Sampa Anupurba, Angul V. DCIT, Central Circle, Cuttack

ITA 58/CTK/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9596 (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); 142(1); 153A; 201; 274; 73; 13; 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 . 5 8 TO 62 /CTK/ 2019 ( / A YS. : 20 1 1 - 2012 TO 2015 - 2016 ) SAMPA ANUPURBA, AT: AMALAPADA, TALCHER, DIST: ANUGUL, ODISHA VS. D CIT, CENTRAL CIRCLE, CUTTACK ./ PAN NO. : A INPA 3951 P ( / APPELLANT ) .. ( / RESPONDENT ) /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 A RE THE APPEALS FILED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF CIT(A) - 2 , BHUBANESWAR , ALL DATED 03 .1 2 .2018 FOR THE ASSESSMENT YEAR S 201 1 - 201 2 TO 201 5 - 201 6 . 2 . SINCE THE ISSUES INVOLVED IN ALL THE APPEALS ARE IDENTICAL TO EACH OTHER, EXCEPT DIFFERE NT 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 AND GROUNDS MENTIONED IN ITA NO. 58 /CTK /2019 FOR THE ASSESSMENT YEAR 201 1 - 201 2 FOR DECIDING ALL ITA NO S . 5 8 - 62 /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 CASE THE LD. A.O AND CIT(A) ARE ERRED IN LAW IN IMPOSING PENALTY, AMOUNTING TO RS. 63 , 657 / - , 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 DURING THE COURSE OF ASSESSMENT VIS - A - V IS 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 INCOME BASED ON SUSPICION AND SURMISES WHI CH 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) MIS UNDERSTOOD 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 PRIVATE PRACTICE AS DOCTOR AND OTHER SOU RCES AND FILED HER ORIGINAL RETURN OF INCOME ON 13 . 12 .201 1 DECLARING TOTAL INCOME AT RS. 3,35,630 / - FOR THE ASSESSMENT YEAR 201 1 - 201 2 . A SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT WAS CONDUCTED ON 03.09.2015 IN THE BUSINESS PREMISES OF COMPANIES AT CUTTAC K AND RESIDENTIAL 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 ITA NO S . 5 8 - 62 /CTK/201 9 3 TO THE ASSESSE E. SUBSEQUENTLY, THE AO ISSUED NOTICE U/S.153 A OF THE ACT TO FURNISH THE RETURN AND IN PURSUANCE TO WHICH THE ASSESSEE FILED HER RETURN OF INCOME ON 24.01.2017 DECLARING TOTAL INCOME AT RS. 7 , 26 , 830/ - THEREAFTER ON ISSUANCE OF STATUTORY NOTICES U/S.143(2) & 142(1) OF THE ACT, THE ASSESSMENT WAS FRAMED BY THE AO U/S.153 A OF THE ACT ASSESSING TOTAL INCOME AT RS. 7 , 26 , 830 / - . CONSEQUENTLY, THE AO INITIATED PENALTY U/S.271 (1)(C) OF THE ACT FOR CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS OF INCOME AND PEN ALTY ORDER U/S.271(1)(C) OF THE ACT WAS PASSED ON 25.04.2018 LEVYING PENALTY OF RS. 63 , 657 / - FOR A.Y.201 1 - 201 2 . SIMILARLY, THE AO LEVIED PENALTY OF RS. 2,10 , 114 / - FOR A.Y.201 2 - 201 3 , RS. 80 , 076 / - FOR A.Y.201 3 - 201 4 , RS. 1,07,648 / - FOR A.Y.201 4 - 201 5 AND RS. 23,0 45 / - FOR A.Y.2015 - 2016, RESPECTIVELY. 4 . FEELING AGGRIEVED WITH THE PENALTY ORDER, 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 T HE AO U/S.271 (1)(C) OF THE ACT IN ALL THE APPEALS FOR THE ABOVE 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 ITA NO S . 5 8 - 62 /CTK/201 9 4 THAT THE AO ISSUED NOTICE U/S.274 R.W.S.271(1)(C) OF THE ACT ON 31. 10 .201 7 , WHEREIN BOTH T HE 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 A LLEGATION THE AO INTENDS TO IMPOSE THE PENALTY ON THE ASSESSEE EITHER ON THE ALLEGATION ON CONCEALMENT OF INCOME OR ON THE ALLEGATION OF FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE, ON BOTH THE COUNTS PENALTY IMPOSED BY THE AO AND CONFIRMED BY T HE CIT(A) CANNOT BE HELD AS SUSTAINABLE. 7 . ON THE OTHER HAND, LD. DR RELIED 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 ISSUED 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 WITHOU T SPECIFYING THE ASSESSEE HAS ITA NO S . 5 8 - 62 /CTK/201 9 5 CONCEALED ''PARTICULARS OF INCOME' OR ASSESSEE HAS FURNISHED '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 ISSUE D IN A STEREOTYPED MANNER WITHOUT APPLYING ANY MIND WHICH IS BAD IN LAW, HENCE 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 24 8(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 MEA DOWS (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 CONCEALMENT 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 CIRCUMST ANCES 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 A ND. 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, THE TRIBUNAL WAS JUSTIFIED IN DECIDING THE APPEALS AGAINST THE REVENUE ON THE BASIS OF NOTICE ISSUED, UNDER SECTION 274 WITHOUT T AKING INTO CONSIDERATION THE ASSESSMENT ORDER WHEN THE ASSESSING OFFICER HAS SPECIFIED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME? ITA NO S . 5 8 - 62 /CTK/201 9 6 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UN DER SECTION 274 READ WITH SECTION 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 SECT ION 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 DERIS ION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER 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 DETERMINATION 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 THA T THE LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEING 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 CO URT 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 T HE 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 INCOM E. ACCORDING TO THE HON'BLE SUPREME COURT, IN SUCH ITA NO S . 5 8 - 62 /CTK/201 9 7 A SITUATION, LEVY OF PENALTY 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, UNSUSTA INABLE. 10 . THE FACTS OF THE PRESENT APPEAL S ARE IDENTICAL TO THE FACTS OF 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 ASSE SSEE. HENCE, RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE CIT(A) IN ALL THE APPEALS UNDER CONSIDERATION AND CANCEL THE PENALTY ORDER OF THE ASSESSING OFFICER DATED 25 .0 4 .201 8 LEVYING PENALTY U/S.271(1)(C) OF THE ACT RS.63, 657/ - FOR A.Y.2011 - 2012, RS.2,10,114/ - FOR A.Y.2012 - 2013, RS.80,076/ - FOR A.Y.2013 - 2014, RS.1,07,648/ - FOR A.Y.2014 - 2015 AND RS.23,045/ - 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 ON 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 . 5 8 - 62 /CTK/201 9 8 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - SAMPA ANUPU RBA, AT: AMALAPADA, TALCHER, DIST: ANUGUL, ODISHA 2. / THE RESPONDENT - DCIT, CENTRAL CIRCLE, CUTTACK 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//