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10-04-2019, Hari Prasad Bhararia, Section 271(1)(c), 292B,Tribunal Visakhapatnam

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1 week 2 days ago #9119 by amit
Section - 271(1)(c), 292B,274, 132, 153A, 2(22)(e)
Order Date - 10-04-2019
Favouring - Revenue
Court - Tribunal Visakhapatnam
Appellant - ACIT
Respondent - Hari Prasad Bhararia
Citation - 419Taxpundit154
Appeal No. - ITA No. 532/VIZ/2018
Asstt. Year - 2009-10



This appeal by the Revenue and the cross objection by the assessee are directed against the order of Commissioner of Income Tax (Appeals)-3, Visakhapatnam, dated 29/06/2018 for the Assessment Year 2009-10.

2. The Department has raised the followings grounds of appeal:-

(i) The CIT(A) ignored the provisions of sec.271(1B) of the I.T. Act.

(ii) In the facts and circumstances, the CIT(A) erred in ignoring the fact that the assessee fully knew in detail the exact charge of the department against it and hence the so-called ambiguous wordings in the notice has not impaired or prejudiced the right of the assessee of reasonable opportunity of being heard.

(iii) In the facts and circumstances, the CIT(A) erred in ignoring the fact that there is no prejudice or violation of principles of natural justice in the case of the assessee and the assesssee was never denied the rights to contest penalty proceedings and had full opportunity to meet the case of Revenue so as to show that the conditions stipulated in section 271 (1)(c) do not exist and that it is not liable to pay penalty.

(iv) The CIT(A) ought to have followed the decisions of Hon'ble High Court of Andhra Pradesh in the case of CIT Vs. Chandu al (1 52 ITR 238)(AP) and Srinivasa Pitty & Sons Vs.CIT (173 ITR 306)(AO).

(iv) The CIT(A) ought to have held that the case of SSA's Emeralds Meadow Vs. CIT(2016) 73 248 (SC) is not binding in view of the decision of Shanmugavel Nadar (263 ITR 658)(SC), as the same is merely a dismissal, where it was held that a rejection of SLP through a non-speaking order is not a binding precedent.

(vi) The CIT(A) ought to have followed the ratio of Hon'ble Supreme Court's decision in the case of Skylight Hospitality LLP vs. ACIT, dated 06-04-2018 wherein it was held that "We are convinced that wrong name given in the notice was merely a clerical error which could be corrected under section 2928 of the Income Tax Act. The Special leave petition is dismissed."

(vii) The CIT(A) ought to have considered the import of section 292B which came up for discussion in the case of CIT vs. Jagat Novel Exhibitions(P) Ltd.,(201 3)356 ITR 559(Del),wherein it was held that "The aforesaid provision (section 2928) has been enacted to curtail and negate technical pleas due to any defect, mistake or omission in a notice/summons/return. The provision was enacted by Tax Laws (Amendment) Act, 1975 with effect from 1st October, 1975. It has a salutary purpose and ensures that technical objections, without substance and when there is effective compliance or compliance with intent and purpose, do not come in the way or affect the validity of the assessment proceedings."

(viii) Any other ground that may be urged at the time of hearing.”

3. The department has raised as many as grounds and also case laws, however, we find that the issue involved in this appeal is whether non-striking of irrelevant portion of the notice under section 274 r.w.s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as 'Act') i e. for concealment of income or
furnished inaccurate particulars of income, makes the notice invalid or not?

4. Facts of the case, in brief, are that the assessee is an individual deriving income from business of trading in shares, rental income and remuneration as Managing Director of M/s.Sampat Vinayaka Steel Pvt. Ltd. The assessee has filed a return of income for A.Y. 2009-10 by declaring total income of Rs.21,87,858/-. Subsequently, a search and seizure operation under section 132 of the Act was conducted in the residential premises of the assessee on 02/10/2010. Accordingly, a notice under section 153A was issued and in response to the notice, the assessee has filed his return of income by admitting total income at Rs. 83,87,860/-. The Assessing Officer completed the assessment by making addition under section 2(22)(e) of Rs.69,17,660/- and unexplained investment of Rs. 11,42,500/- in M/s. Alakananda Vinimay Pvt. Ltd.

5. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A). The ld. CIT(A) directed the Assessing Officer to delete the addition made under section 2(22)(e) of the Act. As against the order of the ld. CIT(A), the Department carried the matter in appeal before the Tribunal and the ITAT, Visakhapatnam vide its order in ITA Nos.435 to 441/VIZ/2014, dated 09/09/2016, has dismissed the appeal filed by the Revenue. Subsequently, the Assessing Officer has communicated to the assessee regarding penalty proceedings initiated under section 271(1)(c) dated 28/09/2016. In response to the communication, the assessee has requested to drop the penalty. However, the Assessing Officer not accepted the explanation of the assessee and passed the penalty order under section 271(1)(c) of the Act on 31/03/2017 and levied penalty of Rs. 22,68,832/-. The assessee carried the matter in appeal before the ld. CIT(A) and raised an additional ground that non-striking of the irrelevant column, notice makes invalid and for that he relied on the decision of the Hon'ble Jurisdictional High Court in the case of Pr.CIT vs.

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