×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
The appeal is by the revenue against the order dated 14.02.2018 of CIT(Appeals), Belagavi, relating to assessment year 2010-11. The Assessee has filed C.O.No.17/Bang/2019 against the very same order of CIT(A).
2. In the appeal by the Revenue, the revenue has challenged the order of the CIT(A) whereby the CIT(A) cancelled the order of the AO imposing penalty on the Assessee u/s. 271(1)(c) of the Income Tax Act, 1961 (Act). In the Cross objection the Assessee has submitted that the penalty proceedings u/s.271(1)(c) of the Act has to be quashed on the ground that the show cause notice issued u/s.274 of the Act, before imposing penalty does not specify the exact charge agains the Assessee and therefore even on this basis the penalty imposed u/s.271(1)(c) of the Act cannot be sustained.
3. There is a delay o about 150 days in filing the CO by the Assessee. The notice in revenue’s appeal was served on the Assessee on 14.8.2018. The CO was not filed within the time within which it ought to have been filed for the reason that the Managing director of the Assessee, which is a State Government Undertaking, was transferred in December, 2018 and no new managing director was appointed by the State Government. The filing of CO had therefore to be approved by the Board. It took time to take such approval and hence the delay in filing CO. An affidavit by Shri S.K.Kulkarni, Accounts Officer of the Assessee has been filed in support of the petition for condonation of delay in filing CO.
4. Though the learned opposed the prayer for condonation of delay in filing CO, we are of the view that in the light of the reasons adduced for the delay in filing CO, the same deserves to be condoned. The Assessee is not guilty of gross negligence or latches. Hence the delay in filing the CO is condoned.
5. The facts and circumstances under which penalty was imposed on the Assessee by the AO are that the Assessee is a co-operative society engaged in manufacture and sale of sugar claimed depreciation of Rs.10,23,53,309/-. The correct claim of depreciation permissible was only Rs.1,44,74,986/-. In the course of assessment proceedings when the mistake was pointed out, the Assessee filed a revised statement of depreciation. Accordingly, the depreciation claim was disallowed to the extent of excess claim made in the return of income. Besides the above there were certain disallowances of expenses under Sec.40(a)(ia) of the Act.
6. In respect of the addition made as aforesaid the AO initiated penalty proceedings u/s.271(1)(c of the Act and imposed penalty on the Assessee which was deleted by the CIT(A). Hence, appeal by the revenue before the Tribunal. In he Cross objection the Assessee has submitted that the penalty proceedings u/s.271(1)(c) of the Act have to be quashed on the ground that the show cause notice issued u/s.274 of the Act, before imposing penalty does not specify the exact charge against the Assessee and therefore even on this basis the penalty imposed u/s.271(1)( c) of the Act cannot be sustained.
7. Before the Tribunal the learned counsel for the Assessee contended that the notice issued before imposing penalty was not in accordance with law and on this ground the order imposing penalty should be quashed. The learned counsel for the Assessee also drew our attention to the show cause notice issued u/s.274 of the Act before imposing penalty and submitted that the said notice does not specify as to whether the Assessee is guilty of having “furnished inaccurate particulars of income” or of having “concealed particulars of such income”. He pointed out that the show cause notice does not strike out the irrelevant portion viz., “furnished inaccurate particulars of income” or “concealed particulars of such income”. He drew our attention to a decision of the Hon’ble Karnataka High Court in the case of CIT Vs. Manjunatha Cotton & Ginning Factory (2013) 218 Taxman 423 (Kar.) wherein it was held that if the show cause notice u/s.274 of the Act does not specify as to the exact charge viz., whether the charge is that the Assessee has “furnished inaccurate particulars of income” or “concealed particulars of income” by striking out the irrelevant portion of printed show cause notice, han the imposition of penalty on the basis of such invalid show cause notice cannot be sustained.
8. We have also perused the show-cause notice issued u/s.274 of the Act. The AO in the said show cause notice has not struck off the irrelevant portion as to whether the charge against the Assessee is “concealing particulars of income or furnishing of inaccurate particulars of income”.
9. The learned DR relied on the order of the CIT(A). He placed reliance on the decision of the Hon’ble ITAT Bangalore Bench in the case of Shri P.M. Abdulla Vs. ITO ITA No.1223 & 1224/Bang/2012 order dated 17.10.2016 taking a view that absence of specific mention in the show cause notice u/s.274 of the Act about the charge u/s.271(1)(c) of the Act isnot fatal to levy of penalty u/s.271(1)(c) of the Act. In coming to the aforesaid conclusion, the Bench followed decision of Hon’ble Karnataka High Court in the case of CIT Vs. Sri Durga Enterprises (2014)