Srinivasa Murthy Uppala, Hyderabad, Hyderabad V. ACIT, Circle-8(1), Hyderabad, Hyderabad

ITA 939/HYD/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2540 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: S RAMA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A SMC BENCH: HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA. NO. 939 /HYD/ 2017 ASSESSMENT YEAR: 2009 - 2010 SRINIVASA MURTHY UPPALA, HYDERABAD. AAJPU 2965 R VS. ACIT, CIRCLE - 8(1), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI S. RAMA RAO FOR REVENUE : SMT. SUMAN MALIK, DR DATE OF HEARING : 21.02 .2018 DATE OF PRONOUNCEMENT : 21.02.2018 ORDER PER D. MANMOHAN , VP. THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A) - 2, HYDERABAD AND IT PERTAINS TO ASSESSMENT YEAR 2009 - 2010. 2. PENALTY LEVIED BY THE A.O U/S 271(1)(C) HAVING BEEN CONFIRMED BY THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL CONTENDING INTER ALIA THAT THE NOTICE ISSUED U/S 271(1) (C) IS BAD IN LAW INASMUCH AS IT DOES NOT INDICATE WHETHER PENALTY PROCEEDINGS ARE INITIATED FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. RESULTANTLY, THE ORDER PASSED U/S 271(1)(C) IS NOT VALID. 3. LD COUNSEL FOR TH E ASSESSEE PLACED BEFORE THE TRIBUNAL A COPY OF THE ORDER OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SSAS EMERALD MEDOWS (73 TAXMANN.COM PAGE 248) (SC) AND AN UNREPORTED DECISION OF THE HONBLE HIGH COURT OF JUDICATURE AT HYDERABAD IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX VS. SMT. BAISETTY REVATHI (I.T.T.A. NO.664 OF 2016) DATED 13.07.2017 TO SUBMIT THAT IF THE NOTICE 2 DOES NOT SPECIFY REASON FOR WHICH THE PENALTY PROCEEDINGS ARE INITIATED, THE ENTIRE PROCEEDINGS STAND VITIATED. HE ALSO ADVERTED MY ATTENTION TO THE NOTICE ISSUED BY THE A.O. U/S 271(1)(C) OF THE ACT TO HIGHLIGHT THAT IT WAS ISSUED WITHOUT SPECIFYING THE REASONS FOR INITIATING THE PENALTY PROCEEDINGS. IN OTHER WORDS, THE NOTICE DOES NOT SPECIFY WHETHER THE PENALTY PROCEED INGS HAVE BEEN INITIATED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR FOR BOTH. 4. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUBMITS THAT THE ASSESSEE WAS GIVEN AMPLE OPPORTUNITY DURING THE COURSE OF PENALTY PROCEEDINGS WHEREIN IT WAS STATED THAT THE PENALTY PROCEEDINGS WERE INITIATED AS PER THE PROVISIONS OF EXPLANATION (1) OF 271(1)(C) OF THE ACT AND THUS IT IS A FIT CASE FOR LEVY OF PENALTY. 5. I HAVE C AREFULLY CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE RECORD. THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT AS WELL AS THE HONBLE SUPREME COURT (SUPRA) MANDATES SPECIFICATION OF THE NATURE OF PROCEEDINGS INITIATED BY THE ASSESSING OFFICER AT THE TIME OF ISSUING OF NOTICE AS OTHERWISE THE PROCEEDINGS WOULD BECOME INVALID. THERE IS NO DISPUTE WITH REGARD TO THE FACTS IN THE INSTANT CASE. HAVING REGARD TO THE BINDING PRECEDENTS, I AM OF THE VIEW THAT THE PENALTY PROCEEDINGS INITIATED BY THE ASSESSING OF FICER ARE BAD IN LAW AND THEREFORE, THE ORDER PASSED BY THE A.O. AS WELL AS LD. CIT(A) ARE HEREBY SET ASIDE AND THE PENALTY ORDER IS QUASHED. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 21 ST FEBRUARY, 2018. S D / - (D. MANMOHAN) VICE PRESIDENT HYDERABAD, DATED: 21 ST FEBRUARY , 2018. OKK, SR.PS 3 COPY TO 1. SRINIVASA MURTHY UPPALA, 8 - 3 - 903/3/F3, FLAT NO.303, SURABHI LOTUS NAGARJUNA NAGAR COLONY, AMEERPET, HYDERABAD 500 073. 2. ACIT, CIRCLE 8(1), SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 3. CIT (A) - 2, HYDERABAD. 4. PR. COMMISSIONER OF INCOME TAX - 2, HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE