RANJAN KUMAR NATH,KORAPUT vs. ITO,JEYPORE WARD, JEYPORE

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ITA 117/CTK/2019Status: DisposedITAT Cuttack26 July 2019AY 2009-103 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty is not sustainable because the assessee was not specifically made aware of whether the penalty was for concealment of income or furnishing inaccurate particulars. The AO's non-application of mind in issuing a general notice was also noted.

What were the facts?

The assessee appealed against the CIT(A)'s order confirming a penalty levied under Section 271(1)(c) for unexplained investment and agricultural income additions. The penalty notice was issued in a standard proforma without striking off irrelevant clauses.

What were the issues?

Whether a penalty under Section 271(1)(c) is sustainable when the penalty notice under Section 274 is issued in a standard proforma without specifying the exact charge (concealment or inaccurate particulars).

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,

Before: SHRI CHANDRA MOHAN GARGBEFORE SHRI CHANDRA MOHAN GARGBEFORE SHRI CHANDRA MOHAN GARG

For Appellant: Shri P.K.Mishra, Adv
For Respondent: Shri Subhendu Dutta, DR
Hearing: 24/07

ITA No. ITA No.117/CTK/2019 Assessment Year: 20 Assessment Year: 2009-10

IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA No.117/CTK/2019 Assessment Year: Assessment Year: 2009-10 Ranjan Kumar Nath, Nath, Rath Vs. ITO, Jeypore Ward, Sharma Colony, Po/Dist: Jeypore Koraput. PAN/GIR No.AIBPN 4939 N AIBPN 4939 N (Appellant) ) .. ( Respondent Respondent) Assessee by : Shri P.K.Mishra, Adv Revenue by Revenue by : Shri Subhendu Dutta, DR Date of Hearing : Date of Hearing : 24/07/ 2019 Date of Pronouncement : Date of Pronouncement : 25 /07/ 2019 / 2019 O R D E R

This is an appeal filed by the assessee against the order of the Commissioner This is an appeal filed by the assessee against the order of the Commissioner This is an appeal filed by the assessee against the order of the Commissioner of Income Tax(Appeals)-1, Bhubaneswar dated 1, Bhubaneswar dated 25.1.2019 for the assessment year for the assessment year 2009-10.

2.

The only issue raised in this appeal is against the order of the CIT(A) The only issue raised in this appeal is against the order of the CIT(A) The only issue raised in this appeal is against the order of the CIT(A) confirming levy of penalty of Rs.73,780/- under section.271(1)(c) of the Act by the under section.271(1)(c) of the Act by the Assessing Officer in respect to addition of Assessing Officer in respect to addition of unexplained investment in Firm and on the unexplained investment in Firm and on the addition of agricultural income as income from other sources. addition of agricultural income as income from other sources.

3.

At the outset, ld A.R. of the assessee submitted that on similar facts penalty At the outset, ld A.R. of the assessee submitted that on similar facts penalty At the outset, ld A.R. of the assessee submitted that on similar facts penalty levied by the AO and confirmed by the CIT(A) has been deleted by the Tribunal in levied by the AO and confirmed by the CIT(A) has been deleted by the Tribunal in levied by the AO and confirmed by the CIT(A) has been deleted by the Tribunal in the case of Suna Nath vs ITO in ITA No.96/CTK/2019 for A.Y. 2009 the case of Suna Nath vs ITO in ITA No.96/CTK/2019 for A.Y. 2009 the case of Suna Nath vs ITO in ITA No.96/CTK/2019 for A.Y. 2009-10 order dated 5.4.2019 and also in the case of Natabar Nath vs ITO in ITA No.97/CTK/2019 for o in the case of Natabar Nath vs ITO in ITA No.97/CTK/2019 for o in the case of Natabar Nath vs ITO in ITA No.97/CTK/2019 for

ITA No.117/CTK/2019 Assessment Year: 2009-10

A.Y. 2009-10 order dated 5.4.2019. Therefore, this issue is covered in the case of the assessee by the above decisions of the Tribunal. Ld D.R. could not controvert the above findings of ld A.R. of the assessee.

4.

Heard arguments of both the sides. Ld A.R of the assessee also relied on the decision of the Hon’ble Supreme Court in the case of CIT vs. SSA’s. Emarld Meadows dated 11th January, 2017 passed in Special Leave to Appeal (CC No.11485/2016).

5.

Ld D.R. supported the orders of lower authorities.

6.

On consideration of rival submissions, I find that Hon’ble Supreme Court in the case of SSA’s Emarld Meadows (supra) has held that Omission by the AO to explicitly specify in the penalty notice as to whether penalty proceedings are being initiated for furnishing of inaccurate particulars or for concealment of income makes the penalty order liable for cancellation.

7.

The Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory, 359 ITR 565 (Kar) observed that the levy of penalty has to be clear as to the limb under which it is being levied. As per Hon'ble High Court, where the Assessing Officer proposed to invoke first limb being concealment, then the notice has to be appropriately marked. The Hon'ble High Court held that the standard proforma of notice under section 274 of the Act without striking of the irrelevant clauses would lead to an inference of non-application of mind by the Assessing Officer.

8.

In the background of the aforesaid legal position and, having regard to the manner in which the Assessing Officer has issued notice under section 274 r.w.s. 271(l)(c) of the Act dated 9.5.2017 for assessment year 2009-2010 in a general

ITA No. ITA No.117/CTK/2019 Assessment Year: 20 Assessment Year: 2009-10

manner in the standard proforma of notice under section 274 of the Act without the standard proforma of notice under section 274 of the Act without the standard proforma of notice under section 274 of the Act without striking of the irrelevant clauses striking of the irrelevant clauses, which led an inference of non-application of mind application of mind by the Assessing Officer. Therefore, Therefore, I am of the considered view that when the I am of the considered view that when the assessee has not been specifically made aware of the charges leveled against him as assessee has not been specifically made aware of the charges leveled against him as assessee has not been specifically made aware of the charges leveled against him as to whether there is a concealment of income or furnishing of inaccurate particulars to whether there is a concealment of income or furnishing of inaccurate particulars to whether there is a concealment of income or furnishing of inaccurate particulars of income on his part, the penalty u/s 271(1 of income on his part, the penalty u/s 271(1)(c) of the Act is not sustainable. )(c) of the Act is not sustainable. Therefore, I delete the penalty of Rs. Therefore, I delete the penalty of Rs.73,780/- imposed u/s.271(1)(c) of the Act. imposed u/s.271(1)(c) of the Act.

9.

In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.

Order pronounced on Order pronounced on 25/07/2019. Sd/- (Chandra Mohan Garg) JUDICIALMEMBER Cuttack; Dated 25 /07/209 /209 B.K.Parida, SPS Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant : Ranjan Kumar Nath, Rath Ranjan Kumar Nath, Rath Sharma Colony, Po/Dist: Koraput Sharma Colony, Po/Dist: Koraput 2. The respondent: ITO, Jeypore Ward, Jeypore The respondent: ITO, Jeypore Ward, Jeypore 3. The CIT(A)-1, Bhubaneswar 1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar 1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// By order

Sr. Pvt. Secretary, Sr. Pvt. Secretary, ITAT, Cuttack

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