Income Tax Appellate Tribunal - Hyderabad
Ito, Ward-6(3),, Hyderabad vs M/S. Paras Collins & Distilleries,, ... on 11 November, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "B", HYDERABAD
BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER
AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
ITA No. 391/Hyd/2013
Assessment Year: 2006-07
Paras Collins Distilleries, vs. Income-tax Officer,
Hyderabad. Ward - 6(3), Hyderabad
PAN - AABCP 2155M
(Appellant) (Respondent)
ITA No. 471/Hyd/2013
Assessment Year: 2006-07
Income-tax Officer, vs. Paras Collins Distilleries,
Ward - 6(3), Hyderabad Hyderabad.
PAN - AABCP 2155M
(Appellant) (Respondent)
Assessee by : Shri S. Rama Rao
Revenue by : Shri K.J. Rao
Date of hearing 20-10-2016
Date of pronouncement 11-11-2016
O RDE R
PER S. RIFAUR RAHMAN, A.M.:
Both these are cross appeals directed against the order of the learned Commissioner of Income-tax(A) - IV, Hyderabad, dated 11/01/2013, for AY 2006-07.
2. Briefly the facts of the case are that the assessee, M/s Paras Collins & Distilleries, a firm carrying on the business of manufacturing Indian made liquor, filed return of income for the A.Y. 2006-07 on 31.10.2006 admitting therein the income of Rs. 3,45,790/-. The return 2 ITA No. 391 & 471/H/13 Paras Collins Distilleries Pvt. Ltd.
was processed u/s 143(1) on 31.05.2007. Later on, the return was taken up for scrutiny by issuing notice u/s 143(2) and assessment order u/s, 143(3) was passed on 31-12-2008 assessing total income at Rs. 4,25,23,985/-. The quantum appeal was upheld by the CIT(A) and ITAT. Penalty proceedings u/s. 271(1)(c) were initiated by issuing notice u/s 274 on 31-12-2008.
3. Before us, the assessee filed petition requesting for admission of the additional ground, which is as under:
"The initiation of proceedings u/s 271(1)(c) of the Income-tax Act, is not valid as the AO did not strike off the inappropriate portion of the notice. The AO ought to have struck off the inappropriate portion and indicated to the appellant the applicable portion in the notice."
4. As the said additional ground is a legal ground, wherein, the facts are on record and facts do not require fresh investigation, following the decision of Hon'ble Supreme Court in the case of National Thermal Power Co., Limited Vs. CIT 229 ITR 383 (SC), we admit the said additional ground of assessee.
5. The ld. AR of the assessee submitted that the Assessing Officer initiated the penalty proceedings by issue of a notice u/s 274 r.w.s. 271 on 29.12.2010. He submitted that While issuing the said notice, the Assessing Officer did not mention whether the notice is issued for concealment of income or for furnishing of inaccurate particulars of income. Therefore, the notice is not validly issued. Consequently, the order passed u/s 271(1)(c) also is not valid. For this proposition, he relied on the decision of the Hon'ble Supreme Court in the case of CIT Vs. SSA's Emerald Meadows, [2016] 73 taxmann.com 248 (SC).
6. The Learned Departmental Representative on the other hand relied on the orders of revenue authorities.
3ITA No. 391 & 471/H/13 Paras Collins Distilleries Pvt. Ltd.
7. Considered the rival submissions and perused the material facts on record. The issue in dispute is squarely covered by the decision of the Hon'ble Supreme Court in the case of CIT Vs. SSA's Emerald Meadows, [2016] 73 Taxmann.com 248 (SC) wherein the Apex Court upheld the decision of the Hon'ble High Court, in which, the Hon'ble High Court confirmed the order of the Tribunal and dismissed the appeal of the revenue, who came in appeal against the order of the Tribunal. The Tribunal relying on a decision of Karnataka High Court in case of CIT Vs. Manjunatha Cotton & Ginning Factory, [2013] 359 ITR 565/210 allowed the appeal of the assessee holding that notice issued by Assessing Officer u/s 274 read with section 271(1)(c) was bad in law, as it did not specify under which limb of section 271(1)(c) penalty proceedings had been initiated, i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income.
7.1 In the case under consideration, on perusal of the show cause notice issued by the Assessing Officer u/s 274 r.w.s. 271 of the IT Act, 1961, dated 31/12/2008, it is seen that the Assessing Officer did not mention whether the notice is issued for concealment of income or for furnishing of inaccurate particulars of income. Therefore, as per the ratio laid down by the Hon'ble Supreme Court in the case of SSA's Emerald Meadows, the notice issued by the Assessing Officer is not valid and consequently, the order passed u/s 271(1)(c) is also not valid. Hence, we set aside the order of the CIT(A) and quash the order passed by the Assessing Officer u/s 271(1)(c) of the Act. Accordingly, the appeal of the assessee is allowed.
8. As we have quashed the order passed by the AO u/s 271(1)(c) in the assessee's appeal, the appeal of the revenue becomes infructuous and, therefore, the same is dismissed as infructuous.
4ITA No. 391 & 471/H/13 Paras Collins Distilleries Pvt. Ltd.
10. In the result, assessee's appeal in ITA No. 391/H/13 is allowed and the revenue's appeal in ITA No. 471/H/13 is dismissed.
Pronounced in the open court on 11 th November, 2016.
Sd/- Sd/-
(P. MADHAVI DEVI) (S. RIFAUR RAHMAN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 11 th November, 2016
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Copy to:-
1) Paras Collins Distilleries, C/o B. Narsing Rao & Co., CAs Plot No. 554, Road No. 92, Jubilee Hills, Hyd. - 56
2) ITO, Ward - 6(3), Hyd.
3) CIT(A) - IV, Hyderabad 4 CIT - III, Hyderabad
5) The Departmental Representative, I.T.A.T., Hyderabad.
6) Guard File