Miss Shivani Jain, Kolkata V. DCIT, CIR-17, KOLKATA, Kolkata

ITA 778/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9345 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 29-04-2014
• Court: TRIBUNAL
• Assessee Lawyers: ANKIT JALAN
• Keywords: Business income; Salary income; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI N.V.VASUDEVAN JM, & DR. A.L.SAINI, AM ./ ITA NO.778 TO 780/KOL/2014 ( / ASSESSMENT YEAR :2004-2005 TO 2006-2007) MISS SHIVANI JAIN, KRISHNA BUILDING, ROOM NO.618, 224, AJC BOSE ROAD, 6 TH FLOOR, KOLKATA-700017 VS. DCIT, CIRCLE-17 INCOME TAX OFFICE, BAMBOO VILLA, 169, AJC BOSE ROAD, KOLKATA-700014 ./ ./PAN/GIR NO. : ADQPJ 1598 R ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI ANKIT JALAN, AR /REVENUE BY : NONE / DATE OF HEARING : 07/02/2017 /DATE OF PRONOUNCEMENT 15/02/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED THREE APPEALS FILED BY THE ASSESSEE, PERTAINING TO THE ASSESSMENT YEARS 2004-2005, 2005-06 & 2006-07, ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, KOLKATA, IN APPEAL NO.1467, 1468 & 1469/CIT(A)-XXIV /C-17/13-14, ALL DATED 10.02.2014, WHICH IN TURN ARISE OUT OF ORDERS MADE BY THE AO U/S.271(1)(C) OF THE INCOME TAX ACT 1961, (HEREINAF TER REFERRED TO THE ACT), ALL DATED 21.05.2009. 2. SINCE THESE THREE APPEALS RELATE TO SAME ASSESSE E, DIFFERENT ASSESSMENT YEARS AND COMMON ISSUES INVOLVED, THEREF ORE, THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. TH E ASSESSEE`S APPEAL IN, ITA NO.778/KOL/2014 IS TAKEN AS THE LEAD CASE. ITA NOS.778-780/KOL/2014 MISS SHIVANI JAIN 2 3. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE IS AN EMPLOYEE OF ICICI PRUDENTIAL LIFE INSURANCE CO. LTD . THE ASSESSEE RECEIVES INCOME FROM THE SAID COMPANY. THE INCOME I S IN TWO FOLD, VIA (I) BASIC AND (II) COMMISSION. THE BASIC IS FIXED AND T HE COMMISSION PORTION DEPENDS ON THE PERFORMANCE OF THE APPELLANT. ACCORD INGLY IN THE RETURN OF INCOME THE APPELLANT HAS SHOWN THE DETAILED INCOME EARNED DURING THE YEAR, IN THE FORM OF SALARY AND COMMISSION. THE COM MISSION INCOME RECEIVED FROM ICICI PRUDENTIAL LIFE INSURANCE CO. L TD. THUS, WAS SHOWN UNDER THE HEAD BUSINESS INCOME BY THE APPELLANT. TH E LD. A.O., HOWEVER, WAS OF THE VIEW THAT THE APPELLANT HAD EARNED ONLY SALARY INCOME, BASED ON FORM NO. 16, AND TREATED BOTH THE SALARY AND COM MISSION INCOME UNDER THE SAME HEAD OF SALARY AND DID NOT ALLOW THE EXPENSES WHICH PERTAIN TO EARNING OF COMMISSION INCOME. FURTHER, THE ASSESSEE HAS NOT SUBMITTED THE DETAILS CALLED BY THE AO, THEREFORE, THE AO ONLY CONSIDERED THE DETAILS OF IN COME AS PER FORM NO.16 OF THE EMPLOYER ICICI PRUDENTIAL LIFE INSURAN CE COMPANY LIMITED, THAT IS, SALARY INCOME ONLY. SINCE THE ASSESSEE HAS NOT SUBMITTED THE COPY OF AGREEMENT IN RESPECT OF COMMISSION RECEIVED BY HIM AND REASONABILITY OF EXPENSES CLAIMED BY THE ASSESSEE, THEREFORE, THE AO HAS DISALLOWED THIS INCOME AND EXPENSES AND INITIATED P ENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. ITA NOS.778-780/KOL/2014 MISS SHIVANI JAIN 3 4. NOT BEING SATISFIED WITH THE PENALTY ORDER U/S.2 71(1)(C) OF THE ACT, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO HAS DISMISSED THE APPEAL OF THE ASSESSEE OBSERVING THE FOLLOWINGS :- THE PRESENT APPEAL IS AGAINST THE PENALTY ORDER U/S . 271(1)(C) PASSED BY THE A.O. I HAVE CAREFULLY PERUSED THE GRO UNDS OF APPEAL AND THE PENALTY ORDER OF THE A.O. AS ALREADY DISCUS SED ABOVE, THE APPELLANT HAS FAILED TO OFFER ANY EXPLANATION FOR S UBMISSION IN SUPPORT OF THE GROUNDS RAISED IN THIS APPEAL NOR AN Y SUPPORTING EVIDENCES WERE PRODUCED BY HIM DESPITE ADEQUATE OPP ORTUNITY HAVING BEEN PROVIDED. IN THIS CONNECTION, RELIANCE MAY BE PLACED UPON THE DECISION OF THE HON.BLE SUPREME COURT IN THE CASE OF H.M. ESUFALI H . M. ABDULALI (1973) 90 ITR 271 WHEREIN THE HON'BLE COURT HAS HEL D THAT THE APPELLATE AUTHORITY CANNOT SUBSTITUTE ITS OWN JUDGE MENT IN PLACE OF THE JUDGEMENT OF THE A.O. UNLESS IT IS SHOWN THAT T HE JUDGEMENT OF THE A.O. WAS BIASED, IRRATIONAL, VINDICTIVE OR CAPR ICIOUS. IN THE INSTANT CASE THE APPELLANT HAS NOT ABLE TO S HOW THAT THE DECISION OF THE A.O. WAS ARBITRARY, BIASED, IRRATIO NAL, VINDICTIVE OR CAPRICIOUS WITHOUT ANY BASIS. I FIND NO REASON TO I NTERFERE WITH THE DECISION OF THE A.O. IN THE RESULT, APPEAL FILED BY THE APPELLANT IS 'DI SMISSED'. 5.NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWING GROUND S OF APPEAL :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. A.O. WAS NOT JUSTIFIED IN IMPOSING PENALTY PROCEEDI NGS U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 AND THE LD. C IT(A)- XXVI ALSO UNJUSTIFIABLY CONFIRMED THE SAME WITHOUT GIVIN G PROPER OPPORTUNITY TO YOUR APPELLANT. 2. THAT THE LD. CIT(A)-XXVI QUIET VEHEMENTLY AND H URRIEDLY PASSED THE APPELLATE ORDER CONFIRMING THE PENALTY P ROCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 WITHOUT GIVING REASONABLE OPPORTUNITY OF HEARING AS WELL AS FILING OF WRITTEN SUBMISSION TO YOUR APPELLANT. 3. THAT THE IMPUGNED PENALTY ORDER AS WELL AS THE IMPUGNED APPEAL ORDER OTHERWISE ILLOGICAL, TORTUROUS, UNJUST IFIED, BAD IN LAW AND SHOULD BE QUASHED, SET ASIDE, RESCINDED, RECALL ED AND /OR OTHERWISE NULLIFIED, EVEN ON SYMPATHETIC AND/ OR HU MANITARIAN GROUNDS. ITA NOS.778-780/KOL/2014 MISS SHIVANI JAIN 4 4. THAT THE APPELLANT CRAVES LEAVE TO AMEND, ALTER , MODIFY, SUBSTITUTE, ADD TO, ANY OR ALL OF THE ABOVE GROUNDS . 6. ALTHOUGH IN THIS APPEAL, THE ASSESSEE HAS RAISED MU LTIPLE GROUNDS OF APPEAL, BUT AT THE TIME OF HEARING THE SOLITARY GRIEVANCE OF THE ASSESSEE HAS BEEN CONFINED TO THE ISSUE THAT PENALTY PROCEED INGS INITIATED BY AO U/S 271 (1) ( C) OF THE ACT AND CONFIRMED BY THE CI T (A) IS UNJUSTIFIED. 6.1 LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT IN THESE THREE APPEALS, THE SHOW CAUSE NOTICE U/S. 274 OF THE INCO ME TAX ACT, 1961 ISSUED BEFORE IMPOSING THE PENALTY, DO NOT INDICATE THE GROUND ON WHICH PENALTY IS SOUGHT TO BE IMPOSED, I.E. AS TO WHETHER THE ASSESSEE IS GUILTY FOR HAVING CONCEALED PARTICULARS OF INCOME OR OF FU RNISHING INACCURATE PARTICULARS OF INCOME. THE PRINTED NOTICE DOES NOT STRIKE OUT THE IRRELEVANT PORTION VIZ 'CONCEALED PARTICULARS OF SUCH INCOME' OR 'FURNISHED INACCURATE PARTICULARS OF INCOME'. THEREFORE, IMPOSITION OF P ENALTY UNDER SUCH CIRCUMSTANCES IS NOT JUSTIFIED, AND BAD IN LAW AND IS LIABLE TO BE QUASHED. IMPOSITION OF PENALTY ON THE BASIS OF SUCH INVALID SHOW CAUSE NOTICE CANNOT BE SUSTAINED. PENALTY PROCEEDING INITIATED O N ONE LIMB AND FIND THE ASSESSEE GUILTY IN ANOTHER LIMB IS BAD IN LAW. TO S UPPORT HIS ARGUMENTS, THE LD AR FOR THE ASSESSEE HAS RELIED ON THE FOLLOW ING JUDGMENTS: (1).THE LD AR FOR THE ASSESSEE RELIED ON THE DECISI ON OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNA THA COTTON & GINNING FACTORY (2013) 218 TAXMANN 423 (KAR), WHERE IN IT WAS HELD THAT: IF SHOW CAUSE NOTICE U/S. 274 OF THE ACT DOES NOT SPECIFY AS TO THE EXACT CHARGE VIZ, WHETHER THE CHARGE IS THAT THE ASSESSEE HAS 'FURNISHED INACCURATE PARTICULARS OF INCOME' OR 'CONCEALED PAR TICULARS OF INCOME' BY STRIKING OUT THE IRRELEVANT PORTION OF THE PRINTED SHOW CAUSE NOTICE, THAN ITA NOS.778-780/KOL/2014 MISS SHIVANI JAIN 5 THE IMPOSITION OF PENALTY ON THE BASIS OF SUCH INVA LID SHOW CAUSE NOTICE CANNOT BE SUSTAINED. (2). THE DECISION OF HON'BLE INCOME TAX APPELLATE T RIBUNAL, KOLKATA BENCH, IN THE CASE OF MAHABIR PRASAD AGARWAL VERSUS ACIT, CENTRAL CIRCLE-XIII, ITA NOS. 738 & 739/KOL/2013 DATED 15.0 1.2016 WHEREIN IT WAS HELD THAT 'FOR THE REASONS GIVEN ABOVE, WE HOLD THAT LEVY OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED. WE THEREFORE CANCEL THE O RDERS IMPOSING PENALTY ON THE ASSESSEE AND ALLOW THE APPEAL BY THE ASSESSEE. IN VIEW OF OUR ABOVE CONCLUSIONS ON THE ISSUE OF DEFECT IN SHO W CAUSE NOTICE U/S.274 OF THE ACT, WE ARE NOT DEALING WITH THE OTH ER ARGUMENTS MADE ON MERITS OF THE ORDERS IMPOSING PENALTY ON THE ASSESS SEE. ' (3).THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, KOLK ATA BENCH, IN THE CASE OF SHRI SANTOSH KUMAR SIKARIA VS. ASSISTANT CO MMISSIONER OF INCOME TAX IN ITA NO. 2428/KOL/2013 DATED 01.06.201 6 WHEREIN A SIMILAR ISSUE WAS DEALT ON AND IT WAS HELD AS - IT IS CLEAR FROM THE AFORESAID DECISION THAT ON TH E FACTS OF THE PRESENT CASE THAT THE SHOW CAUSE NOTICE U/S. 274 OF THE ACT IS D EFECTIVE AS IT DOES NOT SPELL OUT THE GROUNDS ON WHICH THE PENALTY IS SOUGH T TO BE IMPOSED. FOLLOWING THE DECISION OF THE HON'BLE KAMATAKA HIGH COURT REFERRED ABOVE, WE HOLD THAT THAT THE ORDER IMPOSING PENALTY HAS TO BE HELD AS INVALID AND CONSEQUENTLY PENALTY IMPOSED IS CANCELL ED. IN VIEW OF THE ABOVE CONCLUSIONS WE ARE NOT DEALING WITH THE OTHER ASPECTS ON MERITS OF THE IMPOSITION OF PENALTY. (4).THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, KOLK ATA BENCH, IN THE CASE OF SHRI CHAMPALAL JAIN VS INCOME TAX OFFICER I N ITANO. 127/KOL/2013 DATED 01.06.2015 WHEREIN IT WAS HELD T HAT 'THE AO IN THIS CASE LEVIED THE PENALTY FOR BOTH TH E CHARGES WITHOUT MENTIONING ANY SPECIFIC CHARGE. IN CIT V. ATUL MOHA N BINDAL (2009) 9 SCC 589, WHERE HON'BLE SUPREME COURT WAS CONSIDERING TH E SAME PROVISION, IT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATIS FIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME. THUS THE SATISFACTION OF THE AO ABO UT THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME IS ESSENTIAL BEFORE LEVYING ANY PENALTY U/S 271(1) (C). THE AO AS IS APPARENT FROM THE PENALTY ORDER HAS NOT SATISFIE D ABOUT THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE. ON THIS BASIS ITSELF THE PENALTY DELETED.' ITA NOS.778-780/KOL/2014 MISS SHIVANI JAIN 6 THE LD AR FOR THE ASSESSEE, THEREFORE SUBMITTED THA T THE ABOVE CITED CASE LAWS SQUARELY COVERS UP THE ISSUE, SINCE THE N OTICE U/S. 274 IS INVALID AND THUS THE PENALTY ORDER IS BAD IN LAW, S HOULD BE DELETED AND SHOULD NOT BE SUSTAINED. THUS THE DEMAND AMOUNTING TO RS. 37,479/- IMPOSING PENALTY U/S. 271(1)(C) OF THE INCOME TAX A CT, 1961 IS WRONG AND UNJUSTIFIED AND SHOULD BE DELETED. 6.2. HAVING HEARD THE SUBMISSIONS OF LD AR FOR THE ASSESSEE, AND PERUSED THE NOTICE ISSUED UNDER SECTION 274 /271(1) (C ) OF THE ACT, WE NOTICED THAT THE ISSUE IS SQUARELY COVERED BY THE J UDGMENT OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY (2013) 218 TAXM ANN 423 (KAR) (SUPRA). THEREFORE, WE CANCEL THE PENALTY ORDER U/S .271(1)(C) OF THE ACT, IN THESE THREE APPEALS. 6.3. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE IN THESE THREE APPEALS ( ITA NO. 778,779 & 780/KOL/2014), ARE ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15/02 /2017. S D/ - (N.V.VASUDEVAN) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 15/02/2017 & ()* /PRAKASH MISHRA ,SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) & ' , / ITAT, KOLKATA 1. / THE APPELLANT-MISS SHIVANI JAIN 2. / THE RESPONDENT.-DCIT, CIRCLE-17, KOL-14 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//