M/s. Panjwani Packaging P. Ltd., Indore V. The ACIT 3(1), Indore

ITA 748/IND/2013

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1019 (ITAT-INDORE)
• Duration Of Justice: 5 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-03-2019
• Assessment Year: misc
• Appeal Filed On: 26-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S AMBEDKAR
• Assessee Lawyers: K C AGRAWAL
• Keywords: Principle of natural justice; Question of law; Set aside
• Section: 271(1)(c); 148; 132; 11

Judgement Text

PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.748 TO 753/IND/2013 ASSESSMENT YEARS1987-88 TO 1992-93 REVENUE BY S HRI R.S.AMBEDKAR , SR.DR ASSESSEE BY SHRI K.C. AGRAWAL , CA DATE OF HEARING 13.03 .2019 DATE OF PRONOUNCEMENT 25 .0 3 .2019 O R D E R PER MANISH BORAD. THE ABOVE CAPTIONED SIX APPEALS ARE FILED AT THE I NSTANCE OF ASSESSEE PERTAINING TO ASSESSMENT YEARS 1987-88 TO 1992-93 AND ARE DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I (IN SHORT LD.CIT(A)], INDORE DATED 1 4.11.2013 WHICH ARE ARISING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOM E TAX ACT 1961(IN SHORT THE ACT) DATED 30.06.2009 FRAMED BY ACIT-3( 1), INDORE. M/S. PANJWANI PACKAGINGS PVT. LTD, 61, KESAR BAGH ROAD, INDORE VS. ACIT - 3(1) , INDORE ( APPELLANT ) (RESPONDENT ) PAN NO. A ADCP3506G PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 2 2. AS THE ISSUES RAISED IN THESE APPEALS ARE COMMON AND RELATES TO SAME ASSESSEE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THE COMMON ORDER FOR SAKE OF CONVENIENCE AND BREVITY. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE MANUFACTURING ACTIVITY OF PACKAGING GOODS AT GHATA BILLOD, DIST. DHAR (M.P) A ND WAS SET UP WITH THE PROMOTERS CONTRIBUTION AND FINANCE FROM M. P.F.C., BANK AND SUBSIDY. SEARCH U/S 132 OF THE I.T. ACT WAS CA RRIED OUT AT THE BUSINESS/RESIDENTIAL PREMISES OF THE ASSESSEE AND I TS GROUP CONCERNS ON 10.8.1992 TO 13.08.1992. NOTICES U/S 14 8 OF THE ACT WERE DULY SERVED ON THE ASSESSEE AND THE INCOME WAS ASSESSED AND ALSO PENALTY U/S 271(1(C) LEVIED AS FOLLOWS; S.NO ASSESSMENT YEAR ASSESSED INCOME PENALTY U/S 271(1)(C) 1 1 987 - 88 RS.20,67,290/ - RS.5,56,050/ - 2 1988 - 89 RS.58,27,470/ - RS.20,24,236/ - 3 1989 - 90 RS.88,25,810/ - RS.14,45,871/ - 4 1990 - 91 RS.57,95,390/ - RS.8,02,948/ - PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 3 5 1991 - 1992 RS.2.27,00,000/ - RS.2,78,415/ - 6 199 2 - 19 9 3 RS.1,09,15,723/ - RS. 3,66,275/ - AGAINST THE LEVY OF ABOVE PENALTY ASSESSEE FILED A PPEALS BEFORE LD. CIT(A) BUT COULD NOT SUCCEED. 4. THE ASSESSEE IS NOW IN APPEAL RAISING FOLLOWING GROUNDS OF APPEAL FOR ASSESSMENT YEAR 1987-88; ASSESSMENT YEAR 1987-88 'L.THE LEARNED CIT(A)-I INDORE HAS ERRED IN CONFIRM ING THE PENALTY LEVIED U/S.271 (1 )(C) WITHOUT APPRECIATING THAT THE APPEL LANT HAS NEITHER CONCEALED THE INCOME NOR FURNISHED INACCURATE PARTI CULARS OF INCOME. ON THE FACTS AND CIRCUMSTANCES OF THE CASE NO PENALTY IS LEVIABLE U/S, 271 (1) (C) OF THE ACT. 2,THE LEARNED CIT(A)-I INDORE HAS ERRED IN UPHOLDIN G THE PENALTY OF RS.5,56,050/- U/S 271 (1)(C) BY RELYING ON SOME JUDICIAL PRONOUNCEMEN T, WHICH ARE DISTINGUISHABLE. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-I INDORE OUGHT NOT TO HAVE UPHELD THE PENALTY OF RS.5,56,050/- U/S,271 (1) (C) OF THE ACT. PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 4 3,THE LEARNED CIT(A)-I INDORE HAS ERRED IN CONFIRMI NG THE PENALTY OF RS.5,56,050/LEVIED U/S. 271 (1 )(C) OF THE INCOME T AX ACT, 1961. ADDITIONAL GROUNDS OF APPEAL 1. THE PETITIONER SUBMITS THAT THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS)-I, INDORE, HAS ERRED IN UPHOLDING THE PEN ALTY LEVIED U/S 271(1)(C) WITHOUT DETERMINING THE AMOUNT OF TAX SOUGHT TO BE EVADED, AS REQUIRED UNDER THE SAID PROVISION, SOUGHT TO PENDING EFFECT TO THE APPELLATE ORDERS PASSED BY THE HON'BLE BENCH AND THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS)-I, INDORE. THUS, ON THE FACTS AND CIRCUMS TANCES, THE PETITIONER SUBMITS THAT UNLESS TAX SOUGHT TO EVADED IS FINALLY DETERMINED, THE PENALTY ORDER SO PASSED IS PREMATURE AND VOID AND IT IS THE REFORE, PRAYED THAT THE ORDER IMPOSING PENALTY U/S 271 (1 )(C) MAY KINDLY B E SET-ASIDE. ADDITIONAL GROUNDS OF APPEAL 1. BECAUSE T HE PENALTY IMPOSED U/S 271 (I)(C) OF THE INCOME TAX C AND CONFIRMED BY LD. CIT(A) IS ALSO WRONG AND BAD IN LA W AS WHILE INITIATING THE PENALTY IN THE ASSESSMENT ORDER THERE IS NO SPE CIFIC SATISFACTION OF THE ASSESSING OFFICER THAT FOR WHICH DEFAULT THE PE NALTY HAS BEEN INITIATED EITHER FOR CONCEALMENT OF INCOME OR FOR F URNISHING INACCURATE PARTICULARS OF INCOME. 2. BECAUSE THERE IS NO SPECIFIC SATISFACTION OF THE AS SESSING OFFICER WHILE INITIATING THE PENALTY IS ITSELF CLEAR FROM THE NOT ICES ISSUED U/S 271 (I)(C). 5. WE FIND THAT SIMILAR GROUNDS INCLUDING ADDITIONA L GROUNDS HAVE BEEN RAISED FOR ASSESSMENT YEAR 1988-89 TO ASS ESSMENT YEAR PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 5 1992-93 WITH THE CHANGE OF AMOUNT OF PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 6. AT THE OUTSET LD. COUNSEL FOR THE ASSESSE TAKING UP THE LEGAL GROUND ABOUT THE VALIDITY OF THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT POINTED OUT MISTAKE IN THE PEN ALTY NOTICE AND SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAV OUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX V/ S KULWANT SINGH BHATIA DATED 09.05.2018 (ITA 9 TO 14 OF 2018) WHEREIN IT WAS HELD THAT THE PENALTY U/S 271(1)(C) OF THE ACT IS N OT SUSTAINABLE IN LAW AS THE NOTICE WAS NOT SPECIFIC. HON'BLE COURT OBSERVED AS FOLLOWS:- ON DUE CONSIDERATION OF THE ARGUMENTS OF THE LEARN ED COUNSEL FOR THE APPELLANT, SO ALSO CONSIDERING THE FACT THAT THE GR OUND MENTIONED IN SHOW CAUSE NOTICE WOULD NOT SATISFY THE REQUIREMENT OF L AW, AS NOTICE WAS NOT SPECIFIC, WE ARE OF THE VIEW THAT LEARNED TRIBUNAL HAS RIGHTLY RELYING ON THE DECISION OF CIT V/S MANJUNATHA COTTON GINNING F ACTORY AND CIT V/S SSA'S EMERALD MEADOWS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND SET ASIDE THE ORDER OF PENALTY IMPOSED BY THE AUTHO RITIES. NO SUBSTANTIAL QUESTION OF LAW IS ARISING IN THESE APPEALS. ITA. N O(S) 9/2018, 10/2018, 11/2018, 12/2018, 13/2018 AND 14/2018, FILED BY THE APPELLANT HAVE NO MERIT AND ARE HEREBY DISMISSED.' PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 6 7. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUE D AND SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH VARIOUS JUDGMENTS REFERRED AND RELIED BY THE LD. COUNSEL FOR THE ASSE SSEE. ASSESSEE HAS TAKEN UP THE LEGAL ISSUE IN THIS APPEAL CHALLEN GING THE LEGALITY OF THE PENALTY PROCEEDINGS INITIATED BY ISSUANCE OF NOTICE U/S 274 R.W.S 271(1)(C) OF THE ACT BY CONTENDING THAT IN TH E PENALTY NOTICE NO SPECIFIC CHARGE HAS BEEN LEVELED AGAINST THE ASSESS EE AND THE LD.A.O HAS MERELY MENTIONED BOTH THE LIMBS I.E. CON CEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF INCOME. IT HAS BEEN AGREED BY BOTH THE PARTIES THAT SIMILAR TYPE OF NOTICES EXCEPT THE CHANGE OF ASSESSMENT YEARS HAVE BEEN ISS UED U/S 274 OF THE ACT FOR THE YEARS UNDER APPEAL. TO ADJUDICATE T HIS ISSUE WE WILL HAVE TO GO THROUGH THE IMPUGNED NOTICE U/S 274 R.W. S. 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR 1987-88 WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGE-11 AND THE SAME IS REPRODUCED BE LOW:- PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 7 NOTICE UNDER SECTION 274 READWITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 TO, M/S. PANJWANI PACKAGING PVT. LTD, 61, KESHAR BAGH ROAD, INDORE (M.P.) SIR/MADAM, WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE A.Y. 1987-88 IT APPEARS TO ME THAT YOU :- HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR F URNISHED INACCURATE PARTICULARS OF SUCH INCOME . YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 10 .30 A.M ON 30/11/2010 AND SHOW CAUSE WHY AN ORDER IMPOSING PE NALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEAR D IN PERSON OR THROUGH AUTHORISED REPRESENTATIVE, YOU MAY SHOW CAUSE IN WR ITING OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271. SD/- (VIJYENDDRA KUMAR) ASSTT. COMMISSIONER OF INCOME-T AX-3(1), INDORE 9. FROM PERUSAL OF THE ABOVE SHOW CAUSE NOTICE WE F IND 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 PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 8 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 NE EDS TO BE EXAMINED IN THE LIGHT OF JUDGMENT RELIED BY LD. COU NSEL FOR THE ASSESSEE. 10. WE FIND THAT SIMILAR ISSUE CAME UP BEFORE THE J URISDICTIONAL HIGH COURT IN THE CASE OF SHRI KULWANT SINGH BHATIA (SUPRA) WHEREIN THE HON'BLE COURT DISCUSSED THE JUDGMENT O F HON'BLE HIGH COURT IN THE CASE OF CIT V/S MANJUNATHA COTTON GINN ING FACTORY (SUPRA) AND CIT V/S SSAS EMERALAD MEADOWS (SUPRA) AND HELD THAT ON DUE CONSIDERATION OF THE ARGUMENTS OF THE LD. C OUNSEL FOR THE APPELLANT, SO ALSO CONSIDERING THE FACT THAT THE GR OUND MENTIONED 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 PENALTY ENFORCED BY THE AUTHORITY. 11. SIMILARLY IN THE CASE OF CIT V/S MANJUNATHA GIN NING FACTORY, HON'BLE HIGH COURT OF KARNATAKA HELD THAT THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT SHOULD SPECIFICALLY MENTION THE GROUND PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 9 IN SECTION 271(1)(C) WHETHER CONCEALMENT OF INCOME OR FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME. SENDING PRINTED FORM WHERE ALL GROUND OF SECTION 271(1)(C) WOULD NOT MENTION THE S PECIFIC REQUIREMENT OF LAW. ASSESSEE SHOULD KNOW THE SPECIF IC GROUND ON WHICH HE HAS BEEN CHARGED OTHERWISE OPPORTUNITIES O F NATURAL JUSTICE DENIED. ON THE BASIS OF SUCH PROCEEDINGS NO PENALT Y COULD BE IMPOSED TO THE ASSESSEE. TAKING UP THE PENALTY PRO CEEDINGS ON ONE LIMB AND FINDING THE ASSESSSEE IN ANOTHER LIMB IS B AD IN LAW. 12. IN THE INSTANT APPEALS ALSO THE LD. A.O SHOULD BE CLEAR AS TO WHETHER THE ALLEGED ADDITION GOES UNDER THE LIMB OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PA RTICULARS OF INCOME. MERELY ISSUING NOTICE IN GENERAL PROFORMA WILL NEGATE THE VERY PURPOSE OF NATURAL JUSTICE AS HELD BY THE HON 'BLE APEX COURT IN THE CASE OF DILIP N SHRAF 161 TAXMANN 218 THAT THE QUASI- CRIMINAL PROCEEDINGS U/S 271(1)(C) OF THE ACT OUGHT TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE. 13. 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 NOTICES ISSUED U/S 274 R.W.S. PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 10 271(1)(C) OF THE ACT ARE INVALID, UNTENABLE AND SUF FERS FROM THE INFIRMITY OF NON APPLICATION OF MIND BY THE ASSESSI NG OFFICER. WE ACCORDINGLY SET ASIDE THE FINDING OF LD. CIT(A) AND DIRECT TO DELETE THE PENALTY OF RS.5,56,050/-, RS.20,24,236/-, RS.14 ,45,871/-, RS.8,02,948/-, RS.2,78,415/- AND RS. 3,66,275/- LE VIED U/S 271(1)(C) OF THE ACT ON THIS LEGAL GROUND ITSELF. WE ACCORDINGLY ALLOW GROUND NO.1(C) RAISED BY THE ASSESSEE FOR ALL THE Y EARS UNDER APPEAL ON THE LEGALITY OF THE PENALTY PROCEEDINGS INITIATE D U/S 271(1)(C) OF THE ACT. SINCE THE PENALTY U/S 271(1)(C) OF THE AC T HAS BEEN DEALT AND DELETED ON THE PRELIMINARY LEGAL POINTS, OTHER ARGUMENTS OF THE ASSESSEE DEALING WITH THE MERITS OF THE LEVY OF PEN ALTY ARE NOT BEEN DEALT WITH AND THE SAME ARE RENDERED ACADEMIC IN NA TURE. 12. ACCORDINGLY APPEALS OF THE ASSESSEE FOR THE ASS ESSMENT YEARS 1987-88 TO 1992-93 ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 25.03.201 9. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 25 MARCH, 2019 /DEV PANJWANI PACKAGINGS PVT. LTD ITA NO.748 TO 753/IND/2013 11 COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE