ACIT, Circle - 29, Kolkata , Kolkata V. Prakash Kumar Mohta (HUF), Kolkata

MA 35/KOL/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6793 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: RAJ KUMAR AGARWAL
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENCH KOLKATA BEFORE SHRI S. S. GODARA, JM & DR. A.L.SAINI, AM M.A NO.35/KOL/2018 (ARISING OUT OF I.T.A NO.736/KOL/2015) ( / ASSESSMENT YEAR: 2009-10) ACIT, CIRCLE - 29, KOLKATA AAYAKAR BHAWAN, DAKSHIN, 2 GARIAHAT ROAD, SOUTH, KOLKATA 68. VS. PRAKASH KUMAR MOHTA (HUF) 7, RONALDSHAY ROAD, ALIPORE, KOLKATA 700 027. ./ ./PAN/GIR NO. :AADHP 6057 K (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI S. DASGUPTA, ADDL. CIT (DR). RESPONDENT BY :SHRI RAJ KUMAR AGARWAL, FCA / DATE OF HEARING : 25/05/2018 /DATE OF PRONOUNCEMENT : 06/06/2018 / O R D E R PER DR. ARJUN LAL SAINI, AM: BY WAY OF CAPTIONED APPLICATION, THE REVENUE HAS SOUGHT TO POINT OUT THAT A MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT) HAS CREPT IN THE ORDER OF THE TRIBUNAL DATED 15.09.2017. 2. THE CASE OF THE REVENUE IN THIS MISCELLANEOUS APPLICATION IS THAT ASSESSING OFFICER IMPOSED PENALTY U/S 271(1)(C) OF THE ACT.THE LD. DR POINTED OUT THAT ON VERIFICATION OF ORDER U/S 143(3), IT IS APPARENT THAT THE ASSESSING OFFICER CLEARLY AND SPECIFICALLY MENTIONED THE PENALTY RAISED U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND THE NOTICE OF PENALTY HAS ALSO BEEN TICKED ONLY ON THE LIMB OF INACCURATE PARTICULARS OF INCOME. THEREFORE, REVENUE PRAYED BEFORE THE BENCH THAT THE ORDER OF TRIBUNAL DATED 15.09.2017 BE RECTIFIED TO CONSIDER THE PENALTY U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME. PRAKASH KUMAR MOHTA (HUF) M.A NO.35/KOL/2018 ASSESSMENT YEAR: 2009-10 PAGE | 2 3. HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THERE IS NO MISTAKE APPARENT FROM RECORD OF THE ORDER OF THE TRIBUNAL DATED 15.09.2017 IN ITA NO.736/KOL/2015 FOR ASSESSMENT YEAR 2009-10. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT NON-STRIKING OFF ALL THE IRRELEVANT CLAUSE IN THE NOTICE IS REFLECTIVE, NON- APPLICATION OF MIND BY THE ASSESSING OFFICER, THEREFORE, THE PENALTY NOTICE IS DEFECTIVE. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND NON-STRIKING OF THE IRRELEVANT CLAUSE IN THE NOTICE CLEARLY BRINGS OUT THE DIFFERENCE ON THE PART OF THE ASSESSING OFFICER AND THERE IS NO CLEAR AND CRYSTALLIZED CHARGE BEING CONVEYED TO THE ASSESSEE U/S 271(1)(C) OF THE ACT.THEREFORE, PENALTY SHOULD NOT BE LEVIED. 4. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTE THAT THE FIRST LIMB OF THE NOTICE HAS BEEN TICKED BUT THE ANOTHER LIMB HAS NOT BEEN STRICKEN OFF, THEREFORE, THE PENALTY NOTICE REMAINS DEFECTIVE AND FOR THAT WE RELY ON THE JUDGMENT OF THE COORDINATE BENCH OF ITAT AGRA IN THE CASE OF SHRI SACHIN ARORA VS. ITO-3(4), MATHURA IN ITA NO.118/AGRA/2015 WHEREIN IT WAS HELD AS FOLLOWS: 29. 'KAUSHALYA DEVI' (SUPRA) STANDS CONSIDERED IN 'MEHERJEECASSINATH HOLDING (P) LIMITED' (SUPRA), WHEREIN, THE REVENUE, IN THE FACE OF THE JUDGEMENT IN THE CASE OF 'MANJUNATHA COTTON' (SUPRA), AFTER PLACING RELIANCE ON THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ' CIT VS. SMT. KAUSHLAYA&ORS ' (SUPRA), COUNTERED THE ASSESSEE'S SUBMISSION OF NON APPLICATION OF MIND BY THE AO, SUBMITTING THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAD RECORDED THAT PENALTY WAS INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME; THAT THEREFORE, THE PENALTY NOTICE COULD NOT BE EXAMINED SOLELY TO SEE WHETHER THE AO HAD APPLIED HIS MIND OR NOT. THE MUMBAI TRIBUNAL, ADDRESSING THIS ARGUMENT OF THE REVENUE, HELD THAT THE HON'BLE SUPREME COURT, IN THE CASE OF 'DILIP N. SHROFF', HAD APPROVED THAT THE FACTUM OF NON STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE IS REFLECTIVE OF NON- APPLICATION OF MIND BY THE ASSESSING OFFICER; AND THAT SUCH A PROPOSITION HAS BEEN CONSIDERED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF 'SHRI SAMSON PERINCHERY' (SUPRA). THE BENCH HAS FURTHER HELD THAT THE OBSERVATION OF THE AO IN THE ASSESSMENT ORDER AND NON-STRIKING OFF THE IRRELEVANT CLAUSE IN THE NOTICE CLEARLY BRINGS OUT THE DIFFERNCE ON PART OF THE AO AND THERE IS NO CLEAR AND CRYSTALLIZED CHARGE BEING CONVEYED TO THE ASSESSEE U/S 271(1)(C) WHICH HAS TO BE MET BY HIM, THE OBSERVATION OF THE AO IN THE ASSESSMENT ORDER ALONGSIDE HIS ACTION OF NON STRIKING OFF THE IRRELEVANT CLAUSE IN THE NOTICE WAS HELD BE RENDERING THE NOTICE NOT COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. THE BENCH THUS DELETED THE PENALTY. 5. WE NOTE THAT THE FINDING RECORDED IN THE ASSESSMENT ORDERTO BE PASSED BY ASSESSING OFFICER IS ONLY FOR THE PURPOSE OF INITIATING PENALTY PROCEEDINGS. THE SAID FINDING IS NOT CONCLUSIVE; IT IS IN THE NATURE OF PRIMA FACIE SATISFACTION, WHICH AUTHORIZES HIM TO INITIATE THE PENALTY PROCEEDINGS. ONCE A PENALTY PROCEEDINGS IS PRAKASH KUMAR MOHTA (HUF) M.A NO.35/KOL/2018 ASSESSMENT YEAR: 2009-10 PAGE | 3 VALIDLY INITIATED, THEN U/S 274(1) AN OBLIGATION IS CAST ON THE PERSON INITIATING THE PROCEEDINGS TO ISSUE NOTICE TO THE ASSESSEE. WHEN SUCH A NOTICE IS ISSUED, IT IS OPEN TO THE ASSESSEE TO CONTEST THE ACCUSATION AGAINST HIM THAT HE HAS CONCEALED INCOME OR HE HAS FURNISHED INACCURATE PARTICULARS. AS THERE IS AN INITIAL PRESUMPTION OF CONCEALMENT, IT IS FOR THE ASSESSEE TO REBUT THE SAID PRESUMPTION. IF THE AUTHORITY, AFTER HEARING THE ASSESSEE AND LOOKING INTO THE MATERIAL PRODUCED IN THE SAID PROCEEDINGS BEFORE HIM IS SATISFIED THAT THOUGH THE INCOME IS UNDISCLOSED THERE WAS NO INTENT TO AVOID TAX AND, THEREFORE, IF HE HOLDS THERE IS NO CONCEALMENT OF INCOME, THEN THE QUESTION OF IMPOSING PENALTY WOULD NOT ARISE. THEREFORE, RELYING ON THE JUDGMENT OF THE COORDINATE BENCH IN THE CASE OF SHRI SACHIN ARORA (SUPRA), WE DISMISS THE MISCELLANEOUS APPLICATION OF THE REVENUE. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 06/06/2018. SD/- (S. S. GODARA) SD/- (A.L. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED 06/06/2018 RS, SR. PS / COPY OF THE ORDER FORWARDED TO : //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. / THE APPELLANT ACIT, CIRCLE-29, KOLKATA 2. / THE RESPONDENT-PRAKASH KUMAR MOHTA (HUF) 3. ( ) / THE CIT(A), :KOLKATA. 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE.