The Income Tax Officer Ward-7(1)(2), Bangalore V. M/s Triad Resorts and Hotels Pvt Ltd , Bangalore

MA 126/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9285 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 22-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Reassessment proceedings
• Section: 271(1)(c); 274; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER [ M P NO S . 126 & 136/BANG/2019 (IN ITA NOS.3324 AND 3325/BANG/2018)] (ASSESSMENT YEAR S :) MP NOS. AND ASSESSMENT YEAR APPLICANT RESPONDENT 126 /B ANG /201 9 (IN ITA NO.3324/BANG/2018 2008-09 THE INCOME TAX OFFICER, WARD-7(1)(2), BENGALURU. M/S. TRAID RESORTS AND HOTELS PVT. LTD., APARANTA, 2208, HAL 3 RD STAGE, 80 FEET ROAD, KODIHALLI, BENGALURU 560 008. PAN: AAACT 6316 P 136 /B ANG /201 9 (IN ITA NO.3325/BANG/2018 2008-09 THE INCOME TAX OFFICER, WARD-7(1)(3), BENGALURU. M/S. VARDE DEVELOPERS PVT. LTD., APARANTA, 2208, HAL 3 RD STAGE, 80 FEET ROAD, KODIHALLI, BENGALURU 560 008. PAN: AAACV 5595 Q REVENUE BY : SHRI. PRIYADARSHI MISRA, JCIT APPLICANT BY : SHRI. C. P. RAMASWAMI, ADVOCATE DATE OF HEARING : 03 / 01 /20 20 DATE OF PRONOUNCEMENT : 10 / 01 /20 20 O R D E R PER A. K. GARODIA: BOTH THESE MISCELLANEOUS PETITIONS (MPS) ARE FILED BY THE REVENUE WHICH ARE DIRECTED AGAINST THE COMBINED TRIBUNAL ORDER DATED 28.06.2019. BOTH THESE CASES ARE OF TWO DIFFERENT ASSESSEES [MP NOS. 126 AND 136/BANG/2019 (IN ITA NOS.3324 AND 3325/BANG/2018)] PAGE 2 OF 4 BUT BOTH THESE MPS WERE ALSO HEAD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN BOTH THESE MPS, THIS IS THE CONTENTION RAISED BY THE REVENUE THAT THE TRIBUNAL HAS NOT DECIDED ONE OF THE GROUNDS WHICH WAS RAISED BEFORE THE TRIBUNAL THAT THE ASSESSEE HAS COMMITTED BOTH TYPES OF INFRINGEMENTS I.E., IN RESPECT OF SAME ITEMS OF ADDITIONS / DISALLOWANCES, THE FACT OF THE ASSESSEE IS THAT IT HAD FILED INADEQUATE PARTICULARS OF INCOME IN RESPECT OF COST OF IMPROVEMENT AND IT HAD CONCEALED THE PARTICULARS OF SALE CONSIDERATION INCOME. 3. IN THE COURSE OF HEARING, LEARNED DR OF THE REVENUE REITERATED THE SAME CONTENTIONS WHICH ARE RAISED BY THE REVENUE IN THESE TWO MPS. AT THIS JUNCTURE, THE BENCH WANTED TO KNOW AS TO WHETHER IN THE ASSESSMENT ORDER AND IN THE NOTICE ISSUED BY THE AO UNDER SECTION 274 R.W.S 271(1) (C) OF THE IT ACT, 1961, THE AO HAS SPECIFIED THAT THE ASSESSEE HAS COMMITTED BOTH TYPES OF INFRINGEMENTS I.E., FURNISHED INADEQUATE PARTICULARS OF INCOME AND CONCEALED THE INCOME ALSO. IN REPLY, IT WAS SUBMITTED BY THE LEARNED DR OF THE REVENUE THAT AS PER THE ASSESSMENT ORDER, THE AO HAS STATED ON THE LAST PAGE OF THE ASSESSMENT ORDER THAT PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT, 1961 IS INITIATED SEPARATELY AND THERE IS NO SPECIFIC ALLEGATION MADE BY THE AO IN THE ASSESSMENT ORDER. HE ALSO ADMITTED THAT IN THE NOTICE ISSUED BY THE AO UNDER SECTION 274 R.W.S 271(1) (C) OF THE IT ACT, 1961 ALSO, THE AO HAS NOT SPECIFIED THAT THE ASSESSEE HAS COMMITTED BOTH TYPES OF INFRINGEMENTS I.E., FURNISHED INADEQUATE PARTICULARS OF INCOME AND CONCEALED THE INCOME ALSO BUT IN THE PENALTY ORDER, IT IS A CLEAR FINDING OF THE AO THAT THE ASSESSEE IS GUILTY OF BOTH TYPES OF INFRINGEMENTS I.E., FURNISHED INADEQUATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. IT WAS HIS SUBMISSION THAT UNDER THESE FACTS, IT COULD BE ACCEPTED THAT THE MISTAKE OF THE AO IN NOT MAKING BOTH ALLEGATION IN THE NOTICE ISSUED BY HIM UNDER SECTION 274 R.W.S. 271(1)(C) OF THE IT ACT, 1961 IS TAKEN CARE BY SECTION 292B OF THE IT ACT, 1961. HE ALSO PLACED RELIANCE ON THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF SKYLIGHT HOSPITALITY LLP V. ACIT AS REPORTED IN 303 CTR 130. HE SUBMITTED THAT RELIANCE WAS PLACED BY THE LEARNED DR OF THE REVENUE ON THIS JUDGMENT OF THE HONBLE APEX COURT IN THE COURSE OF HEARING OF THE APPEAL ALSO AND IT WAS POINTED OUT THAT IN THIS CASE, THE ISSUE INVOLVED WAS REGARDING [MP NOS. 126 AND 136/BANG/2019 (IN ITA NOS.3324 AND 3325/BANG/2018)] PAGE 3 OF 4 VALIDITY OF REASSESSMENT PROCEEDINGS UNDER SECTIONS 147 AND 148 OF THE IT ACT, 1961 AND IT WAS HELD BY HONBLE APEX COURT IN THAT CASE THAT ALTHOUGH NOTICE WAS ISSUED IN THE NAME OF ERSTWHILE COMPANY, DESPITE COMPANY SEIZING TO EXIST AS IT WAS CONVERTED INTO LLP, THIS ERROR WOULD NOT INVALIDATE REASSESSMENT PROCEEDING AS THE SAME IS NOT AN ILLEGALITY BUT AN IRREGULARITY AND PROCEDURAL / TECHNICAL LAPSE WHICH COULD BE CURED UNDER SECTION 292B OF THE IT ACT, 1961 AND HENCE, IN THE PRESENT CASE ALSO, EVEN IF THERE IS SOME MISTAKE IN THE NOTICE ISSUED BY THE AO UNDER SECTION 274, IT SHOULD BE HELD THAT IT IS A PROCEDURAL AND TECHNICAL LAPSE COULD BE CURED UNDER SECTION 292B OF THE IT ACT, 1961. 4. AS AGAINST THIS, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THERE IS NO APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. HE ALSO SUBMITTED THAT THESE MPS ARE FILED BY THE REVENUE WITHOUT ANY PROPER BASIS AND THEREFORE, THE MPS SHOULD BE DISMISSED AND COST SHOULD BE IMPOSED ON THE REVENUE FOR FILING SUCH FRIVOLOUS MPS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN THE FACTS OF THE PRESENT CASE, WE DO NOT FIND ANY APPARENT MISTAKE IN THE IMPUGNED COMBINED TRIBUNAL ORDER BECAUSE IT IS AN ADMITTED POSITION OF FACT THAT THE ALLEGATION MADE BY THE AO IN THE NOTICE ISSUED BY HIM UNDER SECTION 274 R.W.S. 271(1)(C) OF THE IT ACT, 1961 WAS A VAGUE ALLEGATION. THERE IS NO SPECIFIC ALLEGATION IN THE ASSESSMENT ORDER ABOUT ONE OR BOTH INFRINGEMENTS AND MERELY BECAUSE IN THE PENALTY ORDER, IT IS ALLEGED THAT THE ASSESSEE HAS COMMITTED BOTH INFRINGEMENTS, THE PENALTY CANNOT BE JUSTIFIED BECAUSE IN THE ABSENCE OF SUCH ALLEGATION IN THE ASSESSMENT ORDER AND PENALTY NOTICE, THE ASSESSEE CANNOT PUT FORWARD HIS OBJECTION IN THAT REGARD. IT IS HELD BY THE TRIBUNAL IN THE IMPUGNED TRIBUNAL ORDER THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY AS REPORTED IN (2013) 359 ITR 565. THE JUDGMENT OF THE HONBLE APEX COURT RENDERED IN THE CASE OF SKYLIGHT HOSPITALITY LLP V. ACIT (SUPRA) WAS DULY CONSIDERED BY THE TRIBUNAL IN THE IMPUGNED TRIBUNAL ORDER AND A CLEAR FINDING IS GIVEN BY THE TRIBUNAL IN PARA 11 OF THE IMPUGNED TRIBUNAL ORDER THAT THIS JUDGMENT IS NOT APPLICABLE IN THE PRESENT CASE BECAUSE IN THE PRESENT CASE, THE ISSUE INVOLVED IS REGARDING DEFECT IN PENALTY NOTICE AND THAT TOO NOT REGARDING DEFECT IN THE [MP NOS. 126 AND 136/BANG/2019 (IN ITA NOS.3324 AND 3325/BANG/2018)] PAGE 4 OF 4 NAME BUT REGARDING DEFECT IN THE ALLEGATION AND THEREFORE, THIS JUDGMENT IS NOT APPLICABLE IN THE PRESENT CASE. IN VIEW OF THESE FACTS, WE FIND THAT THERE IS NO APPARENT MISTAKE IN THE IMPUGNED COMBINED TRIBUNAL ORDER. REGARDING THIS REQUEST OF THE LEARNED AR OF THE ASSESSEE THAT COST SHOULD BE IMPOSED ON THE REVENUE FOR FILING THESE TWO MPS, WE WOULD LIKE TO OBSERVE THAT THE REVENUE SHOULD TAKE PROPER CARE BEFORE FILING A M. P. AND M. P. SHOULD NOT BE FILED IN A ROUTINE MANNER TO AVOID THE WASTAGE OF TIME OF ALL THE STAKE HOLDERS I.E., REVENUE, ASSESSEE AND ALSO OF THE TRIBUNAL BUT WE DO NOT CONSIDER IT PROPER TO IMPOSE COST IN THE FACTS OF THE PRESENT CASE BUT WE CAUTION THE REVENUE THAT IF THE REVENUE CONTINUES TO FILE M. P. IN A ROUTINE MANNER, WE MAY IMPOSE COST ALSO ON THE CONCERNED OFFICIALS OF THE REVENUE I.E. THE A.O. WHO FILED THE M. P. AND THE CIT/PCIT WHO GRANTED PERMISSION FOR FILING SUCH M. P. IN A ROUTINE MANNER. 6. IN THE RESULT, BOTH MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) JUDICIAL MEMBER (A. K. GARODIA) ACCOUNTANT MEMBER PLACE : BANGALORE DATED : 10/01/2020 /NS/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE