M/s Jagannath Cement Works Limited, Kolkata V. ITO, Ward-3(4), Kolkata

ITA 639/KOL/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2938 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 30-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: AKSHOY RINGSIA
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c); 143(3); 274; 13

Judgement Text

ITA NO. 639/KOL/2020 A.Y. 20 11-2012 JAGANNATH C EMENT WORKS (P) LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) & SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO.639/KOL/2020 ASSESSMENT YEAR: 2011-2012 JAGANNATH CEMENT WORKS (P) LIMITED,................ .............................APPELLANT 70, AMHEREST ROW, MANICKTALA, KOLKATA-700009 [PAN:AAACJ8328D] -VS.- INCOME TAX OFFICER,................................ ............................................RESPOND ENT WARD-3(4), KOLKATA AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 APPEARANCES BY: SHRI TARAKNATH JAISWAL & SHRI AKSHOY RINGSIA, C.A. , FOR THE APPELLANT SMT. RANU BISWAS, ADDL. CIT, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : OCTOBER 25, 2021 DATE OF PRONOUNCING THE ORDER : OCTOBER 25, 2021 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-1, KOLKATA DAT ED 21.06.2017, WHEREBY HE CONFIRMED THE PENALTY OF RS.3,43,310/- I MPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE IN COME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN DEALING IN JOB WORKS, TRADING AND VARIOUS TYPES OF WORKS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 29.09.2011 DECLARING TOTAL INCOME OF RS.3,11,860/-. IN THE ASS ESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 14.02.2014 , THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICE R AT RS.18,09,360/- ITA NO. 639/KOL/2020 A.Y. 20 11-2012 JAGANNATH C EMENT WORKS (P) LTD. 2 AFTER MAKING ADDITION OF RS.11,06,823/- ON ACCOUNT OF UNEXPLAINED CASH EXPENDITURE. PENALTY PROCEEDINGS UNDER SECTION 271( 1)(C) WERE ALSO INITIATED BY THE ASSESSING OFFICER AND SINCE THE EX PLANATION OFFERED BY THE ASSESSEE IN RESPONSE TO THE SHOW-CAUSE NOTICES ISSU ED DURING THE COURSE OF THE SAID PROCEEDINGS WAS NOT FOUND ACCEPTABLE BY HIM, THE ASSESSING OFFICER IMPOSED THE PENALTY OF RS.3,43,310/- UNDER SECTION 271(1)(C) OF THE ACT. 3. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SA ID PENALTY IMPOSED BY THE ASSESSING OFFICER VIDE HIS APPELLATE ORDER D ATED 21.06.2017. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AT THE T IME OF HEARING BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS RAISED A N EW PRELIMINARY ISSUE CHALLENGING THE VERY INITIATION OF THE PENALTY PROC EEDINGS BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) ON THE GR OUND THAT IN THE ABSENCE OF ANY SPECIFIC MENTION IN THE SHOW-CAUSE N OTICE ISSUED UNDER SECTION 274 OF THE ACT FOR THE YEAR UNDER CONSIDERA TION AS TO WHETHER THE ASSEESSEE IS GUILTY OF HAVING FURNISHED INACCURATE PARTICULARS OF INCOME OR OF HAVING CONCEALED PARTICULARS OF SUCH INCOME , THE INITIATION OF PENALTY PROCEEDINGS ITSELF WAS BAD IN LAW AND THE P ENALTY ORDER PASSED IN PURSUANCE THEREOF IS LIABLE TO BE QUASHED BEING INV ALID. HE HAS INVITED OUR ATTENTION TO THE RELEVANT PENALTY NOTICE (COPY PLACED AT PAGE NO. 16 OF THE PAPER BOOK) TO POINT OUT THAT THE IRRELEVANT PO RTION, VIZ. FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED PAR TICULARS OF SUCH INCOME WAS NOT STRUCK OFF BY THE ASSESSING OFFICER . IT IS OBSERVED THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE O F SUVAPRASANNA BHATTACHARYA VS.- ACIT (IN ITA NO. 1303/KOL/2010) HAD AN OCCASION TO CONSIDER A SIMILAR ISSUE IN THE IDENTICAL FACT SITU ATION AND THE ORDER PASSED BY THE ASSESSING OFFICER IMPOSING PENALTY UN DER SECTION 271(1)(C) ITA NO. 639/KOL/2020 A.Y. 20 11-2012 JAGANNATH C EMENT WORKS (P) LTD. 3 WAS HELD TO BE INVALID BY THE TRIBUNAL RELYING ON T HE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & A NOTHER VS.- MANJUNATHA COTTON & GINNING FACTORY REPORTED IN 359 ITR 565. IN OUR OPINION, THE DECISION OF THE COORDINATE BENCH OF TH IS TRIBUNAL RENDERED IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS.- ACIT RE NDERED VIDE ITS ORDER DATED 06.11.2015 IN ITA NO. 1303/KOL/2010 BY RELYIN G ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANOTHER VS.- MANJUNATHA COTTON & GINNING FACTORY REPORTED IN 359 ITR 565 IS SQUARELY APPLICABLE IN THE PRESENT CASE. IT IS ALSO NOTED TH AT A SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE CALCUTTA HIGH COURT IN TH E CASE OF PRINCIPAL CIT VS.- BIJOY KR. AGARWAL (ITAT NO. 272 OF 2017 DATED 02.04.2019), WHEREIN THE DECISION OF THE TRIBUNAL CANCELLING THE PENALTY IMPOSED UNDER SECTION 271(1)(C) WAS UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT HOLDING THAT THE NOTICE ISSUED UNDER SECTION 271(1)(C) WITH OUT SPECIFYING WHICH OF THE TWO CONTRAVENTIONS, THE ASSESSEE IS GUILTY O F WAS DEFECTIVE AND THE PENALTY IMPOSED IN PURSUANCE OF SUCH DEFECTIVE NOTI CE WAS NOT SUSTAINABLE. TO ARRIVE AT THIS CONCLUSION, HONBLE CALCUTTA HIGH COURT RELIED ON THE DECISION OF AMRIT FOODS VS.- COMMISS IONER OF CENTRAL EXCISE UP REPORTED IN (2005) 13 SCC 419 AS WELL AS THEIR OWN DECISION IN THE CASE OF PRINCIPAL CIT VS. DR. MURARI MOHAN KOL EY (ITAT NO. 306 OF 2017 DATED 18.07.2018). THE ISSUE RAISED BY THE ASS ESSEE IN THIS APPEAL THUS IS SQUARELY COVERED BY THE SAID JUDICIAL PRONO UNCEMENTS INCLUDING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT AND RESPECTFULLY FOLLOWING THE SAME, WE CANCEL THE PENALTY IMPOSED U PON THE ASSESSEE UNDER SECTION 271(1)(C) AND ALLOW THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 25, 2 021. SD/- SD/- (A.T. VARKEY (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT KOLKATA, THE 25 TH DAY OF OCTOBER, 2021 ITA NO. 639/KOL/2020 A.Y. 20 11-2012 JAGANNATH C EMENT WORKS (P) LTD. 4 COPIES TO : (1) JAGANNATH CEMENT WORKS (P) LIMITED, 70, AMHEREST ROW, MANICKTALA, KOLKATA-700009 (2) INCOME TAX OFFICER, WARD-3(4), KOLKATA AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-1, KOLKA TA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVAT E SECRETARY/DDO INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.