Shri Pragnesh Neema , Indore V. ACIT 3(1) , Indore

ITA 723/Ind/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8524 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 05-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: ARPIT GAUR CAS
• Keywords: Wrong claim; Set aside
• Section: 271(1)(c); 143(3); 142(1); 153A; 201; 274; 139(1); 68

Judgement Text

PRAGNESH NEEMA ITA NO.723/IND/2018 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 723/IND/2018 ASSESSMENT YEAR 2008-09 REVENUE BY SHRI K. G . GOYAL SR.DR ASSESSEE BY S/ S HRI ANIL KAMAL GARG & ARPIT GAUR, CAS DATE OF HEARING 09 . 1 0 . 201 9 DATE OF PRONOUNCEMENT 11 . 10. 201 9 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEAL IS FILED AT THE INSTANCE OF ASSESSEE PERTAINING TO ASSESSMENT YEAR 2008-09 AND IS DIREC TED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- I (IN SHORT LD.CIT(A)], INDORE DATED 11.06.2018 WHICH ARE ARI SING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961(IN S HORT THE ACT) DATED 02.03.2016 FRAMED BY ACIT-3(1), INDORE. SHRI PRA GNESH NEEMA, 61/1, PUJA VILA, LAL BAG, KESAR BAG ROAD, BUNGLOW NO.8, INDORE VS. A CIT 3 (1), INDORE ( APPELLANT ) (RESPONDENT ) PAN ABZPN8695E PRAGNESH NEEMA ITA NO.723/IND/2018 2 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL; 1. THAT, THE LEARNED CIT(A) ERRED, BOTH ON FACTS AND I N LAW, IN CONFIRMING THE ORDER OF PENALTY PASSED U/S. 271(1)(C) OF THE I NCOME-TAX ACT, 1961 BY THE AO IMPOSING PENALTY OF RS. 1 ,00,000/-. 2. THAT, THE LEARNED CIT(A) GROSSLY ERRED IN NOT CONSI DERING THE MATERIAL FACT THAT IN THE INSTANT CASE, THE AO IMPOSED THE P ENALTY WITHOUT FIRST ISSUING A PROPER AND VALID SHOW-CAUSE NOTICE TO THE APPELLANT. 3(A) THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ORDER OF PENALTY PASSED U/S. 271 (1 )( C) OF THE ACT, WITHOUT CONSIDERING THE MATERIAL FACT THAT THE APPELLANT HA D NEITHER CONCEALED NOR FURNISHED INACCURATE PARTICULARS OF HER INCOME FOR THE YEAR UNDER CONSIDERATION AND THEREFORE SHE WAS NOT LIABLE FOR ANY PENALTY U/S. 271(L)(C) OF THE ACT. (B) THAT, THE LEARNED CIT(A) GROSSLY ERRED IN NOT CONSIDERING THE MATERIAL FACT THAT PENALTY PROCEEDINGS ARE DIFFERENT FROM AS SESSMENT PROCEEDINGS AND MERELY ON THE BASIS OF CERTAIN FINDING IN ASSES SMENT PROCEEDINGS, PENALTY U/S. 271 (L)( C) CANNOT BE IMPOSED AUTOMATI CALLY. 4. THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED C IT(A) ERRED IN CONFIRMING THE PENALTY WITHOUT CONSIDERING THE MATE RIAL FACT THAT THE ADDITION QUA WHICH THE PENALTY HAS BEEN IMPOSED, IT SELF WAS NOT SUSTAINABLE IN VIEW OF THE DECISION OF THE HON'BLE ITAT, SPECIAL BENCH, MUMBAI, IN THE CASE OF ALL CARGO GLOBAL LOGISTICS L TD. & ORS. VS. DCIT, AS REPORTED IN (2012) 74 DTR (MUMBAI) (SB) (TRIB) 89 A ND ALSO AS PER THE RATIO LAID DOWN BY MANY JUDICIAL AUTHORITIES INCLUD ING BY THE HON'BLE ITAT INDORE BENCH. 5. THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED C IT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE PENALTY IMPOSED BY THE AO, PRAGNESH NEEMA ITA NO.723/IND/2018 3 WITHOUT CONSIDERING THE SETTLED POSITION OF THE LAW THAT MERELY BECAUSE CERTAIN ADDITIONS WERE MADE UNDER S. 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS WOULD NOT AUTOMATICALLY G IVE RISE TO IMPOSITION OF PENALTY UNDER S. 271 (1 )( C). 6. THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED C IT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE PENALTY IMPOSED BY THE AO QUA THE CLAIM OF DEDUCTION FOR MCX EXPENSES, WITHOUT CO NSIDERING THE SETTLED POSITION OF THE LAW THAT PENALTY UNDER S.271(1)(C) OF THE ACT CANNOT BE IMPOSED FOR A MERE WRONG CLAIM OF THE APPELLANT IN THE RETURN OF INCOME AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CI T VS. RELIANCE PETRO PRODUCTS (P) LTD. (2010) 36 DTR (SC) 449. 7. THAT, THE APPELLANT FURTHER CRAVES LEAVE TO ADD, AL TER AND/OR AMEND ANY OF THE FOREGOING GROUNDS OF APPEAL AS AND WHEN CONS IDERED NECESSARY. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM S ALARY AND BUSINESS FROM TRADING IN NCDX/MCS TRANSACTIONS UNDE R A PROPRIETARY CONCERN M/S. PRAGNESH NEEMA.. THE ASSES SEE HAD FURNISHED ORIGINAL RETURN OF INCOME U/S 139(1) OF T HE ACT ON 28.07.2008 DECLARING INCOME OF RS.19,27,699/-. A S EARCH WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESS EE AND ALSO AT VARIOUS PREMISES OF THE GROUP ON 25.11.2010. A NOTI CE U/S 153A OF THE ACT WAS SERVED UPON THE ASSESSEE FOR FURNISHING HIS RETURN OF PRAGNESH NEEMA ITA NO.723/IND/2018 4 TOTAL INCOME. IN RESPONSE TO THE NOTICE, THE APPEL LANT FURNISHED HIS RETURN OF INCOME ON 20.01.2012 DECLARING THE SAME I NCOME OF RS.19,27,699/- WHICH WAS DECLARED IN THE ORIGINAL R ETURN OF INCOME. THE CASE WAS SELECTED FOR SCRUTINY. NOTICES U/S 143 (2) & 142(1) ALONG WITH QUESTIONNAIRES WERE ISSUED AND THE ASSES SEE COMPLIED WITH. THE ASSESSMENT U/S 153A R.W.S. 143(3) OF THE ACT WAS COMPLETED DETERMINING THE TOTAL INCOME AT RS.21,55, 298/- MAKING ADDITION OF RS.2,27,599/-. THE LD. A.O ALSO INITIAT ED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IN RESPECT OF ADDITIONS OF RS.2,27,599/-. 4. AGGRIEVED ASSESSEE PREFERRED APPEAL AGAINST T HE LEVY OF PENALTY BEFORE LD. CIT(A) BUT COULD NOT SUCCEED. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRI BUNAL AGAINST THE PENALTY OF RS.1,00,000/- IMPOSED U/S 271(1)(C) OF T HE ACT. 6. LD. COUNSEL FOR THE ASSESSEE RAISING LEGAL ISSUE R ELYING ON THE DECISION OF JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER COMPANY LIMITED 229 ITR 383(SC) SUBMI TTED THAT AS PER PROVISIONS OF SECTION 271(1)(C) OF THE ACT T HE PENALTY CAN BE INITIATED EITHER FOR CONCEALING THE PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME, WHERE AS THE LD.A.O PRAGNESH NEEMA ITA NO.723/IND/2018 5 HAS NOT RECORDED ANY CHARGE ON THE ASSESSEE, AS TO WHETHER PENALTY IS TO BE LEVIED FOR FURNISHING INACCURATE PARTICU LARS OF INCOME OR CONCEALING THE PARTICULARS OF INCOME. PLACING REL IANCE ON THE JUDGMENTS MENTIONED IN THE WRITTEN SUBMISSION WHICH MAINLY INCLUDES JUDGMENT OF HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF PCIT VS KULWANT SINGH BHATIA ITA NO.9 OF 2018 DATED 9.5.2018, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE LD.A.O HAS FAILED IN COMPLY THE PROVISIONS OF SECTION 271(1)(C ) OF THE ACT BY INITIATING THE PENALTY PROCEEDINGS WITH NO SPECIFIC CHARGE. RELIANCE WAS ALSO PLACED ON INDORE TRIBUNAL DECISION IN THE CASE OF VARAD MEHTA ITA NO.693/IND/16 DATED 06.12.2018. 7. PER CONTRA DEPARTMENTAL REPRESENTATIVE VEHEMENTL Y ARGUED SUPPORTING THE ORDERS OF LOWER AUTHORITIES. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE ISSUES RAISED BY THE ASSESSE E ON BOTH LEGAL AND MERITS REVOLVES AROUND THE LEVY OF PENALTY AT RS.1,00,000/- LEVIED BY THE LD. A.O AND CONFIRMED BY LD.CIT(A). L D. COUNSEL FOR THE ASSESSEE PLEADED THAT LD. A.O HAS WRONGLY INITI ATED THE PENALTY PROCEEDINGS BY NOT SPECIFYING THE CHARGE FOR LEVY O F PENALTY I.E. PRAGNESH NEEMA ITA NO.723/IND/2018 6 WHETHER THE PENALTY PROCEEDINGS HAS BEEN INITIATED FOR CONCEALING PARTICULARS OF INCOME OR FOR FURNISHING THE INACCUR ATE PARTICULARS OF INCOME. IT WAS ALSO PLEADED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THOUGH THE LD. ASSESSING OFFICER HAS MADE PROPER SA TISFACTION ON RECORD IN THE ASSESSMENT ORDER FOR INITIATING PENAL TY PROCEEDINGS BUT IN THE NOTICE ISSUE U/S 274 R.W.S. 271(1)(C) OF THE ACT, LD. A.O REMAINED SILENT BY NOT SPECIFYING AS FOR WHICH CHA RGE THE PENALTY PROCEEDINGS HAVE BEEN INITIATED. 9. TO EXAMINE THIS FACT WE HAVE GONE THROUGH THE IM PUGNED NOTICE ISSUED ON 06.01.2016 FOR INITIATING THE PENA LTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR 2008- 09. FOR REFERENCE WE REPRODUCE BELOW THE NOTICE U/S 271(1)( C) OF THE ACT FOR ASSESSMENT YEAR 2008-09; F.NO.ACIT-3(1)/IND/2015-16/PENALTY FIXATION DA TE: 06.01.2016 PAN ABZPN8695E TO SHRI PRAGNESH NEEMA, 61/L. KESHAR BAGH ROAD, LAL BUAG, INDORE SUB: PENALTY FIXATION U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 FOR THE A.Y. 2008-09 REG. PRAGNESH NEEMA ITA NO.723/IND/2018 7 PLEASE REFER TO THE PENALTY PROCEEDINGS U/S 271(1)( C) OF THE INCOME TAX ACT, 1961 FOR THE A.Y. 2008-09 IN THE ABOVE MEN TIONED CASE, YOU ARE REQUESTED TO APPEAR BEFORE THE UNDERSIGNED 18.01.20 16 AT 11.45 A.M IN MY OFFICE AT ROOM NO.306, AAYKAR BHAWAN ANNEXE, OPP . WHITE CHURCH, INDORE PERSONALLY OR THROUGH AUTHORIZED REPRESENTAT IVE TO SHOW CAUSE AS TO WHY PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961 BE NOT LEVIED AGAINST YOU. IF YOU DO NOT WANT TO APPEAR PERSONALLY, YOU MAY SEND YOU WRITTEN REPLY ON OR BEFORE ABOVE MENTIONED DATE, OTHERWISE PENALTY PROCEEDINGS SHALL BE DECIDED ON MERITS. SD/- (VINITA DUBEY) ASSTT. COMMISSIONER OF INCOME TAX 3(1) INDORE 10. FROM PERUSAL OF THE ABOVE SHOW CAUSE NOTICES WE FIND THAT THE LD.A.O HAS MERELY MENTIONED THE SECTION BUT THE SPE CIFIC CHARGE I.E. WHETHER THE PENALTY HAVE BEEN INITIATED FOR CONCEAL MENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME HAS NOT BEEN MENTIONED. NOW WHETHER SUCH TY PE OF NOTICE WHICH DOES NOT SPEAK ABOUT THE SPECIFIC CHARGE LEVE LED AGAINST THE ASSESSEE IS VALID AND TENABLE IN THE EYES OF LAW N EEDS TO BE EXAMINED. 11. WE FIND THAT SIMILAR ISSUE CAME UP FOR ADJUDICA TION BEFORE US IN THE CASE OF VARAD MEHTA ITA NO.693/IND/16 DATED 06.12.2018 (SUPRA) WHEREIN WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE PRAGNESH NEEMA ITA NO.723/IND/2018 8 BY FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF SHRI KULWANT SINGH BHATIA (SUP RA) WHEREIN THE HON'BLE COURT DISCUSSED THE JUDGMENT OF HON'BLE HI GH COURT IN THE CASE OF CIT V/S MANJUNATHA COTTON GINNING FACTORY (SUPRA) AND CIT V/S SSAS EMERALAD MEADOWS (SUPRA) HELD THAT ON DUE CONSIDERATION OF THE ARGUMENTS OF THE LD. COUNSEL F OR THE APPELLANT, SO ALSO CONSIDERING THE FACT THAT THE GROUND MENTIO NED IN SHOW CAUSE NOTICE WOULD NOT SPECIFY THE REQUIREMENT OF LAW, AS NOTICE WAS NOT SPECIFIC, WE ARE OF THE VIEW THAT LD. TRIBUNAL HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND SET ASIDE THE ORDER OF P ENALTY ENFORCED BY THE AUTHORITY. 12. WE THEREFORE RESPECTFULLY FOLLOWING ABOVE REFER RED JUDGMENTS AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CAS E ARE OF THE CONSIDERED VIEW THAT THE ALLEGED NOTICE ISSUED U/S 271(1)(C) OF THE ACT DATED 06.01.2016 IS INVALID, UNTENABLE AND SUFF ERS FROM THE INFIRMITY OF NON APPLICATION OF MIND BY THE ASSESSI NG OFFICER. WE ACCORDINGLY DIRECT TO DELETE THE PENALTY OF RS.1,00 ,000/- LEVIED U/S 271(1)(C) ON THIS LEGAL GROUND ITSELF. WE ACCORDIN GLY ALLOW THE GROUND RAISED BY THE ASSESSEE ON THE LEGALITY OF TH E PENALTY PRAGNESH NEEMA ITA NO.723/IND/2018 9 PROCEEDINGS INITIATED U/S 271(1)(C) OF THE ACT. SI NCE THE ISSUE OF PENALTY U/S 271(1)(C) ALSO HAS BEEN DEALT ON THE PR ELIMINARY POINTS OTHER ARGUMENTS OF THE ASSESSEE DEALING WITH THE ME RITS OF THE LEVY OF PENALTY ARE NOT BEEN DEALT WITH, AS THE SAME ARE RENDERED ACADEMIC IN NATURE AND THUS THE APPEAL OF THE ASSES SEE FOR THE ASSESSMENT YEAR 2008-09 IS ALLOWED. 13. IN THE RESULT APPEALS OF THE ASSESSEE IS ALLOWE D. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11.10.20 19. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 11 OCTOBER 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE