M/S.RAJADHANI HOTELS & TOURIST ENTERPRISES P. LTD,TRIVANDRUM vs. THE ACIT, CEN CIRCLE, TRIVANDRUM

And such other grounds, arguments or points that may be submitted, urged or enlarged at the time of hearing.

3.1 The assessee has also filed a petition for admission of the additional grounds

of appeals as follows:

“The above appeals have been posted for hearing on 03-06-2019. In the appeal filed before the first appellate authority the following grounds of appeals were left out to be raised. These grounds are legal grounds and all the 2

I.T.A. No.175-180/Coch/2019 necessary material relating to these grounds are already on record. No new facts are to be investigated. The petitioner is given to understand that this ground is very crucial to the adjudication of the case and he would be put to irreparable loss if the ground is not admitted. Though the issues relating to these grounds were raised in the written submission made before the first appellate authority, the same were not considered for adjudication. These grounds could not be raised earlier on account of the ignorance of the petitioner as to the importance of this ground.”

3.2 We have heard the rival submissions and perused the record. We find bona

fide reasons in the act of the assessee in not raising the additional ground on an

earlier occasion by placing reliance on the judgment of the Supreme Court in the

case of National Thermal Power Corporation Ltd. vs. CIT (229 ITR 383) wherein it

was held that Tribunal has the discretion to allow or not to allow additional ground

to be raised for the first time before the Tribunal. Accordingly, we admit the

additional ground for adjudication.

the notice issued for imposing penalty u/s. 274 of the Act which reads as follows:

NOTICE UNDER SECTION 274 READ WITH SECTION 271(l)(c) OF THE INCOME-TAX ACT, 1961

PAN.AABCR3017N/CC-1/TVM/2011-12 Office of the Assistant Commissioner of Income-tax, Central Circle-1, 'Devikripa", Pettah, Pallimukku, Trivandrum- 695 024.

Dated: 27.12.2011 To M/s. Rajadhant Hotels & Tourist Enterprises.Pvt Ltd., 3

I.T.A. No.175-180/Coch/2019 "Sumpthripthi" Rajadliani Buildings, East Fort, Trivandrum. Whereas in the course of proceedings before me for the assessment year it appears to me that you;-

“have without reasonable cause failed to comply with a notice under section 143(1)/143(2) of the Income Tax Act, 1961”.

“have concealed the particulars of your income or furnished inaccurate particulars of such income”

You are hereby requested to appear before me at 10.30PM on and show cause why an order imposing a penalty on you should not be made under section 271 of the Income-tax Act, 1961 . If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative you may show cause in writing on or before the said date which will be considered, before any such order is made under section 271.

sd/-

(Assistant Commissioner of Income-tax) Central Circle-1, Trivandrum

The Ld. AR submitted that the show cause notice u/s. 274 was defective as it does

not spell out the grounds on which penalty was sought to be imposed, whether for

concealing particulars of income or furnishing of inaccurate particulars of such

income. it was submitted that the Assessing Officer had not struck off the irrelevant

portion of the penalty notice which was not applicable to the assessee and does not

clearly mention whether he proposed to levy penalty for concealment of income or

furnishing of inaccurate particulars of income.

4.1 The Ld. AR placed reliance on the judgment of the Karnataka High Court in the

case of the CIT & Ors. Vs. Manjunatha Cotton and Ginning Factory & Ors. (2013) 4

I.T.A. No.175-180/Coch/2019 (359 ITR 565). The Ld. AR also relied on the judgment of the Supreme Court in the

case of CIT & Anr. vs. M/s. SSA’s Emerald Meadows in CC No.11485/2016 dated

05/08/2016 and the decision of the ITAT, Delhi Bench in the case of M/s. ABR Auto

Pvt. Ltd. Vs. ACIT in ITA No. 6236/DEL/2015 dated 04/12/2017. The Ld. AR also

relied on the following judgments:

considered and the appeal should be decided on merit.

carefully gone through the notice issued u/s. 274 r.w.s. 271 of the Act narrated in

para 4 of this order. As seen from the above notice issued u/s. 274 of the Act, the

Assessing Officer has not struck out the irrelevant portion of the notice. In other

words he has not specified whether he is levying penalty for concealment of

I.T.A. No.175-180/Coch/2019 particulars of income or furnishing of inaccurate particulars of income. As held by

the Karnataka High Court in the case of CIT & Anr. vs. M/s. SSA’s Emerald Meadows

(2015) (11) TMI 1620 that the notice issued by the Assessing Officer u/s. 274 r.w.s

271(1)(c) is to be bad in law as it did not specify which limb of section 271(1)(c) of

the Act, the penalty proceedings had been initiated, i.e., whether for concealment of

particulars of income or furnishing of inaccurate particulars of income. This view

was confirmed by the Supreme Court in the same case, i.e., CIT & Anr. vs. M/s.

SSA’s Emerald Meadows reported in (2016) (8) TMI 1145.

proceedings initiated by the AO is void ab initio and allow the appeal of the

assessee. Since we have quashed the penalty proceedings itself, we refrain from

adjudicating the other grounds of appeal raised by the assessee.

Place: Kochi Dated: 1st August, 2019 GJ Copy to: 1. M/s. Rajadhani Hotels & Tourist Enterprises Pvt. Ltd., Sumpthripthi, Rajadhani Buildings, East Fort, Thiruvananthapuram-695 023. 2. The Assistant Commissioner of Income-tax, Central Circle, Trivandrum. 3. The Commissioner of Income-tax(Appeals)-III, Kochi. 4. The Commissioner of Income-tax, Central, Kochi.

I.T.A. No.175-180/Coch/2019 5. D.R., I.T.A.T., Cochin Bench, Cochin. 6. Guard File. By Order

(ASSISTANT REGISTRAR) I.T.A.T., Cochin