDED BY HON'BLE HIGH COURT OF KARNATAKA IS REPRODUCED BELOW : - '2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW: (1) WHETHER, OMISSION IF ASSESSING OFFICER TO EXPLICITLY MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OR THAT FOR CONCEA LMENT OF INCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYOND REASONABLE DOUBT THAT THE ASSESSEE HAD CONCEALED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? (2 WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN. HOLDING THAT THE PENALTY NOTICE UNDER SECTION 274 R.W.S. 271(L)(C) IS HAD IN LAW AND. INVALID IN SPITE THE AMENDMENT OF SECTION 271 (1 B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT, THE ASSESSING OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECORDING THE SATISFACTION FOR THE SAME? (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE TRIBUNAL WAS JUSTIFIED IN DECIDING THE APPEALS AGAINST THE REVENUE ON THE BASIS OF NOTICE ISSUED, UNDER SECTION 274 WITHOUT TAKING INTO CONSIDERATION THE ASSESSMENT ORDER WHEN THE ASSESSING OFFICER HA S SPECIFIED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME? 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION ITA NO S . 53 - 57 /CTK/201 9 6 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT') TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(L)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED 01 THE DERISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONE R OR INCOME TAX - VS - MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETE RMINATION BY THIS COURT, THE APPEAL IS ACCORDINGLY DISMISSED.' 9 . THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR) OBSERVED THAT THE LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEI NG LEVIED. AS PER HON'BLE HIGH COURT, WHERE THE ASSESSING OFFICER PROPOSED TO INVOKE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. THE HON'BLE HIGH COURT HELD THAT THE STANDARD PROFORMA OF NOTICE UNDER SECTION 274 OF THE ACT WITHOUT STRIKING OF THE IRRELEVANT CLAUSES WOULD LEAD TO AN INFERENCE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF VS. JCIT, 291 ITR 519 (SC) HAS ALSO NOTICED THAT WHERE THE ASSESSING OFFICER ISSUES NOTICE UNDER SECTION 274 OF THE ACT IN THE STANDARD PROFORMA AND THE INAPPROPRIATE WORDS ARE NOT DELETED, THE SAME WOULD POSTULATE THAT THE ASSESSING OFFICER WAS NOT SURE AS TO WHETHER HE WAS TO PROCEED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDING TO THE HON'BLE SUPREME COURT, IN SUCH ITA NO S . 53 - 57 /CTK/201 9 7 A SITUATION, LEVY OF PE NALTY SUFFERS FROM NON - APPLICATION OF MIND. IN THE BACKGROUND OF THE AFORESAID LEGAL POSITION AND, HAVING REGARD TO THE MANNER IN WHICH THE ASSESSING OFFICER HAS ISSUED NOTICE UNDER SECTION 274 R.W.S. 271 (1)(C) OF THE ACT DATED 31. 10 .201 7 WITHOUT STRIKING OFF THE IRRELEVANT WORDS, THE PENALTY PROCEEDINGS SHOW A NON - APPLICATION OF MIND BY THE ASSESSING OFFICER AND IS, THUS, UNSUSTAINABLE. 10 . THE FACTS OF THE PRESENT APPEAL S ARE IDENTICAL TO THE FACTS O F THE CASE BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF SSA'S. EMARLD MEADOWS(SUPRA) AND, THEREFORE, THE DECISION OF HON'BLE SUPREME COURT SQUARELY APPLIES TO THE CASE OF THE ASSESSEE. HENCE, RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE IMPUGNED OR DER PASSED BY THE CIT(A) IN ALL THE APPEALS UNDER CONSIDERATION AND CANCEL THE ORDER OF THE ASSESSING OFFICER DATED 25 .0 4 .201 8 LEVYING PENALTY U/S.271(1)(C) OF THE ACT RS.24,792/ - FOR A.Y.2010 - 2011, RS.8,050/ - FOR A.Y.2011 - 2012, RS.13,143/ - FOR A.Y.2012 - 2013, RS.14,210/ - FOR A.Y.2013 - 2014 AND RS.14,476/ - FOR A.Y.2015 - 2016, RESPECTIVELY AND ALLOW THE SOLE GROUND RAISED IN ALL THE APPEALS UNDER CONSIDERATION. 11 . IN THE RESULT, ALL APPEAL S OF THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT O N 08 / 01 / 20 20 . SD/ - ( C.M.GARG ) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 08 / 01 /20 20 PRAKASH KUMAR MISHRA, SR.P.S. ITA NO S . 53 - 57 /CTK/201 9 8 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - SAMAPIKA JE NA, AT - PLOT NO.3(P), SECTOR - 1, CDA, BIDANASI, CUTTACK - 751014 2. / THE RESPONDENT - ACIT, CENTRAL CIRCLE, CUTTACK 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//