RAMESH KABRA, Kishangarh V. ITO, Kishangarh

ITA 979/JPR/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9103 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 08-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANCHAL MEENA JCIT DHK
• Keywords: Principle of natural justice
• Section: 271(1)(c); 274

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ T;IQJ U;K;IHB] T;IQJ T;IQJ U;K;IHB] T;IQJ T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JESK LH-'KEKZ] YS[KK LNL; DS LE{K BEFORE : SHRI RAMESH C.SHARMA, ACCOUNTA NT MEMBER VK;DJ VIHY LA-@ ITA NO. 979/JP/2016 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 SHRI RAMESH KABRA PROP: M/S.RAMESH BARTAN BHANDAR OPP:GOPAL BUILDING, AJMER ROAD,MADAN GANJ , JAIPUR CUKE VS. THE ITO WARD- 1 KISHANGARH LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AJJPK 0077 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SATISH GUPTA, CA JKTLO DH VKSJ LS@ REVENUE BY: MS.CHANCHAL MEENA, JCIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24/07/2020 ?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 03/08/2020 VKNS'K@ ORDER PER RAMESH C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)- AJMER DATED 09-08-2016 FOR THE ASSESSMENT YEAR 20 11-12, IN THE MATTER OF PENALTY OF RS.73,000/- IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2.1 THIS APPEAL WAS EARLIER DECIDED BY THE TRIBUNAL BY PASSING EX-PARTE ORDER DATED 13-04-2017. THEREAFTER, THE ASSESSEE FILED TH E MISC. APPLICATION FOR RECALLING THE EX-PARTE ORDER. THE TRIBUNAL VIDE ITS ORDER DATED 18-08-2017 RECALLED ITS EARLIER ORDER DATED 13-04-2017 AND THE REGISTRY WAS DIRECTED TO FIX THE CASE ITA NO.979/JP/2016 SHRI RAMESH KABRA VS ITO, WARD-1, KISHANGARH 2 FOR HEARING AFRESH BEFORE THE REGULAR BENCH. NOW T HIS APPEAL IS AGAIN PUT UP BEFORE THIS BENCH FOR HEARING. 2.2 I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAR EFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE AO ESTIMATED THE 10% OF NET PROFIT AT RS.4,28,000/- AND ADDED IN THE DECLARED I NCOME OF THE ASSESSEE. PENALTY PROCEEDINGS WERE INITIATED. IN THE LAST, THE AO AT PARA 7 PAGE 6 OF PENALTY ORDER LEVIED THE PENALTY BY HOLDING THAT THE ABOVE FACTS CLEARLY ESTABLISH ON RECORD THAT THE ASSESSEE HAS CONCEALED INCOME CHARGEABLE T O TAX AND FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREBY CAUSED LOSS TO THE REVENUE. 2.3 FROM THE RECORD, I FOUND THAT PRIOR TO LEVY OF PENALTY A NOTICE U/S 274 OF THE ACT WAS ISSUED WHICH WAS IN A FIXED FORMAT AND DID NOT MENTION THE LIMB ON WHICH THE AO ISSUED THE NOTICE TO LEVY THE PENALTY. HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS SSAS EMARALD MEADOWS I N ITA NO. 380 OF 2015 RELYING UPON THE DECISION OF HONBLE HIGH COURT IN THE CASE OF CIT VS MANJUNATH COTTON AND GINNING FACTORY, 359 ITR 565 HELD THAT I TAT ALLOWED THE APPEAL HOLDING THAT THE NOTICE ISSUED BY THE AO U/S 274 IS BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENAL TY PROCEEDINGS HAD BEEN INITIATED. HONBLE SUPREME COURT OF INDIA IN THIS C ASE DISMISSED THE SLP FILED BY THE DEPARTMENT. MOREOVER, HONBLE KARNATAKA HIGH CO URT IN THE CASE OF CIT VS MANJUNATH COTTON AND GINNING FACTORY HAS UPHELD IN CONCLUSION PART PARA 63 SUB PARA P, Q AND R THAT NOTICE U/S 274 OF THE ACT SHOULD SPECIFICALLY STATE THE ITA NO.979/JP/2016 SHRI RAMESH KABRA VS ITO, WARD-1, KISHANGARH 3 GROUNDS MENTIONED IN SECTION 271(1) OF THE ACT I.E . WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORREC T PARTICULARS OF INCOME. IT WAS HELD THAT THE SENDING PRINTING FORM WHERE ALL THE G ROUNDS ARE MENTIONED IN SECTION 271COULD NOT SATISFY REQUIREMENT IN LAW AND THE ASS ESSEE SHOULD KNOW THE GROUNDS WHICH HE HAS TO REPLY SPECIFICALLY OTHERWIS E PRINCIPLE OF NATURAL JUSTICE IS OFFENDED AND ON THE BASIS OF SUCH PROCEEDINGS, N O PENALTY COULD BE IMPOSED TO THE ASSESSEE. RECENTLY HONBLE BOMBAY HIGH COURT I N THE CASE OF CIT VS SAMSON PERINCHERY HAS HELD THAT PENALTY SHOULD BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR THE PENALTY I S NOT SUSTAINABLE. THEY RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE C ASE OF ASHOK PAI VS CIT 292 ITR 11 WHERE HONBLE APEX COURT OBSERVED THAT CONCE ALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME IN S ECTION 271(1) OF THE ACT HAVE DIFFERENT MEANING. ITAT JAIPUR BENCH IN THE CASE OF SHANKARLAL KHANDELWAL VS DCIT IN ITA NO. 878/JP/2013 AND IN THE CASE OF LALC HAND MITTAL, JAIPUR VS DCIT IN ITA NO.772/JP/2016 HAS HELD THAT PENALTY IS NOT LEVIABLE UNDER THESE CIRCUMSTANCES. 2.4 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE AND APPLYING THE JUDICIAL PRONOUNCEMENTS DISCUSSED ABOVE TO THE FACT S OF THE INSTANT CASE, I DO NOT FIND ANY JUSTIFICATION FOR IMPOSITION OF PENALTY AN D THE SAME IS DIRECTED TO BE DELETED. ITA NO.979/JP/2016 SHRI RAMESH KABRA VS ITO, WARD-1, KISHANGARH 4 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 /08 /2020. SD/- JESK LH 'KEKZ (RAMESH C. SHARMA) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03 /08/ 2020 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAMESH KABRA, KISHGANGARH 2. IZR;FKHZ@ THE RESPONDENT- THE ITO WARD1, KISHANGARH 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.979/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR