B. Nageswari v. ITO, Ward-1(4), Visakhapatnam
[Citation -2019-LL-0925-60]

Citation 2019-LL-0925-60
Appellant Name B. Nageswari
Respondent Name ITO, Ward-1(4), Visakhapatnam
Court ITAT-Visakhapatnam
Relevant Act Income-tax
Date of Order 25/09/2019
Assessment Year 2005-06
Judgment View Judgment
Keyword Tags imposition of penalty • concealment of income • defective notice • return of income • notice issued • sale consideration • taxable capital gain • furnishing inaccurate particulars of income
Bot Summary: Against the declared sale consideration of Rs.9.80 lakhs, the Assessing Officer taken a consideration at Rs.1,08,90,000/- and the assessee s share worked out to Rs.85,89,400/-. Subsequently, the Assessing Officer completed the penalty proceedings by imposing penalty u/sec. Against the order of the Assessing Officer, the assessee went on appeal before the ld. During the appellate proceedings, the assessee has taken a ground regarding defective notice issued by the Assessing Officer which renders the penalty order invalid not being convinced with the explanation of the assessee, the ld. CIT(A) dismissed the appeal of the assessee and upheld the validity of the penalty order. Ld.AR further submitted that the Assessing Officer has not struck 3 ITA No. 338/VIZ/2015 off the irrelevant columns in the penalty notice thereby creating confusion to the assessee whether assessee required to furnish explanation for concealment of income or for furnishing the inaccurate particulars of income. The Assessing Officer did not strike out the irrelevant columns thereby causing confusion in the mind of the assessee, for 4 ITA No. 338/VIZ/2015 which act of omission/commission, the assessee required to furnish the explanation.


IN INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON BLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON BLE ACCOUNTANT MEMBER ITA Nos. 338/VIZ/2015 (Asst. Year 2005-06) B. Nageswari, vs. ITO, Ward-1(4), D.No. 48-3-3, Srinagar, Visakhapatnam. Visakhapatnam. PAN No. ABLPB6665J (Appellant) (Respondent) Assessee by Shri I. Kamasastry FCA. Department By Smt. Suman Malik Sr.DR Date of hearing 05/09/2019. Date of pronouncement 25/09/2019. ORDER PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER This appeal by assessee is directed against order of Commissioner of Income Tax (Appeals)-1, Visakhapatnam, dated 10/06/2015 for Assessment Years 2005-06. 2. In instant case, assessment was completed u/sec. 143(3) r.w.s. 148 by order dated 25/11/2011. assessee filed her return of income declaring total income of Rs. 96,720/-. During course of assessment proceedings, Assessing Officer made addition of Rs. 84,81,602/- relating to sale 2 ITA No. 338/VIZ/2015 (Smt. B. Nageswari) consideration of vacant site applying consideration as per agreement found. Against declared sale consideration of Rs.9.80 lakhs, Assessing Officer taken consideration at Rs.1,08,90,000/- and assessee s share worked out to Rs.85,89,400/-. Thus, taxable capital gains was worked out to 84,81,602/- and was brought to tax. Assessing Officer had initiated penalty proceedings u/sec. 271(1)(c) of Act. Subsequently, Assessing Officer completed penalty proceedings by imposing penalty u/sec. 271(1)(c) of act at Rs.16,14,660/- by order dated 30/01/2014. 3. Against order of Assessing Officer, assessee went on appeal before ld. CIT(A). During appellate proceedings, assessee has taken ground regarding defective notice issued by Assessing Officer which renders penalty order invalid, however, not being convinced with explanation of assessee, ld. CIT(A) dismissed appeal of assessee and upheld validity of penalty order. 4. Against order of ld. CIT(A), assessee is in appeal before this Tribunal. 5. During appeal hearing, ld.AR argued that penalty notice issued by Assessing Officer is vague and defective. Ld.AR further submitted that Assessing Officer has not struck 3 ITA No. 338/VIZ/2015 (Smt. B. Nageswari) off irrelevant columns in penalty notice thereby creating confusion to assessee whether assessee required to furnish explanation for concealment of income or for furnishing inaccurate particulars of income. Thus, argued that since penalty notice issued by Assessing Officer is defective, penalty is unsustainable. Accordingly, requested to cancel penalty and set aside order of ld. CIT(A). 6. We have heard both sides and perused material placed on record. 7. In this case, Assessing Officer had issued penalty notice dated 29/11/2011 without striking irrelevant columns in notice. relevant part of penalty notice issued by Assessing Officer is as under:- WHEREAS in course of proceeding before me for Asst. Year 2005-06 it appears to me that you. xxxxxx xxxxxx * have concealed particulars of your income or furnished inaccurate particulars of such income. 8. From perusal of notice issued u/sec. 271(1)(c), Assessing Officer is not clear whether penalty is initiated for concealment of income or furnishing of inaccurate particulars of income. Assessing Officer did not strike out irrelevant columns thereby causing confusion in mind of assessee, for 4 ITA No. 338/VIZ/2015 (Smt. B. Nageswari) which act of omission/commission, assessee required to furnish explanation. On similar facts and circumstances, Hon'ble Andhra Pradesh & Telangana High Court in case of Baisetty Revathi (398 ITR 88) quashed notice issued u/sec. 271(1)(c) as invalid. For sake of clarity and convenience, we extract relevant part of order of Hon ble High Court which reads as under: 17. On principle, when penalty proceedings are sought to be initiated by Revenue under section 271(1)(c) of Act of 1961, specific ground which forms foundation therefore has to be spelt out in clear terms. Otherwise, assessee would not have proper opportunity to put forth his defence. When proceedings are penal in nature, resulting in imposition of penalty ranging from 100 per cent. to 300 per cent. of tax liability, charge must be unequivocal and unambiguous. When charge is either concealment of particulars of income or furnishing of inaccurate particulars thereof, Revenue must specify as to which one of two is sought to be pressed into service and cannot be permitted to club both by interjecting one or between two, as in present case. This ambiguity in show-cause notice is further compounded presently by confused finding of Assessing Officer that he was satisfied that assessee was guilty of both. 18. We are therefore of opinion that order under appeal does not brook interference on any ground. We find no question of law, much less substantial one, arising for consideration warranting admission of this appeal. 9. On similar facts, coordinate bench of ITAT, Visakhapatnam in case of Konchada Sreeram (ITA No.388/VIZ/2015) following decision of Hon'ble Andhra 5 ITA No. 338/VIZ/2015 (Smt. B. Nageswari) Pradesh High Court cited supra and its own decision in cases of Narayana Reddy Enterprises (229/VIZ/2015) and Smt.Makina Annapurna (ITA Nos.604 & 605/Vizag/2014) held that non-striking of irrelevant column renders notice issued u/s 271 as invalid. 10. Since facts are identical and AO did not specify for which act of charge or offence, penalty was initiated, respectfully following decision of Hon ble High Court, notice issued u/s 271(1)(c) is to be held as invalid. Accordingly, we quash notice issued u/s 271(1)(c) and cancel orders of lower authorities and allow appeal of assessee. Since we have quashed notice and cancelled consequent orders of lower authorities, we consider it is not necessary to adjudicate other grounds raised by assessee. 11. In result, appeal filed by assessee is allowed. Order Pronounced in open Court on this 25th day of Sept., 2019. Sd/- sd/- (V. DURGA RAO) (D.S. SUNDER SINGH) Judicial Member Accountant Member Dated: 25 t h September, 2019. vr/- 6 ITA No. 338/VIZ/2015 (Smt. B. Nageswari) Copy to 1. Assessee B. Nageswari, D.No. 48-3-3, Srinagar, Visakhapatnam. 2. Revenue ITO, Ward-1(4), Visakhapatnam. 3. CIT-1, Visakhapatnam. 4. CIT(A)-1, Visakhapatnam. 5. D.R., Visakhapatnam. 6. Guard file. By order (VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam. B. Nageswari v. ITO, Ward-1(4), Visakhapatnam
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