Appeal Details
Counselvise Citation
[2017] 128 COUNSELVISE.COM (IT) 2232 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
8 month(s) 13 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
15-05-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Not Allotted
Next Hearing Date
05-05-2017
Assessment Year
2005-2006
Appeal Filed On
02-09-2016
Judgement Text
SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 1 OF 10 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE , ' .., ( BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER SMT. SEEMA MEHTA E-3 ARERA COLONY BHOPAL PAN: ABFPM 9681H V. ACIT 3(1) BHOPAL ) / APPELLANT +,) / RESPONDENT I.T.A. NO. 907/IND/2016 ASSESSMENT YEAR 2005-06 SHRI SURENDRA MEHTA E-3 ARERA COLONY BHOPAL PAN: AFSPM 8170Q V. ACIT 3(1) BHOPAL ) / APPELLANT +,) / RESPONDENT I.T.A. NO. 909 & 910/IND/2016 ASSESSMENT YEAR 2004-05 & 2007-08 SHRI SANJAY MEHTA E-3 ARERA COLONY BHOPAL PAN: ABFPM 9882E V. ACIT 3(1) BHOPAL ) / APPELLANT +,) / RESPONDENT I.T.A. NO. 913,914 & 915/IND/2016: ASSESSMENT YEAR: 2004-05, 2005-06, 2006-07 SHRI SANDEEP MEHTA E-3 ARERA COLONY BHOPAL PAN: ABFPM 9683F V. ACIT 3(1) BHOPAL ) / APPELLANT +,) / RESPONDENT ) - / APPELLANT BY SHRI YASHWANT SHARMA, I.T.A. NO. 905&906/IND/2016 ASSESSMENT YEAR: 2005-06 & 2006-07 SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 2 OF 10 CA +,) - / RESPONDENT BY SHRI MOHD. JAVED, SR. D.R. - / DATE OF HEARING 05 - 05 - 2017 2 - / DATE OF PRONOUNCEMENT 15-05-2017 / O R D E R PER BENCH. 1. THE APPEALS BY FOUR ASSESSEES ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)[ IN SHORT CIT(A)] DATED 10-06-2016 AND 01-07-2016 FOR THE 8 ASSESSME NT YEAR AS MENTIONED ABOVE WHEREBY CHALLENGING THE CONFIRMA TION OF PENALTY U/S. 271(1)(C)IMPOSED BY THE ACIT 3(1) BHOP AL. THESE APPEALS ARE BELONGS TO SAME GROUP, FACTS OF WHICH A RE IDENTICAL, AND SAME WERE BUNCHED AND HEARD TOGETHER AND BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF BREVITY AND CONVENIENCE. 2. ADDITIONAL GROUND OF APPEAL : DURING THE CURRENCY OF APPEAL, THE ASSESSEES HAVE ALSO FILED AN ADDITIONA L GROUND OF APPEAL AGAINST THE PENALTY ORDER FOR ALL THE 8 ASSE SSMENT YEARS WHICH READ AS UNDER :- THAT, WITHOUT PREJUDICE TO ABOVE, AND ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, SINCE THE NOTICE ISSUED U/S. 271(1)(C) DID NOT SPECIFY SPECIFIC CHAR GE AGAINST THE ASSESSEE AS TO WHETHER IT WAS ISSUED FOR CONCEA LMENT SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 3 OF 10 OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURA TE PARTICULARS OF INCOME, IT WAS WITHOUT JURISDICTION, UNLAWFUL AND AB-INITIO VOID. 3. THE LD. A.R. SUBMITTED THAT THE ABOVE LEGAL GROUND BE ADMITTED AS IT IS BEING PURELY A LEGAL ISSUE, GOES TO THE ROOT OF THE MATTER AND NO FURTHER INQUIRY IS REQUIRED FOR DECIDING THE SAME AS ALL FACTS ARE ALREADY ON RECORD AND ISSUE A RISE OUT OF IMPUGNED ORDER. WE HAVE CONSIDERED THE FACTS AND MA TERIAL ON RECORD. THE ADDITIONAL GROUND BEING LEGAL ONE, HENC E, ADMITTED. RELIANCE IS PLACED ON THE DECISION OF APEX COURT I N THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 I TR 383(SC) WHEREIN IT WAS HELD THAT THE ADDITIONAL GROUND OF A PPEAL CAN BE ADMITTED WHERE THE ISSUE INVOLVED IS PURE QUESTIO N OF LAW NOT INVOLVING ANY INVESTIGATION OF FACTS. NOW WE WILL D EAL WITH THE ADDITIONAL GROUND ON LAW AND MERIT. 4. FACTS IN THE BRIEF EMANATING FROM THE ASSESSMENT ORDERS/PENALTY ORDER IN THE CASE OF SMT. SEEMA MEHT A FOR THE ASSESSMENT YEAR 2004-05 ARE BEING DISCUSSED AS SAME ARE IDENTICAL IN THE CASE OF OTHER ASSESSEES. A SEARCH UNDER SECTION 132 OF THE ACT WAS CONDUCTED ON 30-05 2008 IN THE C ASE OF ASSESSEE GROUP COVERING THE RESIDENTIAL AS WELL AS BUSINESS PREMISES. EX-CONSEQUENTI , NOTICE UNDER SECTION 153A WAS ISSUED, IN RESPONSE TO WHICH RETURN OF INCOME WAS F ILED AND SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 4 OF 10 ASSESSMENT WAS MADE UNDER SECTION 153A READ WITH SE CTION 143 (3) BY MAKING ADDITION ON VARIOUS ISSUES LIKE I NCOME FROM OTHER SOURCES, CONTRACT RECEIPTS, BANK DEPOSITS ETC . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS OFFERED PROFIT @ 8% ON GROSS CONTRACT RECEIPTS, ON PRESUMPT IVE BASIS. HOWEVER, THE AO ADDED THAT GROSS AMOUNT OF CONTRAC T RECEIPTS AS INCOME OF THE ASSESSEE FOR ALL THE YEARS. THE SA ID ADDITION WAS COME TO BE CONFIRMED BY THE CIT (A) AS WELL AS BY THE TRIBUNAL. THEREFORE, THE AO LEVIED A PENALTY ON THI S ISSUE UNDER SECTION 271(1)(C) OF THE ACT. 5. THE LEARNED AR FOR THE ASSESSEE DREW OUR ATTENTION TO PAGE NUMBER 26 OF THE ASSESSMENT ORDER AND SUBMITTE D THAT NO SATISFACTION RECORDED ON THE IMPUGNED ISSUE ALTHOUG H ITEMIZED SATISFACTION RECORDED FOR OTHER ISSUES OF ADDITION. THE LEARNED AR POINTED OUT BY REFERRING PAGE NO 4 OF PAPER BOOK THAT EVEN IN THE SHOW CAUSE NOTICE DATED 31-12-2010, ISSUED B Y THE AO, NO CHARGE AT ALL WAS LEVIED, WHAT TO TALK OF THE SP ECIFIC CHARGE AS TO UNDER WHICH LIMB OF SECTION 271(1)(C), PENALT Y PROCEEDINGS HAD BEEN INITIATED I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME, OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THUS THE AO HAD NOT RECORDED SATISFACTION ON THE IM PUGNED ISSUES ON WHICH PENALTY HAS BEEN LEVIED. ALTHOUGH, INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) IS MENT IONED ON SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 5 OF 10 OTHER ISSUES WHICH ARE NOT SUBJECT MATTER OF PENALT Y. HENCE, THE GENERAL MENTION IN THE ORDER, TO LEVY PENALTY UNDE R SECTION 271(1)(C) WOULD NOT COME IN AID TO THE AO AS ENUMER ATED IN SECTION 271(1B) OF THE ACT. THEREFORE, THE LEARNED AR BY PLACING RELIANCE IN THE CASE OF ACIT V. M.P. STATE TOURISM DEVELOPMENT CORPORATION & OTHERS [2015] 26 ITJ 225 (INDORE), DC IT V. NEPA LTD. [2015] 58 TAXMANN.COM 137 (INDORE), CIT V. SSA `S EMERALD MEADOWS [2016] 73 TAXMANN.COM 248 (SC), CIT V. MANJ UNATH COTTON GINNING FACTORY [2013] 359 ITR 565 (KARNATAK A) AND CIT V. SAMSON PERICHERY [ I.T.A. NO. 1154 OF 2014 D ATED 5 TH JANUARY 2017] OF HON`BLE BOMBAY HIGH COURT CONTENDE D THAT PENALTY LEVIED IS UNLAWFUL ON THIS GROUND ALONE AND VOID-AB- INITIO, THEREFORE, IT MAY BE CANCELLED. EVEN OTHERW ISE, ON MERIT THE INCOME OF OFFERED BY THE ASSESSEE ON PRESUMPTIV E BASIS AT THE RATE OF 8% OF THE GROSS CONTRACT RECEIPTS, WHIC H WAS NOT ACCEPTED BY THE AO AND THE COMPLETELY GROSS RECEIPT S WERE CONSIDERED AS INCOME OF THE ASSESSEE ON WHICH NO PE NALTY PROCEEDINGS INITIATED. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, NO PENALTY IS LEVIABLE AS THERE IS NO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 6. ON THE OTHER HAND, THE LEARNED SR. D.R. RELIED ON T HE ORDERS OF LOWER AUTHORITIES. SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 6 OF 10 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SETTLED PRINCIPAL OF LAW THAT THE PROVISIONS OF SEC TION 271(1)(C) ON THEIR PLAIN READING WOULD REQUIRE PROPER APPLICA TION OF MIND AND RECORDING AT LEAST BARE MINIMUM OPINION ON THE PART OF THE AO THAT A CASE FOR INITIATION OF PENALTY PROCEEDING S WAS MADE OUT AS THERE WAS CONCEALMENT OF INCOME, OR THE INCO RRECT PARTICULARS OF INCOME HAD BEEN FURNISHED BY THE ASS ESSEE, WITH INTENTION TO AVOID PAYMENT OF TAX. IN THE INSTANT C ASE, WE FIND FROM THE PERUSAL OF THE ASSESSMENT ORDER THAT THE A O HAS RECORDED SATISFACTION WITH REGARD TO OTHER SUM OR I SSUES OF ADDITION FOR INITIATION OF PENALTY PROCEEDINGS UNDE R SECTION 271(1)(C) OF THE ACT BUT ON THE VERY ISSUE ON WHICH IMPUGNED PENALTY US 271(1)(C) IS IMPOSED , THERE IS NO INDIC ATION AS COULD BE SEEN FROM PAGE NO 26 OF ASSESSMENT ORDER IN THE CASE OF SMT. SEEMA MEHTA. THUS, NO SPECIFIC CHARGE HAS BEEN MENTIONED IN THE INITIATION OF PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER. WE ALSO FIND THAT THE SHOW CAUSE NOTICE ISSUED FOR LEVY OF PENALTY, PLACED AT PAPER BOOK PA GE NO 4, THAT THERE IS NO MENTION ON WHAT ACCOUNT THE PENALTY PRO CEEDING ARE BEING INITIATED. THIS INDICATES THAT THERE IS NO AP PLICATION OF MIND ON THE PART OF THE AO WHILE ISSUING PENALTY NO TICE. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT TH E AO HAS NOT SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 7 OF 10 MADE OUT A CASE FOR LEVY OF PENALTY US 271(1)(C) OF THE ACT , HENCE, THE SAME ARE NOT SUSTAINABLE IN LAW. THIS VI EW IS ALSO SUPPORT BY THE DECISION OF HON`BLE KARNATAKA HIGH C OURT IN THE CASE OF CIT V. MANJUNATH COTTON GINNING FCATORY [20 13] 359 ITR 565 (KARN) WHEREIN IT WAS HELD AS UNDER: 61. THE ASSESSING OFFICER IS EMPOWERED UNDER THE A CT TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED I N THE COURSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF T OTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THU S THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT A CASE OF FURNISHING OF INACCURATE PARTICULARS. THE APEX COURT IN THE CASE OF T. ASHOK PAI V. CIT REPORTED IN [2007] 292 ITR 11 (SC) AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HIGH COURT IN THE CASE OF CIT V. MANU ENGINEERING WORKS REPORTED IN [1980] 122 ITR 306 (GUJ) AND THE DELHI HIGH COURT IN THE CASE OF CIT V. VIRGO MARKETING REPORTED IN [2008] 171 TAXMAN 156 , HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 8 OF 10 LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE, WHEN THE ASS ESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CON CEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIM ILAR IS THE CASE FOR FURNISHING INACCURATE PARTICULARS OF I NCOME. THE STANDARD PRO FORMA WITHOUT STRIKING OF THE RELE VANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NON-APPLICA TION OF MIND. 8. THE LD. A.R. RELIED IN THE CASE OF CIT V. SSA`S EME RALD MEADOWS [2016] 73 TAXMANN.COM 248 (SC) WHEREIN IT W AS HELD THAT NO PENALTY WITHOUT SPECIFYING WHICH LIMB OF SE CTION 2771 WOULD BE APPLICABLE, SLP WAS DISMISSED THE HEAD NOT E OF WHICH READS AS US UNDER:- SECTION 274 , READ WITH SECTION 271(1)(C) , OF THE INCOME-TAX ACT, 1961 - PENALTY - PROCEDURE FOR IMPOSITION OF ( CONDITIONS PRECEDENT) - ASSESSMENT YEAR 2009-10 - TRIBUNAL, RE LYING ON DECISION OF DIVISION BENCH OF KARNATAKA HIGH COU RT RENDERED IN CASE OF CIT V. MANJUNATHA COTTON & GINN ING FACTORY [2013] 359 ITR 565/218 TAXMAN 423/35 TAXMANN.COM 250 , ALLOWED APPEAL OF ASSESSEE HOLDING THAT NOTICE ISSUED BY ASSESSING OFFICER UND ER SECTION 274 READ WITH SECTION 271(1)(C) WAS BAD IN LAW, AS SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 9 OF 10 IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271( 1)(C) PENALTY PROCEEDINGS HAD BEEN INITIATED, I.E., WHETH ER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME - HIGH COURT HELD THAT MATTER WAS COVERED BY AFORESAID DECISION OF DIVISIO N BENCH AND, THEREFORE, THERE WAS NO SUBSTANTIAL QUESTION O F LAW ARISING FOR DETERMINATION - WHETHER SINCE THERE WAS NO MERIT IN SLP FILED BY REVENUE, SAME WAS LIABLE TO B E DISMISSED - HELD, YES [PARA 2] [IN FAVOUR OF ASSESS EE] 9. SIMILAR VIEW WERE ALSO EXPRESSED BY HON`BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. SHRI SAMSON PERINC HERY I.T.A. NO. 1154 OF 2014 DATED 5 TH JANUARY 2017. 10. IN THE LIGHT OF ABOVE WE FIND THAT THE AO HAS NOT S PECIFY THE SPECIFIC CHARGE ON WHICH PENALTY HAS BEEN INITI ATED IN THE ASSESSMENT ORDER NOR IN PENALTY SHOW CAUSE NOTICE AND THEREFORE, IT IS NOT CLEAR AS TO THE LIMB FOR WHIC H IT IS LEVIED AND THE POSITION BEING UNCLEAR HERE THE PENALTY IS NOT SUSTAINABLE. THEREFORE, CONSIDERING THE CONSISTENT VIEW EXPRESSE D BY THE HON`BLE HIGH COURTS AND AFFIRMED BY HON`BLE SUPRE ME COURT , WE HOLD THAT ADDITIONAL GROUND RAISED IS ALLOWED ON TECHNICAL GROUND FOR THE IMPUGNED PENALTY LEVIED IN ALL THE E IGHT ASSESSMENT YEARS UNDER CONSIDERATION IN RESPECT OF FOUR SMT. SEEMA MEHTA AND OTHERS/ I.T.A. NO. 905 TO907, 909 TO910 AND 913 TO 915/IND/2016/AY.:04-05 TO 04-0 7 PAGE 10 OF 10 ASSESSEE-APPLICANT AND PENALTY U/S. 271(1)(C)IS NOT SUSTAINABLE. HENCE, WE DO NOT FIND IT NECESSARY TO ADDRESS THE I SSUES URGED ON MERITS. ACCORDINGLY WE SET ASIDE THE ORDERS OF T HE LD. CIT (A) AND DIRECT THE AO TO DELETE THE PENALTY LEVIED UNDE R SECTION 271 (1)(C) OF THE ACT FOR ALL THE 8 ASSESSMENT YEARS UN DER CONSIDERATION IN ALL THE APPEALS OF FOUR ASSESSEE` S UNDER CONSIDERATION. 11. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSESSEE FOR EIGHT-ASSESSMENT YEARS AS MENTION IN ABOVE FORMAT S TAND ALLOWED. 12. THE ORDER PRONOUNCED IN THE OPEN COURT ON 15.5.201 7 SD/- (C. M. GARG) SD/- (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15 TH MAY, 2017 OPM
Mehul