M/s Sobhagia Sales Pvt. Ltd., Ludhiana V. ACIT, CC-2, Ludhiana

ITA 96/CHANDI/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5665 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 31-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority
• Section: 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NOS. 96 TO 97/CHD/2019 / ASSESSMENT YEARS : 2013-14 & 2014-15 M/S SOBHAGIA SALES PRIVATE LIMITED, VILLAGE SANECH,G.T.ROAD, NEAR SAHNEWAL, LUDHIANA VS. THE ACIT, CENTRAL CIRCLE-2, LUDHIANA ! ' ./ PAN NO: AABCS5893F !#/ APPELLANT %& !# / RESPONDENT & ./ ITA NOS. 98/CHD/2019 / ASSESSMENT YEARS : 2014-15 M/S SOBHAGIA CLOTHING COMPANY, VILLAGE KANECH,G.T.ROAD, NEAR SAHNEWAL, LUDHIANA VS. THE ACIT, CENTRAL CIRCLE-2, LUDHIANA ! ' ./ PAN NO: AAAFS7606K !#/ APPELLANT %& !# / RESPONDENT '()* /ASSESSEE BY : SH. ASHWANI KUMAR, CA )* / REVENUE BY : SH. MANJIT SINGH, CIT DR + ,)( -' /DATE OF HEARING : 21.08.2019 ./ )( -' / DATE OF PRONOUNCEMENT : 27.09.2019 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE AS SESSEES AGAINST THE SEPARATE ORDERS DATED 10.12.2018 OF THE COMMISSIONER OF ITA NOS. 96 TO 98-CHD-2019 M/S SOBHAGIA SALES PVT LTD & SOBHAGIA CLOTHING CO., LUDHIANA 2 INCOME TAX (APPEALS)-2, JALANDHAR [HEREINAFTER REFE RRED TO AS CIT(A)] AGITATING THE LEVY OF PENALTY U/S 271AAB OF THE AC T AND FURTHER CONFIRMED BY THE LD. CIT(A) U/S 154 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SINCE THE APPEALS HAVING COMMON ISSUE INVOLVED W ERE HEARD TOGETHER, THEREFORE, THESE ARE BEING DISPOSED OFF B Y THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. FIRST, WE SHALL DEAL WITH APPEAL IN ITA NO. 96/CHD/2019 FOR THE ASSESSMENT YEAR 2013-14, WHEREIN, THE ONLY GROU ND RAISED BY THE ASSESSEE READS AS UNDER:- THAT ORDER PASSED U/S 154 OF THE INCOME TAX ACT, 1961 BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, JALANDHAR IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS NEITHER THERE WAS ANY MISTAKE MUCH LESS APPARENT MISTAKE IN THE ORDER DATED 15.3.2018 PASSED BY HIM AGAINST LEVY OF PENALTY OF RS. 2.50 LACS U/S 271AAB BY THE LD. ASSESSING OFFICER NOR WAS HE JUSTIFIED TO UPHOLD THE PENALTY ON MERITS. 4. THE ASSESSEE IN THIS APPEAL HAS CONTESTED THE CO NFORMATION OF PENALTY LEVIED BY THE ASSESSING OFFICER @ 10% OF TH E UNDISCLOSED INCOME UNDER SECTION 271AAB (1) OF THE INCOME TAX A CT. ITA NOS. 96 TO 98-CHD-2019 M/S SOBHAGIA SALES PVT LTD & SOBHAGIA CLOTHING CO., LUDHIANA 3 5. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE PENALTY U/S 271AAB OF THE ACT LEVIED BY TH E ASSESSING OFFICER WAS VOID ABINITIO BECAUSE HE HAS NOT TAKEN THE PRIOR APPROVAL UNDER SECTION 274(2) OF THE ACT, WHICH WAS ACCORDED VIDE LETTER NO. 1026 DT. 30/09/2016 WHILE THE PENALTY O RDER WAS PASSED BY THE ASSESSING OFFICER ON 29/09/2016 I.E PRIOR TO TAKING THE APPROVAL FROM THE ADDITIONAL CIT, CENTRAL CIRCLE, R ANGE LUDHIANA. THAT THE SAID COLUMN OF LETTER NUMBER AND DATE HAVE BEEN HAND FILLED LATER ON IN THE TYPED PENALTY ORDER. THE FAC T ITSELF SPEAKS THAT THE ASSESSING OFFICER PASSED THE PENALTY ORDER WITHOUT TAKING THE REQUISITE APPROVAL FROM THE COMPETENT AUTHORITY AND LATER ON THE BLANK COLUMN WAS FILLED AFTER PASSING OF THE OR DER IN QUESTION. THE PENALTY U/S 271AAB OF THE ACT LEVIED BY THE ASS ESSING OFFICER WAS VOID ABINITIO . 6. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR STRONGLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND FURTHER SUBMITTE D THAT THERE MAY BE A TYPOGRAPHICAL MISTAKE IN THE ORDER PASSED UNDE R SECTION 271AAB(1) OF THE ACT AND BY MISTAKE THE DATE WAS ME NTIONED AS 29/09/2016 WHILE THE DCR NUMBER WAS DT. 30/09/2016. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. TO RE SOLVE THE PRESENT ITA NOS. 96 TO 98-CHD-2019 M/S SOBHAGIA SALES PVT LTD & SOBHAGIA CLOTHING CO., LUDHIANA 4 CONTROVERSY IT IS RELEVANT TO REFER THE PROVISIONS CONTAINED IN SECTION 274(2) OF THE ACT WHICH READ AS UNDER: SECTION 274(1) (2) NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE MADE- (A) BY THE INCOME-TAX OFFICER, WHERE THE PENALTY EXCEEDS TEN THOUSAND RUPEES; (B) BY THE ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER, WHERE THE PENALTY EXCEEDS TWENTY THOUSAND RUPEES, EXCEPT WITH THE PRIOR APPROVAL OF THE JOINT COMMISSIONER. 8. FROM THE ABOVE PROVISIONS CONTAINED IN SECTION 2 74 OF THE ACT, IT IS CRYSTAL CLEAR THAT THE PENALTY UNDER SE CTION 271AAB OF THE ACT, WHICH FALLS IN CHAPTER XXI OF THE ACT SHAL L NOT BE IMPOSED BY THE ASSESSING OFFICER UNTIL AND UNLESS P RIOR APPROVAL IS TAKEN FROM THE CONCERNED JOINT COMMISSIONER OF INCO ME TAX (JCIT). THE USE OF WORD SHALL MAKE IT MANDATORY T O TAKE THE PRIOR APPROVAL OF THE JCIT / ADDITIONAL CIT BEFORE PASSING THE ORDER IMPOSING THE PENALTY UNDER SECTION 271AAB OF THE ACT. IN THE PRESENT CASE IT IS CRYSTAL CLEAR FROM THE PENAL TY ORDER WAS PASSED BY THE ASSESSING OFFICER ON 29/09/2016 WHILE THE APPROVAL FROM THE ADDITIONAL CIT, RANGE LUDHIANA WAS ACCORDE D VIDE LETTER NO. 1026 DT. 30/09/2016, WHICH CLEARLY ESTABLISHED THAT THE PENALTY ORDER WAS PASSED BY THE ASSESSING OFFICER ON 29/09/ 2016 BEFORE ITA NOS. 96 TO 98-CHD-2019 M/S SOBHAGIA SALES PVT LTD & SOBHAGIA CLOTHING CO., LUDHIANA 5 TAKING THE APPROVAL FROM THE CONCERNED ADDITIONAL C IT / J.C.I.T. THE CONTENTION OF THE LD. DR THAT THE SAME MAY BE A TYPOGRAPHICAL MISTAKE IS NOT TENABLE BECAUSE THE RELEVANT COLUMN OF APPROVAL LETTER NO. AND DATE HAD BEEN LEFT BLANK IN THE P ENALTY ORDER WHICH HAVE BEEN FILLED WITH PEN ON RECEIPT OF SAID APPROVAL LETTER AND THE DATE MENTIONED FALLS AFTER THE DATE OF PRON OUNCEMENT OF IMPUGNED PENALTY ORDER. THEREFORE, THE PENALTY ORDE R PASSED BY THE ASSESSING OFFICER FOR LEVYING THE PENALTY UNDER SEC TION 271AAB OF THE ACT IS VOID ABINITIO. IN THAT VIEW OF THE MATTER THE IMPUGNED PENALTY LEVIED U/S 271AAB OF THE ACT BY THE ASSESSI NG OFFICER AND SUSTAINED BY THE LD. CIT(A) IS DELETED. ITA NOS. 97 & 98/CHD/2019 9. IN ITA NOS. 97 & 98/CHD/2019 FOR THE A.Y. 2014-1 5, THE FACTS ARE IDENTICAL AS WERE INVOLVED IN THE ITA NO. 96/CHD/2018 IN THE CASE OF SOBHAGIA SALES PRIVATE LIMITED, LUDHIAN A. THE ONLY DIFFERENCE IS IN THE AMOUNT OF PENALTY U/S 271 AAB OF THE ACT LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY TH E LD. CIT(A), THEREFORE, OUR FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS. ACCORDINGLY THE PENALTY LEV IED BY THE ASSESSING OFFICER UNDER SECTION 271AAB OF THE ACT A ND SUSTAINED BY THE LD. CIT(A) IN THIS APPEAL IS ALSO DELETED. ITA NOS. 96 TO 98-CHD-2019 M/S SOBHAGIA SALES PVT LTD & SOBHAGIA CLOTHING CO., LUDHIANA 6 IN THE RESULT, THE CAPTIONED APPEALS OF THE ASSESS EES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.09.2019 SD/- SD/- ( . . / N.K. SAINI) ( ! / SANJAY GARG) '#$ / VICE PRESIDENT %& / JUDICIAL MEMBER DATED : 27. 09.2019 .. 1)%(2343( / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. %& !# / THE RESPONDENT 3. + 5( / CIT 4. + 5( ( )/ THE CIT(A) 5. 36 %(7 , - 7 , 89:; / DR, ITAT, CHANDIGARH 6. :< , / GUARD FILE 1 + / BY ORDER, = / ASSISTANT REGISTRAR