Divya Pesticides & Seeds, Warangal, Hyderabad V. ITO, Ward-1, Warangal, Hyderabad

ITA 701/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6273 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 06-10-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 16-05-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: D SATYANARAYANA

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 701/HYD/2016 ASSESSMENT YEAR: 2005-06 M/S DIVYA PESTICIDES & SEEDS WARANGAL PAN AAFFD0287R VS. THE INCOME TAX OFFICER, WARD-1, WARANGAL (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI D. SATYANARAYANA REVENUE BY : SHRI K.J. RAO DATE OF HEARING : 29-12-2016 DATE OF PRONOUNCEMENT : 11-01-2017 ORDER PER P. MADHAVI DEVI, J.M.: THIS IS THE ASSESSEES APPEAL FOR THE A.Y. 2005-06 , AGAINST THE ORDER OF THE CIT(A)-3, HYDERABAD, DATED 19-02- 2016. IN THIS APPEAL THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE ASSESSEE HAS RAISED THE FOLLOWING G ROUNDS OF APPEAL. 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BO TH ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 1,16,573/-, U/S 271(1)(C) OF THE I.T ACT. 3. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THERE IS NO CONCEALMENT OF INCOME AND THE PENALTY IS NOT LEVIAB LE. 4. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 2 ITA NO. 701/HYD/2016 M/S. DIVYA PESTICIDES & SEEDS, WARANGAL. 2. FURTHER, VIDE LETTER DATED 28-12-2016, THE ASSES SEE HAS RAISED THE FOLLOWING ADDITIONAL GROUND OF APPEA L. THE INITIATION OF PROCEEDINGS U/S 271(1)(C) OF TH E INCOME TAX ACT IS NOT VALID AS THE ASSESSING OFFICER DID NOT S TRIKE OFF THE INAPPROPRIATE PORTION OF THE NOTICE. THE ASSESSING OFFICER OUGHT TO HAVE STRUCK OFF THE INAPPROPRIATE PORTION AND IN DICATED THE APPELLANT THE APPLICABLE IN THE NOTICE. SINCE THE ADDITIONAL GROUND RAISED IS A LEGAL GROUN D, WE ADMIT THE SAME AND PROCEED TO DISPOSE OF THE SAME A S UNDER: 3. THE COPY OF THE NOTICE ISSUED BY THE A.O UNDER S ECTION 274 R.W.S. 271(1)(C) OF THE ACT IS ALSO FILED BEFOR E US. ON PERUSAL OF THE SAME, WE FIND THAT THE A.O. HAS ISSU ED A NOTICE IN THE PRESCRIBED PROFORMA BUT HAS NOT STRUC K OFF THE ITEMS NOT APPLICABLE I.E. AS TO WHETHER THE NOT ICE IS ISSUED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF SUCH INC OME . THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DECISIO N OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS, [2016] 73 TAXMANN.COM 248 (SC) WHEREIN THE APEX COURT UPHELD THE DECISION OF THE H ONBLE HIGH COURT, IN WHICH, THE HONBLE HIGH COURT CONFIR MED THE ORDER OF THE TRIBUNAL AND DISMISSED THE APPEAL OF THE REVENUE, WHO CAME IN APPEAL AGAINST THE ORDER OF TH E TRIBUNAL. THE TRIBUNAL HAD RELIED UP ON DECISION O F KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY, [2013] 359 ITR 565/210 AL LOWED THE APPEAL OF THE ASSESSEE HOLDING THAT NOTICE ISSU ED BY ASSESSING OFFICER U/S 274 READ WITH SECTION 271(1)( C) WAS BAD IN LAW, AS IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) PENALTY PROCEEDINGS HAD BEEN INIT IATED, 3 ITA NO. 701/HYD/2016 M/S. DIVYA PESTICIDES & SEEDS, WARANGAL. I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCO ME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4. RESPECTFULLY FOLLOWING THE SAME, WE ALLOW THE ADDITIONAL GROUND OF APPEAL ON THE ASSESSEE AND THE ORIGINAL GROUNDS OF APPEAL RAISED ON MERITS OF THE PENALTY ARE NOT ADJUDICATED AS THE NOTICE ITSELF HAS BEEN H ELD TO BE INVALID. ACCORDINGLY, THE ASSESSEES APPEAL IS PAR TLY ALLOWED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY , 2017. SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 11 TH JANUARY, 2017 KRK 1) M/S DIVYA PESTICIDES & SEEDS C/O S RAMA RAO, FLAT NO. 102, SHRIYA ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR HYDERABAD 29. 2) ITO, WARD -1, WARANGAL 3) CIT -3, HYDERABAD 4) PCIT-3, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. 6) GUARD FILE