M/S ORTHONONVA HOSPITAL , JALANDHAR V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1, JALANDHAR

ITA 65/ASR/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9554 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 26-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 250; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.65/Asr/2021 Assessment Year: 2006-07 M/s Orthonova Hospital Nakodar Road, Near Nari Niketan, Jalandhar. [PAN: AAAFO7491B] (Appellant) Vs. ITO, National Faceless Appeal Centre (NFAC), Delhi. (Respondent) Appellant by None.(Written Submission) Respondent by Ms. Amanpreet Kaur, Sr.DR Date of Hearing 27.09.2022 Date of Pronouncement 30.09.2022 ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax(Appeals), NFAC, Delhi, [in brevity the CIT(A)] bearing appeal No.DIN & Order No.ITBA/NFAC/S/250/2021-22/1034619248(1), date of order 04.08.2021, the order passed u/s 250 of the Income Tax Act 1961, [in I.T.A. No.65/Asr/2021 Assessment Year: 2006-07 2 brevity the Act] for A.Y. 2006-07.The impugned order was emanated from the order of the ld. Assistant Commissioner of Income Tax, Circle-1, Jalandhar, (in brevity the AO) order passed u/s 271(1)(c)of the Act, date of order 11.05.2020. 2. The brief fact of the case is that the assessment was completed and the demand was levied. The penalty was initiated u/s 271(1)(c) in relation to this demand. The grievance of the assessee is that the notice, issued by the ld. AO was defective& without jurisdiction. The notice was not specified by nature of penalty whether the concealment of income or inaccurate particular of income. Thesanctity of the notice was challenged before the ld. CIT(A) but the ld. CIT(A) upheld the order of the ld. AO and dismissed the assessee’s legal ground. 3. Aggrieved assessee filed an appeal before us. 4. During the appeal hearing, none was present on behalf of the assessee. The matter was taken up with the consent of the ld. Sr. DR for adjudication. The observation of the ld. CIT(A) vide para 7 which is reproduced as below: “7. I have considered the facts and circumstances of the case, submissions of the appellant and material available on record and various case laws, the appellant has challenged that, the Assessing Officer has erred in imposing penalty without levelling specific charge in the notice as to whether I.T.A. No.65/Asr/2021 Assessment Year: 2006-07 3 assessee has concealed particulars of income or furnished inaccurate particulars of income as in the show cause notice, the AO has not struck off the words ‘and/or’. The appellant contention is not acceptable because in the Assessment order as well as the penalty order the AO has clearly mentioned that the appellant has not furnished the inaccurate particulars of income therefore the penalty is levied. Further, the appellant has not produced any details in respect of his claim during the assessment proceedings or appellate proceedings. The Hon'ble Supreme Court in the case of Union of India Vs Dharmendra Textile Processors &Ors [306 ITR 277] has held that the explanation appended to section 271(1)(c) of the I.T. Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. It was further held that the enactment of Sec 271(1)(c) read with explanation indicates that the said section has been enacted to provide for a remedy for loss of revenue. It was further observed that the penalty under section 271(1)(c) is a civil liability and wilful concealment is not an essential ingredient for attracting civil liability and assessee is liable to be penalized u/s 271(1)(c) of the I.T. Act.” I.T.A. No.65/Asr/2021 Assessment Year: 2006-07 4 5. We heard the submissions of Sr. DR. and considered both the orders of revenue authorities. The different High Courts and the Tribunal already decided the issue in favour of the assessee related to issuance of notice u/s 271(1)(c) of the Act. Section 271(1)(c) is two limbs concealed income and inaccurate particulars of the income. Before issuing the notice, the ld. AO should specify the limb related to penalty proceedings. This particular notice it is a self-defective and the ld. AO did not mention the nature of concealment in the notice issued u/s 274/271(1)(c). The counsel laid down that in the absence of such specific notice, the notice would be invalid as held in various judicial pronouncements including the decision of Hon’ble Karnataka High Court in CIT V/s SAS’s Emerald Meadows (73 Taxmann.com 241) against which Special Leave Petition (SLP) filed by the department stood dismissed by Hon’ble Supreme Court which is reported as 73 Taxmann.com 248. The notice u/s 274/271(1)(c) of the Act is not carrying the specific limb. Therefore, this is a case where both the parts of the offences i.e., concealment of income as well as furnishing of inaccurate particulars of income were involved. The decision of Jaipur Tribunal (Third Member) in the case of Grass Field Farms and Resorts P. Ltd. (159 ITD 31) was referred to confirm the impugned penalty. I.T.A. No.65/Asr/2021 Assessment Year: 2006-07 5 Finally, respectfully following the binding judicial precedents as cited aforesaid, we are of the considered opinion that the impugned penalty is not sustainable on legal grounds. Hence, the penalty order passed U/s 271(1) (c ) is quashed. 6. In the result, the appeal bearing ITA No.65/Asr/2021 isallowed. Order pronounced in the open court on 30.09.2022 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order