Smt. Jyoti Singh, Sultanpur V. Dy. Commissioner of Income Tax, Central Circle-1, Lucknow

ITSSA 397/LKW/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3767 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 15-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Question of law; Condonation of delay
• Section: 271(1)(c)

Judgement Text

I.T.A. NOS.395 TO 397/LKW/2017 ASSESSMENT YEAR:2006-07, 07-08 & 09-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NOS.395 TO 397/LKW/2017 ASSESSMENT YEARS:2006-07, 07-08 & 09-10 SMT. JYOTI SINGH, KHAIRABAD, SHASTRI NAGAR, SULTANPUR. PAN:BDAPS 6059 R VS. DY.C.I.T., CENTRAL CIRCLE-1, LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THESE THREE APPEALS HAVE BEEN FILED BY THE ASSESSE E AGAINST THE RESPECTIVE ORDERS OF THE LEARNED CIT(A)-3, LUCKNOW, ALL DATED 28/9/2016. 2. IN ALL THESE APPEALS, THE GRIEVANCE OF THE ASSESSEE IS AGAINST IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT WHICH HAS BEEN CONFIRMED BY THE LEARNED CIT(A). 3. AT THE VERY OUTSET, WE NOTICE THAT ALL THESE APPEAL S ARE TIME BARRED BY 188 DAYS AND THERE IS A CONDONATION PETITION FILED BY THE ASSESSEE. THE GROUNDS FOR CONDONATION OF DELAY ARE CORROBORATED B Y SUPPORTING AFFIDAVIT FILED ALONG WITH CONDONATION PETITION AND THE AFFID AVIT IS STATED ON OATH AND CONFIRMED BEFORE THE NOTARY PUBLIC AND IS A PART OF CONDONATION PETITION. 4. WE HAVE PERUSED THE CONDONATION PETITION AS WELL AS THE AFFIDAVIT AND WE ARE CONVINCED WITH THE GROUNDS IN THE CONDONATIO N PETITION AND WE COME APPELLANT BY SHRI P. K. KAPOOR, C. A. RESPONDENT BY DR. A. K. SINGH, CIT, (D.R.) DATE OF HEARING 2 5/05/2018 DATE OF PRONOUNCEMENT 31 /05/2018 I.T.A. NOS.395 TO 397/LKW/2017 ASSESSMENT YEAR:2006-07, 07-08 & 09-10 2 TO THE FINDING THAT ASSESSEE WAS PREVENTED FROM FIL ING THE APPEALS ON TIME BECAUSE OF THE REASONS BEYOND HIS CONTROL. ACCORDI NGLY WE ADMIT THE APPEALS AND PROCEED TO HEAR THEM. 5. THESE APPEALS WERE HEARD TOGETHER AND THE FACTS BEI NG COMMON AND ISSUE SIMILAR, THEREFORE, THEY ARE BEING DISPOSED O F IN THIS CONSOLIDATED ORDER. 6. AT THE TIME OF HEARING BEFORE US, THE LD. A.R. OF T HE ASSESSEE INVITED OUR ATTENTION TO THE PAPER BOOK FILED BEFORE US WHE REIN SHOW CAUSE NOTICES FOR PENALTY UNDER SECTION 274 READ WITH 271(1)(C) O F THE ACT FOR ALL THE THREE ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2006-07, 200 7-08 AND 2009-10 WERE PLACED. IT WAS SUBMITTED THAT FROM A PERUSAL OF THESE NOTICES, IT IS CRYSTAL CLEAR THAT THE CHARGE IS NOT SPECIFIC FOR W HICH PENALTY IS LEVIED UNDER SECTION 271(1)(C) OF THE ACT, WHETHER FOR CONCEALME NT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH E LD. A.R. OF THE ASSESSEE VEHEMENTLY ARGUED THAT IT IS SETTLED POSITION OF LA W THAT IF NOTICE UNDER SECTION 274 READ WITH 271(1)(C) IS NOT SPECIFIC ABO UT THE CHARGE OR LIMB UNDER WHICH PENALTY IS BEING LEVIED UNDER SECTION 2 71(1)(C) OF THE ACT, THEN ANY PENALTY LEVIED ON THE BASIS OF SUCH NOTICE IS B AD IN LAW AND LIABLE TO BE DELETED. WITHOUT PREJUDICE IT WAS ARGUED THAT ASSE SSING OFFICER HAD COMPLETED ASSESSMENTS WITHOUT MAKING ANY ADDITIONS AND THEREFORE, ALSO NO PENALTY WAS LEVIABLE. 7. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDE RS OF THE AUTHORITIES BELOW. 8. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE R IVAL CONTENTIONS AND AS APPARENT FROM NOTICES UNDER SECTION 274 READ WITH 271(1)(C) OF THE ACT FOR ALL THE ASSESSMENT YEARS, WE FIND THAT THE CHARGE ON WHICH PENALTY IS LEVIED IS NOT SPECIFIC. THE COPY OF SHOW CAUSE NOTI CES HAVE BEEN MADE PART OF THIS ORDER, WHICH IS AS UNDER: I.T.A. NOS.395 TO 397/LKW/2017 ASSESSMENT YEAR:2006-07, 07-08 & 09-10 3 I.T.A. NOS.395 TO 397/LKW/2017 ASSESSMENT YEAR:2006-07, 07-08 & 09-10 4 I.T.A. NOS.395 TO 397/LKW/2017 ASSESSMENT YEAR:2006-07, 07-08 & 09-10 5 I.T.A. NOS.395 TO 397/LKW/2017 ASSESSMENT YEAR:2006-07, 07-08 & 09-10 6 FROM A PERUSAL OF THESE NOTICES, IT IS CRYSTAL CLEA R THAT THE CHARGE IS NOT SPECIFIC FOR WHICH PENALTY IS LEVIED UNDER SECTION 271(1)(C) OF THE ACT, WHETHER FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD. A.R. OF THE ASSESSE E VEHEMENTLY ARGUED THAT IT IS SETTLED POSITION OF LAW THAT IF NOTICE UNDER SECTION 274 READ WITH 271(1)(C) IS NOT SPECIFIC ABOUT THE CHARGE OR LIMB UNDER WHICH PENALTY IS BEING LEVIED UNDER SECTION 271(1)(C) OF THE ACT, TH EN ANY PENALTY LEVIED ON THE BASIS OF SUCH NOTICE IS BAD IN LAW AND LIABLE T O BE DELETED. 9. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE O RDERS OF THE AUTHORITIES BELOW. 10. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS AND AS APPARENT FROM NOTICES UNDER SECTION 274 READ WITH 271(1)(C) OF THE ACT FOR ALL THE ASSESSMENT YEARS, WE FIND THAT THE CHARGE ON WHICH PENALTY IS LEVIED IS NOT SPECIFIC. THE LAW MANDATES THAT THE AUTHORITY WHO IS PROPOSING TO IMPOSE PENALTY SHALL BE CERTAIN AS TO WHAT BASIS PENALTY IS BEING LEVIED AND NOTICE MUST REFLECT THAT SPECIFIC REASON SO THA T ASSESSEE TO WHOM SUCH NOTICE IS GIVEN CAN WELL PREPARE HIMSELF REGARDING DEFENCE WHICH HE LIKES TO TAKE TO SUPPORT HIS CASE. THIS IS EVEN ENSHRINED I N THE PRINCIPLES OF NATURAL JUSTICE AND AS HAS BEEN UPHELD BY HON'BLE APEX COUR T AND OTHER HIGH COURTS. WE WOULD LIKE TO RELY ON THE FOLLOWING CAS ES:- (1) CIT VS. SSAS EMERALD MEADOWS [2016] 73 TAXMANN.COM 248 (SC). IN THIS CASE THE HON'BLE APEX COURT LOOKED I NTO THE FACTS BEFORE THEM THAT TRIBUNAL RELYING ON THE DECISION O F DIVISION BENCH OF HON'BLE KARNATAKA HIGH COURT IN THE CASE O F CIT AND ANOTHER VS. MANJUNATH COTTON & GINNING FACTORY (SUP RA) ALLOWED THE APPEAL OF THE ASSESSEE HOLDING THAT NOT ICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WIT H SECTION 271(1)(C) OF THE ACT WAS BAD IN LAW AS IT DID NOT S PECIFY UNDER I.T.A. NOS.395 TO 397/LKW/2017 ASSESSMENT YEAR:2006-07, 07-08 & 09-10 7 WHICH LIMB OF 271(1)(C) PENALTY PROCEEDINGS HAS BEE N INITIATED I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCO ME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. WH EN THE MATTER TRAVELLED UPTO THE HIGH COURT, IT SUPPORTED THE JUD GMENT OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT AND ANOTHER VS. MANJUNATH COTTON & GINNING FACTORY (SUPRA) AND DECIDED THAT THERE WAS THEREFORE NO SUBSTANTIAL QUESTION OF LAW TO BE DECIDED. THEREAFTER AN SLP WAS FILED BEFORE THE HO N'BLE APEX COURT AND THE APEX COURT DISMISSED THE SLP OF THE R EVENUE FINDING NO MERIT THEREIN AND CONFIRMING THE ISSUE I N FAVOUR OF THE ASSESSEE. (2) CIT AND ANOTHER VS. MANJUNATH COTTON & GINNING FACT ORY [2013] 359 ITR 565 (KARN.). IN THIS CASE, IT HAS B EEN CLEARLY MENTIONED AND HELD BY THE HON'BLE HIGH COURT THAT N OTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF TH E ACT SHOULD SPECIFICALLY STATE THE GROUNDS MENTIONED IN 271(1)( C) I.E. WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURN ISHING OF INACCURATE PARTICULARS OF INCOME. SENDING PRINTED FORM WHERE ALL THE GROUNDS MENTIONED WOULD NOT SATISFY THE REQ UIREMENT OF LAW. ASSESSEE SHOULD KNOW THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, THE PRINCIPLES OF NATURAL JUSTICE IS OFFENDED. ON THE BASIS OF SUCH PROCEEDINGS NO PEN ALTY COULD BE IMPOSED TO THE ASSESSEE. PENALTY PROCEEDINGS AR E DISTINCT FROM ASSESSMENT PROCEEDINGS THOUGH IT EMANATES FROM THE ASSESSMENT PROCEEDINGS STILL IT IS SEPARATE AND IND EPENDENT PROCEEDINGS ALL TOGETHER. (3) MEHERJEE CASSINATH HOLDINGS PVT. LTD VS. ACIT (ITAT MUMBAI) ITA NO. 2555/MUM/2012, ORDER DATED 28/04/2017 WHERE IN THE I.T.A. NOS.395 TO 397/LKW/2017 ASSESSMENT YEAR:2006-07, 07-08 & 09-10 8 OBSERVATION OF THE BENCH WAS THAT PENALTY PROCEEDIN GS UNDER SECTION 271(1)(C) OF THE ACT ARE 'QUASI-CRIMINAL' P ROCEEDINGS AND OUGHT TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE. THE NON-STRIKING OF THE IRRELEVANT PORTION IN THE SHOW- CAUSE NOTICE MEANS THAT THE ASSESSING OFFICER IS NOT FIRM ABOUT THE CHARGE AGAINST THE ASSESSEE AND THE ASSESSEE IS NOT MADE A WARE AS TO WHICH OF THE TWO LIMBS OF S. 271(1)(C) HE HAS TO RE SPOND. (1) CHANDRA PRAKASH BUBNA VS. INCOME TAX OFFICER, WARD 27(3), KOLKATA (ITAT KOLKATA BENCH) [2015] 64 TAXMANN.COM 155 WHEREIN IT WAS HELD THAT WHEN THE ASSESSING OFFICER LEVIED PENALTY WITHOUT BRINGING OUT ANY SPECIFIC CHARGE FO R WHICH PENALTY HAD BEEN IMPOSED, PENALTY WAS LIABLE TO BE DELETED. 11. THE SETTLED LEGAL POSITION ON THE ISSUE AS ENSH RINED IN THE AFORESAID CASES IS APPARENT AND WE ARRIVE AT THE CONSIDERED V IEW THAT NOTICE UNDER SECTION 274 READ WITH 271(1)(C) OF THE ACT WHICH HA S NOT SPECIFIED THE CHARGE AND LIMB UNDER WHICH PENALTY SHOULD BE LEVIE D, IT IS VOID AB INITIO AND ANY CONSEQUENT PENALTY IMPOSED ON THE BASIS OF SUCH NOTICE IS, THEREFORE, ILLEGAL AND BAD IN LAW AND LIABLE TO BE DELETED. W E, THEREFORE, DIRECT DELETION OF PENALTY IN ALL THESE THREE APPEALS FOR EACH OF T HE ASSESSMENT YEARS. 12. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/05/2018. SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:31/05/2018 *SINGH I.T.A. NOS.395 TO 397/LKW/2017 ASSESSMENT YEAR:2006-07, 07-08 & 09-10 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW