Shri Jitendra V. Parsana - HUF, RAJKOT-GUJARAT V. The Assistant Commissioner of Income Tax, Central Circle-1, RAJKOT-GUJARAT

ITSSA 32/RJT/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3116 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 18-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MJ RANPURA
• Keywords: Opportunity of being heard; Reasonable cause; Revised return
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY , MEMBER IT (SS) A NO. 32 / RJT /201 3 : ASS T. YEAR : 2008 - 09 JITENDRA V. PARSANA HUF NEELAM , 13 - RAMKRISHNANAGAR, RAJKOT (APPELLANT) PAN : AAEHJ5588G VS ACIT, CENTRAL CIRCLE - 1, RAJKOT (RESPONDENT) APPELLANT S BY : SHRI M.J. RANPURA, CA RESPONDENT BY : SHRI YOGESH PANDE, DR DATE OF HEARING : 2 4 /0 3 /201 7 DATE OF PRONOUNCEMENT : 24 /0 3 /201 7 O R D E R PER K.NARASIMHA CHARY, JM : THIS IS AN APPEAL BY THE ASSESSEE CHALLENGING THE ORDER DATED 7.10.2013 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV, AHMEDABAD (FOR SHORT HEREINAFTER REFERRED TO AS LD. CIT(A) ) IN APPEAL NO.CIT(A) - IV/25/RJT/CC - 1/12 - 13. 2. BRIEF FACTS OF THE CASE ARE THAT PURSUANT TO SEARCH OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (FOR SHORT HEREINAFTER REFERRED TO AS THE ACT ) CARRIED OUT IN THE PREMISES OF THE ASSESSEE ON 15.9.2009, THE ASSESSEE FILED REVISED COMPUTATION OF INCOME SHOWING A SUM OF RS.1,44,58,310/ - FOR LONG TERM CAPITAL GAINS ON THE SALE OF LAND BY 2 ITA NOS. 32/ RJT/2013 JITENDRA V. PARSANA - HUF & ANR. TAKING COST INFLATION INDEX FROM FINANCIAL YEAR 2002 - 03 AS THE AGREEMENT OF SALE WAS EXECUTED ON 22.4.2002. SINCE THERE W AS NO DOCUMENTARY EVIDENCE FOR THAT PURPOSE, A REVISED RETURN WAS FILED ENHANCING THE INCOME TO RS.2,01,19,750/ - , WHICH WAS TAKEN ON RECORD. SINCE THE PROPERTY WAS SOLD FOR RS.6,14,16,757/ - AS PER THE IMPOUNDED MATERIAL OF WHICH RS. 4 CRORES WAS CONSIDERE D IN THE YEAR UNDER CONSIDERATION BY FILING REVISED COMPUTATION AND BALANCE AMOUNT OF RS.2,14,16,757/ - HAD BEEN SHOWN IN THE ASSESSMENT YEAR 2010 - 11. WHILE ACCEPTING THE REVISED COMPUTATION, THE ASSESSING OFFICER INITIATED PENALTY U/S 271(1)(C) OF THE ACT . PROCEEDINGS ENDED UP IN LEVY OF PENALTY OF RS.65,83,886/ - BY WAY OF AN ORDER DATED 26.6.2012. THE MATTER WAS CHALLENGED BEFORE THE LD. CIT(A) AND THE LD. CIT(A), BY WAY OF THE IMPUGNED ORDER, DISMISSED THE APPEAL CONFIRMING THE LEVY OF PENALTY. 3. BY WAY OF THE ADDITIONAL GROUND, ASSESSEE HAS QUESTIONED THE VALIDITY OF NOTICE LEVYING PENALTY STATING THAT SINCE THE NOTICE DOES NOT STATE WHETHER THE PENALTY IS PROPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF IN COME, THE SAME IS INVALID. 4. IT IS THE ARGUMENT OF THE LD. AR THAT NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT DOES NOT CLEARLY SPELL OUT UNDER WHICH LIMB OF SEC. 271(1)(C) OF THE ACT EITHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHI NG OF INACCURATE PARTICULARS OF INCOME THAT THE PENALTY PROCEEDINGS ARE INITIATED, AND THE NOTICE DATED 28.12.2011 CLEARLY INDICATES THE PERFUNCTORY MANNER IN WHICH THE PENALTY PROCEEDINGS ARE 3 ITA NOS. 32/ RJT/2013 JITENDRA V. PARSANA - HUF & ANR. INITIATED AND IT DOES NOT SPELL OUT CLEARLY WHAT CHARGE THE ASS ESSEE IS TO DEFEND, AS SUCH, THE VERY BASIS OF THE PENALTY PROCEEDINGS IS VITIATED AND THE ORDERS OF THE AUTHORITIES BELOW HAVE TO BE QUASHED. LD. AR PLACES RELIANCE ON THE DECISION REPORTED IN COMMISSIONER OF INCOME TAX VS SSA S EMERALD MEADOWS, [2016] 7 3 TAXMANN.COM 248 (SC) AND ALSO THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI RAHULBHAI VITTHALBHAI VADALIA VS ACIT IN IT(SS)A NO. 8/RJT/2014 DATED 28.11.2016 . 5. PER CONTRA, THE LD. DR IS HEAVILY RELYING UPON THE ORDERS OF TH E AUTHORITIES BELOW AND SUBMITS THAT THE ORDER OF LD. CIT(A) IS VERY REASONED AND SELF - EXPLANATORY ONE. 6. WE HAVE CAREFULLY GONE THROUGH THE CONTENTIONS OF EITHER SIDE AND PERUSED THE MATERIAL PAPERS ON RECORD, PARTICULARLY THE NOTICE DATED 28.12.2011 U/ S 274 R.W.S. 271(1)(C) OF THE ACT IN THE LIGHT OF THE DECISIONS RELIED UPON BY THE ASSESSEE. FOR THE SAKE OF CLARITY, WE EXTRACT THE NOTICE U/S 274 OF THE ACT. NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 DATE: - 28 /1 2 /201 1 PAN : AA EHJ5588G TO, JITENDRA VALJIBHAI PARSANA NEELAM , 13, RANCHHODNAGAR, RAJKOT. WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASST. YEAR 200 8 - 0 9 (U/S. 143(3)), 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 GIVEN UNDER SECTION 22(1)/22(2)/34 OF THE INDIAN INCOME TAX ACT, 1922 OR WHICH YOU WERE REQUIRED TO FURNISH UNDER SECTION 139(1) OR BY A NOTICE GIVEN UNDER SECTION 139(2)/148 OF THE INCOME TAX ACT, 1961 NO. _______ DATED ______ OR HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH IT 4 ITA NOS. 32/ RJT/2013 JITENDRA V. PARSANA - HUF & ANR. WITHIN THE TIME ALLOWED AND THE MANNER REQUIRED BY THE SAID SECTION 139(1 OR BY SUCH NOTICE. * HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 22(4)/23(2) OF THE INDIAN INCOME TAX ACT, 1922 OR UNDER SECTION 142(1)/143(2) OF THE INCOME TAX ACT, 1961. NO. __________ DATED ________ * HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH I NCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME WITHIN 15 DAYS FROM THE RECEIPT OF THIS NOTICE AND SHOW CAUSE AS TO WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271(1)(C). SD/ - ( RAVINDRA ) ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 1 , RAJKOT 7. IT, THEREFORE, IS AMPLY CLEAR THAT THE ASSESSING OFFICER HAS NOT SPECIFIED WHETHER THE NOTICE WAS ISSUED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE HON BLE SUPREME COURT IN SSA S EMERALD MEADOWS (SU PRA) DISMISSED THE SLA PREFERRED AGAINST THE DECISION OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS SSA S EMERALD MEADOWS , [2016] 73 TAXMANN.COM 241 (KARNATAKA) . THE HON BLE KARNATAKA HIGH COURT IN ITS DECISION HAS FOLLOWED THE DIVISION BENCH JUDGMENT IN THE CASE OF CIT VS MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR) . THE COORDINATE BENCH OF THIS TRIBUNAL HAS REFERRED TO AND FOLLOWED THE DECISION OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF SSA S EMERALD MEADOWS (SUPRA) . THE P RINCIPLES LAID DOWN BY THE DECISION IS CLEAR THAT THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT SHALL SPECIFY UNDER WHICH LIMB OF SEC. 271(1)(C) OF THE ACT THE PENALTY PROCEEDINGS WERE INITIATED, AND IN THE ABSENCE OF SUCH CLARITY, THE 5 ITA NOS. 32/ RJT/2013 JITENDRA V. PARSANA - HUF & ANR. PROCEEDINGS ARE BAD IN LAW. THEREFORE, WHILE RESPECTFULLY FOLLOWING THE JUDGEMENTS REFERRED TO ABOVE, WE HOLD THAT THE IMPUGNED PENALTY PROCEEDINGS ARE BAD IN LAW AND CANNOT BE SUSTAINED. WE, THEREFORE, WHILE QUASHING THE PROCEEDINGS, ALLOW THE APPEALS. 8 . IN THE R ESULT, ALL THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH MARCH, 2017. SD/ - SD/ - ( S.V. MEHROTRA ) ACCOUNTANT MEMBER (K. NARASIMHA CHARY) JUDICIAL MEMBER RAJKOT , DATE : 24 TH MARCH , 201 7 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, RAJKOT 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, RAJKOT