BAGARIA LEASING PVT. LTD.,KOLKATA vs. ITO, WARD-1(1), KOLKATA

आयकर अपीलीय अधिकरण कोलकाता 'बी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA श्री संजय शमाा, न्याधयक सदस्य एवं श्री राकेश धमश्रा, लेखा सदस्य के समक्ष Before SONJOY SARMA, JUDICIAL MEMBER & SRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. Nos.: 441 & 442/KOL/2024 Assessment Years: 2007-08 & 2008-09 Bagaria Leasing Pvt. Ltd. ITO, Ward-1(1), Kolkata Vs. (Appellant) (Respondent) PAN: AABCB0441L Appearances: Assessee represented by : Miraj D. Shah, AR. Department represented by : P.N. Barnwal, CIT, DR and Abhijit Adhikari, JCIT, Sr. DR. Date of concluding the hearing : November 28th, 2024 Date of pronouncing the order : November 29th, 2024 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: Both the appeals filed by the assessee pertaining to the AYs 2007- 08 & 2008-09 are against the separate orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as ld. 'CIT(A)'] dated 11.01.2024. Since the issues raised in both these appeals are common and the facts are identical, therefore, they were heard together and are being disposed of vide this common order for the sake of convenience and brevity.

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Section 271(1B) as afore-quoted was inserted by Finance Act, 2008 (18 of 2008) with retrospective effect from 1-4-1989, which specifically provides that where any amount is added or disallowed in computing the total income or loss of the assessee in any order of assessment or reassessment of the and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceeding under the said clause (c).[Para 29] The deeming provision as provided in sub-section (1B) was inserted by the Parliament on account of certain judgments after taking note of the judicial pronouncement. [Para 29] Thus, sub-section (1B) of Section 271 creating a legal fiction deserves to be given full effect. [Para 30] It is settled law that in interpreting a statute, every effort should be made to give effect to each and every word used by the legislature. Presumption is that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect. A construction which attributes redundancy to the legislature will not be accepted except for compelling reasons such as obvious drafting errors vide Nathi Devi v. Radha Devi Gupta JT 2005 (1) SC 1 (paragraphs 12- 15) : (2005) 2 SCC 271. There cannot be any scope for Courts to undertake exercise to read something into the provision which the legislature in its wisdom has consciously omitted vide 2009 (242) ELT 162 [State v. Parmeshwaran Subramani]. Court’s jurisdiction to interpret a statute can be invoked when the same is ambiguous. Court can iron out fabric but cannot the change the texture of fabrics. It cannot enlarge the scope of legislation or intention when language is plain and unambiguous. It cannot add or subtract words to a statute or read something into it which is not there. It cannot rewrite or recast legislation. Intention of legislation must be gathered from the language used. Legislative intention must be found from the provision. When negative words are used, provision shall be mandatory. Every clause in a statute be construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole statute or series of statute. [Para 35] There is no ambiguity in section 271(1)(c) or section 271(1B) or in Explanation 5A to sub-section 1 of section 271(c). Therefore, one cannot assume something which is not expressed or which shall stand in conflict

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with the aforesaid provisions. A plain reading of the aforesaid unambiguous provisions lead to an irresistible conclusion that if an assessee falls within the four corners of the legal fiction created by section 271(1B) and the Explanation 5A and the Assessing Officer has recorded his satisfaction of concealment of particulars of income during the course of assessment proceedings then the penalty proceedings cannot be said to be bad. [Para 36] In the present set of facts the Assessing Officer has noted in the assessment order the concealment of particulars of income by the respondent/assessee. Notices were also directed to be issued as has been observed in the assessment orders. Once, in the assessment order the Assessing Officer has mentioned concealment of particulars of income by the assessee, the notice under section 274 is merely consequential. The respondent/assessee was well aware of the grounds of concealment of income recorded in the assessment order which he admitted. Section 274 prohibits imposition of penalty unless the assessee has been heard or has been given a reasonable opportunity of being heard. It is admitted fact of the case that the respondent/assessee was heard by the Assessing Officer who passed the penalty order. The submissions made by the respondent/assessee before the Assessing Officer in penalty proceedings, have been noted by the Assessing Officer. Thus, it is undisputed that the assessee has been heard. Under the circumstances, when a satisfaction has been recorded by the Assessing Officer during the assessment proceedings, consequential notice under section 274 was issued to the assessee and the assessee has been afforded an opportunity of being heard then the Tribunal has committed a manifest error of law and facts and has completely misdirected itself to set aside the penalty orders on the ground that ‘the grounds for imposition of penalty were not mentioned in the show cause notice under section 274 and thus, the show cause notice was defective’. [Para 37] The assessee relied upon judgment in Manjunatha Cotton And Ginning Factory (supra) to contend that ‘Notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1)(c)’. In the instant notice under Section 274 for penalty under section 271(1)(c) of the Act, 1961 was issued by the Assessing Officer to the respondent assessee to afford him opportunity of hearing for concealment of particulars of income. Details of undisclosed/concealed income have been well mentioned in the assessment order of the respondent assessee and being well aware of it, the respondent assessee made specific submission in penalty proceedings. Thus, essential requirements of

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Assistant Registrar ITAT, Kolkata Benches Kolkata

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