Shri Gulam Mohammed Liakat Ali, Baroda V. The ACIT., Circle-8, Baroda

ITSSA 77/AHD/2008

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7583 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-04-2012
• Assessment Year: misc
• Appeal Filed On: 30-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: MRS URVASHI SHODHAN
• Keywords: Salary income; Opportunity of being heard; Principle of natural justice; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI D. K. TYAGI, JM AND A. MOHAN ALANKAMON Y, AM) IT(SS)A NO.77/AHD/2008 B. P.:01-04-1990 TO 17-08-2000 SHRI GULAM MOHAMMAD LIAKAT ALI, 302, HAMPTON SQUARE, FATEHGUNJ, BARODA PA NO. ABLPG 0543 J VS THE A. C. I. T., CIRCLE 8, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA (APPELLANT) (RESPONDENT) IT(SS)A NO.7/AHD/2009 B. P.:01-04-1990 TO 17-08-2000 THE D. C. I. T., CIRCLE 8, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA VS SHRI GULAM MOHAMMAD LIAKAT ALI, 302, HAMPTON SQUARE, FATEHGUNJ, BARODA PA NO. ABLPG 0543 J (APPELLANT) (RESPONDENT) ASSESSEE BY MRS. URVASHI SHODHAN, AR DEPARTMENT BY SHRI B. L. YADAV, SR. DR DATE OF HEARING: 19 -04-2012 DATE OF PRONOUNCEMENT: 19-04-2012 O R D E R PER A. MOHAN ALANKAMONY: THESE CROSS APPEALS ARE FILED BY THE ASSESSEE AND THE REVENUE AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A)-VI, BARODA DATED 28-11-2008 IN APPEA L NO. CAB-VI- 487/07-08 PASSED U/S 158BFA (2) OF THE IT ACT FOR T HE BLOCK PERIOD 01-04-1990 TO 17-08-2000. SINCE BOTH THE CROSS APPE ALS WERE HEARD IT (SS) A NO.77/AHD/2008 & IT (SS) A NO.7/AHD/2009 SHRI GULAM MOHAMMED LIAKAT ALI 2 TOGETHER AND ARE RELATED TO THE SAME BLOCK PERIOD, FOR THE SAKE OF CONVENIENCE, THEY ARE ADJUDICATED TOGETHER BY THIS COMMON & CONSOLIDATED ORDER. IT (SS) A NO.77/AHD/2008(ASSESSEES APPEAL) 2. THE ASSESSEE HAS TAKEN 3 GROUNDS IN HIS APPEAL A ND THEY ARE LISTED HEREIN BELOW: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING PENALTY LEVIED U/S 158BFA (2) OF THE ACT BY AO OF RS.20,99,230/- THAT IS WHOLLY UNSUSTAINABLE IN LAW AND ON FACTS. BOTH THE LOWER AUTHORITIES HAVE FAILED TO AP PRECIATE THE FACT THAT THE APPELLANT HAS NEITHER FURNISHED INACCURATE PARTICULARS NOR CONCEALED ANY INCOME AND HENCE THE PENALTY LEVIED WITHOUT ANY MERITS AND JUSTIFICATION REQUIRES TO BE QUASHED. 2. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING PENALTY LEVIED US/ 158BFA (2) OF THE ACT AS NEITHER ANY SATISFACTION IS RECORDED BY AO REGARDING CONCEALMEN T OF INCOME OR FURNISHING OF INACCURATE PARTICULARS NOR ANY COGENT MATERIAL IS BROUGHT ON RECORD TO SHOW THAT T HERE WAS DELIBERATE ATTEMPT TO CONCEAL INCOME BY THE APPELLANT. 3. BOTH THE LOWER AUTHORITIES HAVE ERRED IN NOT APP RECIATING THE FACT THAT THE APPELLANT HAS CHALLENGED THE VARI OUS ADDITIONS MADE IN THE BLOCK ASSESSMENT ON THE BASIS OF CONJECTURES & SURMISES THAT IS PENDING FOR HEARING BEFORE THE HONBLE ITAT AND THEREFORE PENALTY LEVIED ON TH E BASIS OF THE ADDITIONS MADE IN THE BLOCK ASSESSMENT WITHOUT ANY MERITS REQUIRES TO BE QUASHED AND IS NO T JUSTIFIED. 2.1 BASED ON THE ABOVE 3 GROUNDS, THE ASSESSEE HAS TAKEN THE FOLLOWING 2 LEGAL GROUNDS: IT (SS) A NO.77/AHD/2008 & IT (SS) A NO.7/AHD/2009 SHRI GULAM MOHAMMED LIAKAT ALI 3 1. THE IMPUGNED PENALTY ORDER IS BARED BY LIMITATI ON FOR THE FOLLOWING REASONS: SECTIOIN158BFA (3) ( C) LAYS DOWN THAT AN ORDER IMP OSING PENALTY HAS TO BE PASSED IN A CASE WHERE THE ASSESS MENT IS THE SUBJECT-MATTER OF APPEAL TO THE COMMISSIONER (APPEALS) UNDER SECTION 246A OR AN APPEAL TO THE IT AT UNDER SECTION 253 (A) BEFORE SIC AFTER THE EXPIRY OF THE FINANCIAL YE AR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTIO N FOR IMPOSITION OF PENALTY HAS BEEN INITIATED OR (B) WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE APPELLATE TRIBUNAL IS RECEIVED BY THE COMMISSIONER, WHICHEVER PERIOD EXPIRES LATER. IT IS SUBMITTED THAT IN THE PRESENT CASE THE LEARNE D AO HAS PASSED THE ORDER IMPOSING PENALTY CALCULATING SIX MONTHS F ROM THE END OF THE MONTH OF RECEIPT OF THE ORDER OF ITAT, HOWEVER THE SAID ORDER OF THE ITAT IN THE CASE OF THE DEPARTMENTAL APPEAL WAS ONL Y ON ONE GROUND RELATING TO PARTIAL RELIEF IN THE MATTER OF SURCHAR GE TO THE ASSESSEE AND THAT WAS DISMISSED BY THE ITAT. THEREFORE, IT HAS T O BE PRESUMED THAT THE PRESENT PENALTY ORDER IS PASSED BASED ON T HE ORDER OF THE LEARNED CIT(A)-V BARODA DATED 29-01-2004. IN SUCH C ASE, THE LAST DATE FOR PASSING PENALTY ORDER WOULD BE SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE LEARNED CIT(A) WAS RECEIVED BY THE COMMISSIONER AND THEREFORE, THE IMPUGNED ORDER IS BARRED BY LIMITATION U/S 158BFA (2) OF THE ACT. 3. ON THIS ISSUE, THE LEARNED DR PLACED RELIANCE ON THE ORDER OF THE LEARNED CIT(A). IT (SS) A NO.77/AHD/2008 & IT (SS) A NO.7/AHD/2009 SHRI GULAM MOHAMMED LIAKAT ALI 4 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE RECORDS BEFORE US. ON A CLOSE SCRUTINY OF SECTI ON 158BFA (3) (C) OF THE ACT, IT IS APPARENT THAT THE LEARNED AO IS E MPOWERED TO PASS THE PENALTY ORDER ON AN UPPER TIME LIMIT, WITHIN SI X MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE LEARNED CIT(A) OR AS THE CASE MAY BE, THE APPELLATE TRIBUNAL IS RECEIVED BY THE CHIEF COMMISSIONER OR THE COMMISSIONER WHICHEVER PERIOD E XPIRES LATER. THUS, THE LEARNED AO CAN PASS PENALTY ORDER U/S 158 BFA OF THE ACT ANY TIME WITHIN SIX MONTHS FROM THE END OF THE MONT H IN WHICH THE ORDER OF THE APPELLATE TRIBUNAL IS RECEIVED BY THE CHIEF COMMISSIONER OR THE COMMISSIONER. BASED ON THIS INTERPRETATION, WE ARE IN CONFORMITY WITH THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE WHO HAS HELD AS UNDER: 5.3 THE GROUND RAISED BY THE APPELLANT BEING LEGA L IN NATURE, IT IS ALLOWED TO BE ADMITTED. HAVING CONSID ERED THE SUBMISSIONS OF THE APPELLANT, PROVISION OF ACT AND REMAND REPORT, I AGREE WITH THE ASSESSING OFFICER THAT THE LIMITATION IS FOR COMPLETING THE PENALTY PROCEEDINGS BEYOND A PAR TICULAR DATE AND THAT THE ASSESSING OFFICER IS NOT PRECLUDED FRO M MAKING PENALTY ORDER PRIOR TO RECEIPT OF QUANTUM ORDER FOR M HONORABLE ITAT. 5.3.1 NORMALLY, THE A. O. SHOULD WAIT FOR THE OUTC OME OF THE ITAT ORDER BEFORE PROCEEDING WITH THE PENALTY P ROCEEDINGS. THE A. O. SEEMS TO HAVE ADOPTED THE INTERPRETATION THAT THE PERIOD OF 6 MONTHS WOULD COMMENCE FROM THE RECEIPT OF ITAT ORDER ON DEPARTMENTS APPEAL. IN MY VIEW, THE A. O. WOULD HAVE TO COMMENCE PENALTY PROCEEDINGS ALL OVER AGAIN AFTE R RECEIPT OF HONBLE ITATS ORDER ON ASSESSEES APPEAL AND THE P RESENT PENALTY ORDER WOULD GET MERGED WITH THE SUBSEQUENT PENALTY ORDER. HOWEVER, ACADEMICALLY SPEAKING, THERE DOES N OT APPEAR TO BE ANY BAR ON A. O. TO PASS THE PENALTY ORDER PR IOR TO RECEIPT IT (SS) A NO.77/AHD/2008 & IT (SS) A NO.7/AHD/2009 SHRI GULAM MOHAMMED LIAKAT ALI 5 OF HONBLE ITAT ORDER. THE PLEA OF THE APPELLANT IS THUS REJECTED. ACCORDINGLY, THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. 5. THE OTHER LEGAL GROUND TAKEN BY THE ASSESSEE IS THAT THE ASSESSEE WAS NOT PROVIDED WITH REASONABLE OPPORTUNI TY OF BEING HEARD. IT IS ADMITTED THAT THE PENALTY PROCEEDINGS U/S 158BFA OF THE ACT WAS INITIATED BY THE LEARNED AO VIDE NOTICE DAT ED 27-06-2002 WHICH WAS RECEIVED BY THE ASSESSEE ON 19-07-2002. H OWEVER, THE CASE OF THE ASSESSEE HAD NOT COME FOR HEARING BEFOR E THE ITAT IN SPITE OF WHICH THE ASSESSEE WAS SERVED WITH NOTICE DATED 13-12-2007 ON 18-12-2007 FOR FINALIZATION OF PENALTY PROCEEDIN GS INITIATED U/S 158BFA (2) OF T HE ACT WHICH STATED THAT SINCE THE REVENUES APPEAL WAS DECIDED AND NO FURTHER APPEAL U/S 260 A OF THE ACT WAS PREFERRED BY THE DEPARTMENT, THE PENALTY PROCEEDINGS U/S 158B FA (2) OF THE ACT WAS INITIATED IN THE BLOCK ASSESSMENT AND WAS TO BE COMPLETED. FURTHER, IT WAS SUBMITTED THAT NO SPECIFIC INSTANCE OF ADDITIONS WAS STATED IN RESPECT OF WHICH THE LEARNED AO PROPOSED TO LEVY PENALTY. IT WAS ALSO SUBMITTED BY THE ASSESSEE THAT THE LEARNED AO HAS NOT RESPONDED TO THE VARIOUS REPLIES SUBMITTED BY THE A SSESSEE AND HAD PASSED THE IMPUGNED ORDER. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. THE IMPUGNED PENALTY ORDER U/S 158BFA (2) OF THE ACT WAS PASSED BY THE LEARNED AO ON 27-12-2007 WHEREAS THE TRIBUNAL PASSED THE QUANTUM ORDER ON 11-03-2011 WHE REIN SOME OF THE ADDITIONS WERE DELETED AND CERTAIN ADDITIONS WE RE CONFIRMED BASED ON ITS FINDINGS. AT THIS JUNCTURE, WE ARE OF THE OPINION THE ENTIRE IT (SS) A NO.77/AHD/2008 & IT (SS) A NO.7/AHD/2009 SHRI GULAM MOHAMMED LIAKAT ALI 6 MATTER SHOULD BE REMITTED BACK TO THE FILE OF THE L EARNED AO TO PASS APPROPRIATE ORDER U/S 158BFA (2) OF THE ACT IN THE LIGHT OF THE ORDER OF THE TRIBUNAL DATED 11-03-2011. IT IS ORDERED ACCORD INGLY. THIS DECISION OF OURS WILL ALSO GIVE SOLACE TO THE GROUN D OF APPEAL OF THE ASSESSEE THAT SUFFICIENT OPPORTUNITY OF BEING HEARD WAS NOT PROVIDED BY THE LEARNED AO IN FRAMING THE PENALTY ORDER U/S 158BFA (2) OF THE ACT. FURTHER, WE DIRECT THE LEARNED AO TO KEEP IN MIND THE PRINCIPLES OF NATURAL JUSTICE AND PASS APPROPRIATE ORDER ACCOR DING TO LAW AND ON MERIT. IT (SS) A NO.7/AHD/2009 (REVENUES APPEAL) 7. THE REVENUE HAS RAISED 5 GROUNDS IN ITS APPEAL W HEREIN GROUNDS NO.4 AND 5 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. THE OTHER 3 GROUNDS OF APPEAL ARE LIS TED HEREIN BELOW: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACT S OF THE CASE IN HOLDING THAT THE SUM OF RS.5,55,159/-, BEIN G SALARY INCOME FOR WHICH RETURN WAS NOT FILED BY THE ASSESSEE BUT ON WHICH TDS WAS DEDUCTED BY THE EMPLOYER AND NO REFUND WAS CLAIMED BY THE ASSESSEE, CANNOT BE CONSIDERED FOR THE PURPOSES OF LEVY OF PE NALTY U/S 158BFA(2). 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN GIVING DOUBLE RELIEF IN DIRECTING THAT THE SUM OF RS.64043/, BEING HOUSE HOLD EXPENDITURE, SHOULD NOT BE CONSIDERED FOR THE LEVY OF PENALTY, WHEN HE HAS ALR EADY GIVEN RELIEF OF RS.1,26,000/- ON ACCOUNT OF AGGREGA TE OF STANDARD DEDUCTION REPRESENTING FUNDS AVAILABLE TO THE ASSESSEE FOR INVESTMENT ETC. THE LD. CIT(A) HAS GIV EN RELIEF ON THE GROUND THAT ADDITION IS AN ESTIMATE BUT HAS NOT APPRECIATED THAT ADDITION WAS MADE BY THE ASSES SING OFFICER ON ACCOUNT OF NEGATIVE FUNDS FROM SALARY AV AILABLE IT (SS) A NO.77/AHD/2008 & IT (SS) A NO.7/AHD/2009 SHRI GULAM MOHAMMED LIAKAT ALI 7 FOR THE A.Y.S 1991-92 TO 1997-98, AFTER DEDUCTING STANDARD DEDUCTION FROM THE GROSS SALARY. HENCE THE RELIEF OF RS.1,26,000/- INCLUDES THIS RELIEF OF RS.64043/- . 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DIRECTING THAT THE SUM OF RS.37,405/- SHOUL D NOT BE CONSIDERED FOR THE PURPOSE OF LEVY OF PENALTY. 8. AT THE BEGINNING OF THE HEARING IT WAS SUBMITTED BY THE LEARNED AR THAT ALL THE THREE ADDITIONS ARE DELETED BY THE TRIBUNAL OR BY THE LEARNED CIT(A) IN THEIR RESPECTIVE QUANTUM ORDER. 9. WE HAVE HEARD BOTH THE PARTIES. SINCE THE ASSESS EES APPEAL IS REMITTED BACK TO THE FILE OF THE LEARNED AO TO PASS APPROPRIATE ORDER IN THE LIGHT OF THE QUANTUM ORDER PASSED BY THE TRI BUNAL DATED 11-03-2011, WE ARE OF THE CONSIDERED VIEW THAT THIS APPEAL MAY ALSO BE REMITTED BACK TO THE FILE OF THE LEARNED AO TO P ASS APPROPRIATE ORDER IN THE LIGHT OF THE APPELLATE ORDERS, NEEDLES S TO MENTION THAT PENALTY WILL NOT SURVIVE FOR THE ADDITION DELETED B Y THE APPELLATE AUTHORITIES. IT IS ORDERED ACCORDINGLY. 10. IN THE RESULT, BOTH THE APPEAL OF THE ASSESSEE AND THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19-04-2012 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ IT (SS) A NO.77/AHD/2008 & IT (SS) A NO.7/AHD/2009 SHRI GULAM MOHAMMED LIAKAT ALI 8 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD