DCIT, Ranchi V. Sri Sunil Rungta, Ranchi

ITSSA 21/RAN/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3782 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL
• Assessee Lawyers: S K PODDAR
• Keywords: Opportunity of being heard; Retrospective amendment; Question of law; Reasonable cause
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER IT (SS) A NO. 21 /RAN/201 6 ASSESSMENT YEAR : 2007 - 08 DCIT, CENTRAL CIRCLE - 1, RANCHI. VS. SRI SUNIL RUNGTA, PUSHAPANJALI, BARIATU ROAD, KARAMTOLI CHOWK, RANCHI PAN/GIR NO .ABQPR 5568 M (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY: SHRI S.K.PODDAR & DEVESH PODDAR, AR REVENUE BY : SHRI P.K.MONDAL, JCIT DATE OF HEARING : 21/05 / 201 8 DATE OF PRONOUNCEMENT : 22 /05/ 2018 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 3 PATNA, DATED 12.2.2016 , F OR THE ASSESSMENT YEAR 2007 - 08. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN DEL ETING THE AMOUNT OF RS.15,30,367 / - LEVIED U/S.271(1)(C) OF THE ACT BY THE ASSESSING OFFICER. 3. THE APPEAL FILED BY THE REVENUR IS BARRED BY 19 DAYS. THE REVENUE HAS FILED CONDONATION PETITION DATED 25.5.2016 ALONGWITH APPEAL MEMO FOR CONDONING THE DELAY IN FILING THE APPEAL. AFTER GOING THR OUGH THE 2 IT(SS)A NO. 21 /RAN/2016 ASSESSMENT YEAR: 2007 - 08 CONDONATION PETITION, WE FIND THAT THE REVENUE HAD REASONABLE CAUSE FOR NOT FILING THE APPEAL WITH IN THE STIPULATED TIME. WE , THE REFORE, CONDONE THE DELAY OF 19 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL AND ADMIT THE APPEAL FOR HEARING. 4 . AT THE OUTSET, LD A.R. OF THE ASSESSEE BY FILING COPY OF NOTICE ISSUED U/S.271(1)(C) OF THE ACT BY THE A SSESSING OFFICER DATED 30.12.2009 IN ASSESSMENT YEAR 2007 - 08 SUBMITTED THAT THE ASSES S ING OFFICER IN THE SAID NOTICE HAS STATED AS UNDER: HAVE CONCEALED THE PARTICULA RS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 5 . THUS, IT IS NOT CLEAR FROM THE SAID NOTICE ISSUED U/S.271(1)(C) OF THE ACT BY THE ASSESSING OFFICER WHETHER THE SHOW CAUSE IS ISSUED TO THE ASSESSEE FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 6. ON THE OTHER H AND, LD D.R RELIED ON THE ORDER OF TH E ASSESSING OFFICER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. T HE NOTICE ISSUED BY THE AO U/S 271(L) (C) IS REPRODUCED AS UNDER : - WHERE IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE A SSESSMENT YEAR 2007 - 08 IT APPEARS TO ME THAT YOU: - *HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH ME RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTICE BY U/S.22(L)/22(2)/B4 3 IT(SS)A NO. 21 /RAN/2016 ASSESSMENT YEAR: 2007 - 08 OF THE INDIAN INCOME TAX ACT, 1922 OR WHICH YOU WERE REQ UIRED TO FURNISH UNDER SECTION 139(1) OR BY A NOTICE GIVEN BY U/S. . 139(2) /148 OF THE INCOME TAX ACT, 1961. NO.___ DT. ____ OR HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT WITHIN THE TIME ALLOWED AND THE MANNER REQUIRED BY THE SAID SECTIO N 139(1) OR BY SUCH NOTICE. ** HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE U/S. 22(4) /23(2) OF THE INDIAN TAX ACT, 1922 OR UNDER SECTION 142(1) / 143(2) OF THE INCOME - TAX ACT, 1961. ***HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED IN ACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11.3 0 AM ON 11.2.2010 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE U/S 271 OF THE INCOME - TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORISED REPRESENTATIVE, YOU MAY SHOW CAUSE IN WRI TING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE U/S.271. ' 8 . HON'BLE APEX COURT VIDE JUDGMENT IN CASE OF M/S. SSA'S EMERALD MEADOWS, (2016) 73 TAXMANN.COM 248(SC) DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE JUDGMENT RENDERED BY HON'BLE HIGH COURT OF KARNATAKA WHEREBY IDENTICAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF THE JUDGMENT IN CASE OF M/S. SSA'S EMERALD MEADOWS (SUPRA) DECIDED BY HON'BLE HIGH COURT OF KARNA TAKA IS REPRODUCED BELOW : - '2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW: (1) WHETHER, OMISSION IF ASSESSING OFFICER TO EXPLICITLY MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISHING OJ INACCURATE PARTICULARS OR THAT FOR CONCEALMENT OF INCOME MAKES 4 IT(SS)A NO. 21 /RAN/2016 ASSESSMENT YEAR: 2007 - 08 THE PENALTY ORDER LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYOND REASONA BLE DOUBT THAT THE ASSESSEE HAD CONCEALED INCOME IN THE FACTS AND CIRC UMSTANCES OF THE CASE? (2 WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN. HOLDING THAT THE PENALTY NOTICE UNDER SECTION 274 R.W.S. 271(L)(C) IS HAD IN LAW AND. INVALID INSPITE THE AMENDMENT OF SECTION 271(1 B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT, THE ASSESSING OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECORDING THE SATISFACTION FOR THE SAME? (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN DECIDING THE APPEALS AGAINST THE REVENUE ON THE BASIS OF NOTICE ISSUED, UNDER SECTION 274 WITHOUT TAKING INTO CONSIDERATION THE ASSESSMENT ORDER WHEN THE ASSESSING OFFICER HAS SPECIFIED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME ? 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(L)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT') TO BE BAD IN LAW AS IT DID NOT SPECIFY WHIC H LIMB OF SECTION 271(L)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. .THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIE D 01 THE DERISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OR INCOME T AX - VS - MANJUNATHA C OTTON AND G INNING F ACTORY (2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT, THE APPEAL IS ACCORDINGLY DISMISSED.' 9 . BARE PERU SAL OF THE NOTICE ISSUED U/S 271 ( 1 )( C) APPARENTLY GOES TO PROVE THAT THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS BY ISSUING THE NOTICE U/S 274/271(1)(C) OF THE ACT WITHOUT SPECIFYING WHETHER THE 5 IT(SS)A NO. 21 /RAN/2016 ASSESSMENT YEAR: 2007 - 08 ASSESSEE HAS CONCEALED ''PARTICULARS OF INCOME' OR ASSESSEE HAS FURNISHED 'INACCURATE PARTICULARS OF INCOME', SO AS TO PROVIDE ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SHOW CAUSE NOTICE. RATHER NOTICE IN THIS CASE HAS BEEN ISSUED IN A STEREOTYPED MANNER WITHOUT APPLYING ANY MIND WHICH IS BAD IN LAW, HENCE IS NOT A VALID NOTICE S UFFICIENT TO IMPOSE PENALTY U/S 271(1 )(C) OF THE ACT. 10 . THE PEN ALTY PROVISIONS OF SECTION 271(1 )(C) OF THE ACT ARE ATTRACTED WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS ALSO A WELL - ACCEPTED PROPOSITION THAT THE AFORESAID TWO L IMBS OF SECTION 271(1 )(C) OF THE ACT CARRY DIFFERENT MEANINGS. THEREFORE, IT WAS IMPERATIVE FOR THE ASSESSING OFFICER TO STRIKE - OFF THE IRRELEVANT LIMB SO AS TO MAKE THE ASSESSEE AWARE AS TO WHAT IS THE CHARGE MADE AGAINST HIM SO THAT HE CAN RESPOND ACCORDINGLY. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR) OBSERVED THAT THE LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEING LEVIED. AS PER HON'BLE HIGH COURT, WHERE THE ASSESSING OFFICER PROPOSED TO INVOKE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. THE HON'BLE HIGH COURT HELD THAT THE STANDARD PROFORMA OF NOTICE UNDER SECTION 274 OF THE ACT WITHOUT S TRIKING OF THE IRRELEVANT CLAUSES WOULD LEAD TO AN INFERENCE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF VS. JCIT, 291 ITR 519(SC) HAS ALSO NOTICED THAT WHERE THE 6 IT(SS)A NO. 21 /RAN/2016 ASSESSMENT YEAR: 2007 - 08 ASSESSING OFFICER ISSUES NO TICE UNDER SECTION 274 OF THE ACT IN THE STANDARD PROFORMA AND THE INAPPROPRIATE WORDS ARE NOT DELETED, THE SAME WOULD POSTULATE THAT THE ASSESSING OFFICER WAS NOT SURE AS TO WHETHER HE WAS TO PROCEED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED THE PARTIC ULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDING TO THE HON'BLE SUPREME COURT, IN SUCH A SITUATION, LEVY OF PENALTY SUFFERS FROM NON - APPLICATION OF MIND. IN THE BACKGROUND OF THE AFORESAID LEGAL POSITION AND, HAVING REGARD TO TH E MANNER IN WHICH THE ASSESSING OFFICER HAS ISSUED NOTICE UNDER SECTION 274 R.W.S. 271( 1 )(C) OF THE ACT DATED 30. 1 2.2009 FOR THE ASSESSMENT YEAR 2007 - 08, WITHOUT STRIKING OFF THE IRRELEVANT WORDS, THE PENALTY PROCEEDINGS SHOW A NON - APPLICATION OF MIND BY THE ASSESSING OFFICER AND IS, THUS, UNSUSTAINABLE. WE HOLD SO. 11 . THEREFORE, IN OUR CONSIDERED VIEW, THE CIT(A) IS JUSTIFIED IN DELETING THE PENALTY OF RS.15,30,367/ - , WHICH IS HEREBY CONFIRMED AND GROUND OF APPEAL OF THE REV ENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 /05 /201 8 SD/ - SD/ - (PAVAN KUMAR GADALE) (N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER RANCHI; DATED 22 /05 /201 8 B.K.PARIDA, SPS 7 IT(SS)A NO. 21 /RAN/2016 ASSESSMENT YEAR: 2007 - 08 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : DCIT, CENTRAL CIRCLE - 1, RANCHI. 2. THE RESPONDENT SRI DEEPAK RUNGTA, PUSHAPANJALI, BARIATU ROAD, KARAMTOLI CHOWK, RANCHI , 3. THE CIT(A), RANCHI 4. PR. CIT , RANCHI 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//