Shri Mahesh Chand, Kanpur V. Income Tax Officer-2(2), Kanpur

ITA 900/LKW/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2029 (ITAT-LUCKNOW)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MAHESH KUKREJA ITP
• Keywords: Principle of natural justice

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.900/LKW/2014 ASSESSMENT YEAR:2008-2009 SHRI MAHESH CHAND, 122/577, SHASTRI NAGAR, KANPUR. PAN ABMPC 6306 J VS. THE INCOME TAX OFFICER, 2(2) KANPUR (APPELLANT) (RESPONDENT) A SSESSEE BY SHRI MAHESH KUKREJA, ITP RE VENUE BY SMT. ALKA SINGH, DR DATE OF HEARING 1 2 /0 8 /201 5 DATE OF PRONOUNCEMENT 3 1 . 0 8 . 2 0 1 5 O R D E R PER SUDHANSHU SRIVASTAVA , J.M. : THIS IS ASSESSEES APPEAL AGAINST THE ORDER PASSED BY THE LD. CIT(A)-II, DEHRADUN (CONCURRENT CHARGE OF CIT(A)-II, KANPUR) D ATED 15.10.2014 AND PERTAINING TO A.Y. 2008-09 WHEREIN THE LD. CIT(A) HAS CONFIRME D THE PENALTY IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT TH E ACT) EX PARTE. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) -II, DEHRADUN (CONCURRENT CHARGE OF COMMISSIONER OF INCO ME TAX (A)-II, KANPUR) CAMP AT KANPUR HAS BEEN WRONG IN LA W AND ON FACTS IN CONFIRMING THE PENALTY OF RS.12,500/- IMPO SED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2 2. THAT THE PENALTY OF RS.12,500/- IMPOSED U/S 271( 1)(C) OF THE INCOME TAX ACT, 1961 BY THE ASSESSING OFFICER AND S USTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (A)-II, D EHRADUN (CONCURRENT CHARGE OF COMMISSIONER OF INCOME TAX (A )-II, KANPUR) CAMP AT KANPUR IS WITHOUT CONSIDERING THE F ACTS OF THE CASE WHICH IS UNJUSTIFIED AND ARBITRARY. 3. THAT THE ORDER PASSED BY THE LEARNED COMMISSIONE R OF INCOME TAX (A)-II, DEHRADUN (CONCURRENT CHARGE OF COMMISSIONER OF INCOME TAX (A)-II, KANPUR) CAMP AT KANPUR IS BAD IN LAW, ON FACTS AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 3. IT IS SEEN THAT VIDE ASSESSMENT ORDER DATED 11.1 0.2010 PASSED U/S 143(1) OF THE ACT, FOUR ADDITIONS WERE MADE TO THE RETURNED INCOME AS UNDER:- (I) ADDITION OF RS.43,730/- ON ACCOUNT OF CHANGE IN INTEREST RATE FROM 18% TO 12% ON MONEYS LENT BY THE ASSESSEE. (II) ADDITION OF RS.30,000/- ON ACCOUNT OF LOW WITH DRAWALS. (III) ADDITION OF RS.14,500/- ON ACCOUNT OF UNSUBST ANTIATED AGRICULTURAL INCOME. (IV) ADDITION OF RS.915/- ON ACCOUNT OF INTEREST ON INCOME TAX REFUND NOT REFLECTED IN THE RETURN OF INCOME. 4. IT IS FURTHER SEEN THAT THROUGH THE PENALTY OR DER U/S 271(1)(C) DATED 26.04.2011, THE AO HAS IMPOSED A PENALTY OF RS. 12, 500/- ON ALL THE ADDITIONS AS ENUMERATED ABOVE IN PARA 3. THE OPERATIVE PORTIO N OF THE PENALTY ORDER (AS CONTAINED IN PARA 14 AND 15 ON PAGE 3 OF THE P ENALTY ORDER READ AS UNDER: ' 14. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE FOREGOING DECISION AND FOLLOWING THE DOCTRINE OF ' STARE DECISIS' THERE IS NOT EVEN AN IOTA OF DOUBT IN MY MIND THAT EXPLANAT ION 1 OF SECTION 271(1)(C) IS CLEARLY APPLICABLE IN THE CASE OF THE ASSESSEE AND CALLS FOR LEVY OF APPROPRIATE PENALTY. 3 15. THE MINIMUM AND MAXIMUM PENALTY, WHICH IS LEVI ABLE, IN THIS CASE COMES TO RS. 12,183/- AND RS. 35,549/- RESPECTIVEL Y. HOWEVER, IT WOULD SERVE THE ENDS OF JUSTICE IF PENALTY OF RS. 12,500/- IS IMPOSED ON THE ASSESSEE AND I ORDER ACCORDINGLY. ISSUE NOTICE OF DEMAND AND CHALLAN.' 5. WITHOUT GOING INTO THE MERITS OF EACH ISSUE ON W HICH THE PENALTY HAS BEEN IMPOSED, IT IS EVIDENT FROM THE PENALTY ORDER THAT THE AO HAS NOT STATED CLEARLY WHETHER THE PENALTY IS BEING LEVIED FOR 'CO NCEALMENT OF INCOME' OR FOR 'FURNISHING INACCURATE PARTICULARS OF INCOME'. IN O UR CONSIDERED OPINION, IN THE ABSENCE OF CLEAR FINDING IN THE PENALTY ORDER, THE SAME IS BAD IN LAW. REFERENCE MAY BE MADE TO THE JUDGMENT OF THE HON'BL E HIGH COURT OF GUJARAT IN CIT VS MANU ENGINEERING WORKS (1980) 122 ITR (GU J) WHEREIN THE HON'BLE HIGH COURT OBSERVED, ' WE FIND FROM THE ORDER OF THE IAC IN THE PENALTY PROCEEDINGS, THAT IS, THE FINAL CONCLUSION AS EXPRE SSED IN PARA. 4 OF THE ORDER : 'I AM OF THE OPINION THAT IT WELL HAVE TO BE SAID THAT TH E ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PART ICULARS OF SUCH INCOME'. NOW, THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOT ICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CASE OR A QUASI-CRI MINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDING AS TO WH ETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PA RTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR-CUT F INDING WAS REACHED BY THE IAC AND ON THAT GROUND ALONE, THE ORDER OF PENALTY PASS ED BY THE INSPECTING ASSISTANT COMMISSIONER WAS LIABLE TO BE STRUCK DOWN.' 6. WE HAVE CONSIDERED ALL THE FACTS OF THE CASE. TH E PENALTY ORDER SHOWS THAT NO CLEAR CUT FINDING HAS BEEN REACHED AS TO WH ETHER THE PENALTY WAS 4 IMPOSED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS. IN OUR CONSIDERED OPINION AND RESPECTFULLY FOLLOWING T HE RATIO LAID DOWN BY THE HON'BLE GUJARAT HIGH COURT IN CIT VS MANU ENGINEER ING WORKS (SUPRA), WE HOLD THAT PENALTY U/S 271(1)(C) CANNOT BE IMPOSED W ITHOUT RECORDING A CLEAR CUT FINDING IN THE PENALTY ORDER. WE ACCORDINGLY DE LETE THE PENALTY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLO WED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- ( A. K. GARODIA ) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIA L MEMBER AKS DATED: 31/08/2015 COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. R EGISTRAR