TMI Blog2020 (9) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... RAJESH KUMAR , AM AND SHRI AMARJIT SINGH , JM Assessee by : Shri Jitendra Jain Revenue by : Shri Rahul Raman ( DR ) ORDER PER AMARJIT SINGH , JM : The assessee has filed the present appeal against the order dated 30.01.2017 passed by the Commissioner of Income Tax (Appeals)-53, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Y. 2012-13 wherein the penalty levied by the AO has been ordered to be confirmed. 2. The assessee has raised the following grounds: - The Commissioner of Income Tax(Appeals) - 53, Mumbai, (hereinafter referred to as CIT(A) erred in confirming the order passed by the Assessing Officer (AO) U/s 271(1)(c) of the I.T. Act for the A.Y. 2012-13. The Appellant submits that the penalty order passed by the AO is had in law, ultravires and contrary to the provision of the Act and shall be quashed. (a) The CIT(A) erred in confirming the penalty of ₹ 3,24,45,000/- levied by the AO u/s 271(1)(c ) of the I.T. Act. The Appellant submits that it has neither concealed any particulars of income nor furnished inaccurate particulars of such income so as to justify levy of penalty and hence the AO shall be direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies at page no. 1 to 3 of the paper book, therefore, in the said circumstances, no penalty is leviable. It is also specifically argued that at the time of the process of the assessment, the AO raised the query which was replied vide letter dated 12.02.2015 and 10.03.2015 lies at page no. 55 to 58 of the paper book, therefore, in the said circumstances, there should be no initiation of the penalty u/s 271(1)(c) of the Act. It is argued that the claim of the assessee was denied and the amount was treated as revenue which nowhere attract the penalty in view of the provisions u/s 271(1)(c) of the Act and in this regard, the Ld. Representative of the assessee has placed reliance upon the decision of the Hon ble Supreme Court in the case of Reliance Petroproduct Vs. CIT (P) Ltd. 322 ITR 158 SC. However, on the other hand, the Ld. Representative of the Department has refuted the said contention and strongly placed reliance upon the decision of the CIT(A) under challenged. Taking into consideration the arguments advanced by the Ld. Representative of the parties and perusing the record, we noticed that the assessee has disclosed the amount in sum of ₹ 10 crores as settlement capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnishing of inaccurate particulars. In view of the said circumstances, we are of the view that the no penalty is leviable in accordance with law. Now coming to the other point which has been raised by the Ld. Representative of the assessee that the notice was not in accordance with law and no penalty can be levied on account of defective notice. On appraisal of the assessment order, we find that the penalty was initiated on account of furnishing the inaccurate particulars of income. Subsequently while initiating the penalty proceeding, the notice dated 24.03.2015 was issued wherein both the limbs have been tick off. Subsequently, while passing the order penalty order dated 29.09.2015. the penalty was levied on both the limbs which is not justifiable. In the case of Meherjee Cassinath Holdings P. Ltd. Vs. ACIT, Circle-4(2). It has been held that 8. We have carefully considered the rival submissions. Sec. 271(1)(c) of the Act empowers the Assessing Officer to impose penalty to the extent specified if, in the course of any proceedings under the Act, he is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing the order of assessment laid emphasis that he had dealt with both the situations. 84. The impugned order, therefore, suffers from non- application of mind. It was also bound to comply with the principles of natural justice. (See Malabar Industrial Co. Ltd. v. CIT [2000] 2 SCC 718] 9. Factually speaking, the aforesaid plea of assessee is borne out of record and having regard to the parity of reasoning laid down by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra), the notice in the instant case does suffer from the vice of non-application of mind by the Assessing Officer. In fact, a similar proposition was also enunciated by the Hon'ble Karnataka High Court in the case of M/s. SSA s Emerald Meadows (supra) and against such a judgment, the Special Leave Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n rendered by Hon ble Bombay High Court in the case of Smt. B Kaushalya and Others (supra) and the decision rendered by Hon ble Supreme Court in the case of Dilip N Shroff (supra) would make it clear that there should be application of mind on the part of the AO at the time of issuing notice. In the case of Lakhdir Lalji (supra), the AO issued notice u/s 274 for concealment of particulars of income but levied penalty for furnishing inaccurate particulars of income. The Hon ble Gujarat High Court quashed the penalty since the basis for the penalty proceedings disappeared when it was held that there was no suppression of income. The Hon ble Kerala High Court has struck down the penalty imposed in the case of N.N.Subramania Iyer Vs. Union of India (supra), when there is no indication in the notice for what contravention the petitioner was called upon to show cause why a penalty should not be imposed. In the instant case, the AO did not specify the charge for which penalty proceedings were initiated and further he has issued a notice meant for calling the assessee to furnish the return of income. Hence, in the instant case, the assessing officer did not specify the charge for which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee u/s 271(1)(c), which has to be met by him. As noted by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra), the quasi-criminal proceedings u/s 271(1)(c) of the Act ought to comply with the principles of natural justice, and in the present case, considering the observations of the Assessing Officer in the assessment order alongside his action of non-striking off of the irrelevant clause in the notice shows that the charge being made against the assessee qua Sec. 271(1)(c) of the Act is not firm and, therefore, the proceedings suffer from non- compliance with principles of natural justice inasmuch as the Assessing Officer is himself unsure and assessee is not made aware as to which of the two limbs of Sec. 271(1)(c) of the Act he has to respond. 14. Therefore, in view of the aforesaid discussion, in our view, the notice issued by the Assessing Officer u/s 274 r.w.s. 271(1)(c) of the Act dated 10.12.2010 is untenable as it suffers from the vice of non-application of mind having regard to the ratio of the judgment of the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra) as well as the judgment of the Hon'ble Bombay High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peculiar facts of the present case. The notice in the present case is itself is defective and further, there is no finding or satisfaction recorded in relation to concealment or furnishing of inaccurate particulars. 9. For the aforesaid reasons, we hold that no substantial questions of law arise in this appeal. Consequently, this appeal is dismissed. 6. In view of the above said discussion and by relying upon the above mentioned decisions, we nowhere found any justifiable ground to uphold the order passed by the CIT(A) in question, therefore, we set aside the finding of the CIT(A) and delete the penalty. Reasons for delay in pronouncement of order 6.1 Before parting, we would like to enumerate the circumstances which have led to delay in pronouncement of this order. The hearing of the matter was concluded on 07/02/2020 and in terms of Rule 34(5) of Income Tax (Appellate Tribunal) Rules, 1963, the matter was required to be pronounced within a total period of 90 days. As per sub-clause (c) of Rule 34(5), every endeavor was to be made to pronounce the order within 60 days after conclusion of hearing. However, where it is not practicable to do so on the ground of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date for pronouncement. (c) In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily (emphasis supplied by us now) be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board. 8. Quite clearly, ordinarily the order on an appeal should be pronounced by the bench within no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression ordinarily has been used in the said rule itself. This rule was inserted as a result of directions of Hon ble jurisdictional High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein Their Lordships had, inter alia, directed that We, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown . Hon ble Bombay High Court, in an order dated 15th April 2020, has, besides extending the validity of all interim orders, has also observed that, It is also clarified that while calculating time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly , and also observed that arrangement continued by an order dated 26th March 2020 till 30th April 2020 shall continue further till 15th June 2020 . It has been an unprecedented situation not only in India but all over the world. Government of India has, vide notification dated 19th February 2020, taken the stand that, the coronavirus should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure . The term force majeure has been defined in Black s Law Dictionary, as an event or effect that can be neither anticipated nor controlled When such is the position ..... X X X X Extracts X X X X X X X X Extracts X X X X
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