ACIT, CIR-44, KOLKATA, Kolkata V. Ram Singh Rathore, Kolkata

ITA 864/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1349 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 12-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACH ARJEEADDL
• Keywords: Initiation of penalty proceedings; Competent authority
• Section: 143(3)

Judgement Text

ITA N0.864/KOL/2015-RAM SINGH RATHORE PROP. OF MARU TI AIR COURIERS-A.Y.2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NO.864/KOL/2015 ASSESSMENT YEAR : 2010-11 A.C.I.T., CIRCLE-44, -VERSUS- RAM SINGH RAT HORE, PROP. OF KOLKATA MARUTI AIR COURIERS, KOLKATA (PAN: AFHPR 4129 K) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI ARINDAM BHATTACHARJEE.A DDL. CIT, SR.DR FOR THE RESPONDENT: SHRI SUBASH AGARWAL, ADVOCATE DATE OF HEARING : 21.09.2017. DATE OF PRONOUNCEMENT : 04.10.2017. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 18.03.2015 OF CIT(A)-XIII, KOLKATA CANCELLING THE ORDER OF AO IMP OSING PENALTY ON THE ASSESSEE U/S 271D OF THE INCOME TAX ACT, 1961 (ACT.) 2. THE ASSESSEE IS AN INDIVIDUAL. IN THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT FOR A.Y.2010-11, THE AO NOTICED THAT THE ASSESSEE HAD ACCEPTED LOAN OTHERWISE BY ACCOUNT PAYEE CHEQUE/DRAFT IN EXCESS O F RS.20,000 CONTRARY TO THE PROVISION OF SECTION 269SS OF THE ACT. PENALTY WAS THEREFORE LEVIED U/S 271D OF THE ACT OF AN AMOUNT EQUAL TO THE LOAN ACCEPTED IN CASH IN VIOLATION OF THE PROVISION OF SECTION 269SS OF THE ACT NAMELY LOAN OF RS.13,37,03 5/-. 3. BEFORE CIT(A) THE ASSESSEE RAISED A PRELIMINAR Y ISSUE ON THE VALIDITY OF THE ORDER PASSED BY JCIT, RANGE-44 U/S 271D OF THE ACT. THE O BJECTION WAS AS FOLLOWS :- IN THIS CASE PENALTY PROCEEDING WAS INITIATED BY DC1T, CIR - 44, KOL. DURING THE COURSE OF ASSESSMENT AS IS EVIDENT FROM THE ASSESSM ENT ORDER DATED 14.03.2013 AND SHOW CAUSE LETTER DATED 14.03.2013. LATER. LD. .JCIT, R-44, KOLKATA ISSUED A LETTER DAT ED 21.08.2013 WHICH IS REPRODUCED HEREWITH :- SUB: PENALTY PROCEEDING U/S 27/ D FOR THE A. Y. 2 010-11- REGARDING ITA N0.864/KOL/2015-RAM SINGH RATHORE PROP. OF MARU TI AIR COURIERS-A.Y.2010-11 2 IN CONNECTION WITH THE PENALTY PROCEEDING U/ S 271 D FOR THE A. Y. 2010-11, YOU ARE HEREBY REQUESTED TO APPEAR BEFORE THE UNDER SIGNED PERSONALLY OR THROUGH YOUR AUTHORIZED REPRESENTATIVE ON 29.08.2013 AT 3.00 P.M. PLEASE NOTE THAT THIS LETTER IS NOT A SHOW CAUSE FOR IMPOSITION OF PENALTY U/S 271 D BUT A RECOGNITION TO THE PROCEEDING INITIATED BY DCIT, CIR-44 ON 14.03.2013. (EMPHASIS SUPPLIED) THE ASSESSEE SUBMITTED THAT THE HONBLE KOLKATA ITA T DECISION DATED 09.08.20I2 IN ITA NO. 508/KOL/2012 IN THE CASE OF BISHWANATH DUTT A V. ADD! CIT RANGE, BUNKUM AND THE SPECIAL BENCH CHANDIGARH ITAT IN THE CASE OF DEWAN CLUTND AMRIT LAL V. DCIT (2006)283 ITR (AT) 203 (CHD) (SB) HAVE TAKEN T HE VIEW THAT THE AUTHORITY COMPETENT TO IMPOSE PENALTY UNDER SECTION 271D AND 271E IS VESTED WITH DY.CIT (NOW JT.CIT) AND THE A.O. DOES NOT HAVE THE POWER E ITHER TO INITIATE THE PENALTY PROCEEDINGS OR IMPOSE THE SAME. THERE IS NO PROCEDU RE FOR REFERENCE BY THE A. O TO THE COMPETENT AUTHORITY FOR IMPOSITION OF PENALTY U NDER SECTION 271 D OR 271 E. THEREFORE, IF THE JCIT IMPOSES PENALTY WITHOUT ISSU ING SHOW CAUSE NOTICE AND INITIATING PENALTY PROCEEDINGS U/S.271D OR 271 E OF THE ACT, THEN THE IMPOSITION OF SUCH PENALTY IS LIABLE TO BE CANCELLED ON THE GROUN D THAT THERE WAS NO SHOW CAUSE NOTICE ISSUED AND THEREFORE NO VALID INITIATION OF PENALTY PROCEEDINGS. THE ASSESSEE HIGHLIGHTED THE FACT THAT EVEN IN THE LETTER 28.3.2 014 ISSUED BY THE JCIT, HE HAD SPECIFICALLY MENTIONED THAT IT IS NOT A SHOW CAUSE NOTICE AND THIS BEING THE ONLY NOTICE ISSUED BY HIM PRIOR TO IMPOSING PENALTY U/S.271D OF THE ACT, THE SAME HAS TOBE HELD AS NULL AND VOID. THE ASSESSEE POINTED OUT THE FOL LOWING OBSERVATIONS OF THE KOLKATA ITAT IN THE CASE OF BISHWANATH DUTTA (SUPRA) UNDER SIMILAR FACTS: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSA L OF THE SHOW-CAUSE NOTICE DATED 30.12. 2009 SHOWS THAT THE PENALTY HAS BEEN I NITIATED BY THE ITO, WARD 4, BANKURA. A PERUSAL OF THE PENALTY ORDER PASSED BY T HE LEARNED ADDL. CIT, RANGE - BANKURA SHOWS THAT HE HAS RECOGNIZED THE IN ITIATION OF PENALTY PROCEEDINGS BY THE ASSESSING OFFICER. IT IS FURTHER NOTICED THAT THE LEARNED ADDL. CIT HAD NOT ISSUED ANY FURTHER SHOW-CAUSE NOT ICE OR DONE ANYTHING TO INITIATE PENALTY PROCEEDINGS. A PERUSAL OF THE DECI SION OF THE HON 'BLE SPECIAL BENCH [ITAT, CHANDIGARH] OF THIS TRIBUNAL IN THE CA SE OF DEWAN CHAND AMRITLAL (SUPRA) SHOWS THAT IT HAS BEEN CATEGORICAL LY HELD THAT THE VALIDITY OF ITA N0.864/KOL/2015-RAM SINGH RATHORE PROP. OF MARU TI AIR COURIERS-A.Y.2010-11 3 PENALTY PROCEEDINGS HAS TO BE SEEN WITH REFERENCE T O AUTHORITY EMPOWERED TO IMPOSE PENALTY ON THE RELEVANT DATE. 1T IS ALSO NOT ICED THAT THE SPECIAL BENCH, ITAT, CHANDIGARH IN THE CASE OF DEWAN CHAND AMRIT L AL (SUPRA) HAS CATEGORICALLY HELD THAT THERE IS NO PROCEDURE FOR R EFERENCE BY THE ASSESSING OFFICER TO THE COMPETENT AUTHORITY FOR IMPOSITION OF PENALTY U/S 271 D OR 271 E. IN THE PRESENT CASE, AS IT IS NOTICED THAT THE P ENALTY PROCEEDING HAS BEEN INITIATED BY THE ASSESSING OFFICER AND NOT BY THE A DDL. CIT/JT. CIT, WHO WAS TIRE COMPETENT AUTHORITY, IN VIEW OF THE SAID DECIS ION OF THE SPECIAL BENCH, ITAT, CHANDIGARH IN THE CASE OF DEWAN CHAND AMRITLA L (SUPRA), THE PENALTY AS CONFIRMED BY THE LEARNED COMMISSIONER A/INCOME-TAX (APPEALS) STANDS DELETED'. THE ASSESSEE SUBMITTED THAT RATIO LAID DOWN AS ABOV E, WILL SQUARELY APPLY TO THE FACTS OF THE ASSESSEES CASE AS PENALTY PROCEEDING WAS I NITIATED BY AUTHORITY (DCIT, CIR - 44), WHO WAS NOT COMPETENT TO INITIATE AND IMPOSE A ND IT WAS IMPOSED BY A COMPETENT AUTHORITY (JCIT. RANGE - 44) WHO HAS NOT INITIATED THE VALID PENALTY PROCEEDING. THE ASSESSEE THEREFORE SUBMITTED THAT THE PENALTY IMPOS ED U/S 271 D IS LIABLE TO BE DELETED. 4. ON THE ABOVE SUBMISSION THE CIT(A) HELD THAT THE JUDGMENT OF JURISDICTIONAL ITAT WAS SQUARELY APPLICABLE TO THE CASE OF THE ASS ESSEE WHERE IN PENALTY HAS BEEN INITIATED BY ASSESSING OFFICER BUT THE AUTHORITY CO MPETENT TO LEVY PENALTY VIZ., JCIT DID NOT INITIATE PENALTY PROCEEDINGS BUT ONLY ISSUE D A NOTICE FIXING THE CASE FOR HEARING. PENALTY PROCEEDING WAS INITIATED BY DCIT A ND NOT BY JCIT WHO WAS THE COMPETENT AUTHORITY FOR IMPOSITION OF PENALTY. IN V IEW OF THE JUDGMENT OF HON'BLE ITAT, KOLKATA BENCH - A , HE HELD THAT THE PENALTY IMPOSED IS LIABLE TO BE CANCELLED AND HE CANCELLED THE PENALTY IMPOSED. 5. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. AR RELIED ON THE ORDER OF CIT(A) AND THE LD. DR RELIED ON THE ORDER OF AO. WE ARE OF THE VIEW THAT IN THE LIGHT OF CLEAR FINDING OF THE FACT THAT JCIT WHO WAS THE AUTHORITY COMPETENT TO IMPOSE PENALTY AND HE HAD NOT INITIATED PENALTY PROCEEDINGS U/S 271D O F THE ACT AND ON A CONJOINT READING ITA N0.864/KOL/2015-RAM SINGH RATHORE PROP. OF MARU TI AIR COURIERS-A.Y.2010-11 4 OF ITAT, KOLKATA BENCH IN THE CASE OF BISHWANATH D UTTA V. ADDL. CIT, RANGE, BANKURA (SUPRA) IT IS CLEAR THAT THE RATIO LAID DO WN THEREIN WAS CLEARLY APPLICABLE. THE RATIO LAID DOWN IN THE DECISION OF ITAT, CHANDIGARH SPECIAL BENCH IN THE CASE DEWAN CHAND AMRITLAL VS. DCIT (SURPA) WAS ALSO CLEARLY AP PLICABLE TO THE FACTS OF THE CASE. IN THE LIGHT OF THE RATIO LAID DOWN IN THESE DECISI ONS ORDER IMPOSING PENALTY PASSED BY JCIT WITHOUT INITIATING PENALTY PROCEEDINGS U/S 271 D OF THE ACT IS TO BE HELD AS BAD IN LAW. WE THEREFORE DO NOT FIND ANY MERIT IN THIS APP EAL BY THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 7. IN THE RESULT THE APPEAL BY THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE COURT ON 04.10.2017. SD/- SD/- [M.BALAGANESH] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 04.10.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.RAM SINGH RATHORE, PROP. OF MARUTI AIR COURIERS, 287, B.B.GANGULY STREET, LAL BAZAR, KOLKATA-700012. 2.A.C.I.T., CIRCLE-44, KOLKATA. 3. C.I.T.(A)- 13, KOLKATA 4. C.I.T- 15 , KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES