Deputy Commissioner of Income-tax, Circle - 1, Nashi V. Minitex Systems (I) Pvt. Ltd., Nashik

MA 56/PUN/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6669 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Procedural lapse
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / MA NO. 56 /P U N/ 20 1 7 ARISING OUT OF ITA NO. 532 /P U N/20 1 5 ASSESSMENT YEAR : 20 0 9 - 1 0 THE DY . COMMISSIONER OF INCOME TAX, CIRCLE 1, NASHIK ... APPLICANT VS. MINITEK SYSTEMS (I) PVT. LTD., 1 ST FLOOR, PINGLE COMPLEX, GHANKAR LANE, OPP. RED CRO SS, NASHIK 422001 ... RESPONDENT PAN: AACCM3355R APPLICANT BY : S HRI ACHAL SHARMA RESPONDENT BY : S HRI SANKET JOSHI / DATE OF HEARING : 13 . 0 4 .201 8 / DATE OF PRONOUNCEMENT: 15 . 0 5 .201 8 / ORDER PER SUSHMA CHOWLA , JM : THE PRESENT MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE REVENUE - APPLICANT IS AGAINST THE ORDER OF TRIBUNAL DATED 31.01.2017. 2. THE ISSUE WHICH HAS BEEN DECIDED BY THE TRIBUNAL WAS AGAINST NON - RECORDING OF SATISFACTION BY TH E ASSESSING OFFICER WHILE INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE TRIBUNAL HELD THAT SINCE THE ASSESSING OFFICER HAD FAILED TO RECORD SATISFACTION AS TO WHICH LIMB OF SAID SECTION 2 M A NO. 56 /P U N/20 1 7 WAS NOT COMPLIED WITH BY THE ASSESSEE, THEN THE PROCEEDINGS INITIATED IN THE CASE BY ISSUE OF NOTICE IN WHICH IN - APPROPRIATE PORTION WAS NOT STRUCK OFF WERE VITIATED AND THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT WAS DELETED. VIDE PRESENT MISCELLANEOUS APPLICATION, THE REVENUE HAS POINTE D OUT THAT THE TRIBUNAL HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSING OFFICER HAD ONLY INADVERTENTLY FORGOT TO STRIKE OFF ONE LIMB OF SECTION ON WHICH PENALTY WAS INITIATED. AS PER THE REVENUE - APPLICANT, IT WAS JUST PROCEDURAL LAPSE AND NOT A LEGAL LAPSE. IN THIS REGARD, SECTION 292B OF THE ACT WAS RELIED UPON. FURTHER, RELIANCE WAS PLACED ON THE PROVISIONS OF SECTION 271(1 B ) OF THE ACT FOR THE PROPOSITION THAT WHERE IN ASSESSMENT ORDER ITSELF MENTIONED THAT PENALTY PROCEEDINGS WERE INITIATED SEPA RATELY, THEN ORDER WAS DEEMED TO CONSTITUTE THE NECESSARY SATISFACTION OF THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. THE REVENUE - APPLICANT FURTHER POINTS OUT THAT THE HONBLE SUPREME COURT IN MAK DATA PVT. LTD. VS. CIT REPORTED IN 358 ITR 5 93 (SC) HAD LAID DOWN THAT THE ASSESSING OFFICER WAS NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT IN WRITING. FURTHER, RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN CIT VS. KAUSHALYA REPORTED IN 216 ITR 660 (BOM), WHEREIN VIDE PARA 7, IT WAS HELD THAT MERE MISTAKE IN LANGUAGE USED OR MERE NON - STRIKING OF INACCURATE PORTION CANNOT BY ITSELF INVALID THE NOTICE. THE APPLICANT THUS, HOLDS THAT IN VIEW OF ABOVE FACT, THE ASSESSING OFFICER HAD INITIATED P ENALTY PROCEEDINGS CORRECTLY AND THE ORDER OF TRIBUNAL BE RECALLED AND ISSUE BE DECIDED ON MERITS. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE APPLICANT STRONGLY RELIED ON THE CONTENTS OF MISCELLANEOUS APPLICATION AND POINTED OUT THAT IN VIEW THEREOF, MISTAKE HAD CREPT IN THE ORDER OF TRIBUNAL, WHICH NEEDS TO BE RECTIFIED, IN VIEW OF THE PROVISIONS OF SECTION 254(2) OF THE ACT. 3 M A NO. 56 /P U N/20 1 7 3. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ON THE OTHER HAND, POINTED OUT THAT THE CLAIM OF ASSESSEE THAT NON - S TRIKING OF ONE LIMB IN SECTION ON WHICH PENALTY WAS INITIATED CANNOT BE SAID TO BE A PROCEDURAL LAPSE AND PROVISIONS OF SECTION 292B OF THE ACT ARE NOT APPLICABLE. IN RESPECT OF OTHER PROPOSITIONS RAISED BY THE REVENUE, THE LEARNED AUTHORIZED REPRESENTATI VE FOR THE ASSESSEE POINTED OUT THAT THE REVENUE IN THE GARB OF MISCELLANEOUS APPLICATION WAS RE - ARGUING THE APPEAL WHICH CANNOT BE ALLOWED UNDER SECTION 254(2) OF THE ACT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PRESENT MISCEL LANEOUS APPLICATION IS AGAINST THE ORDER OF TRIBUNAL DATED 31.01.2017, WHERE THE ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS DECIDED IN TURN, RELYING ON EARLIER DECISION OF PUNE BENCH OF TRIBUNAL IN KANHAIYALAL D. JAIN VS. ACIT IN ITA N OS.1201 TO 1205/PN/2014, RELATING TO ASSESSMENT YEARS 2003 - 04 TO 2007 - 08, DATED 30.11.2016. THE PERUSAL OF SAID ORDER WOULD REFLECT THAT THE ISSUE WAS DECIDED AFTER TAKING NOTE OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN CIT VS. KAUSHALYA (SUPRA) AND ALSO TAKING NOTE OF THE DECISION OF HONBLE SUPREME COURT IN MAK DATA PVT. LTD. VS. CIT (SUPRA). IN OTHER WORDS, ONCE THE ORDER HAS BEEN DECIDED AFTER CONSIDERING DIFFERENT DECISIONS, THERE IS NO MERIT IN THE PLEA OF APPLICANT THAT THE SAID DECISIONS HAVE NOT BEEN CONSIDERED BY THE TRIBUNAL. FURTHER, IT MAY BE POINTED OUT THAT EVEN THE ISSUE OF APPLICABILITY OF SECTION 271(1B) OF THE ACT WAS NOT RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE APPLICANT WHILE ARGUING PENALTY APPEAL AND THE PR OPOSITION RAISED BY WAY OF MISCELLANEOUS APPLICATION AMOUNTS TO RE - ARGUING THE ISSUE WHICH CANNOT BE ALLOWED IN THE GARB OF MISCELLANEOUS APPLICATION FILED UNDER SECTION 254(2) OF THE ACT. BUT THE PROPOSITION OF APPLICANT REVENUE THAT THE MISTAKE IN NON S TRIKING OF ONE LIMB IS CURABLE UNDER SECTION 292B OF THE ACT DOES NOT STAND SINCE FOR LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT, DICTATE OF SECTION AND 4 M A NO. 56 /P U N/20 1 7 VARIOUS COURTS IMPLEMENTING THE SECTION IS THAT THE ASSESSING OFFICER HAS TO RECORD SATISFACTIO N AS TO WHICH LIMB OF SAID SECTION HAS NOT BEEN COMPLIED WITH BY THE ASSESSEE AND SHOW CAUSE THE ASSESSEE IN THIS REGARD WHILE INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE FAILURE OF THE ASSESSING OFFICER TO RECORD SUCH SATISFACT ION MAKES THE ORDER LEVYING PENALTY INVALID AND BAD IN LAW AND SUCH MISTAKE IS NOT CURABLE DEFECT UNDER SECTION 292B OF THE ACT AS IT GOES TO THE JURISDICTION OF LEVY OF PENALTY FOR CONCEALMENT. ACCORDINGLY, THERE IS NO MERIT IN THE PRESENT MISCELLANEOUS APPLICATION FILED BY THE APPLICANT REVENUE AND THE SAME IS DISMISSED ON ALL COUNTS. 5 . IN THE RESULT, MISCELLANEOUS APPLICATION OF APPLICANT IS DISMISSED. ORDER P RONOUNCED ON THIS 15 TH DAY OF MAY , 201 8 . SD/ - SD/ - ( ANI L CHATURVEDI ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 15 TH MAY , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. THE APP LICANT ; 2. THE RESPONDENT; 3. THE CIT(A) - 1 , NASHIK ; 4. THE CIT - 1 , NASHIK ; 5. THE DR A , ITAT, PUNE; 6. GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE