Shri Maganlal Limbabhai Parsana,, RAJKOT-GUJARAT v. The Deputy Commissioner of Income Tax, Central Circle-1,, RAJKOT-GUJARAT

ITA 445/RJT/2014 | 2007-2008
Pronouncement Date: 19-11-2019 | Result: Allowed

Appeal Details

RSA Number 44524914 RSA 2014
Assessee PAN AGCPP4915F
Bench Rajkot
Appeal Number ITA 445/RJT/2014
Duration Of Justice 5 year(s) 4 month(s) 2 day(s)
Appellant Shri Maganlal Limbabhai Parsana,, RAJKOT-GUJARAT
Respondent The Deputy Commissioner of Income Tax, Central Circle-1,, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 19-11-2019
Appeal Filed By Assessee
Tags 445
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 19-11-2019
Last Hearing Date 17-07-2019
First Hearing Date 18-10-2019
Assessment Year 2007-2008
Appeal Filed On 17-07-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI WASEEM AHMED ACCOUNTANT MEMBER & MS. MADHUMITA ROY JUDICIAL MEMBER ITA NOS. 443TO446/RJT/2014 (ASSESSMENT YEAR : 2007-08) SMT. HANSABEN MADHUKANT PARSANA NARSI PARK-2 NEAR SHREE COLONY RAJKOT VS. DCIT CENTRAL CIRCLE-I RAJKOT [PAN NO. AGC PP4 915 F] LATE SHRI TULSIBHAI LIMBABHAI PARSANA L/R. HARISHBHAI T PARSANA NARSI PARK-2 NEAR SHREE COLONY RAJKOT VS. DCIT CENTRAL CIRCLE-I RAJKOT [PAN NO. AGC PP4 921 H] SHRI MAGANLAL LIMBABHAI PARSANA NARSI PARK-2 NEAR SHREE COLONY RAJKOT VS. DCIT CENTRAL CIRCLE-I RAJKOT [PAN NO. ADD PP8 193 P ] SHRI LAKHABHAI LIMBABHAI PARSANA NARSI PARK-2 NEAR SHREE COLONY RAJKOT VS. DCIT CENTRAL CIRCLE-I RAJKOT [PAN NO. AGC PP4 923 F] (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI D. M. RINDANI A.R. RESPONDENT BY : SHRI RANJEET SINGH CIT D .R. - 2 - ITA NOS.443 444 445 & 446/RJT/2014 SMT. HANSABEN MADHUKANT PARSANA VS. DCIT ASST.YEAR 2007-08 DATE OF HEARING 18 . 10 .2019 DATE OF PRONOUNCEMENT 19.11.2019 O R D E R PER MS. MADHUMITA ROY JUDICIAL MEMBER: THE BUNCH OF APPEALS FILED BY DIFFERENT ASSESSEES A RE DIRECTED AGAINST THE ORDER DATED 24.06.2014 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS) - I RAJKOT ARISING OUT OF THE ORDER PASSED BY THE ITO WARD-1( 4) UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED AS TO T HE ACT) FOR THE ASSESSMENT YEAR (A.Y.) 2007-08 CONSEQUENTIAL TO A SEARCH ACTION CAR RIED OUT UNDER SECTION 132 OF THE ACT DATED 22.12.2006. SINCE ALL THE CASES ARE RELATIN G TO THE IDENTICAL ISSUE ARISING OUT OF THE COMMON SEARCH PROCEEDING CONDUCTED ON 22.12.2006 UN DER SECTION 132 OF THE ACT THE APPEALS ARE HEARD ANALOGOUSLY AND ARE BEING DISPOSE D OF BY A COMMON ORDER. 2. ITA NO. 443/RJT/2014 FOR A.Y. 2007-08 IS TAKEN A S THE LEAD CASE. THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT IN REGARD TO THE AS SESSEE WAS FINALIZED UPON ASSESSMENT OF THE LONG-TERM CAPITAL GAIN IN REGARD TO THE SALE OF LAND AT RS. 1 43 63 312/- AS AGAINST RS. 52 07 005/- AS WORKED OUT BY THE ASSESSEE IN TH E RETURN OF INCOME. PENALTY PROCEEDING UNDER SECTION 271(1)(C) WAS ALSO INITIAT ED BY THE LD. AO. SUCH PENALTY PROCEEDING WAS ULTIMATELY FINALIZED BY THE CONCERNE D OFFICER UPON LEVYING PENALTY OF RS. 15 11 885/- UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH WAS IN T URN CONFIRMED BY THE LD. CIT(A). HENCE THE INSTANT APPEAL BEFORE US. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE PENALTY PROCE EDING DOES NOT FULFILL THE CRITERIA LAID - 3 - ITA NOS.443 444 445 & 446/RJT/2014 SMT. HANSABEN MADHUKANT PARSANA VS. DCIT ASST.YEAR 2007-08 DOWN U/S 271(1)(C) OF THE ACT. SPECIFIC CHARGE THOU GH REQUIRES TO BE MENTIONED IN THE SHOW-CAUSE NOTICE AS TO WHETHER FOR CONCEALMENT OF INCOME OR FOR INACCURATE PARTICULARS OF INCOME AS HELD BY DIFFERENT HIGH COURTS HAS NOT BEEN SPECIFICALLY ALLEGED. FURTHERMORE THE LEARNED AO WHILE IMPOSING PENALTY MENTIONED BOTH THE LIMBS BEING FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME WHICH IS VAGUE AND AMBIGUOUS TOO AND HENCE THE PENALTY IS IN VALID AND LIABLE TO BE QUASHED AS URGED BY THE LD. AR. THE LEARNED AO SINCE NEITHER S PECIFIED THE ALLEGED GUILT COMMITTED BY THE ASSESSEE BY FURNISHING OF INACCURATE PARTICU LARS OF INCOME OR CONCEALMENT OF INCOME THE SAME IS NOTHING BUT NON APPLICATION OF M IND AS SUBMITTED BY THE LEARNED AR. IN SUPPORT OF HIS ARGUMENT LEARNED AR RELIED UPON THE JUDGMENT PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE MATTER OF SNITA TR ANSPORT PVT. LTD-VS-ACIT REPORTED IN 42 TAXMANN.COM 54. THE LEARNED AR ALSO RELIED UPON THE JUDGMENT PASSED BY THE GUJARAT HIGH COURT IN THE CASE OF CIT-VS-JYOTI LTD. REPORTED IN [2013] 34 TAXMANN.COM 65 (GUJARAT) AND ALSO RELIED UPON THE ORDER PASSED BY THE HONBLE TRIBUNA L AHMEDABAD BENCHES IN THE CASE OF DHARMESH DHULABHAI PRAJAPATI-VS-ITO IN ITA NO.1570/ AHD/2017 FOR A.Y. 2011-12 AND ALSO THE CASE OF SMT. USHABEN ATULBHAI SHAH IN ITA NO.197/AHD/2017 FOR A.Y 2012-13. THE LEARNED CIT(A) WHILE CONFIRMING THE ORDER LEVYI NG PENALTY ALLEGED ON ACCOUNT OF BOTH COUNTS; AGAIN FAILED TO APPLY HIS M IND TOWARDS THE LEGAL BARS IMPOSED BY DIFFERENT COURTS AS SUBMITTED BY THE LEARNED AR. HE THEREFORE PRAYS FOR QUASHING OF THE ORDER OF PENALTY BEFORE US. ON THE CONTRARY THE LEA RNED DR VEHEMENTLY ARGUED THAT THIS TECHNICAL GROUND OF MAINTAINABILITY OF THE PENALTY PROCEEDING HAS NOT BEEN TAKEN EITHER BEFORE THE LD. CIT(A) OR BEFORE US BY WAY OF SPECIF IC GROUND AND HENCE THE SAME CANNOT BE CONSIDERED BY US AT THIS STAGE. FINALLY LD. DR RELIED UPON THE ORDERS PASSED BY THE AUTHORITIES BELOW. - 4 - ITA NOS.443 444 445 & 446/RJT/2014 SMT. HANSABEN MADHUKANT PARSANA VS. DCIT ASST.YEAR 2007-08 4. WE HAVE HEARD THE RESPECTIVE PARTIES WE HAVE AL SO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. THE CRUX OF THE MATTER IS THIS THAT THE PENALTY PR OCEEDING WAS INITIATED AGAINST THE ASSESSEE ON BOTH THE LIMBS BEING FOR CONCEALMENT OF INCOME AND FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH WAS CULMINAT ED INTO AN ORDER IMPOSING PENALTY THAT TOO ON BOTH THE LIMBS BY THE AUTHORITIES BELOW WHICH IS CONTRARY TO THE PROVISION OF SEC. 271(1)(C) OF THE ACT AND HENCE THE ENTIRE PENA LTY PROCEEDING IS LIABLE TO BE QUASHED. THIS GROUND OF MAINTAINABILITY OF THE PENALTY PROCE EDING THOUGH HAS NOT BEEN TAKEN UP BEFORE LD. CIT(A) OR BEFORE US BY THE ASSESSEE SIN CE THIS IS A POINT OF LAW AND FURTHER IT TOUCHES THE VERY INTEGRAL PART OF THE ISSUE INVOLVE D IN THE MATTER THE SAME CAN BE ENTERTAINED BY US IN TERMS OF VARIOUS JUDGMENT PRON OUNCED BY DIFFERENT COURT OF LAW INCLUDING THE APEX COURT AND IN THAT VIEW OF THE MA TTER WE FIND NO MERIT IN THE ARGUMENT ADVANCED BY THE LD. DR FOR REJECTION OF THE SAID GR OUND ARGUED BY THE LD. AR. 5. ADMITTEDLY THE PENALTY PROCEEDING WAS INITIATED BY THE LD. AO UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE P ARTICULARS AND CONCEALMENT OF INCOME WHICH HAS ALSO BEEN RECORDED BY THE LD. ITO AT PAGE 3 OF THE PENALTY ORDER DATED 19.03.2014. FURTHER THAT THE LD. ITO IMPOSED THE P ENALTY OF RS. 15 11 885/- UPON BEING SATISFIED ON BOTH THE LIMBS OF GUILT COMMITTED BY T HE ASSESSEE BEING CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME UNDER SECTION 271(1)(C) OF THE ACT. BUT SEC. 271(1)(C) PUTS THE BAR IN INITIATING AS WELL AS LEVYING PENALTY ON BOTH THE LIMBS BY THE REVENUE AND RESTRICTED INITIATION AND IMPOSITION OF PENALTY ON THE SPECIFIC GUILT COMMITTED BY THE ASSESSEE EITHER FOR CONCEAL MENT ON INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. - 5 - ITA NOS.443 444 445 & 446/RJT/2014 SMT. HANSABEN MADHUKANT PARSANA VS. DCIT ASST.YEAR 2007-08 5. THIS IS AN ADMITTED POSITION THAT THE AUTHORITIE S BELOW HAS FAILED TO SPECIFY THE CHARGES AS MANDATED UNDER SECTION 271(1)(C) OF THE ACT AT THE TIME OF EITHER ISSUING OF SHOW-CAUSE UNDER SECTION 271(1)(C) R.W.S. 274 OF TH E ACT OR AT THE FINAL STAGE OF ISSUING PENALTY AND THUS THE SAME SUFFERS FROM AMBIGUITY IN REGARD TO THE ALLEGED GUILT COMMITTED BY THE ASSESSEE IN THE LIGHT OF THE JUDGMENT PASSED IN THE MATTER OF SNITA TRANSPORT PVT. LTD.-VS-ACIT REPORTED IN 42 TAXMANN.COM 54 WHEREBY AND WHEREUNDER THE PRINCIPLE OF SPECIFYING THE GUILT COMMITTED BY THE ASSESSEE IN T HE SHOW-CAUSE UNDER SECTION 271(1)(C) AS WELL AS IN THE PENALTY ORDER BY THE AO HAS BEEN DIRECTED TO BE APPLIED. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED HEREINBELOW: 9. REGARDING THE CONTENTION THAT THE ASSESSING OFFIC ER WAS AMBIVALENT REGARDING UNDER WHICH HEAD THE PENALTY WAS BEING IMPOSED NAME LY FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS WE MAY RECORD THAT THOUGH IN THE ASSESSMENT ORDER THE ASSESSING OFFICER DID ORDER IN ITIATION OF PENALTY ON BOTH COUNTS IN THE ULTIMATE ORDER OF PENALTY THAT HE PASSED HE CL EARLY HELD THAT LEVY OF PENALTY IS SUSTAINED IN VIEW OF THE FACT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME. THUS INSOFAR AS FINAL ORDER OF PENALTY WAS CONCERNE D THE ASSESSING OFFICER WAS CLEAR AND PENALTY WAS IMPOSED FOR CONCEALING PARTICULARS OF I NCOME. IN LIGHT OF THIS WE MAY PERUSE THE DECISION OF THIS COURT IN CASE OF MANU ENGINEER ING WORKS (SUPRA). IN THE SAID DECISION THE DIVISION BENCH CAME TO THE CONCLUSION THAT LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE FOR PENALTY BUT IT WAS INCUMBENT UPON THE ASSESSING AUTHORITY TO COME TO A POSITIVE FINDING AS TO WHETHER THERE W AS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF S UCH INCOME HAD BEEN FURNISHED BY THEM. IF NO SUCH CLEAR CUT FINDING IS REACHED BY TH E AUTHORITY PENALTY CANNOT BE LEVIED. IT WAS A CASE IN WHICH IN FINAL CONCLUSION THE AUTHORI TY HAD RECORDED THAT 'I AM OF THE OPINION THAT IT WILL HAVE TO BE SAID THAT THE ASSES SEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PARTICULARS OF SUCH INC OME.' IT WAS IN THIS RESPECT THE BENCH OBSERVED THAT 'NOW THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CA SE OR A QUASI-CRIMINAL CASE BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDIN G AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER AN Y INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR CUT FINDING WAS REACHED BY THE IAC AND ON THAT GROUND ALONE THE ORDER OF PENALTY PASSED BY THE IAC WAS LIABLE TO BE STRUCK DOWN.' THE PRINCIPLES LAID DOWN BY THE HONBLE JURISDICTI ONAL HIGH COURT IN THE ABOVE CASE ARE SQUARELY APPLICABLE TO THE FACTS OF THE CA SE IN HAND. AT THE COST OF REPETITION WE - 6 - ITA NOS.443 444 445 & 446/RJT/2014 SMT. HANSABEN MADHUKANT PARSANA VS. DCIT ASST.YEAR 2007-08 OBSERVE THAT THE AO HAS NOT MENTIONED THE SPECIFIC CHARGE/GUILT IN ITS PENALTY ORDERS WHETHER IT WAS LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE IN OUR CONSIDERED VIEW THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LEARNED CIT (A) IS NOT SUSTAINABLE IN THE EYE OF LAW. THE PENALTY THEREFORE IS DELETED. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. AS WE HAVE DELETED THE PENALTY IMPOSED BY THE LEAR NED AO & CONFIRMED BY THE LEARNED CIT(A) ON THIS TECHNICAL GROUND I.E. NO SP ECIFIC CHARGE HAS BEEN INVOKED AS DISCUSSED ABOVE WE ARE INCLINED TO REFRAIN OURSELV ES FROM ADJUDICATING THE GROUNDS OF APPEAL OF ASSESSEE RAISED ON MERITS. ITA NOS. 444 TO 446/RJT/2014(A.Y. 2007-08):- 6. THE GROUND OF APPEAL ON MAINTAINABILITY OF PENAL TY PROCEEDING AS ARGUED BY THE LD. AR ARE IDENTICAL TO THAT OF THE ISSUES ALREADY BEEN DEALT WITH BY US IN ITA NO. 443/RJT/2014 FOR A.Y. 2007-08 AND IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES THE SAME SHALL APPLY MUTATIS MUTANDIS. HENCE THESE GROUNDS OF APPEAL PREFERRED BY THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT ALL THE APPEALS FILED BY THE SEPA RATE ASSESSEE ARE ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 19/11/2019 SD/- SD/- (WASEEM AHMED) (MS. MADHU MITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 19/11/2019 TANMAY SR. PS - 7 - ITA NOS.443 444 445 & 446/RJT/2014 SMT. HANSABEN MADHUKANT PARSANA VS. DCIT ASST.YEAR 2007-08 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. ! /DR ITAT RAJKOT 6. '# $% / GUARD FILE. / BY ORDER //TRUE COPY// / ( DY./ASSTT.REGISTRAR) ! / ITAT RAJKOT 1. DATE OF DICTATION 23.10.2019. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24.10.2019 3. OTHER MEMBER. 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S .. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.1 1.2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER