Income Tax Officer, Patiala V. Sh. Rajesh Kumar, Patran

ITA 866/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6670 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 26-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KULDEEP DHIMAN
• Keywords: Principle of natural justice; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO 866/CHD/2017 ASSESSMENT YEAR : 2007-08 THE ITO, VS. SHRI RAJESH KUMAR WARD-SAMANA, PROP. M/S MADAN LAL RAJESH KUMAR, AT PATIALA. DANDIAL ROAD, PATRAN. PAN NO. AGOPK7494A (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. CHANDER KANTA, SR.DR RESPONDENT BY : SHRI KULDEEP DHIMAN DATE OF HEARING : 25.09.2017 DATE OF PRONOUNCEMENT : 01.11.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 07.03.2017 OF LD. CIT (APPE ALS) PANCHKULA PERTAINING TO 2007-08 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A), PATIALA IS LEGALLY CORRECT IN DELETING THE PENALTY U/S 271(L)(C) OF THE INCOME TAX ACT, 1961 AMOUNTING TO RS. 15,00,220/- IMPOSED BY THE ASSESSING OFFICER FOR FA MISHING INACCURATE PARTICULARS OF HIS INCOME AND WITHOUT APPRECIATING THE FACTS OF THE PR ESENT CASE, AS THE FACTS OF THIS CASE ARE DIFFERENT FROM THE FACTS MENTIONED IN THE CASE OF C IT VS. M/S MANUJUNATHA COTTON & GINNING FACTORY & ORS. (2013) 359 ITR 565 (KARN) ON THE BASIS OF WHICH THE LD. CIT(A) HAS RELIED UPON THE JUDGEMENT OF THE HON'BLE KARNAT AKA HIGH COURT. 2. BOTH THE PARTIES HAVE BEEN HEARD. THOUGH THE LD. SR .DR RELIED UPON PENALTY ORDER, HOWEVER THE FINDING OF FACT RENDERED BY THE CIT(A) THAT THE AO DID NOT STRIKE OUT OR MARK IN INK THE APPROPRIATE WORDS IN THE NOTICE ISSUED U/S 274 READ WITH 271(1)(C) OF THE ACT WAS NOT DISPUTED. T HE LD. AR RELIES UPON DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF M/S MANJU NATH COTTON & GINNING FACTORY & ORS. (2013) 359 ITR 565 (KAR) . 3. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATER IAL AVAILABLE ON RECORD. ON CONSIDERATION OF THE FACTS, CIRCUMSTANCES AND POSITION OF LAW, AS CONSIDERED BY THE CIT(A) WHEREIN ON FACTS, THERE WAS NO R EBUTTAL BY THE REVENUE, I FIND THAT THERE IS NO INFIRMITY IN THE IMPUGNED ORD ER. THE RELEVANT EXTRACT OF THE FINDINGS OF CIT(A) IS REPRODUCED HEREUNDER : I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE RELEVANT MATERIAL ON RECORD. THE APPELLANT AVERRED THAT THE A.O. DID NOT MARK THE APPROPRIATE LIMB IN THE NOTIC E ISSUED U/S 274 RWS 271(L)(C) OF THE ACT AND THE SAM E DOES NOT MENTION WHETHER THE ITA 866/CHD/2017 A.Y. 2007-08 PAGE 2 OF 2 PENALTY TO BE LEVIED IS FOR CONCEALMENT OF INCOME O R FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE APPELLANT RELIED UPON TH E ORDER OF HON'BLE KARNATKA HIGH COURT REPORTED IN 359 ITR 565 (KAR) WHEREIN IT WAS HELD AS UNDER: 'THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FORM WHERE ALL THE GRO UNDS MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NAT URE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROV ISIONS HAVE TO BE HELD TO BE STRICTLY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD S ATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLE OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASSESSEE.' I HAVE SEEN THE ASSESSMENT RECORD. INDEED, THE PENA LTY NOTICE U/S 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961 DOES NOT SPECIFY WH ETHER THE PROPOSED PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME AS NEITHER THE AO HAS TICKED THE DESIRED LIMB OF THE SECTION NOR THE INAPPLICABLE LIMB HAS BEEN STRUCK O FF. THIS MAKES THE PENALTY NOTICE INVALID. IN THE ABOVE VIEW OF THE MATTER AND THE APPLICABLE LEGAL POSITION, THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT IMPOSED ON THE BASI S OF ADDITION MADE AND BY ISSUING NOTICE U/S 274 RWS 271 WITHOUT MENTIONING THE LIMB OF THE SECTION IS HELD INVALID AND THE SAME IS HEREBY DELETED. (EMPHASIS PROVIDED) 4. IN THE AFOREMENTIONED PECULIAR FACTS AND CIRCUMSTANCES AS THEY STAND, THE CONCLUSION DRAWN, I FIND IS FULLY SUPPORTED BY THE DECIS ION OF THE KARNATAKA HIGH COURT IN THE CASE OF M/S MANJU NATH COT TON & GINNING FACTORY & ORS. ACCORDINGLY, BEING SATISFIED BY THE REASONIN G AND FINDINGS RECORDED IN THE AFORESAID CONCLUSION OF THE CIT(A), I FIND TH AT THERE IS NO MERIT IN THE APPEAL FILED. THE IMPUGNED ORDER IS UPHELD AND THE A PPEAL IS DISMISSED. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.11.2017. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.