GANGABEN P CHOUDHARY, MUMBAI V. ITO 19(2)3, MUMBAI

ITA 696/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3464 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 18-02-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 28-01-2013
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN V P
• Assessee Lawyers: AJAY C GOSALIA
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER I.T.A. NO.696/M/2013 (ASSESSMENT YEAR: 2002 - 2003 ) GANGABEN P CHOUDHARY, 1, AMAR KUNJ, BEASANT ROAD, SANTACRUZ (W), MUMBAI - 400054. / VS. ITO - 19(2)(3), PIRAMAL CHAMBERS, MUMBAI. ./ PAN : AACPC0655R ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AJAY C. GOSALIA / RESPONDENT BY : SHRI ASGHAR ZAIN, VP - DR / DATE OF HEARING : 18.02.2016 / DATE OF PRONOUNCEMENT : 18 .03.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 28.1.2013 IS AGAINST THE O RDER OF THE CIT (A) - 11, MUMBAI DATED 5.11.20 12 FOR THE ASSESSMENT YEAR 2002 - 2003. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT (A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 3,00,439/ - U/S 271(1)(C) OF THE ACT BY THE ITO. B) HE ERRED IN HOLDING THAT CROSS - EXAMINATION OF THE BROKER ON WHOSE STATEMENT THE LD ITO RELIED UPON WAS NOT IMPORTANT AND IT WAS NOT NECESSARY TO GRANT OPPORTUNITY TO CROSS - EXAMINE IN ALL CASES. C) HE FURTHER ERRED IN GENERALIZING THAT EVEN IN THE APPELLANTS CASE, THE BROKER HAD MERELY ISSUED BILLS AND CONTRACTS WITHOUT ACTUALLY EFFECTING THE DELIVERY OF THE SHARES MENTIONED IN THE SA ID BILLS AND CONTRACTS. D) HE FAILED TO APPRECIATE THAT THERE WAS NO MATERIAL ON RECORD TO SHOW THAT THE SALE OF SHARES BY THE APPELLANT WAS BOGUS AND HENCE THERE WAS NO MATERIAL TO SHOW THAT THE APPELLANT HAD CONCEALED HER INCOME OR HAD FURNISHED INACCURA TE PARTICULARS THEREOF. E) HE THEREFORE OUGHT TO HAVE HELD THAT NO PENALTY COULD HAVE BEEN LEVIED UPON THE APPELLANT U/S 271(1)(C) OF THE ACT. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT THE CASE IN HAND STANDS COVERED BY SERIES OF D ECISIONS OF THE ITAT READ WITH THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY [2013] 359 ITR 565 (KARN.). IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEVY OF PENALTY U/S 27 1(1)(C) OF THE ACT IS UNSUSTAINABLE IF THE AO IS NOT CLEAR IN HIS MIND ABOUT THE APPLICABLE LIMB OF CLAUSE - (C) OF SECTION 27 1(1) OF THE ACT IE FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. DRAWING OUR ATTENTION TO THE COP Y OF THE NOTICES ISSUED U/S 274 R.W.S 271 OF THE ACT, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE AO KEPT THE RELEVANT COLUMNS BLANK ON PAGE 2 OF THE SAID NOTICE. HE READ OUT THE RELEVANT COLUMNS OF THE SAID NOTICE AND ALSO THE CITED JUDGMENT OF THE HO NBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA). 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) AND ALSO THE RELEVANT MATERIAL PLACED BEFORE US. ON PERUSAL OF THE SAID NOTICE ISSUED U/S 274 R.W.S 271 OF THE ACT, WE FIND , THE APPLICABLE LIMB OF CLAUSE - (C) OF SECTION 271(1) OF THE ACT IE FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME IS KEPT BLANK BY THE AO WHILE ISSUING THE NOTICE. IN SUCH CIRCUMSTANCES, THE RATIO LAID DOWN IN THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACT ORY (SUPRA) IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. ACCORDINGLY, IN OUR OPINION THIS NOT A FIT CASE TO LEVY PENALTY U/S 271(1)(C) OF THE ACT AND THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 4. IN THE RESULT, APPEAL OF THE AS SESSEE IS ALLOWED. ORDER PRONOUNC ED IN THE OPEN COURT ON 18 TH MARCH, 2016. SD/ - SD/ - ( PAWAN SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 18 .3.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI