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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO& SHRI D.S. SUNDER SINGH
आदेश /O R D E R PER D.S. SUNDER SINGH, Accountant Member: 1. This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] vide I.T.A. No.0167/13- 14/ITO W-3(2), VSP/2014-15 dated 19.08.2014 for the Assessment Year 2008-09.
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Delay : There was a delay of 98 days in filing the appeal. The assessee ought to have filed the appeal on 12.12.2017 against which the appeal was filed on 15.03.2018 with a delay of 98 days. The assessee filed condonation petition stating that his wife was undergoing medical treatment for uterus cancer and he has to attend his wife for various medical consultations and treatment, therefore, the appeal could not be filed in time, hence requested to condone the delay. We have heard both the parties and convinced that there is a reasonable cause for delay in filing the appeal, accordingly, the delay is condoned.
In this case, the assessee filed the return of income declaring total income of Rs.13,17,360/- and the assessment was completed u/s 143(3) on total income of Rs.33,33,300/-. During the assessment proceedings, the AO made the addition of Rs.16,42,750/- u/s 68 of the Act on account of unexplained creditors and penalty u/s 271(1)(c) was initiated. Subsequently, the AO levied penalty of Rs.6,61,589/- u/s 271(1)(c) of the Act.
Against the order of the Ld.CIT(A), the assessee is in appeal before this Tribunal. During the appeal hearing, the assessee filed petition for
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admission of additional ground relating to the validity of issue of notice u/s 274 r.w.s. 271(1)(c) of the Act. The assessee during the appeal hearing submitted that in the instant case, the AO had issued the notice u/s 274 r.w.s. 271 without striking irrelevant columns relating to concealment of income or furnishing of inaccurate particulars. The Ld.AR argued that the notice u/s 271 r.w.s. 274 is ambiguous causing confusion and the assessee was not made known for which limb of the notice the penalty proceedings were initiated? whether for concealment of income or furnishing of inaccurate particulars. He further stated that the said ground was not taken before the Ld.CIT(A) due to oversight and requested for admission of the additional ground. The Ld.AR argued that notice u/s 271 r.w.s. 274 is invalid and required to be quashed. On the other hand the Ld.DR supported the orders of the Lower authorities.
We have heard both the parties and perused the material placed on record. The additional ground raised by the assessee with regard to validity of issue of notice u/s 274 r.w.s. 271 is a legal issue which does not require verification of facts or need further investigations. Therefore, after hearing both the parties, the additional ground raised by the assessee is admitted.
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We have gone through the notice issued by the AO dated 10.05.2012 which is reproduced hereunder :
6.1. In the said notice, the AO did not strike off irrelevant column and made known to the assessee the specific charge for initiating the proceedings u/s 271(1)(c) of the Act, whether it is for concealment of income or for furnishing of inaccurate particulars. The assessment order is also silent on the initiation of proceedings, whether it is for concealment of income or for furnishing of inaccurate particulars of income. It is settled issue by Hon’ble High Court of Andhra Pradesh in the case Pr.CIT Vs. Baisetty Revathi in ITTA 684/2016 dt30.07.2017 that not specifying the specific charge in the notice u/s 271(1)(c) renders the notice invalid. The
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assessee should be make known the specific charge for which the penalty proceedings are initiated.. For the sake of clarity and convenience, we extract relevant part of the order of the Hon’ble Andhra Pradesh High Court in ITTA No.684/2016 dated 13.7.2017. “On principle, which penalty proceedings are sought to be initiated by the revenue under section 271(1)(c) of the Act of 1961, the specific ground which forms the foundation therefore has to be spelt out in clear terms. Otherwise, an assessee would not have proper opportunity to put forth his defense. When the proceedings are penal in nature resulting in imposition of penalty ranging from 100% to 300% of the tax liability, the charge must be unequivocal and unambiguous. When the charge is either concealment of particulars of income or furnishing of inaccurate particulars thereof, the revenue must specify as to which one of the two is sought to be pressed into service and cannot be permitted to club both by interjecting an 'or” between the two, as in the present case. This ambiguity in the show-cause notice is further compounded presently by the confused finding of the Assessing Officer that he was satisfied that the assessee was guilty of both. We are therefore of the opinion that the order under appeal does not brook interference on any ground. We find no question of law, much less a substantial one, arising for consideration warranting admission of this appeal.” On the similar facts, the Hon'ble ITAT, Visakhapatnam in the case of Konchada Sreeram(ITA No.388/Viz/2015) following the decision of the Hon'ble Andhra Pradesh High Court cited supra and its own decision in the cases of Narayana Reddy Enterprises (229/Viz/2015) and Smt.Makina Annapurna (ITA Nos.604 & 605/Vizag/2014) held that non-striking of the irrelevant column renders the notice issued u/s 271 as invalid.
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6.2. In the instant case as discussed above, the AO did not strike out the irrelevant column. Therefore, respectfully following the decision of Hon’ble Andhra Pradesh High Court in the case of Baisetty Revathy and the decision of Hon’ble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory, we hold that the notice issued u/s 271(1)(c) is invalid. Accordingly we quash the notice and cancel the penalty imposed by the AO.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 5th April, 2019.
Sd/- Sd/- (िी.दुगाा राि) (धड.एस. सुन्दर धसंह) (V. DURGA RAO) (D.S. SUNDER SINGH) न्याधयक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER नवशधखधपटणम /Visakhapatnam नदनधंक /Dated : 05.04.2019 L.Rama, SPS
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आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee- Sri Samiullah Khan, Prop : Shabnam Steels, D.No.12-13-4, A.K.Street, Islampet, One Town, Vijayawada 2. रधजस्व/ The Revenue – Income Tax Officer, Ward-1(2), Vijayawada 3. The Pr.Commissioner of Income Tax, Vijayawada 4. The Commissioner of Income-Tax (Appeals), Vijayawada 5. तिभागीय प्रतितिति, आयकर अिीिीय अतिकरण, तिशाखािटणम /DR, ITAT, Visakhapatnam 6.गार्डफ़ाईि / Guard file आदेशािुसार / BY ORDER // True Copy //
Sr. Private Secretary ITAT, Visakhapatnam