Asstt. Commissioner of Income Tax, Lucknow V. Shri K.N. Singh Patel, Lucknow

ITA 568/LKW/2014

• Counselvise Citation: 56823714 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-10-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 03-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESS MENT YEAR
• Keywords: Principle of natural justice
• Section: 234B; 6; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.568 TO 572/LKW/2014 A.YRS:2003-04, 04-05, 06-07 TO 08 -09 A.C.I.T., CENTRAL CIRCLE-I, LUCKNOW. VS. SHRI K. N. SINGH PATEL, E-3555-57, RAJAJIPURAM, LUCKNOW. PAN:AIRPP3813B (APPELLANT) (RESPONDENT) I.T.A. NO.635/LKW/2014 ASSESSMENT YEAR:2009-10 SHRI K. N. SINGH PATEL, E-3555-57, RAJAJIPURAM, LUCKNOW. PAN:AIRPP3813B VS. A.C.I.T., CENTRAL CIRCLE-I, LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R PER A. K. GARODIA, A.M.: OUT OF THIS BUNCH OF SIX APPEALS, FIVE APPEALS ARE FILED BY THE REVENUE FOR ASSESSMENT YEAR 2003-04, 2004-05, 2006- 07, 2007-08 AND 2008-09 AND THE REMAINING ONE APPEAL FOR ASSESSMENT YEAR 2009-10 IS FILED BY THE ASSESSEE. ALL THESE APPEALS WERE HEAR D TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR T HE SAKE OF CONVENIENCE. REVENUE BY DR. A. K. SINGH, CIT, D.R. ASSESSEE BY NONE DATE OF HEARING 15 /10/2015 DATE OF PRONOUNCEMENT 1 8 / 12 /2015 2 2. FIRST WE TAKE UP ALL THE FIVE APPEALS FILED BY THE REVENUE. IN ALL THESE APPEALS, SEVERAL GROUNDS ARE RAISED BY THE RE VENUE IN EACH YEAR BUT THE ONLY GRIEVANCE OF THE REVENUE IS REGARDING DELE TION OF PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT O F RS.31.19 LACS FOR ASSESSMENT YEAR 2003-04, RS.24.13 LACS FOR ASSESSME NT YEAR 2004-05, RS.38.01 LACS FOR ASSESSMENT YEAR 2006-07, RS.3.13 LACS FOR ASSESSMENT YEAR 2007-08 AND RS.51.05 LACS FOR ASSESSMENT YEAR 2008-09. 3. THESE APPEALS WERE FIXED FOR HEARING ON SEVERAL DATES AND EARLIER SHRI P. K. KAPOOR, C. A. AND A. R. OF THE ASSESSEE WAS APPEARING ON BEHALF OF THE ASSESSEE AND SEEKING ADJOURNMENTS. ON HIS R EQUEST, THE HEARING WAS ADJOURNED ON SEVERAL OCCASIONS. ON 30/03/2015, IT WAS MADE CLEAR THAT THIS IS THE LAST CHANCE GIVEN TO THE ASSESSEE AND THE HEARING WAS ADJOURNED TO 30/04/2015. ON 30/04/2015 AND AFTER T HAT ON SEVERAL OCCASIONS, THE HEARING WAS ADJOURNED ON THE REQUEST OF A.R. OF THE ASSESSEE AND ON EACH OCCASION, IT WAS MADE CLEAR TH AT NO FURTHER OPPORTUNITY WILL BE PROVIDED. THEREAFTER, ON 29/09 /2015, IN PLACE OF SHRI P. K. KAPOOR, C. A., SHRI K. G. BANSAL, C. A. APPEA RED AND REQUESTED FOR ADJOURNMENT. ALTHOUGH ADJOURNMENT WAS GRANTED ON T HAT DATE ALSO BUT THIS WAS MADE CLEAR TO HIM THAT NO FURTHER ADJOURNM ENT WILL BE GRANTED. ON THIS DATE, THE HEARING WAS ADJOURNED TO 15/10/20 15. ON THIS DATE, I.E. ON 15.10.2015, NONE APPEARED ON BEHALF OF THE ASSES SEE AND THERE IS NO REQUEST FOR ADJOURNMENT ALSO AND THEREFORE, ALL THE SE APPEALS WERE HEARD EX-PARTE QUA THE ASSESSEE. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE PENAL TY ORDERS. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D. R. OF THE REVENUE. WE FIND THAT PENALTY IN ALL THESE FIVE YE ARS WAS IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT BY INVOK ING EXPLANATION 5A OF 3 THIS SECTION. THIS PENALTY WAS DELETED BY CIT(A) I N ALL THESE YEARS ON THE BASIS THAT SECTION 271AAA WAS INSERTED IN THE STATU TE BOOK BY THE FINANCE ACT 2007 WITH EFFECT FROM 01/04/2007 AND AS PER SUB SECTION (1) OF THIS SECTION, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS SECTION, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007 BUT BEFORE THE 1 ST DAY OF JULY, 2012, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION T O TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED @10% OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. AS PER SUB SECTION (2) OF THIS SECT ION, IF IN A STATEMENT UNDER SUB SECTION (4) OF SECTION 132, THE ASSESSEE ADMITS THE UNDISCLOSED INCOME IN THE SPECIFIED MANNER AND FULFILLS CERTA IN OTHER CONDITIONS, THEN NOTHING CONTAINED IN SUB-SECTION (1) OF SECTION 271 AAA WILL APPLY TO THAT ASSESSEE. AS PER SUB-SECTION (3) OF SECTION 271AAA OF THE ACT, NO PENALTY U/S 271(1)(C) OF THE ACT SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION ( 1) OF SECTION 271AAA OF THE ACT. A CLEAR FINDING HAS BEEN GIVEN BY CIT(A) THAT SINCE THE SEARCH IN THE PRESENT CASE WAS CARRIED OUT ON 19/11/2008, SEC TION 271AAA IS APPLICABLE AND THEREFORE, IN VIEW OF SUB-SECTION (3 ) OF SECTION 271AAA, PENALTY U/S 271(1)(C) CANNOT BE IMPOSED. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) BECAUSE THIS IS NOT IN DISPUTE THAT THE DATE OF SEARCH IS 19/11/2008 AND THEREFORE, SECTION 271AAA IS APPLICA BLE AND AS PER THE PROVISIONS OF SUB SECTION (3) OF THIS SECTION, PENA LTY U/S 271(1)(C) IS NOT LEVIABLE WHERE SUB-SECTION (1) OF SECTION 271AAA IS APPLICABLE. WE, THEREFORE, DECLINE TO INTERFERE IN THE ORDER OF CIT (A) IN ALL THESE YEARS. HOWEVER, THE A.O. IS AT LIBERTY TO INITIATE PENALTY PROCEEDINGS U/S 271AAA AS PER LAW. 6. IN THE RESULT, ALL THE FIVE APPEALS OF THE REVEN UE ARE DISMISSED. 4 7. NOW WE TAKE UP THE REMAINING APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2009-10 IN I.T.A. NO.635/LKW/2014. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE THE 'CIT(A)' HAS ERRED IN LAW AND ON FA CTS IN HOLDING THAT AMOUNT OF TAX ALONG WITH INTEREST (WIT H REFERENCE TO THE INCOME DISCLOSED) WAS 'SUPPOSED TO BE PAID TOGETHER WITH TAX IN 2008-09' AND BY REASON THAT IN TEREST AMOUNTING TO RS.7,15,578/- (RS.2,01,412 + RS.5,14,1 66 UNDER SECTION 234B AND 234C) WAS PAID ON 15.04.2014 ONLY, THE CONDITION FOR 'NON-LEVY' OF PENALTY UNDER SECTI ON 271AAA AS CONTAINED IN CLAUSE (III) OF SUB-SECTION (2) THE REOF REMAINED UNFULFILLED AND ON THAT GROUND IN UPHOLDIN G THE LEVY OF PENALTY OF RS.55,00,000/-. 2. BECAUSE THE 'CIT(A)' ON A DUE CONSIDERATION OF T HE FACTS AND CIRCUMSTANCES OF THE CASE, PARTICULARLY T HAT : (A) THERE IS NO TIME FRAME LAID DOWN IN SECTION 271AAA FOR PAYMENT OF 'TAX TOGETHER WITH INTEREST' IF ANY; (B) LOOKING TO THE OVERALL FACTS AND CIRCUMSTANCES OF T HE CASE UNDER WHICH DECLARATION OF ADDITIONAL INCOME H AD BEEN MADE, THE 'APPELLANT' WAS UNDER A BONAFIDE BEL IEF THAT HE WAS ENTITLED TO WAIVER OF INTEREST THAT HAD BEEN CHARGED UNDER SECTION 234B & 234C AGGREGATING RS.7,15,578; (C) THE 'APPELLANT'S' BELIEF ABOUT HIS ENTITLEMENT FOR WAIVER OF THE INTEREST GOT REINFORCED BY THE FACT THAT HIS PETITION (FOR WAIVER OF INTEREST) WAS STILL SUB-JUD ICE BEFORE THE INCOME-TAX AUTHORITY CONCERNED, AND THE SAME HAD NOT BEEN REJECTED (WHICH IS THE STATE OF AFFAIRS EVEN ON THIS DATE); (D) IN ANY CASE THE 'APPELLANT' HAD FULLY COMPLIED WITH THE CONDITION LAID DOWN IN CLAUSE (III) OF SUB-SECTION 271AAA BY PAYING INTEREST UNDER SECTION 234B & 234G AGGREGATING RS.7,15,578/- ALONG WITH INTEREST UNDER SECTION 220(2), THE REQUIREMENT TO PAY TAX ALONGWIT H INTEREST AND BEEN FULLY COMPLIED WITH IN LETTER AND SPIRIT. (E) THE DELAY (SO CALLED) IN MAKING PAYMENT OF INTEREST WAS CAUSED BY REASONABLE PLEA; 5 (F) FOR DELAY IN PAYMENT, THE EXCHEQUER STANDS DULY COMPENSATED IN THE FORM OF INTEREST, UNDER SECTION 220(2) WHICH IN THIS CASE AMOUNTED TO RS.2,79,077; AND SHOULD HAVE HELD THAT THE 'APPELLANT'S' CASE IS FUL LY COVERED BY SUB-SECTION (2) OF SECTION 271AAA AND NO PENALTY TH EREUNDER WAS LEVIABLE. 3. BECAUSE LEVY OF PENALTY UNDER SECTION 271AAA AN D APPLICATION OF THE SAID PROVISION BY THE AUTHORITIE S BELOW IN THE INSTANT CASE, IS BASED ON MIS-CONCEPTION ABOUT THE PROVISIONS OF LAW IN THIS RESPECT AND ALSO ON NON-A PPRECIATION OF MATERIAL AND INFORMATION ON RECORD, OWING TO WHI CH THERE WAS AN INFIRMITY IN THE PENALTY PROCEEDINGS WHICH W AS FATAL TO THE VERY SURVIVAL THEREOF. 4. BECAUSE EVEN IN RELATION TO PROCEEDINGS FOR LEVY OF PENALTY UNDER SECTION 271AAA, REQUIREMENT TO RECORD THE REQUISITE SATISFACTION WAS IN-BUILT AND SUCH REQUIR EMENT HAVING NOT BEEN COMPLIED WITH BY THE ASSESSING OFFICER, TH E ORDER DATED 28.06.2011 LEVYING PENALTY OF RS.55,00,000/- WAS WHOLLY UNSUSTAINABLE. 5. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY T O THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 8. IN THIS YEAR, THE PENALTY HAS BEEN IMPOSED BY TH E ASSESSING OFFICER U/S 271AAA AND NOT U/S 271(1)(C) OF THE ACT. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A), IT WAS HELD BY CIT(A) THAT THE REQUIREMENT OF SUB-SECTION (2) OF SECTION 271AAA WE RE NOT FULFILLED BY THE ASSESSEE AND THEREFORE, THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271AAA @10% OF UNDISCLOSED INCOME OF THIS YEAR IS JUSTIFIED. IT IS NOTED BY CIT(A) ON PAGE NO. 54 OF HIS ORDER THAT IT IS TH E SUBMISSION OF THE ASSESSEE BEFORE HIM THAT THE ASSESSEE HAS FULFILLED THE THREE CONDITIONS AND PAID THE TAX LIABILITY OF RS.7,15,583/- ON 15/0 4/2014 INCLUDING THE INTEREST BUT AS PER SECTION 271AAA, THE INTEREST WA S SUPPOSED TO BE PAID DURING THE COURSE OF ASSESSMENT TOGETHER WITH THE T AX AND THEREFORE, THE ASSESSEE HAS NOT FULFILLED THE REQUIREMENT OF SUB- SECTION (2) OF SECTION 6 271AAA OF THE ACT. IN VIEW OF THESE FACTS, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) IN THIS YEAR ALSO AND HENCE, WE DECLINE T O INTERFERE IN THE SAME. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. 10. IN THE COMBINED RESULT, ALL THE FIVE APPEALS OF THE REVENUE ARE DISMISSED AND THE ONLY APPEAL OF THE ASSESSEE IS AL SO DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED:18/12/2015 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT . REGISTRAR