Sharad Mehrotra, New Delhi V. ACIT, New Delhi

ITA 6374/DEL/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3833 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 02-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANAT KAPUR KISLAY PARASH
• Keywords: Retrospective amendment; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D: NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 6373/DEL /2013 ASSESSMENT YEAR: 2009-10 SHRI SHAMBHU NATH MEHROTRA, 9-B, MATHURA ROAD, NEW DELHI-110044 (PAN: AEWPM2896M) VS ACIT, CIRCLE-32(1), NEW DELHI. (APPELLANT) (RESPONDENT) ITA NO. 6374/DEL /2013 ASSESSMENT YEAR: 2009-10 SHRI SHARAD MEHROTRA, 9-B, MATHURA ROAD, NEW DELHI. (PAN: AEWPM2896M) VS ACIT, CIRCLE-32(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI SANAT KAPUR, KISLAY PARASH AR, ADV. RESPONDENT BY : SHRI AMIT JA IN, SR. DR DATE OF HEARING: 24.01.2018 DATE OF PRONOUNCEMENT : 30.01.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. BOTH THESE APPEALS HAVE BEEN PREFERRED BY THE ASSESSEES AND THEY CHALLENGE THE CONFIRMATION OF IMPOSITION OF PENALTY IMPOSED U/S 271(1)(C) OF THE ITA NO. 6373 & 6374/DEL/2013 ASSESSMENT YEAR 2009-10 2 INCOME TAX ACT, 1961 (HEREINAFTER CALLED 'THE ACT') . IN THE CASE OF THE ASSESSEE SHRI SHAMBHU NATH MEHROTRA, TH E PENALTY IMPOSED IS RS. 8,02,944/- WHEREAS IN THE CA SE OF THE ASSESSEE SHRI SHARAD MEHROTRA, THE PENALTY UNDE R APPEAL IS RS.10,66,345/-. BOTH THE APPEALS PERTAIN TO ASSESSMENT YEAR 2009-10 AND SINCE BOTH THE APPEALS INVOLVE IDENTICAL ISSUES, THEY ARE BEING HEARD TOGE THER AND DISPOSED OF THROUGH THIS COMMON ORDER FOR THE S AME OF CONVENIENCE. 2. AT THE OUTSET, THE LD. AR SUBMITTED THAT ADDITIO NAL GROUNDS OF APPEAL HAD BEEN FILED IN BOTH THE CASES AND GROUND NO. 2 OF THE ADDITIONAL GROUNDS WAS ON THE L EGAL ISSUE CHALLENGING THE IMPOSITION OF PENALTIES WITHO UT SPECIFYING THE CHARGE ON WHICH THE PENALTY U/S 271( 1)(C) OF THE ACT WAS SOUGHT TO BE LEVIED. THE LD. AR SUB MITTED THAT THE BENCH SHOULD HEAR OUT BOTH THE PARTIES ON THIS ADDITIONAL GROUND AND IF REQUIRED, THEN THE ARGUMEN TS CAN BE HEARD ON MERITS. LD. SR. DR HAD NO OBJECTIO N TO THIS PROPOSAL OF THE LD. AR. 3. THE LD. AR DREW OUR ATTENTION TO THE NOTICES ISS UED U/S 274 R/W SECTION 271(1)(C) OF THE ACT WHICH WERE ITA NO. 6373 & 6374/DEL/2013 ASSESSMENT YEAR 2009-10 3 DATED 13.12.2011 IN THE CASE OF BOTH THE ASSESSEES AND SUBMITTED THAT THE ASSESSING OFFICER IN BOTH CASES HAS NOT SPECIFIED THE CHARGE ON WHICH PENALTY U/S 271(1 )(C) WAS SOUGHT TO BE LEVIED. IT WAS SUBMITTED THAT THE AO HAD SIMPLY SENT THE PRINTED FORM OF NOTICE WITHOUT CROSSING OUT THE IRRELEVANT PORTIONS. IT WAS FURTH ER SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 271 (1)(C) OF THE ACT THERE ARE TWO LIMBS UNDER WHICH THE PENA LTY CAN BE IMPOSED AND THE ASSESSING OFFICER HAS TO NECESSARILY SPECIFY AS TO UNDER WHICH LIMB THE PENA LTY IS BEING SOUGHT TO BE IMPOSED I.E. WHETHER FOR CONCEAL MENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. AR FURTHER SUBMITTED THAT SINCE IN BOTH THE NOTICES, BOTH THE CHARGES WERE MENTIONED IN THE NOTICES AND THE IRRELEVANT PORTIONS WERE NOT CROSSE D OUT, THE NOTICES WERE NOT AS PER THE REQUIREMENTS OF THE ACT. THE LD. AR RELIED UPON THE JUDGMENT OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. MANJUNATH A COTTON & GINNING FACTORY REPORTED IN (2013) 359 ITR 565 (KAR) IN SUPPORT OF HIS ARGUMENT. THE LD. AR ALSO SUBMITTED THAT THIS JUDGMENT IN THE CASE OF CIT VS. ITA NO. 6373 & 6374/DEL/2013 ASSESSMENT YEAR 2009-10 4 MANJUNATHA COTTON & GINNING FACTORY (SUPRA) WAS FOLLOWED BY HONBLE KARNATAKA HIGH COURT IN THE CAS E OF CIT VS. SSAS EMERALD MEADOWS REPORTED IN (2016) 73 TAXMANN.COM 241 (KAR) AND FURTHER THE SLP FILED BY THE REVENUE AGAINST THE JUDGMENT OF THE HONBLE KARNATA KA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEA DOWS (SUPRA) HAD BEEN DISMISSED BY THE HONBLE SUPREME COURT. 4. THE LEARNED DR, APPEARING ON BEHALF OF THE REVEN UE, ARGUED THAT PENALTY PROCEEDINGS HAVE BEEN VALIDLY INITIATED IN THE NOTICE U/S.274 R.W.S. 271 OF THE A CT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT FROM THE BOTH THE NOTICES U/S.274 R.W.S. 271 OF THE ACT DATE D 13.12.2011 FOR THE IMPUGNED YEAR THAT THE ASSESSING OFFICER HAS NOT SPECIFICALLY MENTIONED AS TO UNDER WHICH LIMB OF SECTION 271(L)(C) OF THE ACT THE PENALTY PROCEEDINGS HAD BEEN INITIATED BY HIM, I.E., WHETHE R FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISH ING OF INACCURATE PARTICULARS OF INCOME. THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. MANJUNATHA COTT ON & ITA NO. 6373 & 6374/DEL/2013 ASSESSMENT YEAR 2009-10 5 GINNING FACTOR, REPORTED IN 359 ITR 565 (KAR) HAS, UNDER IDENTICAL FACTS, HELD AS UNDER - '(P) NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPECIFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(L)(C), I.E., WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. (Q) SENDING PRINTED FORM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW.' 5.1 THE SAID ABOVE-SAID JUDGMENT OF THE HONBLE HIG H COURT OF KARNATAKA IN THE CASE OF C IT VS. MANJUNATHA COTTON & GINNING FACTOR (SUPRA) HAS BEEN FOLLOWED B Y THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF COMMISSIONER OF INCOME TAX VS SSAS EMERALD MEADOWS , REPORTED IN (2016) 73 TAXMANN.COM 241 (KAR) AND THE RELEVANT PARAGRAPHS OF THE SAID JUDGMENT READ AS UN DER- '2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWIN G SUBSTANTIAL QUESTIONS OF LAW, WHETHER, OMISSION IF ASSESSING OFFICER TO EXPLICITL Y MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATE D FOR FURNISHING OF INACCURATE PARTICULARS OR THAT FO R CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABL E FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYON D REASONABLE DOUBT THAT THE ASSESSEE HAD CONCEALED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLD ING THAT THE PENALTY NOTICE UNDER SECTION 274 R.W.S. ITA NO. 6373 & 6374/DEL/2013 ASSESSMENT YEAR 2009-10 6 271(I)(C) IS BAD IN LAW AND INVALID DESPITE THE AMENDMENT OF SECTION 271 (1 B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT, THE ASSESSIN G OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECOR DING 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 TAKING INTO CONSIDERATION THE ASSESSMENT ORDER WHEN THE ASSESSING OFFICER HAS SPECIFIED THAT THE 'ASSESSEE HAS CONCEALED PARTICULARS OF INCOME? 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY TH E ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(L)( 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 PARTICUL ARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF T HE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISIO N BENCH OF THIS COURT RENDERED, IN THE CASE OF CIT V. MANJUNATHA COTTON & GINNING FACTORY [2013] 359ITR 565/218 TAXMAN 423/35 TAXMANN.COM 250 (KAR.). 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE AR E OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE AP PEAL IS ACCORDINGLY DISMISSED. 5.2 FURTHER, THE SLP FILED BY THE REVENUE AGAINST T HE JUDGMENT OF THE KARNATAKA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS SSAS EMERALD MEADOWS (SUPRA) WAS DISMISSED BY THE HONBLE SUPREME COURT OF INDIA. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGME NT OF ITA NO. 6373 & 6374/DEL/2013 ASSESSMENT YEAR 2009-10 7 THE HONBLE KARNATAKA HIGH COURT AS ABOVE-MENTIONED WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSING OFFIC ER IS REQUIRED TO SPECIFY WHICH LIMB OF SECTION 271 (1)(C ) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED, I. E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. FRO M THE PERUSAL OF THE NOTICES, IN THE CASE OF BOTH THE ASS ESSEES, ISSUED U/S 274 R.W.S. 271 OF THE ACT, IT IS CLEAR T HAT THE ASSESSING OFFICER HAS NOT SPECIFIED AS TO UNDER WHI CH LIMB OF THE SECTION THE PENALTY WAS IMPOSABLE. THE NOTICES, IN FACT, ARE IN THE STANDARD PRO FORMA WHEREIN THE IRRELEVANT CLAUSES HAVE NOT BEEN STRUCK OFF. TH IS INDICATES NON APPLICATION OF MIND ON THE PART OF TH E ASSESSING OFFICER WHILE ISSUING THE PENALTY NOTICES . THUS, IN THE CIRCUMSTANCES AND FACTS OF BOTH THE CASES, T HE PENALTY PROCEEDINGS INITIATED BY THE ASSESSING OFFI CER ARE BAD IN LAW AND DESERVE TO BE DELETED. ACCORDINGLY, THE IMPUGNED ORDERS ARE SET ASIDE AND THE AO IS DIRECTE D TO DELETE THE PENALTY IN BOTH THE CASES. ITA NO. 6373 & 6374/DEL/2013 ASSESSMENT YEAR 2009-10 8 5.3 THUS THE LEGAL GROUND OF THE ASSESSEES RAISED A S ADDITIONAL GROUND IS DECIDED IN FAVOUR OF THE ASSES SEE AND IS ALLOWED. 6. IN THE FINAL RESULT, THE APPEALS OF BOTH THE ASS ESSEES ARE ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2018. SD/- SD/- (B.P. JAIN) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30TH JANUARY, 2018 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR