Dy Commissioner of Income Tax, Jammu V. Sh. Chander Mohan Arora, Jammu

MA 10/ASR/2020

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT), Central Circle, Jammu, as the appellant, and Sh. Chander Mohan Arora, the respondent, concerning the assessment years 2009-10 and 2010-11. The core issue revolves around the validity of the penalty notices issued under section 271(1)(c) of the Income Tax Act, 1961, for alleged concealment of income. The ITAT had previously allowed the assessee's appeal, citing the issuance of a defective notice that did not specify the grounds of 'concealment of particulars of income' or 'furnishing inaccurate particulars of income'. The revenue filed MAs arguing that the notice was indeed specific and required rectification. The Tribunal, upon reviewing the documents and arguments, found that the notice was not adequately specific, leading to the recall of its earlier order and setting the stage for a new hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115193 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-07-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-06-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 22-06-2020
• Other Referred Cases: Manjunath Cotton & Ginning Factory vs. Commissioner of Income-tax, Popular Engg. Co vs. Income-tax Appellate Tribunal, Commissioner of Income-tax vs. Karam Chand Thapar & Bros. (P.) Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 271(1)(c); 80HHC; 274; 254(2); 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER ANDSH. ANIKESH BANERJEE, JUDICIAL MEMBER M.A. Nos. 9 &10/Asr/2020 (In I.T.A.No.49 & 50/Asr/2017) Assessment Years: 2009-10 & 2010-11 DCIT Central Circle, Jammu. (Appellant) Vs. Sh. Chander Mohan Arora, H. No.789/A, Gandhi Nagar, Jammu [PAN: ACCPA1863D] (Respondent) Appellant by Sh. Pradeep Kumar, Sr. DR , CA. Respondent by Sh. Joginder Singh, CA Date of Hearing 12.06.2023 Date of Pronouncement 17.07.2023 ORDER Per Anikesh Banerjee, JM: These instant Miscellaneous Applications (in brevity the MA) were filed by the revenue u/s 254(2) of the Income Tax Act, 1961 (in brevity the Act) against the order of ITAT, Amritsar Bench, bearing I.T.A.No. 49 & 50/Asr/2017 related to assessment years 2009-10 and 2010-11.After consent of both the parties MA 9/Asr/2019 is taken as lead case. M.A. Nos. 9 &10/Asr/2020 (In I.T.A.No.49 & 50/Asr/2017) 2 2. The ld. DR first argued and placed the relevant paragraphs 3 to 8 of the MA which are reproduced as below: “(3) That the Hon’ble tribunal has further held that the notice in this case has been issued in a stereotype manner without applying mind which is bad in law, hence cannot be considered a valid notice sufficient to impose penalty u/s 271(1)(c) of the Act, because as per Manjunath Cotton & Ginning Factory (supra) case, if the show cause notice is vague then principles of natural justice is offended and on the basis of such proceedings, no penalty could be imposed on the assessee. (4) That the kind attention of the Hon’ble ITAT is drawn to the fact that the notice u/s 274 r.w.s 271(1 )(c) of the Act, dated 21-03-2014 (Copy enclosed) issued by the A. O. at the time of initiation of the penalty proceedings has only the following words mentioned on it:- “Have concealed particulars of your income.'’ The words “have furnished inaccurate particulars of income” have been omitted on the body of the notice issued by the A. O. (5) That it is relevant to mention that the A.O. while initiating the penalty proceedings has expressed his clear M.A. Nos. 9 &10/Asr/2020 (In I.T.A.No.49 & 50/Asr/2017) 3 intentions that he proposes to initiate the proceedings for concealment of income only. (6) That in view of the above mentioned omissions, referred in para “4” above, it is humbly submitted that there is a mistake apparent from record in the order dated 30-12-2019 passed by the Hon’ble tribunal, which requires rectification. (7) That it is requested that the order dated 30-12-2019 in this case may kindly be recalled to rectify the mistake pointed out above and validity of the order passed by the A. O. may kindly be restored. (8) That this petition is being filed on approval conveyed by the Pr. Commissioner of Income Tax (Central), Ludhiana vide his office letter No. 472 dated 04.06.2020.” 3. The ld. DR further argued that the single order of group of assesses was passed by the ITAT, Amritsar Bench and assessee’s case was taken under the same instance related to other cases. The ITAT Amritsar Bench allowed the appeal of the assessee on the ground for issuance of defective notice u/s 271(1)(c) for non- specificationof limb related“concealed of particular of income” or “assessee has furnished inaccurate particular of income”. The ld. DR further invited our attention in order of ITAT Amritsar Bench in ITA Nos. 49 & 50/Asr/2017 para 10.9 is reproduced as below: M.A. Nos. 9 &10/Asr/2020 (In I.T.A.No.49 & 50/Asr/2017) 4 “10.9 In the background of the aforesaid legal position and, having regard to the manner in which the Assessing Officer has issued notice under section 274 r.w.s. 271(l)(c) of the Act dated 16.12.2011 without striking off the irrelevant words, apparently goes to prove that the Assessing Officer initiated the penalty proceedings by issuing the notice u/s 274/271(l)(c) of the Act without specifying whether the assessee has concealed "particulars of income" or assessee has furnished "inaccurate particulars of income", so as to provide adequate opportunity to the assessee to explain the show cause notice. Rather notice in this case has been issued in a stereotyped manner without applying mind which is bad in law, hence can not be considered a valid notice sufficient to impose penalty u/s 271(l)(c) of the Act, because as per Manjunatha Cotton & Ginning Factory (supra) case, if the show cause notice is vague then principles of natural justice is offended and on the basis of such proceedings, no penalty could be imposed on the assessee. Hence we are inclined to delete the penalty imposed by the Assessing Officer and upheld by the Ld. CTT(A).” 3.1 The ld. DR further placed the copy of notice issued by the ld. AO u/s 274/271(1)(c) of the Act dated 21/03/2014. The copy of the notice is reproduced as below:- M.A. Nos. 9 &10/Asr/2020 (In I.T.A.No.49 & 50/Asr/2017) 5 4. The ld. AR vehemently argued and relied on the order of ITAT Amritsar Bench. He further placed that the bench has no power to recall the order for further hearing. M.A. Nos. 9 &10/Asr/2020 (In I.T.A.No.49 & 50/Asr/2017) 6 5. Weheard the rival submission and considered the documents available in the record. The ITAT Amritsar Bench has passed the order for group of assessee and had taken ground that the limb of reason of penalty was not specified by the ld. AO during issuance of notice u/s 271(1)(c) r.w.s. 274. But in factual matrix it is very specific that the ld. AO specifically mentioned that “concealed particulars of your income” no other reason was mentioned. The assessee will not come under thecategory with group of assesse. The mistake itself apparent from the record and on the face of order. The question will come whether the Bench will recall its own order. The issue is duly delt by the Hon’ble Jurisdictional High Court and Hon’ble Apex Court. The bench has respectfully relied of the following judgments with are reproduce as below:- Punjab & Haryana High Court in the case of Popular Engg. Co Vs. Income- tax Appellate Tribunal reported in 119 Taxmann 51 has held as under: "Section 254 of the Income-tax Act, 1961 - Appellate Tribunal -Powers of - Assessment year 1992-93 - Tribunal approved speaking order of first appellate authority allowing petitioner’s appeal against Assessing Officer’s disallowance of petitioner’s claim for deduction under section 80HHC - Subsequently, it recalled its order under section 254(2) on ground that department’s plea had not been considered on merits - Whether under section 254(2), Appellate Tribunal is empowered to amend any order passed by it under section 254(1) in order to rectify any mistake apparent from record but it has no power to review or revise its order - Held, yes - Whether since order of Tribunal under section 254(1) satisfied M.A. Nos. 9 &10/Asr/2020 (In I.T.A.No.49 & 50/Asr/2017) 7 requirements of speaking order insofar it had not only taken cognizance of reasons assigned by first appellate authority but had also approved them, impugned order of recall must be held to be vitiated by error of law - Held, yes”. Similarly, the same view has been held by the Honourable Supreme Court in the case of Commissioner of Income-tax Vs. Karam Chand Thapar & Bros. (P.) Ltd reported in 176 ITR 535 has held as under: “It is equally settled that the decision of the Tribunal has not to be scrutinised sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on record has not been noticed by the Tribunal in its judgment. If the Court, on a fair reading of the judgment of the Tribunal. finds that it has taken into account all relevant materials and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless of course. The conclusions arrived at by the Tribunal are perverse. It was not necessary for the Tribunal to state in its judgment specifically or in express words that it had taken into account the cumulative effect of the circumstances or had considered the totality of facts, if the judgment of the Tribunal showed that it had, in fact, done so. Thus, there was no reason to interfere with the decision of the Tribunal. Accordingly, the appeal was to be dismissed”. M.A. Nos. 9 &10/Asr/2020 (In I.T.A.No.49 & 50/Asr/2017) 8 In our considered view, the mistake is apparent from the record. So, the MA No. 9/Asr/2019 is allowed for further hearing. The MA 9/Asr/2019 is mutatis mutandis applicable to Miscellaneous Application 10/Asr/2019 also. 6. In view of the above, the order dated 30.12.2019 is recalled. The appeal is ordered to be restored to its original no. in situ. For merits, it shall now come up for hearing on 09 th August 2023. The Registry is also directed to issue the fresh notice for hearing of both the parties. 7. In the result, the Miscellaneous Application of the revenue bearing M.A. No. 9 & 10/Asr/2019 are allowed. Order pronounced in the open court on 17.07.2023 S d/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order