Shri Ashish Khurana, Ahmedabad V. The Dy.CIT.,Circle-7, Ahmedabad

ITSSA 584/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0783 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 24-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMARSR
• Keywords: Opportunity of being heard; Reasonable cause; Assessment record

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD . . , , # $ BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER IT(SS) A.NO.584/AHD/2011 BLOCK PERIOD: 1-4-1996 TO 25-07-2002 SHRI ASHISH KHURANA 60 SANSKAR BHARATI SOC., ANKUR CORSS ROAD, AHMEDABAD-380 013 PAN: AHBPK 7460 N VS DY.COMMISSIONER OF INCOME TAX, CCIRCLE-7, AHMEDABAD. %& / (APPELLANT) ' %& / (RESPONDENT) APPELLANT BY : -NONE- RESPONDENT BY : SMT. SONIA KUMAR,SR.D.R. ) /DATE OF HEARING : 06/05/2015 ) /DATE OF PRONOUNCEMENT: 05/06/2015 /O R D E R PER SHRI KUL BHARAT JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE C.I.T.(A)-XI, AHMEDABAD DATED 12-09-2011. THE ASSES SEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED C.I.T. (A) ERRED IN UPHOLDING THE N ATURE AND ISSUE OF SHOW CAUSE NOTICES REGARDING LEVY OF PENALTY UPO N THE APPELLANT. 2. THE LD. C.I.T.(A) ERRED IN CONFIRMING PENALTY OF RS.4,96,500/- IMPOSED BY A.O. U/S.158BFA (2)OF THE INCOME TAX ACT ,1961. IT(SS)A NO.584/AHD/2011 SHRI ASHISH KHURANA VS. DY.CIT BLOCK PERIOD 1.4.1996 TO 25.07.2002 2 3. THE APPELLANT CRAVE LEAVE TO ADD, ALTER, EDIT, D ELETE, MODIFY, CHANGE OR AMEND ALL OR ANY OF THE GROUNDS OF APPEAL AT THE TIME OR BEFORE THE HEARING OF THE APPEAL. 2. AT THE TIME OF HEARING, NO ONE APPEARED ON BEHAL F OF THE APPELLANT BUT AN APPLICATION DATED 5-5-2015 WAS FILED. IN THE APP LICATION ASSESSEE HAS SUBMITTED AS UNDER:- WITH REFERENCE TO SUBJECT MENTIONED ABOVE, WE WOUL D LIKE TO BRING TO YOUR KIND NOTICE THE FACT THAT ABOVE MATTER HAS BEE N FIXED FOR HEARING BEFORE YOUR HONOURS ON 06-05-2015. LOOKING INTO THE COMPLEXITY OF MATTER INVOLVED, WE ARE ANTICIPATING THAT PREPARATION ON OUR PART SHALL TAKE QUITE SOME TIME AS CERTAIN DETAILS FOR PAPER BOOK ARE UNDER COMPILATION. IN VIEW OF ABOVE, IT IS MOST RESPECTFULLY REQUESTED THAT THE SAID MATTER MAY KINDLY BE ADJOURNED FOR TWO (2) MONTHS OR TO A FUTURE DATE CONVENIENT TO THE HONOURABLE BENCH. 3. IT IS TRANSPIRED FROM THE RECORDS THAT THE PRESE NT APPEAL WAS FILED ON 24/10/2011. THE NOTICE OF HEARING WAS ISSUED ON 10 /03/2015 FIXING THE DATE OF HEARING ON 06/05/2015. THE REASONING GIVEN BY T HE ASSESSEE FOR SEEKING ADJOURNMENT THAT LOOKING INTO THE COMPLEXITY OF MAT TER INVOLVED AND PREPARATION ON THE PART OF THE ASSESSEE WOULD TAKE SOME TIME AS CERTAIN DETAILS FOR PAPER-BOOK ARE UNDER COMPILATION IS NOT ACCEPTA BLE AS THE ASSESSEE HAD SUFFICIENT TIME TO PREPARE FOR THE APPEAL. THEREFO RE, NO REASONABLE CAUSE IS SHOWN FOR SEEKING ADJOURNMENT, SAME IS HEREBY REJEC TED AND THE APPEAL IS TAKEN FOR HEARING IN THE ABSENCE OF THE ASSESSEE. 4. IN THIS CASE, A SEARCH ACTION U/S.132 OF THE I. T.ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CONDUCTED IN THE CAS E OF KHURANA GROUP ON 25/07/2002. THE ASSESSMENT IN RESPECT OF THE ASSES SEE WAS FRAMED U/S.158BC IT(SS)A NO.584/AHD/2011 SHRI ASHISH KHURANA VS. DY.CIT BLOCK PERIOD 1.4.1996 TO 25.07.2002 3 R.W.S.143(3) OF THE ACT IN RESPECT OF BLOCK PERIOD TO 25/07/2002 VIDE ORDER DATED 28/07/204. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER (AO IN SHORT) ALSO INITIATED PENALTY PROCEEDINGS BY IS SUING A SHOW-CAUSE NOTICE U/S.158BFA OF THE ACT. THE ASSESSEE ASSAILED ADDI TIONS IN QUANTUM PROCEEDINGS AND THE ADDITIONS WERE SUSTAINED TILL T HE STAGE OF THIS TRIBUNAL. THE AO PROCEEDED TO IMPOSE PENALTY. ACCORDINGLY, PENALTY OF RS.4,96,500/- WAS IMPOSED U/S.158BFA(2) OF THE ACT VIDE ORDER DAT ED 27/04/2009. THE ASSESSEE FEELING AGGRIEVED BY THIS ORDER, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A ), NOW THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 5. GROUND NO.1 OF ASSESSEES APPEAL IS AGAINST CON FIRMING THE ACTION OF THE AO WITH REGARD TO ISSUANCE OF SHOW-CAUSE NOTICE S. THE LD.SR.DR SMT.SONIA KUMAR SUPPORTED THE ORDERS OF THE AUTHORI TIES BELOW AND SUBMITTED THAT BEFORE THE LD.CIT(A) THE ASSESSEE HAD TAKEN OB JECTION WITH REGARD TO ISSUANCE OF NOTICES. THE OBJECTIONS OF THE ASSESSE E WERE THAT THE AO HAS NOT RECORDED SATISFACTION. THE NOTICES SO ISSUED WERE BLANK AND THERE WAS NO OFFICE SEAL OF THE AO. THE LD.SR.DR SUBMITTED THAT ALL THESE OBJECTIONS OF THE ASSESSEE WERE DULY CONSIDERED BY THE LD.CIT(A) AND FOUND TO BE BASELESS. 6. WE HAVE HEARD THE LD.SR.DR, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. BEFORE THE LD.CIT(A), THE ASSESSEE HAS TAKEN A GROUND FOR NOT GIVING SUFF ICIENT OPPORTUNITY FOR REPRESENTING HIS CASE. THE LD.CIT(A) HAS DISMISSED THE GROUND ON THE BASIS THAT HE ASSESSEE WAS GIVEN OPPORTUNITY VIDE NOTICES DATED 29/01/2009 AND 25/09/2009. THE ASSESSEE IN ITS STATEMENT OF FACTS IN PARA-3 OF ITS SUBMISSION SUBMITTED AS UNDER:- IT(SS)A NO.584/AHD/2011 SHRI ASHISH KHURANA VS. DY.CIT BLOCK PERIOD 1.4.1996 TO 25.07.2002 4 3. THE A.O. INITIALLY INITIATED PENALTY PROCEEDIN GS FOR FURNISHING INACCURATE PARTICULAR OF INCOME. SINCE THE INCOME ADDITION WAS UNDER DISPUTED THE PENALTY PROCEEDINGS WERE KEPT PENDING. THEREAFTER T HE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE DATED 27/0 1/2009 AND 05/0 2/2009 CALLING FOR GIVING REPLY THE NOTICES DO NOT INDICATE THE TIME L IMIT BY WHICH THE REPLAY WAS REQUIRED TO FILE. MOREOVER THE NOTICE ISSUED U/ S. 158BFA(2), THE CONTENTS OF THE NOTICE REQUIRED TO GIVE REPLY U/S. 271(1)(C) . IT MAY ALSO BE NOTED THAT THE NOTICE DATED 27/01/2009 AND 25/02/2009 WERE REC EIVED ON THE DATE 04/03/2009. SINCE THE NOTICE DID NOT MENTION THE DA TE OF FILING THE OBJECTIONS, THE APPELLANT HONESTLY PRESUMED THAT THE PROCEEDING S WERE DROPPED. HOWEVER TO SURPRISE THE APPELLANT THE PENALTY ORDER WAS RECEIVED 29/04/2009 LEVYING PENALTY OF RS.496,500/, YOUR APP ELLANT IN APPEAL AGAINST THE ORDER PASSED BOTH ON THE LEGAL GROUNDS AS WELL AS ON ACTUAL GROUNDS ATTACHED HEREWITH. 6.1. WE FIND THAT THE AO HAD IMPOSED PENALTY O N THE BASIS THAT THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY PENALTY SHO ULD NOT BE LEVIED U/S.158BFA(2) OF THE ACT IN RESPECT OF THE UNDISCLO SED INCOME DETERMINED IN HIS CASE. IT IS OBSERVED BY THE AO THAT IN RESPONS E TO THE SAID NOTICE NEITHER ANYBODY ATTENDED ON BEHALF OF THE ASSESSEE NOR ANY WRITTEN REPLY HAS BEEN FILED. HOWEVER, BEFORE THE LD.CIT(A), THE ASSESSEE MADE ELABORATE SUBMISSION WHICH IS REPRODUCED IN THE ORDER OF THE LD.CIT(A) IN PARA-2 OF HIS ORDER. THE RELEVANT CONTENTS OF THE ASSESSEES SU BMISSION BEFORE THE LD.CIT(A) ARE REPRODUCED HEREUNDER:- THEREAFTER THE A. O. HAS POINTED OUT THAT PENALTY BECOMES LEVIABLE AFTER GIVING EFFECT TO THE APPELLATE ORDER. HERE IT IS NO T CLEAR AS TO WHICH APPELLATE ORDER AND ALSO THE DATE OF THE ORDER IS MISSING. TH E A. O. HAS PRE ASSUMED IN THE NOTICE ITSELF THAT PENALTY BECOMES LEVIABLE ON THE ADDITIONS CONFIRMED BY THE HONOURABLE ITAT. THIS IMPLIES THAT THE A.O. HAS TAKEN A DECISION IN ADVANCE FOR LEVY OF PENALTY AND WITHOUT CALLING FOR THE OBJECTIONS FROM THE ASSESSEE AS STATUTORILY REQUIRED UNDER THE LAW. MOR EOVER THE A. O. HAS REFERRED TO THE ORDER DATED 27.01.2009 (PG NO 33-34 )GIVING APPEAL EFFECT. THE NOTICE DATED 27.01.2009 IS ALSO NOT CLEAR AS TO THE CHARGE FOR WHICH NOTICE HAS BEEN ISSUED. IN ORDER THAT THE PROCEEDIN GS ARE VALID, THE CHARGE IT(SS)A NO.584/AHD/2011 SHRI ASHISH KHURANA VS. DY.CIT BLOCK PERIOD 1.4.1996 TO 25.07.2002 5 FRAMED AGAINST THE ASSESSEE SHOULD ALSO BE CLEAR AN D SPECIFIC. IN THE NOTICE DATED 27.01.2009, CLAIMED TO BE ISSUED U/S 158BFA ( 2) LATER ON REFERS TO THE PROVISIONS OF SEC 271 (1)(C) OF THE ACT. THUS THE T ITLE AND THE CHARGE ARE DIFFERENT. THE A. O IS ALSO NOT CLEAR THE SECTION U NDER WHICH PROCEEDINGS ARE INITIATED. IT APPEARS THAT THERE IS NO APPLICATION OF MIND. COMING TO THE NOTICE OF 25.02.2009, IT MAY BE NOTED THAT IT IS CL AIMED TO BE A FRESH OPPORTUNITY OF BEING HEARD HOWEVER THE SENTENCE REQ UIRING FURNISHING SHOW CAUSE AS TO WHY PENALTY SHOULD NOT BE LEVIED IS SILENT ABOUT THE CHARGE OF SPECIFIC SECTION. FURTHER THE SHOW CAUSE NOTICES DO NOT INDICATE THE AMOUNT FOR WHICH NOTICE HAS BEEN ISSUED. IN THIS NOTICE IT APPEARS THAT THE A.O. HAS PRE DETERMINED MIND IN AS MUCH AS HE HAS REQUIRED T O SHOW CAUSE AS TO WHY PENALTY SHALL NOT BE LEVIABLE ON THE ADDITIONS CONF IRMED. IT APPEARS THAT ACCORDING TO THE A. O. WHATEVER ADDITION IS CONFIRM ED, IT IS SUBJECT TO LEVY OF PENALTY IRRESPECTIVE OF FACT, WHETHER THERE IS JUST IFICATION FOR LEVY OF PENALTY OR NOT. LASTLY THE A.O. HAS EVEN NOT SPECIFIED THE TIME OR PERIOD BY WHICH THE REPLY IS TO BE GIVEN. FINALLY THE NOTICE DATED 25.02.2009 DO NOT BEAR THE SEAL OF THE CONCERNED OFFICER. THUS YOUR APPELLANT CONTENDS THA T THERE IS NO VALID NOTICE ISSUED BY THE A.O IN ACCORDANCE WITH THE PROVISION OF LAW AND THAT THE PENALTY IS LEVIED BASED ON THIS VOID AND ILLEGAL NO TICE BY AN ORDER DATED 27.04.2009 REQUIRES TO BE CONSIDERED AS INEFFECTIVE , ILLEGAL AND BAD IN LAW. IT SHOULD THEREFORE BE SQUASHED. 6.2. THE ASSESSEE HAS NOT FILED ANY PAPER-BOOK NOR THE REVENUE HAS BROUGHT THE ASSESSMENT RECORDS. UNDER THESE FACTS, THE CO NTENTION OF THE ASSESSEE CANNOT BE VERIFIED AND THE LD.CIT(A) HAS ALSO NOT G IVEN A CLEAR FINDING ABOUT THE OBJECTIONS OF THE ASSESSEE. THEREFORE, AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, THE ORDER OF THE LD.CIT(A) IS HE REBY SET ASIDE AND THE GROUND NO.1 IS RESTORED TO HIS FILE FOR ADJUDICATING THE I SSUE WITH REGARD TO LEGALITY OF THE NOTICES ISSUED BY THE AO. NEEDLESS TO SAY THAT THE LD.CIT(A) WOULD AFFORD REASONABLE OPPORTUNITY TO THE ASSESSEE FOR REPRESEN TING HIS CASE. THE LD.CIT(A) WOULD GIVE A CLEAR FINDING IN RESPECT OF THE NOTICE DATED 27/01/2009 AND 25/02/2009 AS THE CLAIM OF THE ASSESSEE IS THAT THE NOTICE DATED 27/01/2009 CLAIMED TO HAVE BEEN ISSUED U/S.158BFA(2 ) OF THE ACT LATER ON IT(SS)A NO.584/AHD/2011 SHRI ASHISH KHURANA VS. DY.CIT BLOCK PERIOD 1.4.1996 TO 25.07.2002 6 REFERENCE OF THE PROVISIONS OF SECTION 271(1)(C) O F THE ACT IS MADE. THUS, THE TITLE AND CHARGE ARE DIFFERENT. IT IS ALSO THE CON TENTION OF THE ASSESSEE THAT THE NOTICE DATED 25/02/2009 IS ALSO SILENT ABOUT THE CH ARGE OF SPECIFIC SECTION. THESE ASPECTS REQUIRE SPECIFIC FINDING BY THE LD.CI T(A), ACCORDINGLY LD.CIT(A) IS HEREBY DIRECTED TO VERIFY THE CONTENTI ON OF THE ASSESSEE AND DECIDE THE GROUND OF APPEAL AFRESH. THUS, GROUND NO.1 OF ASSESSEES IS ALLOWED FOR STATISTICAL PURPOSES. 7. APROPOS TO GROUND NO.2 OF ASSESSEES APPEAL, AS WE HAVE SET ASIDE THE ORDER OF THE LD.CIT(A) IN RESPECT OF LEGALITY OF NO TICE FOR FRESH DECISION IN OUR ORDER ON GROUND NO.1 OF THIS APPEAL, THIS GROUND I S ALSO RESTORED TO THE FILE OF LD.CIT(A) FOR DECISION AFRESH. THUS, GROUND NO.2 O F ASSESSEES APPEAL IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 8. GROUND NO.3 IS GENERAL IN NATURE WHICH REQUIRE N O INDEPENDENT ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 5 T H DAY OF JUNE, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) 1 # 1 ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 05/ 06 /2015 2.., .#../ T.C. NAIR, SR. PS IT(SS)A NO.584/AHD/2011 SHRI ASHISH KHURANA VS. DY.CIT BLOCK PERIOD 1.4.1996 TO 25.07.2002 7 / COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. '5%& / THE RESPONDENT. 3. 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-XI, AHMEDABAD 5. 78 '## , , / DR, ITAT, AHMEDABAD 6. 89: ; / GUARD FILE. / BY ORDER, 57 '# //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 2.6.15 (DICTATION-PAD 12+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.5.6.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .........5.6.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER