Indian Kanoon - Search engine for Indian Law

Income Tax Appellate Tribunal - Mumbai

Adhiraj Investment And Finance P.Ltd, ... vs Asst Cit 1(1), Mumbai on 3 May, 2017

ITA No.5240/Mum/2014 Adhiraj Investments and Finance Pvt. Ltd.,, Assessment Year 2009-2010 आयकर अपीलीय अिधकरण "ए" ायपीठ मुंबई म ।

IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, MUMBAI BEFORE SHRI D.T. GARASIA, JM AND SHRI RAMIT KOCHAR, AM आयकर अपील सं./I.T.A. No. 5240/Mum/2014 (िनधा रण वष / Assessment Year: 2009-2010) ADHIRAJ INVETMENT AND Asst. COMMISSIONER OF FINANCE PVT. LTD. INCOME TAX 1(1), 303, Sharda Chambers, 15, New बनाम/ Aaykar Bhavan, M.K. Marg, Marine Lines, Vs. Mumbai - 400 020.

Mumbai - 400 020.

थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AAACA5217G (अ पीलाथ /Appellant) : ( थ / Respondent) अ पीलाथ की ओर से / Appellant by : Shri Rishabh Shah थ की ओर से/Respondent by : Shri Rajesh Kumar Yadav सुनवाई की तारीख / : 22/03/2017 Date of Hearing घोषणा की तारीख / : 03 /05/2017 Date of Pronouncement 2 ITA No.5240/Mum/2014 Adhiraj Investments and Finance Pvt. Ltd.,, Assessment Year 2009-2010 आदे श / O R D E R Per D.T. Garasia (Judicial Member)

1. The captioned appeal by the assessee for the Assessment Year 2009-10 as raised out of the order of the Ld. Commissioner of Income-Tax (Appeals)- 01 [CIT(A)], Mumbai dated 16/06/2014. Following grounds are raised in the assessee's appeal:-

1. Penalty of Rs. 15,66,306/- levied u/s. 271(1)(c) of the Income Tax Act, 1961:

On the facts and circumstances of the case, the Appellant submits that the Hon. Commissioner of Income Tax Appeals, Mumbai erred in upholding the additions of the amount of Provision for FBT and Income Tax of Rs. 46,08,139/- made u/s. 154 of the Income Tax Act, 1961 by the Learned Assessing Officer as concealed income.

On the facts and circumstances of the case, the Appellant submits that the Hon. Commissionr of Income Tax erred in levying the penalty of Rs. 15,66,306/- u/s. 271(1)(c) of the Income Tax Act, 1961.

The Appellant submits that the penalty of Rs. 15,66,306/- levied u/s. 271(1)(c) be deleted.

2. The said facts of the case are that the assessee has filed its return of income on 03/10/2009 declaring income of Rs. 96,36,542/-. The return was selected for scrutiny. During the course of assessment proceedings, as per the audited profit & loss account the profit was shown at Rs. 1,38,15,629/- and after making provisions of FBT and provisions for Income Tax, the profit was Rs. 92,07,490/-. However, in computation of income the stated figure has been taken at Rs. 92,07,490/- and provision for FBT and Income Tax was not added back. Assessee has filed the original return wherein taxes was rightly calculated though the assessee filed revised return on 03/10/2009 showing the net income of Rs. 96,36,542/-. Therefore, AO has rectified the order u/s. 154 by passing the rectification order. The AO has added the amount of Rs. 46,08,139/- to the total income of the assessee and penalty proceedings u/s. 271(1)(c) of the Income Tax Act was initiated by AO for furnishing inaccurate particulars of income. In reply to show cause notice, the assessee contended that 3 ITA No.5240/Mum/2014 Adhiraj Investments and Finance Pvt. Ltd.,, Assessment Year 2009-2010 the assessee has not willfully filed any inaccurate particulars of income which was due to the error in computation of total income mainly the provision for Income Tax, FBT, and Mandatory addition on account of 14A these order u/s. 154 has been passed. Therefore, penalty may be dropped but the assessee has deliberately attempted and furnished the inaccurate particulars of income. Therefore, he levied the penalty u/s. 271(1)(c) of the Act.

3. Matter was carried to CIT(A) and CIT(A) has dismissed. During the course of hearing the Ld. AR has taken the additional ground before us notice u/s. 274 of the Act does not specify the charge whether party has been levied for furnishing for inaccurate particulars of income or concealment of income. The Ld. AR submitted that in the assessment order and in penalty order the penalty has been imposed for furnishing inaccurate particulars of income. While in the notice the AO has not pointed out whether the penalty has been imposed for concealment of income. It is the duty of the AO to specify the charge before initiating the penalty. The Ld. AR relied upon the decision of the Hon'ble Karnataka High Court in the case of Commissioner of Income Tax, Vs. Manjunatha Cotton & Ginning Factory 35 taxmann.com 250 (Karnataka),wherein the Hon'ble High Court has made the conclusion in the judgement that it is a duty of the AO which has not specify the charge, therefore, penalty may be deleted. On the other hand, the Ld. DR submitted that as per Section 292B notices deemed to be valid in certain circumstances and said that when assessee appears in proceedings or in the enquiry relating to assessment or re-assessment. It should have been deemed that proper notice has been served upon him in accordance with the provision of the Act and assessee has participated in proceedings or enquiry and not objected that notices served upon him was I an improper manner.

4. We have heard the rival contentions of both the parties along to the facts and circumstances of the case, we find that in this case these legal ground was not taken before CIT(A). Moreover, the assessee has produced the Xerox copy of notice u/s. 274 r.w.s.

Adhiraj Investments and Finance Pvt. Ltd.,, Assessment Year 2009-2010 271(1)(c) of the Act before us. These are legal ground which was not taken before CIT(A). Moreover, Section 292B also came into plea while deciding the assessee's issue's. therefore, in the interest of justice we restore these issue to the file of the CIT(A) and CIT(A) is directed to decide these legal ground by considering the decisions of High Court of Karnataka 35 taxmann 250 and latest judicial preceding and also Section 292B of the Income Tax Act, 1961. CIT(A) is directed to grant opportunity of hearing to assessee before deciding the same. In the result, the appeal of assessee is allowed for statistical purpose.

Order pronounced in the open court on 3rd May, 2017 Sd/- Sd/-

           (Ramit Kochar)                                   (D.T. Garasia)
     लेखा सद! / Accountant Member                     "ाियक सद! / Judicial Member
मुंबई Mumbai; िदनां क Dated : 03 .05.2017
PS:- Pooja K.

आदे श की ितिलिप अ ेिषत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. थ / The Respondent

3. आयकर आयु&(अपील) / The CIT(A)

4. आयकर आयु& / CIT - concerned

5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai

6. गाड+ फाईल / Guard File आदे शानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुंबई / ITAT, Mumbai