Shreekumar K. Parsana, RAJKOT-GUJARAT V. The Assistant Commissioner of Income Tax, Central Circle-1, RAJKOT-GUJARAT

ITSSA 33/RJT/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3115 (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: 2004-2005
• Appeal Filed On: 18-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MJ RANPURA
• Keywords: Income from undisclosed sources; Opportunity of being heard; Reasonable cause
• 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 S . 33 TO 35 / RJT /201 3 : ASS T. YEAR S : 2004 - 05, 2005 - 06 & 2007 - 08 SHREEKUMAR K. PARSANA C/O. J.V. PATEL MEDICAL AGENCY, 107 - 108, ALAP - B, RAJKOT PAN : ACWPP4205A (APPELLANT) 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 BENCH : 1. THESE THREE APPEALS ARE PREFERRED 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/2 7 /RJT/CC - 1/12 - 13 TO CIT(A) - IV/29/RJT/CC - 1/12 - 13 . 2. SINCE THE QUESTION INVOLVED IN ALL THESE THREE APPEALS IS ONE AND THE SAME, THESE ARE DISPOSED OF BY WAY OF COMMON ORDER, BY TAKING FACTS FROM THE C ASE RELEVANT FOR THE AY 2004 - 05. BRIEF FACTS OF THE CASE 2 ITA NOS. 3 3 TO 35/RJT/2013 SHREEKUMAR K. PARSANA 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 FILE D REVISED COMPUTATION OF INCOME SHOWING A SUM OF RS.1, 22,090 / - WHEREIN THE ASSESSEE HAD SHOWN INCOME FROM CAPITAL GAIN OF RS.72,433/ - WHICH HE HAD NOT SHOWN IN THE REGULAR INCOME, AS SUCH THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IN RESPECT OF SUCH UNACCOUNTED INCOME AND LEVIED A PENALTY OF RS.14,418/ - . 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 A DDITIONAL 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 INCOME, THE SA ME 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 FURNISHING OF INACCU RATE PARTICULARS OF INCOME THAT THE PENALTY PROCEEDINGS ARE INITIATED, AND THE NOTICE DATED 2 6 .12.2011 CLEARLY INDICATES THE PERFUNCTORY MANNER IN WHICH THE PE NALTY PROCEEDINGS ARE INITIATED, AND IT DOES NOT SPELL OUT CLEARLY WHAT CHARGE THE ASSESSEE 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 3 ITA NOS. 3 3 TO 35/RJT/2013 SHREEKUMAR K. PARSANA VS SSA S EMERALD MEADOWS, [2016] 73 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 L D. DR IS HEAVILY RELYING UPON THE ORDERS OF THE 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 2 6 .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: - 2 6 /1 2 /201 1 PAN : ACWPP4205A TO, SHREEKUMAR KANTILAL PARSANA, C/O: JV PATEL MEDICAL AGENCY , 105 - 106, AALAP - B, LIMDA CHOWK, 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 REQUIRE D 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 WITHIN THE TIME ALLOWED AND THE MANNER REQUIRED BY THE SAID SECTION 1 39(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 ________ 4 ITA NOS. 3 3 TO 35/RJT/2013 SHREEKUMAR K. PARSANA * HAVE CONC EALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 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 CONSID ERED 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 (SUPRA) 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 BE NCH 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) . T HE PRINCIPLES 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 PROCEEDI NGS ARE BAD IN LAW. THEREFORE, WHILE RESPECTFULLY FOLLOWING THE JUDGEMENTS REFERRED TO ABOVE, WE HOLD THAT THE IMPUGNED PENALTY 5 ITA NOS. 3 3 TO 35/RJT/2013 SHREEKUMAR K. PARSANA PROCEEDINGS ARE BAD IN LAW AND CANNOT BE SUSTAINED. WE, THEREFORE, WHILE QUASHING THE PROCEEDINGS, ALLOW THE APPEALS. 8 . IN T HE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE 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