ACIT, Cuttack V. M/s. Bishandayal Jewellers, Cuttack, Cuttack

ITA 88/CTK/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4954 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 20-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Assessee Lawyers: S K SARANGI
• Keywords: Principle of natural justice; Question of law
• Section: 271(1)(c); 250; 274; 73; 263

Judgement Text

P A G E 1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO S . 88 & 89 /CTK/201 9 ASSESSMENT YEAR S : 2010 - 2011 & 2011 - 12 ASST. CIT, CENTRAL CIRCLE, CUTTACK VS. M/S. BISHANDAYAL JEWELERS, NAYASARAK, CUTTACK PAN/GIR NO. AAHFB 3298 C (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K.SARANGI , AR REVENUE BY : SHRI M.K.GAUTAM , CIT DR DATE OF FINAL HEARING : 17 / 07 / 20 20 DATE OF PRONOUNCEMENT : 15 / 10 /20 20 O R D E R PER C.M.GARG,JM TH ESE APPEAL S HAVE BEEN FILED BY THE REVENUE AGAINST THE SEPARATE ORDER S BOTH DATED 4.12.2018 OF THE CIT(A), 2 , BHUBANESWAR FOR THE ASSESSMENT YEAR S 2010 - 11 & 2011 - 12 . 2. IN BOTH THE APPEALS, THE GRIEVANCE OF THE REVENUE IS THAT THE LD CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 BY FOLLOWING THE DECISION OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V S. SSAS EMERALD MEADOWS (2016) 73 TAXMANN.COM 248 (SC). ITA NOS.88 & 89/CTK/2019 ASSESSMENT YEARS : 2010 - 2011 & 2011 - 12 P A G E 2 | 6 3. AT THE TIME OF HEARING, LD DEPARTMENTAL REPRESENTATIVE BY REFERRING TO THE GROUNDS OF APPEAL SUBMITTED THAT THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SSAS EMERALDS MEADOW (SUPRA) IS NO T BINDING ON THE DEPARTMENT IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SHANMUGAVAEL NADAR, 263 ITR 658 ( SC ),WHEREIN, IT IS HELD THAT A REJECTION OF SLP THROUGH A NON - SPEAKING ORDER IS NOT A BINDING PRECEDENT. HE, THEREFORE PRAYED THAT THE ORDERS OF THE LD CIT(A) BE REVERSED BY RESTORING THE ORDER OF THE AO. 4. REPLYING TO ABOVE, LD COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDERS OF THE LD CIT(A) AND FURTHER SUBMITTED THAT IN THIS CASE, BOTH NOTICE S U/S 274 R.W.S. 271 WAS ISSUED ON 29.12. 2017 FOR THE ASSESSMENT YEAR 2010 - 2011 AND 2011 - 12 AND THE INAPPROPRIATE WORDS IN THE SAID NOTICE HAVE NOT BEEN STRUCK OFF. THEREFORE, IT IS NOT UNDERSTOOD AS TO UNDER WHICH LIMB OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT, THE ASSESSING OFFICER HAS LEVI ED PENALTY. SINCE THE SAID SHOW CAUSE NOTICE S ISSUED U/S 274 DID NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT WAS FOR CONCEALING THE PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME, THEREFORE, THE PENALTY ORDER S PASSED UNDER SECTION 271(1)(C) OF THE ACT IN PURSUANCE TO THE SAID NOTICE S WERE RIGHTY REVERSED BY LD CIT(A) . THE LD. AR FURTHER SUBMITTED THAT THE LD CIT(A) HAS FOLLOWED THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTO N & GINNING FACTORY REPORTED IN 359 ITR 565 , WHICH DECISION HAS BEEN UPHELD BY THE ITA NOS.88 & 89/CTK/2019 ASSESSMENT YEARS : 2010 - 2011 & 2011 - 12 P A G E 3 | 6 HONBLE APEX COURT IN CASE OF CIT VS. SSAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 248 (SC). THEREFORE, IT WAS HIS CONTENTION THAT THERE WAS NO AMBIGUITY AND PERVERSITY IN T HE ORDERS OF THE LD CIT(A) TO BE INTERFERE D WITH AND SAME MAY BE UPHELD. 5 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, INTER ALIA, NOTICES U/S.274 READ WITH SECTION 271(1)(C) OF THE ACT DATED 29.12.2017 . WE FIND THE ONLY ISSUE TO BE DECIDED IN THE GROUNDS OF APPEAL IS R EGARDING DELETION OF PENALTY LEVIED U/S 271(1)(C) ON THE GROUND OF INAPPROPRIATE WORDS IN THE SAID NOTICES HAVE NOT BEEN STRUCK OFF. A PERUSAL OF THE NOTICES ISSUED U/S 274 R.W.S. 271 DATED 29.12.2017 S HOW THAT THE INAPPROPRIATE WORDS IN THE SAID NOTICE HAVE NOT BEEN STRUCK OFF. EVEN THE LAST LINE OF THE SAID NOTICE ONLY SPEAKS OF SECTION 271 AND DOES NOT EVEN MENTION OF SECTION 271(1)(C) OF THE I.T. ACT. IT IS PERTINENT TO NOTE HERE THAT THE PENALTY O RDER IS BASED ON FURNISHING OF INACCURATE PARTICULARS BUT THE NOTICE IS NOT SPECIFYING EXACTLY ON WHICH LIMB THE PENALTY U/S 271(1)(C) HAS BEEN INITIATED. FROM THE NOTICE S DATED 29.12.2017 FOR BOTH THE ASSESSMENT YEARS PRODUCED DURING THE HEARING, IT CAN B E SEEN THAT THE ASSESSING OFFICER WAS NOT SURE UNDER WHICH LIMB OF PROVISIONS OF SECTION 271 OF THE INCOME TAX ACT, 1961, THE ASSESSEE IS LIABLE FOR PENALTY. IN THE INSTANT CASE ALSO THE INAPPROPRIATE WORDS IN THE PENALTY NOTICES HAVE NOT BEEN STRUCK OFF AND THE NOTICES DO NOT SPECIFY AS TO UNDER WHICH LIMB OF THE PROVISIONS, THE PENALTY U/S 271(1)(C) HAS BEEN INITIATED . ON PERUSAL OF THE ITA NOS.88 & 89/CTK/2019 ASSESSMENT YEARS : 2010 - 2011 & 2011 - 12 P A G E 4 | 6 IMPUGNED ORDER, WE OBSERVE THAT THE LD CIT(A) DELETED THE PENALTY AFTER CONSIDERING THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATHA COTTON & GINNING FACTORY, 35 TAXMANN.COM 250 (KAR) AND ALSO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS SSAS EMERALD MEADOWS, 73 TAXMANN.COM 248 (SC). THE RELEVANT FINDINGS OF THE LD CIT(A) AR E AS UNDER: 4. I HAVE CAREFULLY EXAMINED THE ASSESSMENT ORDER, PENALTY ORDER AND SUBMISSIONS OF THE APPELLANT. I FIND THAT IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS U/S.271( 1 )(C) OF THE INC O ME TAX ACT,' 1961, FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE PENALTY NOTICE, THE ASSESSING OFFICER CHARGED THE APPELLANT FOR CONCEALING THE PARTICULARS OF INCOME. IN THE PENALTY ORDER THE ASSESSING OFFICER HAS LEVIED THE PENALTY FOR CONCEALME NT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. HON'BLE HIGH COURT OF KARNATAKA IN THE EASE OF MANJUNATHA COTTON & GINNING FACTORY HAS HELD THAT THE ASSESSING OFFICER HAS TO CLEARLY SPECIFY WHETHER THERE IS CONCEALMENT OF INCOME OR WHETHER THERE I S FILING OF INACCURATE PARTICULARS OF INCOME AND IN THE ABSENCE OF SUCH CLARITY THE LEVY OF PENALTY WILL BE BAD IN LAW. THE RELEVANT PORTION OF THE JUDGEMENT IS AS B ELOW: CIT VS. MANJUNATHA COTTON & GINNING FACTORY [2013] 35 TAXMANN.COM 250 (KARNATAKA) 'NOTICE UNDER SECTION] 274 SHOULD SPECIFICALLY STATE THE GROUNDS MENTIONED IN SECTION 2 71(1)(C) , I.E., WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORRECT PARTICULARS OF INCOME. SENDING PRINTED FORM, WHERE A \ L THE GROUNDS MENTIONED IN SECTION 271 ARE MENTIONED, WOULD NOT SATISFY REQUIREMENT OF LAW. THE ASSESSEE SHOULD KNOW THE GROUNDS WHICH HE HAS T O MEET SPECIFICALLY. OTHERWISE, PRIN CIPLES OF NATURAL JUSTICE IS OFFENDED. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED TO THE ASSESSEE. TAKING UP OF PENALTY PROCEEDINGS ON ONE LIMB AND FINDING THE ASSESSEE GUILTY OF ANOTHER LIMB ' BAD IN LAW. [PARA 0] ' 5. THIS DECISION WAS APPLIED BY HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. SSA'S EMERALD MEADOWS. THE HEAD NOTES ARE AS BELOW: CIT VS. SSA'S EMERALD MEADOWS [2016] 73 TAXMANN.COM 241 (KARNATAKA) ITA NOS.88 & 89/CTK/2019 ASSESSMENT YEARS : 2010 - 2011 & 2011 - 12 P A G E 5 | 6 'SECTION 274, READ WITH SECTION 271( 1 )(C), OF THE INCOME - TAX ACT, 1961 - PENALTY - PROCEDURE FOR. IMPOSITION OF (CONDITIONS PRECEDENT) - ASSESSMENT YEAR 2009 - FO - TRIBUNAL ALLOWED APPEAL OF ASSESSEE HOLDING THAT NOTICE ISSUED BY ASSESSING O FFICER UNDER SECTION 274 READ WITH SECTION 271(L)(C) WAS BAD IN LAW, AS IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(L)(C) PENALTY PROCEEDINGS HAD BEEN INITIATED, I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PART ICULARS OF INCOME - IT RELIED ON DECISION OF DIVISION BENCH OF KARNATAKA HIGH COURT RENDERED IN CASE OF C IT V. MAN JUNATHA COTTON & GINNING FACTORY [2013] 359 ITR 565/218 TAXMAN 423/35 TAXMANN.COM 250 - AGAINST ORDER OF TR IBUNAL, REVENUE FILED APPEAL BEFORE HIGH COURT WHETHER SINCE MATTER WAS COVERED BY ABOVE DECISION OF DIVISION BENCH, THERE WAS NO SUBSTANTIAL QUESTION OF LAW ARISING FOR DETERMINATION - HELD, YES [PARA 4] [IN FAVOUR OF ASSESS]. ' 6. HON'BLE SUPREME COURT IN THE SAME CASE HAS UPHELD THE DECISION OF HON'BLE HIGH COURT OF KARNATAKA. THE HEAD NOTES ARE AS BELOW: CIT VS. SSA'S EMERALD MEADOWS [2016] 73 TAXMANN.COM 248(SC) 'SECTION 274, READ WITH 'SECTION 271(L)( C), OF THE INCOME - TAX ACT, 1961 - PENALTY - PROCEDURE FOR IMPOSITION OF (CONDITIONS PRECEDENT) - ASSESSMENT YEAR 2009 - 10 - TRIBUNAL, RELYING ON DECISION OF DIVISION BENCH OF KARNATAKA HIGH COURT RENDERED IN [CASE OF CIT V. MANJUNATHA COTTON & GINNING FACTOR Y [2013] 359 ITR 565/218 TAXMAN 423/35 TAXMANN.COM 250, ALLOWED APPEAL OF ASSESSEE HOLDING THAT NOTICE ISSUED BY ASSESSING OFFICER UNDER SECTION 274 READ W ITH SECTION 271( 1 )(C) W AS BAD IN LAW] AS IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271( 1 )(C) PENALTY PROCEEDINGS HAD BEEN INITIATED, I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME - HIGH COURT HELD THAT MATTER WAS COVERED BY AFORESAID DECI SION OF DIVIS ION BENCH AND, THEREFORE, THERE WAS NO SUBSTANTIAL QUESTION OF LAW ARISING FOR DETERMINATION WHETHER SINCE THERE WAS NO MERIT, IN SLP FILED BY REVENUE, SAME WAS LIABLE TO BE DISMISSED - HELD, YES [PARA 2] [IN FAVOUR OF ASSESSEE . ' 7. THE APPELLANT'S CASE IS CLEARLY COVERED BY THE DECISIONS MENTIONED ABOVE. THEREFORE, THE PENALTY LEVIED BY THE ASSESSING OFFICER OF RS.42,86,803/ - U/S.271( 1 )(C) OF THE INCOME TAX ACT, 1961 IS ORDERED TO BE DELETED. THE GROUND OF APPEAL IS ALLOWED. FROM THE ABOVE, IT CLEARLY SHOWS THAT THE LD CIT(A) HAS FOLLOWED THE JUDICIAL DISCIPLINE BY FOLLOWING THE PROPOSITION IN THE CASE OF MANJUNATHA COTTON (SUPRA), WHICH DECISION HAS BEEN UPHELD BY HONBLE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS (SUPRA). THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE LD CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY ITA NOS.88 & 89/CTK/2019 ASSESSMENT YEARS : 2010 - 2011 & 2011 - 12 P A G E 6 | 6 LEVIED U/S 271(1)(C) OF THE ACT. HENCE, WE DO NOT SEE ANY INFIRMITY IN THE ORDERS OF THE CIT(A) AND, ACCORDINGLY, UPHOLD THE SAME. 6. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON 17 / 10 /20 20 . S D/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 17 / 10 /20 20 B.K.PARIDA, SPS (OS) COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : ASST. CIT, CENTRAL CIRCLE, CUTTACK 2. THE RESPONDENT. M/S. BISHANDAYAL JEWELERS, NAYASARAK, CUTTACK 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//