M/s. Banarsi Marble Stone Private Limited, Udaipur v. ACIT, Central Circle-1, Udaipur

ITA 365/JODH/2019 | 2011-2012
Pronouncement Date: 28-11-2019 | Result: Allowed

Appeal Details

RSA Number 36523314 RSA 2019
Assessee PAN AACCS1969D
Bench Jodhpur
Appeal Number ITA 365/JODH/2019
Duration Of Justice 1 month(s) 6 day(s)
Appellant M/s. Banarsi Marble Stone Private Limited, Udaipur
Respondent ACIT, Central Circle-1, Udaipur
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 28-11-2019
Assessment Year 2011-2012
Appeal Filed On 22-10-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH JODHPUR BEFORE SHRI N.K. SAINI VICE PRESIDENT AND SHRI SANDEEP GOSAIN JUDICIAL MEMBER ITA NOS. 364 TO 366/JODH/2019 ASSESSMENT YEARS: 2010-11 TO 2012-13 M/S BANARSI MARBLE STONE PVT. LTD. VS. ASST. CIT SP2 UDYOG VIHAR CENTRAL CIRLE-1 SUKHER UDAIPUR(RAJ.) UDAIPUR(RAJ.) PAN/ TAN NO. AACCS1969D (APPELLANT) (RESPONDENT) ASSESSEE BY : SMT. RAKSHA BIRLA CA SHRI RAJENDRA JAIN ADVOCATE DEPARTMENT BY: SHRI GIRISH MEHTA JCIT DR DATE OF HEARING : 28/11/2019 DATE OF PRONOUNCEMENT : 28/11/2019 O R D E R PER N.K. SAINI VICE PRESIDENT : THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DT. 23/07/2019 OF LD. CIT(A)-2 UDAIPUR. 2. SINCE THE ISSUE INVOLVED IS COMMON IN ALL THESE APPEALS WHICH WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS C ONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. AT THE FIRST INSTANCE WE WILL DEAL WITH THE APP EAL IN ITA NO. 364/JODH/2019 FOR THE A.Y. 2010-11 WHEREIN ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A)-2 UDAIPUR HAS ERRED IN CONFIRMING THE PENALTY OF RS. 15 83 190/- U NDER SECTION 271(1)(C) OF THE ACT. 2. THAT THE PETITIONER MAY KINDLY BE PERMITTED TO RAISE ANY ADDITIONAL OR ALTERNATIVE GROUNDS AT OR BEFORE THE TIME OF HEARING. 3. THE PETITIONER PRAYS FOR JUSTICE & RELIEF. 3.1 FROM THE AFORESAID GROUNDS IT WOULD BE CLEAR TH AT THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE CONFIRMATION OF PENALTY LEV IED BY THE AO AMOUNTING TO RS. 15 83 190/- UNDER SECTION 271(1)(C) OF THE INCOME T AX ACT 1961 (HEREINAFTER REFERRED TO AS ACT). 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE E-FILED ITS RETURN OF INCOME ON 27/09/2010 DECLARING TOTAL INCOME OF RS. 43 84 904/ -. HOWEVER THE ASSESSMENT WAS FRAMED AT AN INCOME OF RS. 95 08 500/- VIDE ORDER D T. 30/03/2015 PASSED BY THE AO UNDER SECTION 144 R.W.S 147 OF THE ACT. THE AO DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE RECEIVED LICE NSE PREMIUM OF RS. 51 23 590/- FOR THE YEAR UNDER CONSIDERATION FROM MAHARAJA GROU P OF COMPANIES AND SAME WAS UNACCOUNTED. HE MADE THE ADDITION AND INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING O F INACCURATE PARTICULARS OF INCOME. ACCORDING TO THE AO THE ASSESSEE COMPLETELY FAILED TO EXPLAIN THE TRANSACTIONS WITH REGULAR BOOKS OF ACCOUNT AND HAD NOT FURNISHED THE LEDGER ACCOUNT ALONGWITH VOUCHERS FOR VERIFICATION. THEREFORE UNRECORDED AN D UNVERIFIED TRANSACTION OF INCOME AMOUNTING TO RS. 51 23 590/- IN FORM OF LICE NSE PREMIUM WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE AS AN INCOME FROM 'UND ISCLOSED SOURCES'. THE AO LEVIED THE PENALTY OF RS. 15 83 190/- UNDER SECTION 271(1) (C) OF THE ACT. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT AS THE PENAL PROVISIONS HAVE HELD TO BE STRICTLY CONSTRUED THE NOTICE ISSUED U/S 274 OF THE ACT SHOULD SATISFY THE GROUND S WHICH THE AO HAS TO MEET SPECIFICALLY. IT WAS FURTHER STATED THAT IN THE NOT ICE ISSUED UNDER SECTION 274 R.WS. 271(1)(C) OF THE ACT TO THE ASSESSEE NO SPECIFIC C HARGE WAS MENTIONED AND IT WAS NOT CLEAR AS TO WHETHER THE PENALTY PROCEEDINGS WER E INITIATED FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH SHOWS THAT THE AO HIMSELF WAS NOT SURE. THE RELIANCE WAS PLACED ON TH E FOLLOWING CASE LAWS: CIT VS. MANJUNATHA COTTON & GINNING FACTORY (2013) 359 ITR 565 (KAR) H. LAKSHMINARAYANA VS. ITO IT APPEALS NOS. 992-996 (BANG) OF 2014 CIT VS. JYOTI LTD. ]2013] 34 TAXMANN.COM 65 DCIT VS. B.J.D PAPER PRODUCTS [2012] 17 TAXMANN.COM J 11 (LUCK) DCIT VS. NEPA LIMITED. ITA NO. 683/INDORE/2013 HAFEEZ CONTRACTOR VS. ACIT ITA NO. 6222/2013 (MUMB AI) SUVAPRASANNA B VS. ACIT ITA NO. 1303/KOL/2010 SANJOG T. LODHA VS. ITO ITA NO. 688/PN/2014 ETC. 5.1 IT WAS FURTHER SUBMITTED THAT EXPLANATION 1 TO SECTION 271(1)(C) DID NOT MAKE THE ASSESSMENT ORDER AS CONCLUSIVE EVIDENCE THAT TH E AMOUNT ASSESSED WAS IN FACT THE INCOME OF THE ASSESSEE AND EVEN THE ASSESSEE GA VE THE EXPLANATION WHICH WAS NOT PROVED BUT ALSO NOT DISPROVED I.E; IT WAS NOT A CCEPTED BUT CIRCUMSTANCES DID NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE T HAT THE ASSESSEE'S CASE WAS FALSE AND THAT THERE WAS NO POSITIVE MATERIAL TO SHOW THA T THE AMOUNT IN QUESTION WAS THE INCOME OF THE ASSESSEE. 6. LD. CIT(A) AFTER CONSIDERED THE SUBMISSIONS OF T HE ASSESSEE OBSERVED THAT THERE WAS NO EXISTING LEGAL CHALLENGE TO THE ASSESS MENT ORDER IN ANY FORM THEREFORE THE ADDITION TO THE INCOME OF THE ASSESSEE ON ACCOU NT OF UNDISCLOSED LICENSE PREMIUM RECEIVED IN CASH HAD ATTENDED THE FINALITY THEREFORE THERE WAS CONCEALMENT OF INCOME ON ACCOUNT OF UNDISCLOSED LIC ENSE PREMIUM RECEIVED IN CASH. ACCORDINGLY THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME ON UNDISCLOSED LICENSE PREMIU M RECEIVED IN CASH WAS CONFIRMED. 7. NOW THE ASSESSEE IS IN APPEAL. 8. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AO DID NOT SPECIFIED UNDER WHICH LIMB THE PENALTY WAS LEVIED I.E; IT WAS NOT SPECIF IED IN THE NOTICE ISSUED UNDER SECTION 274 R.W.S 271(1)(C) OF THE ACT (COPY OF WHI CH IS PLACED AT PAGE NO. 1 OF THE ASSESSEE'S COMPILATION) THAT AS TO WHETHER THERE WA S CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND IN THE ABSENCE OF SPECIFIC CHARGE IN THE PENALTY NOTICE UNDER SECTION 274 OF T HE ACT THE PENALTY UNDER SECTION 271(1)(C) MAY NOT BE LEVIED. RELIANCE WAS PLACED ON THE FOLLOWING DECISION OF THE ITAT JODHPUR BENCH: SHRI SHIV SINGH CHOUHAN VS ACIT IN ITA NO. 23/JODH/ 2019 DT. 07/05/2019 SHRI MANOJ SINGHVI V/S DCIT CENTRAL CIRCLE-2 IN IT A NO. 391/JODH/2017 DT. 03/05/2019 SHRI DEEPAK SHESHRAO BAKDE VS. ITO IN ITA NO. 43/JO DH/2019 DT. 03/05/2019 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE FROM THE NOTICE UNDER SECTION 274 R.W.S 271(1)(C) OF THE ACT DT. 31/08/2015 IT IS CLEAR THAT THE AO HAD NOT SPECIFIED THE CHARGE FOR WHICH THE PENALTY WAS INITIATED UNDE R SECTION 271(1)(C) OF THE ACT THE SAID NOTICE PLACED AT PAGE NO. 1 OF THE ASSESSEE'S COMPILATION READ AS UNDER: TO THE DIRECTOR M/S SHREE BANARSI MARBLE STONE PVT. LTD. SP-2 UDYOG VIHAR SUKHER UDAIPUR PAN: AACCS1969D SIR PLEASE REFER TO THIS OFFICE NOTICE DATED 30.03.2015 ISSUED U/S. 274 READ WITH SECTION 271(L)(C) OF THE INCOME-TAX ACT 1961 FOR A.Y. 2010- 11 WHEREAS IN THE COURSE OF PROCEEDINGS FOR ABOVE REFERRED A.Y. IT APPEARS THAT YOU HAVE WITHO UT REASONABLE CAUSE CONCEALED THE PARTICULARS OF YOUR INCOME AND I OR FURNISHED INACCURATE PARTICULARS OF YOUR INCOME . 2. IN THE CASE YOU HAVE PREFERRED AN APPEAL AGAINS T THE RELEVANT ORDER OF ASSESSMENT AND THEN YOU ARE REQUESTED TO FURNISH THE COPY OF RELEVANT A PPEAL MEMO GROUNDS OF APPEAL WITH EVIDENCE OF DATE OF FILING OF THE APPEAL TO THIS OFFICE. 3. IN THE ABOVE MATTER ONE MORE OPPORTUNITY IS BEI NG GIVEN TO YOU. THEREFORE YOU ARE REQUESTED TO SUBMIT YOUR EXPLANATIONS ON 08.09.2015 IN WRITIN G IN MY OFFICE AT THE ABOVE ADDRESS. YOURS FAITHFULLY SD/- (D.KHANDELWAL) ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1 UDAIPUR 10. THE SIMILAR ISSUE HAVING IDENTICAL FACTS HAS BE EN DECIDED BY THIS BENCH OF THE TRIBUNAL IN CASE OF SHRI DEEPAK SHESHRAO BAKDE VS. ITO IN ITA NO. 43/JODH/2019 DT. 03/05/2019 AND THE RELEVANT FINDINGS HAS BEEN GIVEN IN PARA 6 TO 6.3 READ AS UNDER: 6. NOW COMING TO THE MERITS OF THE CASE. IN THE INS TANT CASE THE A.O. INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(L)(C) OF THE A CT FOR FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREAFTER ISSUED THE NOT ICE U/S 274 WITHOUT SPECIFYING THE LIMB OF THE PENALTY IMPOSABLE AND FINALLY IMPOSED PENA LTY FOR FURNISHED INACCURATE PARTICULARS OF INCOME. THEREFORE THE QUESTION EMERGES AS TO WHETHER PENALTY IS SUSTAINABLE UNDER THE FACTS WHEREIN THE NOTICE IS N OT CLEAR AND/OR ISSUED WITHOUT SPECIFYING THE LIMB OF CHARGE. 6.1 HON'BLE APEX COURT VIDE JUDGMENT IN CASE OF M/S. SSA'S EMERALD MEADOWS (2016) 73 TAXMANN.COM 248(SC) DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE JUDGMENT RENDERED BY HON'BLE HIG H COURT OF KARNATAKA WHEREBY IDENTICAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESS EE. OPERATIVE PART OF THE JUDGMENT IN CASE OF M/S. SSAS EMERALD MEADOWS (SUPRA) DECIDED BY HON'BLE HIGH COURT OF KARNATAKA IS REPRODUCED BELOW '2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWING S UBSTANTIAL QUESTIONS OF LAW: (1) WHETHER OMISSION IF ASSESSING OFFICER TO EXPLIC ITLY MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISHING OF INACCURATE PART ICULARS OR THAT FOR CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATIO N EVEN WHEN IT HAS BEEN PROVED BEYOND REASONABLE DOUBT THAT THE ASSESSEE HAD CONCEA LED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? (2 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE TRIBUNAL WAS JUSTIFIED IN LAW IN. HOLDING THAT THE PENALTY NOTICE UNDER SEC TION 274 R.W.S. 271(L)(C) IS HUD IN LAW AND. INVALID INSPITE THE AMENDMENT OF SECTION 271(1 B) WITH RETROSPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT THE ASSESSING OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECORDING THE SATISFACTION FOR THE SAME? (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE TRIBUNAL WAS JUSTIFIED IN DECIDING THE APPEALS AGAINST THE REVENUE ON THE BA SIS OF NOTICE ISSUED UNDER SECTION 274 WITHOUT TAKING INTO CONSIDERATION THE A SSESSMENT ORDER WHEN THE ASSESSING OFFICER HAS SPECIFIED THAT THE ASSESSEE HAS CONCEALE D PARTICULARS OF INCOME? 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASS ESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH S ECTION 271(L)(C) OF THE INCOME TAX ACT 1961 (FOR SHORT 'THE ACT') TO BE BAD IN LAW AS I T DID NOT SPECIFY WHICH LIMB OF SECTION 271(L)(C) OF THE ACT THE PENALTY PROCEEDINGS HAD BEE N INITIATED I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. . THE TRIBUNAL WHILE ALLOWING THE APPEAL OF THE ASSESSE E HAS RELIED 01 THE DERISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE O F COMMISSIONER OR INCOME T AX - VS - MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 IT R565. . 4. IN OUR VIEW SINCE THE MATTER IS COVERED BY JUDGM ENT OF THE DIVISION BENCH OF THIS COURT WE ARE OF THE OPINION NO SUBSTANTIAL QUESTION OF LA W ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT THE APPEAL IS ACCORDINGL Y DISMISSED.' 6.2 PENALTY PROVISIONS OF SECTION 271(L)(C) OF THE A CT ARE TRIE RE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME FERED INACCURAT E PARTICULARS OF SUCH INCOME. IT IS ALSO A WELL- UC.-EPTED PROPOSITION THAT THE AFORESAI D TWO LIMBS OF SECTION 271(L)(C) OF THE ACT CARRY DIFFERENT MEANINGS. THEREFORE IT IS IMPER ATIVE FOR THE ASSESSING OFFICER TO STRIKE - OFF THE IRRELEVANT LIMB SO AS TO MAKE THE ASSESSEE AWARE AS TO WHAT IS THE CHARGE MADE AGAINST HIM SO THAT HE CAN RESPOND ACCORDINGLY. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MA NJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) OBSERVED THAT THE LEVY O F PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEING LEVIED. AS PER HONBLE HIGH C OURT WHERE THE ASSESSING OFFICER PROPOSED TO INVOKE FIRST LIMB BEING CONCEALMENT THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. THE HONBLE HIGH COURT HELD THA T THE STANDARD PROFORMA OF NOTICE UNDER SECTION 274 OF THE ACT WITHOUT STRIKIN G OFF THE IRRELEVANT CLAUSES WOULD LEAD TO AN INFERENCE OF NON-APPLICATION OF MIND BY THE ASSE SSING OFFICER. THE HONBLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF VS. JOT 291 ITR 519(SC) HAS ALSO NOTICED THAT WHERE THE ASSESSING OFFICER ISSUES NOTICE UNDER SEC TION 274 OF THE ACT IN THE STANDARD PROFORMA AND THE INAPPROPRIATE WORDS ARE NOT DELETED THE SAME WOULD POSTULATE THAT THE ASSESSING OFFICER WAS NOT SURE AS TO WHETHER HE WAS TO PROCEED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDING TO THE HON'BLE SUPREME COURT IN SUCH A SITUATION LEVY OF PENALTY SUFFERS FROM NON-APPLICATION OF MIND. 6.3 IN THE INSTANT CASE FROM THE NOTICE DATED 22-0 1-2014 ISSUED U/S 274 OF THE ACT IT IS CLEAR THAT THE ASSESSING OFFICER INITIATED THE PENA LTY PROCEEDINGS BY ISSUING THE NOTICE U/S 274/271(L)(C) OF THE ACT WITHOUT SPECIFYING AS T O WHETHER THE ASSESSEE HAS CONCEALED 'PARTICULARS OF INCOME' OR ASSESSEE HAS FURNISHED 'I NACCURATE PARTICULARS OF INCOME' AND WITHOUT STRIKING OFF THE IRRELEVANT WORDS SO AS TO PROVIDE ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SHOW CAUSE NOTICE WHICH IN OUR CONSIDERED VIEW AMOUNTS TO NON-APPLICATION OF MIND BECAUSE WHILE ISSUING THE NOTI CE DATED 22-01-2014 U/S 274 OF THE ACT THE A.O. WAS NOT CLEAR UNDER WHICH LIMB T HE ASSESSEE WAS SUPPOSED TO REPLY AND DEFEND ITS CASE AND UNDER WHICH LIMB THE PENALTY WAS SUPPOSED TO BE LEVIED HENCE THE PENALTY BECOMES UNSUSTAINABLE THEREFORE WE HAVE NO HESITATION TO DELETE THE PENALTY LEVIED BY THE AO AND AFFIRMED BY THE LD. CIT (A). SO RESPECTFULLY FOLLOWING THE FORESAID REFERRED TO ORDER THE IMPUGNED PENALTY UNDER SECTION 271(1)(C) OF THE ACT LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT(A)IS DELETED. 11. THE FACTS AND ISSUE INVOLVED IN ITA NO. 365 & 3 66/JODH/2019 ARE SIMILAR TO THE FACTS AND ISSUE INVOLVED IN ITA NO. 364/JODH/2019 W HICH WE HAVE ALREADY ADJUDICATED IN THE FORMER PART OF THIS ORDER THEREFORE OUR FINDINGS FOR THE ASSESSMENT YEAR 2010-11 SHALL APPLY MUTATIS MUTANDIS FOR THE A SSESSMENT YEARS 2011-12 & 2012- 13. 12. IN THE RESULT APPEALS OF THE ASSESSEE ARE ALLO WED. (ORDER PRONOUNCED IN THE OPEN COURT ON 28/11/2019 ) SD/- SD/- (SANDEEP GOSAIN) (N.K. SAINI) JUDICIAL MEMBER VICE PRESIDENT DATED : 28/11/2019 AG COPY TO: 1.THE APPELLANT 2. THE RESPONDENT 3. THE CI T(A) 4. THE CIT 5. THE DR