M/s Maruti Sales Corporation,, Rajkot v. Income Tax Officer, Ward-2(1)(3),, Rajkot

ITA 98/RJT/2018 | 2012-2013
Pronouncement Date: 27-11-2019 | Result: Allowed

Appeal Details

RSA Number 9824914 RSA 2018
Assessee PAN AAUFM2490G
Bench Rajkot
Appeal Number ITA 98/RJT/2018
Duration Of Justice 1 year(s) 8 month(s) 15 day(s)
Appellant M/s Maruti Sales Corporation,, Rajkot
Respondent Income Tax Officer, Ward-2(1)(3),, Rajkot
Appeal Type Income Tax Appeal
Pronouncement Date 27-11-2019
Appeal Filed By Assessee
Tags 98
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 27-11-2019
Last Hearing Date 01-08-2019
First Hearing Date 15-10-2019
Assessment Year 2012-2013
Appeal Filed On 13-03-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI WASEEM AHMED ACCOUNTANT MEMBER & MS. MADHUMITA ROY JUDICIAL MEMBER ITA NO. 98/RJT/2018 (ASSESSMENT YEAR : 2012-13) M/S. MARUTI SALES CORPORATION NEVIL 2 GUNDAWADI RAJKOT VS. ITO WARD-2(1)(3) RAJKOT [PAN NO. AAU FM2 490 G] (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI KALPESH DOSHI A.R. RESPONDENT BY : SHRI SUHAS MISTRY SR. D.R. DATE OF HEARING 18.10.2019 DATE OF PRONOUNCEMENT 27.11.2019 O R D E R PER MS. MADHUMITA ROY JUDICIAL MEMBER: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 21.12.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 RAJKOT ARISING OUT OF THE ORDER DATED 24.09.2015 PASSED BY THE ITO WARD-2(1)(3) RAJKOT UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED AS TO THE ACT) FOR THE ASSESSMENT YEAR (A.Y.) 2012-13. 2. THE CASE OF THE ASSESSEE WAS REOPENED ON 07.10.2 013 BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT AFTER RECORDING REASON WHICH ULTIMATELY FINALIZED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT BY DETER MINING TOTAL INCOME AT RS. - 2 - ITA NO.98/RJT/2018 M/S. MARUTI SALES CORPORATION VS. ITO ASST.YEAR 2012-13 4 36 848/- AT 8% OF THE GROSS RECEIPT OF RS. 54 60 596/- IN TERMS OF THE PROVISION OF SEC. 44AD OF THE ACT ON 20.03.2015. CONSEQUENTLY PENALTY PROCEEDING WAS INITIATED UNDER SECTION 271(1)(C) OF THE ACT AND TH E SHOW-CAUSE NOTICE DATED 27.08.2015 WAS ISSUED BY THE ITO WARD-2(1)(3) RAJK OT FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME BY THE ASSESSEE. SUCH PENALTY PROCEEDING WAS FINALIZED BY THE CONCERNED OFFICER BY LEVYING PENALTY OF RS. 1 34 987/- FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY T HE ASSESSEE ON 24.09.2015 WHICH WAS IN TURN CONFIRMED BY THE FIRST APPELLATE AUTH ORITY. 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 P ROCEEDING DOES NOT FULFILL THE CRITERIA LAID DOWN U/S 271(1)(C) OF THE ACT. SPECIF IC CHARGE THOUGH REQUIRES TO BE MENTIONED IN THE SHOW-CAUSE NOTICE AS TO WHETHER TH E GUILTY FOR CONCEALMENT OF INCOME OR FOR INACCURATE PARTICULARS OF INCOME HAS BEEN COMMITTED BY THE ASSESSEE AS HELD BY DIFFERENT HIGH COURTS HAS NOT BEEN SPECI FICALLY ALLEGED. FURTHERMORE THE LEARNED AO WHILE IMPOSING PENALTY MENTIONED BOTH TH E LIMBS BEING FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME WHICH IS VAGUE AND AMBIGUOUS TOO AND HENCE THE PENALTY IS INVALID AND LIABLE TO BE QUASHED AS ARGUED BY THE LD. AR. HE FURTHER ARGUED THAT THE LEARNED A O HAS NEITHER SPECIFIED THE ALLEGED GUILT COMMITTED BY ASSESSEE BY FURNISHING O F INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME WHICH IS NOTHING BU T NON APPLICATION OF MIND. IN THIS ASPECT LEARNED AR RELIED UPON THE JUDGMENT PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE MATTER OF SNITA TR ANSPORT PVT. LTD-VS-ACIT - 3 - ITA NO.98/RJT/2018 M/S. MARUTI SALES CORPORATION VS. ITO ASST.YEAR 2012-13 REPORTED IN 42 TAXMANN.COM 54 WHERE IT WAS HELD THA T WHILE IMPOSING PENALTY U/S 271(1)(C) OF THE ACT THE AO SHOULD APPLY HIS MIND A ND IT SHOULD BE DEFINITE AS TO WHETHER HE HAS PROCEEDED AND FINALIZED ON THE BASIS THAT THE TAX PAYER HAS CONCEALED HIS INCOME OR HE HAD FURNISHED INACCURATE PARTICULARS OF INCOME IN DEFAULT THE PENALTY BE QUASHED. 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 TRIBUNAL 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 MI ND TOWARDS THE LEGAL BAR IMPOSED BY DIFFERENT COURTS AS SUBMITTED BY THE LEA RNED AR. HE THEREFORE PRAYS FOR QUASHING OF THE ORDER OF PENALTY BEFORE US. ON THE CONTRARY THE LEARNED DR RELIED UPON THE ORDERS PASSED BY THE AUTHORITIES BE LOW. 4. WE HAVE HEARD THE RESPECTIVE PARTIES WE HAVE AL SO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ORD ER IMPOSING PENALTY ADMITTEDLY HAS NOT SPECIFIED THE GUILT COMMITTED BY THE ASSESS EE FOR SUCH PENALTY AS ALREADY DISCUSSED BY US WHILE DEALING WITH FACTS OF THE CAS E HEREINABOVE. THE PARTICULAR LACUNA FOUND IN THE PROCEEDING MORE PARTICULARLY IN THE ORDER IMPOSING PENALTY ARE AS FOLLOWS: - 4 - ITA NO.98/RJT/2018 M/S. MARUTI SALES CORPORATION VS. ITO ASST.YEAR 2012-13 THE SHOW-CAUSE NOTICE DATED 27.08.2015 WAS ISSUED APPEARING AT PAGE 4 OF THE PAPER BOOK FILED BEFORE US DOES NOT SPECIFY THE ALLEGE GUILT COMMITTED BY THE ASSESSEE RATHER IT SPEAKS AS FOLLOWS:- 2. WHEREAS DURING THE COURSE OF ASSESSMENT PROCEED INGS FOR A.Y. 2012-13 A NOTICE U/S. 271(1)(C) R.W.S. 274 OF THE I.T. ACT HAD BEEN ISSUED ON 20.03.2015 AND SERVED UPON YOUR FOR CONCEALED THE PARTICULARS OF YOUR INCOME O R FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 5. FURTHER THAT IN THE ORDER IMPOSING PENALTY THE L D. ITO IN ITS PENALTIMATE PARAGRAPH WHILE DEALING WITH THE GUILT COMMITTED BY THE ASSESSEE CLUBBED BOTH THE LIMBS BEING FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME TOO THE RELEVANT PORTION WHEREOF IS AS FOLL OWS:- IT IS UNDISPUTED FACT THAT THE DEFAULT WAS DETECTE D DURING THE COURSE OF SCRUTINY ASSESSMENT. IF THE CASE WAS OT SELECTED FOR SCRUTI NY THAN THE OFFENCE/DEFAULT WOULD HAVE NOT BEEN DETECTED. THE ASSESSEE HAS COMMITTED DEFA ULT WITHIN THE MEANING OF PENALTY U/S. 271(1)(C) OF THE INCOME-TAX ACT HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HENCE I AM SATISFIED THAT THE ASSESSEE HAS COMMITTED DEFAULT WITHIN THE MEANING OF SECTION 271 (1)(C) OF THE INCOME-TAX ACT AND ACCORDINGLY PENALTY IS LEVIED ON THE PART OF THE I NCOME. I LEVY PENALTY OF RS. 1 34 987/- BEING 100% OF TAX SOUGHT TO BE EVADED AS AGAINST THE MAXIMUM 300% LEVIABLE OF RS. 4 04 961/-. 6. FURTHER THIS PARTICULAR ASPECT OF THE MATTER IS NEITHER BEEN CONSIDERED EVEN AT THE APPELLATE STAGE BY THE LD. CIT(A). THUS THIS IS AN ADMITTED POSITION THAT THE AUTHORITIES BELOW HAS FAILED TO COME TO A DEFINITE FINDING REGARDING THE CHARGE/GUILT COMMITTED BY THE ASSESSEE AS MANDATED UNDER SECTION 271(1)(C) OF THE ACT WHILE EITHER ISSUING OF SHOW-CAUSE UNDER SECTION 271(1)(C ) R.W.S. 274 OF THE ACT OR AT THE FINAL STAGE OF ISSUING PENALTY BOTH OF WHICH SUFFE R FROM AMBIGUITY IN THE LIGHT OF THE JUDGMENT PASSED IN THE MATTER OF SNITA TRANSPOR T PVT. LTD.-VS-ACIT REPORTED IN - 5 - ITA NO.98/RJT/2018 M/S. MARUTI SALES CORPORATION VS. ITO ASST.YEAR 2012-13 42 TAXMANN.COM 54 WHEREBY AND WHEREUNDER THE PRINCI PLE OF SPECIFYING THE GUILT COMMITTED BY THE ASSESSEE IN THE SHOW-CAUSE UNDER S ECTION 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 BELOW: 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 PRINCIPLE LAID DOWN BY THE HONBLE JURISDICTION AL HIGH COURT IN THE ABOVE CASE IS SQUARELY APPLICABLE TO THE FACTS OF T HE CASE IN HAND. AT THE COST OF REPETITION WE OBSERVE THAT THE AO HAS NOT MENTIONED THE SPECIFIC CHARGE IN ITS PENALTY ORDERS AS TO WHETHER IT WAS LEVIED FOR CONC EALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. NO SU CH DEFINITE FINDING IS REFLECTING FROM THE ORDERS IMPUGNED BEFORE US. THEREFORE IN OUR CONSIDERED VIEW THE - 6 - ITA NO.98/RJT/2018 M/S. MARUTI SALES CORPORATION VS. ITO ASST.YEAR 2012-13 PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LEARN ED CIT (A) IS NOT SUSTAINABLE IN THE EYE OF LAW. THE PENALTY IS THUS DELETED. H ENCE 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 THE TECHNICAL GROUND I.E. NO SPECIFIC CHARGE HAS BEEN ALLOWED AS DISCUSSED ABOVE WE ARE INCLINED TO REFR AIN OURSELVES FROM ADJUDICATING THE GROUNDS OF APPEAL OF ASSESSEE RAISED ON MERITS. 7. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 27/11/2019 SD/- SD/- (WASEEM AHMED) (MS. MADHU MITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/11/2019 TANMAY / 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