Income Tax Officer Ward-5(2)(4), Bangalore V. Shri.Indudhar Seetharam , Bangalore

MA 27/BANG/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7410 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER M.P. NO. 27/BANG/2019 (IN ITA NO. 1 279 /BANG/2018) ASSESSMENT YEAR : 20 09 - 10 THE INCOME TAX OFFICER, WARD 7 (2) (4), BANGALORE. VS. SHRI INDUDHAR SEETHARAM, 82, 2 ND CROSS, 4 TH BLOCK, THYAGARAJANAGAR, BANGALORE 560 019. PAN: AAJPI6529D APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : DR. P.V. PRADEEP KUMAR, ADDL. CIT (DR) DATE OF HEARING : 05 .0 7 .2019 DATE OF PRONOUNCEMENT : 19 .0 7 .2019 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS M.P. IS FILED BY THE REVENUE AND WE REPRODUCE THE CONTENTS OF THE M.P. 1. THE HON'BLE ITAT, VIDE ITS ORDER IN ITA NO.1279/BANG/2018 DT. 07.09.2018 FOR AY 2009-10, HAS HELD THAT THE IMPUGNED ORDER OF PENALTY CANNOT BE SUSTAINED IN VIEW OF THE FACT THAT THE AO HAS NOT MADE IT CLEAR IN THE NOTICE ISSUED BY HIM U/S 274 RWS 271 OF THE IT ACT WHETHER THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR OF FURNISHING INACCURATE PARTICULARS OF INCOME AND THUS DELETED THE PENALTY LEVIED U/S 271(1)(C). 2. HOWEVER, IT IS OBSERVED FROM PARA 4 OF THE ASSESSMENT ORDER DATED 28.12.2011 THAT THE PENALTY PROCEEDINGS U/S 271(1)(C) ARE INITIATED SEPARATELY SINCE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME. THE SAID PARA READS AS UNDER: 'THE ASSESSEE HAS INTENTIONALLY AND DELIBERATELY CONCEALED THE PARTICULARS OF INCOME BY NOT DECLARING THE ACCOUNT MAINTAINED AT AXIS BANK ACCOUNT AND IS LIABLE FOR PENAL PROCEEDINGS U/S 271 OF THE IT ACT AND ACCORDINGLY PENALTY PROCEEDINGS U/S 271(1)(C) OF THE IT ACT 1961 IS INITIATED SEPARATELY'. THE ASSESSMENT ORDER DATED 28.12.2011 WAS DULY SERVED ON THE ASSESSEE AND THE ASSESSEE WAS WELL AWARE OF THE FACT THAT THE PENAL PROCEEDINGS WERE INITIATED FOR CONCEALMENT OF INCOME. M.P. NO. 27/BANG/2019 (IN ITA NO. 1279/BANG/2018) PAGE 2 OF 4 3. FURTHER, PARA 5 AND 6 OF THE PENALTY ORDER DATED 28.03.2016, PASSED U/S 271(1)(C) ALSO CLEARLY MENTION THAT THE PENALTY HAS BEEN IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE. 4. IN VIEW OF THE ABOVE CLEAR CUT FINDINGS THROUGH SAID PARA 4, IT HAS TO BE CONSIDERED THAT THE AO HAS INITIATED PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME BY THE ASSESSEE, AND THE DEFECT IN NOTICE U/S 274 RWS 271(1)(C) IS CURABLE ONE U/S 292B OF THE IT ACT, 1961. 5. THE ITAT, BANGALORE BENCH IN DECISION IN THE CASE OF JAYSONS INFRASTRUCTURE INDIA PVT. LTD., VS. ITO [TS-5873-ITAT-2017 (BANGALORE)-01 AFTER GOING THROUGH THE FACTS INVOLVING SIMILAR ISSUE OBSERVED THAT SINCE THE ASSESSMENT ORDER CLEARLY MENTIONED THE REASON FOR INITIATION OF PENALTY PROCEEDINGS, NOT MENTIONING THE REASON IN THE PENALTY NOTICE SHOULD NOT CAUSE ANY PREJUDICE TO THE TAXPAYER AND ALL THE REQUIREMENTS OF SECTION 271(1)(C) AS DISCUSSED BY THE HON'BLE KARNATAKA HIGH COURT, WERE COMPLIED WITH. 6. ALSO, SIMILAR STAND WAS TAKEN BY THE MUMBAI BENCH OF ITAT IN THE CASE OF MAHESH M GANDHI VS. ACIT IN [TS-5465-ITAT-2017 (MUMBAI)- 01 ON IDENTICAL ISSUE AND WAS DECIDED IN FAVOUR OF REVENUE. 7. MERE FACT THAT THE PENALTY NOTICE DOES NOT MENTION THE REASON FOR INITIATION OF PENALTY PROCEEDINGS CANNOT BE A REASON FOR INVALIDATING THE PENALTY PROCEEDINGS, IF THE REASONS FOR INITIATING THE PENALTY ARE DISCERNIBLE FROM THE ASSESSMENT ORDER. IT IS THEREFORE PRAYED THAT THE ORDER OF THE TRIBUNAL FOR AY 2009-10 MAY BE RECALLED AND THE CASE MAY BE DECIDED ON MERITS. 2. THIS M.P. WAS FIXED FOR HEARING FOR THE FIRST TIME ON 10.05.2019 AND THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE BY RPAD. ON THIS DATE, NONE APPEARED ON BEHALF OF THE ASSESSEE AND HENCE, THE HEARING WAS ADJOURNED TO 14.06.2019. ON THIS DATE ALSO, NONE APPEARED ON BEHALF OF THE ASSESSEE AND THE HEARING WAS AGAIN ADJOURNED TO 05.07.2019 AND THE NOTICE OF HEARING WAS SENT TO ASSESSEE THROUGH DR. ON THIS DATE OF HEARING ALSO, NONE APPEARED ON BEHALF OF THE ASSESSEE BUT LD. DR OF REVENUE HAS SUBMITTED EVIDENCE REGARDING SERVICE OF THIS NOTICE THROUGH THE NOTICE SERVER AND HENCE, WE PROCEED TO HEAR THIS M.P. OF REVENUE EX-PARTE QUA THE ASSESSEE. THE LD. DR OF REVENUE MADE VARIOUS ARGUMENTS AND THE M. P. WAS HEARD. 3. WE HEARD THE SUBMISSIONS OF LD. DR OF REVENUE AND GONE THROUGH THE IMPUGNED ORDER OF THE TRIBUNAL AS PER WHICH, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF HON'BLE M.P. NO. 27/BANG/2019 (IN ITA NO. 1279/BANG/2018) PAGE 3 OF 4 KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY AS REPORTED IN (2013) 359 ITR 565. IN THE M.P. FILED BY THE REVENUE, THIS IS NOT THE CASE OF THE REVENUE THAT THERE IS ANY MISTAKE IN THE FINDING OF THE TRIBUNAL THAT AS PER THE NOTICE ISSUED BY THE AO U/S. 274 R.W.S. 271(1)(C) OF THE IT ACT, THE AO HAS NOT MADE IT CLEAR AS TO WHETHER THE ALLEGATION IS REGARDING CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT WAS FOLLOWED BY THE TRIBUNAL UNDER THESE FACTS IN THE PRESENT CASE. IN THE M.P. FILED BY THE REVENUE, THE CONTENTION RAISED BY THE REVENUE IS THIS THAT IN THE ASSESSMENT ORDER, THE AO HAS GIVEN A FINDING THAT PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE IT ACT ARE BEING INITIATED FOR THIS REASON THAT ASSESSEE HAS CONCEALED PARTICULARS OF INCOME AND THEREFORE, EVEN IF THE ALLEGATION WAS NOT SPECIFIC IN THE NOTICE ISSUED BY THE AO U/S. 274 R.W.S. 271(1)(C) OF THE IT ACT, DEFECT IN THAT NOTICE IS CURABLE U/S. 292B OF IT ACT. IN OUR CONSIDERED OPINION, IF THIS ARGUMENT OF REVENUE IS ACCEPTED THEN IT WILL AMOUNT TO SAY THAT ONCE THE ALLEGATION IS MADE BY THE AO IN THE ASSESSMENT ORDER REGARDING CONCEALMENT OF INCOME, THERE IS NO NEED TO LEVEL ANY CHARGE IN THE NOTICE ISSUED BY THE AO U/S. 274 OF THE IT ACT FOR LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT. BUT IN THE PENALTY PROCEEDINGS, THE ASSESSEE HAS TO COMPLY WITH THE NOTICE ISSUED BY THE AO U/S. 274 R.W.S. 271(1)(C) AND HENCE, EVEN IF SPECIFIC ALLEGATION IS MADE IN THE ASSESSMENT ORDER, BUT NO SPECIFIC ALLEGATION IS MADE IN THE NOTICE ISSUED BY THE AO U/S. 274 R.W.S. 271(1) THEN ALSO, THIS JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) IS APPLICABLE AND THEREFORE, IN OUR CONSIDERED OPINION, THERE IS NO APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 4. IN THE RESULT, THE M.P. FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 19 TH JULY, 2019. /MS/ M.P. NO. 27/BANG/2019 (IN ITA NO. 1279/BANG/2018) PAGE 4 OF 4 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.