Ramanbhai Gordhanbhai Patel, Ahmedabad V. Asstt. Commissioner of Income Tax,Circle-3(2), Ahmedabad

ITA 913/AHD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0352 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS VIBHA BHALLA
• Assessee Lawyers: B R POPAT
• Section: 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER. ITA. NO. 913/AHD/2016 (ASSESSMENT YEAR:2008-09) RAMANBAHI GORDHANBHAI PATEL 1964, THALTEJ GAM, FULWAD, THALTEJ, AHMEDABAD 380 059 APPELLANT VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 3(2), AHMEDABAD RESPONDENT PAN: ASUPP2614B /BY ASSESSEE : SHRI B. R. POPAT, A.R. /BY REVENUE : MRS. VIBHA BHALLA, CIT D.R. /DATE OF HEARING : 19.09.2016 /DATE OF PRONOUNCEMENT : 14.10.2016 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 ARISES AGAINST THE CIT-3, AHMEDABADS ORDER DATED 22.03.2016, IN PROCE EDINGS U/S.263 OF THE INCOME TAX ACT. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUSED. ITA NO.913/AHD/2016 (RAMANBHAI G. PATEL VS. ACIT) A.Y. 2008-09 - 2 - 2. THE ASSESSEE PLEADS FOLLOWING SUBSTANTIVE GROUND S IN THE INSTANT APPEAL: 1. INVOKING THE JURISDICTION AND CONSEQUENTLY PASS ING AN ORDER UNDER SECTION 263 OF THE ACT; 2. BY HOLDING THAT NON-INITIATION OF PENALTIES UNDE R SECTION 271(1)(C) AND 271F IN THE BODY OF THE ASSESSMENT ORDER RENDERS TH E SAME ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, SO AS TO AS SUME JURISDICTION UNDER SECTION 263 OF THE ACT. WHILE HOLDING THIS, HE DISBELIEVED THE FACT (FOR UNTENABLE REASONS AS SPECIFIED IN THE ORDER) THAT THE PENALTY UNDER SECT ION 271(1)(C) WAS VERY MUCH INITIATED IN THE BODY OF THE ORDER ITSELF AND CONSE QUENTIAL NOTICE UNDER SECTION 274 WAS VERY MUCH SERVED UPON THE APPELLANT ALONG WITH THE SAME; 3. WITHOUT PREJUDICE, HOLDING THAT THE ORDER WHICH IS AVAILABLE IN THE RECORD OF THE AO IS TO BE TREATED AS CORRECT ASSESSMENT OR DER AND THE SAME IS TO BE TAKEN COGNIZANCE OF. THE PCIT OUGHT TO HAVE APPRECIATED T HAT WHEN THE ORDER SERVED UPON THE APPELLANT WAS ADMITTEDLY A DIFFERENT ONE A ND WHEN THE AO HAS ADMITTEDLY ACCEPTED THIS FACT, IT HAS TO BE THE ORDER THAT IS PASSED AND SERVED UPON THE APPELLANT WHICH IS TO BE CONSIDERED AS VALID AND NO T THE ONE WHICH WAS FOUND IN THE DEPARTMENTAL RECORD. 3. WE COME TO THE RELEVANT FACTS NOW. THE WHOLE IS SUE APPEARS TO HAVE ARISEN FROM THE ASSESSEE/APPELLANTS LAND DEVELOPME NT AGREEMENT DATED 15.05.2007 BY REGISTERED DEED NO. 2075 WITH SHREE S URGOVIND REALTORS LTD. REGARDING HIS LAND AT SURVEY NO. 541, VILLAGE THALT EJ, DIST. AHMEDABAD. HE RECEIVED PAYMENT OF RS.40,94,676/-. THE ASSESSEE D OES NOT APPEAR TO HAVE FILED ANY RETURN. THE ASSESSING OFFICER ISSUED SEC TION 148 NOTICE. THE ASSESSEE FILED RETURN ON 24.01.2013 DECLARING TOTAL INCOME OF RS.22,88,620/-. THE ASSESSING OFFICER THEREAFTER FRAMED RE-ASSESSM ENT ON 28.01.2014 ACCEPTING ASSESSEES RETURN. 4. THIS CASE FILE INDICATES THAT THE SOLE BONE OF C ONTENTION BETWEEN THE PARTIES IS ABOUT CORRECTNESS OF THE ABOVE RE-ASSESS MENT ORDER DATED 28.01.2014. THE ORDER FORMING PART OF THE CASE REC ORD READS THAT THE ASSESSING OFFICER/DCIT, CIRCLE-6, AHMEDABAD, HAD IN ITIATED SECTION 271(1)(C) PENALTY PROCEEDINGS ALLEGING CONCEALMENT OF INCOME. LD. COUNSEL ITA NO.913/AHD/2016 (RAMANBHAI G. PATEL VS. ACIT) A.Y. 2008-09 - 3 - ALSO PRODUCES ORIGINAL OF THIS ORDER BEFORE US IN T HE COURSE OF HEARING. THE CIT HOWEVER APPEARS TO HAVE ISSUED SECTION 263 NOTI CE DATED 22.01.2016 STATING THEREIN THAT THE ASSESSING OFFICER HAD NOT INITIATED SECTION 271(1)(C) EXPLANATION 3 AND SECTION 271F PENALTY PROCEEDINGS AGAINST THE ASSESSEE. THIS TAX PAYER APPEARED BEFORE THE CIT. HE INTER A LIA PLEADED THAT THE ASSESSING OFFICER HAD DULY INITIATED SECTION 271(1) (C) PENALTY PROCEEDINGS. HIS FURTHER CASE WAS THAT SECTION 263 REVISIONAL PR OCEEDINGS COULD NOT BE INVOKED FOR THE REASON THAT AN ASSESSING OFFICER HA S NOT BROUGHT INTO ACTION PENAL PROVISIONS UNDER THE ACT AS PER CASE LAW CIT VS. PARMANAND PATEL (2005) 278 ITR 3 (GUJ.) AND CIT VS. MANILAL TARACHA ND (2002) 254 ITR 630 (GUJ.). THE CIT OBSERVES IN HIS ORDER UNDER CHALLE NGE THAT THEIR LORDSHIPS SUBSEQUENT JUDGMENT IN CIT VS. J P CONSTRUCTION TAX APPEAL NO. 2581/2009 DECIDED ON 22.10.2013 DISTINGUISHES FORMER TWO PREC EDENTS BY TAKING NOTE OF AMENDMENT IN SECTION 271(1)(C) OF THE ACT. HE THER EAFTER COMES TO ASSESSING OFFICERS ORDER AND HOLDS THAT THE OFFICE R CONCERNED HAD FILED A CLARIFICATION DATED 21.03.2016 CONFIRMING THAT ASSE SSMENT ORDER NOT INITIATING PENALTY PROCEEDINGS AVAILABLE IN THE ASSESSMENT REC ORD IS THE CORRECT ORDER. THE CIT THEN TAKES INTO COGNIZANCE ASSESSEES NON F ILING OF REPLY IN RESPONSE TO SECTION 271(1)(C) NOTICE TO CONCLUDE THAT THE AS SESSING OFFICER HAD INDEED OMITTED TO INITIATE THE IMPUGNED PENAL ACTION. HE THUS DIRECTS THE ASSESSING OFFICER TO MAKE A FRESH ASSESSMENT. THIS LEAVES TH E ASSESSEE AGGRIEVED. 5. WE HAVE HEARD RIVAL SUBMISSIONS. THE DISPUTE AD MITTEDLY BETWEEN THE PARTIES IS AS TO WHETHER THE ASSESSING OFFICER IN H IS ORDER DATED 28.01.2014 HAD IN FACT INSTITUTED PENAL ACTION OR NOT AGAINST THE ASSESSEE. IT HAS COME ON RECORD THAT THE ASSESSMENT ORDER FORMING PART OF TH E CASE FILE CONTAINS PENALTY INITIATION STIPULATION. THERE IS NO SUCH ORDER FIL ED AT THE REVENUES BEHEST IN THE COURSE OF ARGUMENTS BEFORE US. THE ASSESSEES ASSESSMENT ORDER FILED ALONG WITH THE APPEAL CONTAINS SIGNATURES OF THE AS SESSING OFFICER. THE SAME ITA NO.913/AHD/2016 (RAMANBHAI G. PATEL VS. ACIT) A.Y. 2008-09 - 4 - GOES AGAINST ASSESSING AUTHORITYS CLARIFICATION DA TED 09.03.2016 SUBMITTED BEFORE THE CIT(A). WE AFFORDED SUFFICIENT TO THE R EVENUE TO PLACE ON RECORD THE SAID CLARIFICATION ALONG WITH THE ASSESSMENT OR DER NOT INITIATING PENALTY PROCEEDINGS. THE SAME HAS NOT BEEN FILED. ALL THI S MAKES US TO CONCLUDE THAT THE ASSESSMENT ORDER IN THE INSTANT APPEAL FILED IS THE CORRECT ASSESSMENT ORDER. THE CIT IS THEREFORE HELD TO HAVE ERRED IN EXERCISING SECTION 263 JURISDICTION FOR THE REASON THAT THE ASSESSING OFFI CER HAD NOT INITIATED THE IMPUGNED PENALTY PROCEEDINGS. THIS EXERCISE OF REV ISIONAL JURISDICTION IS ACCORDINGLY DECLARED TO BE NOT SUSTAINABLE SINCE BA SED ON A WRONG ASSUMPTION OF THE RELEVANT FACTS FORMING THE VERY BACKBONE OF SECTION 263. WE ACCEPT ASSESSEES ARGUMENTS ON FACTS ACCORDINGLY. 6. THIS ASSESSEES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF OCTOBER, 2016.] SD/- SD/- (MANISH BORAD) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 14/10/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. !'# $%% , , / DR, ITAT, AHMEDABAD 6. #() / GUARD FILE. BY ORDER/ , / ,