Ita/357/2010 Of Shri G Dasharatharami Reddy (Huf) v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF KARNATAKA AT BENGALURU|ON THE 14 DAY OF NOVEMBER, 2018 BEFORE THE HON BLE MR. JUSTICE RAVI MALIMATH| AND| THE HON BLE MR. JUSTICE K. NATARAJAN. INCOME TAX APPEAL NO.35/7 OF 201 BEIWEEN: | SHRI G. DASHARATHARAMI REDDY (HUF).G-1, EDEN AULAC APARTMENTS,OLD MADRAS ROAD,INDIRA NAGAR,BANGALORE. — APPELLANT| (BY SRI A. SHANKAR & SRI M, LAVA, ADVOCATES) AND: THE ASSISTANT COMMISSIONER OF |INCOME TAX,CENTRAL CIRCLE-1(2),C.R. BUILDING,QUEEN'S ROAD,BANGALORE. .. RESPONDENT (BY SRI E.I. SANMATHI, ADVOCATE) THIS INCOME TAX APPEAL [IS FILED UNDERSECTION 260-A OF THE INCOME TAX ACT, 1961,|PRAYING|TO.FORMULATETHE.SUBSTANTIALQUESTIONS OF LAW AS STATED THEREIN AND ALLOW|THE APPEAL AND SET ASIDE THE ORDER PASSED BY.THE TRIBUNAL IN I.T.A. NO.823/BANG/2009 DATED|19-5-2010, IN THE INTEREST OF JUSTICE. THIS INCOME TAX APPEAL COMING ON FORHEARING THIS DAY,RAVI MALIMATH, J.,DELIVEREDTHE FOLLOWING: JUDGMENT The appellant is a Hindu Undivided Family. |A search under Section 132 of the Income Tax Act,1961, (for short, ‘the Act’) was conducted in the case)of Sri Dasaratnarami Reddy and his associates. Certaingold jewelry were found during tne course of searcn.|The appellant claimed that part of the jewelry belongs|to the Hindu Undivided Family. A notice under Section|142(1) was issued to the appellant to file their return|of income. Thereafter, in response to the notice, the| appellant declared a total income of Rs.48,200/- and|agricultural income of Rs.90,250/-. Thereafter, notice|under Sections 142(1) and 143(2) of tne Act were)issued. The Assessing Officer added to the income otf tneappellant.TO.tnevalue|Of|tnejewelryOf|Rs.6,06,/790/-. Subsequently, the assessing Officerissued notice under Section 271(1)(c) to snow-cause asto why penalty should not be imposed. In response tothe notice, a reply was furnished. Thereafter, penalty|of Rs.1,97,572/- was imposed on the appellant.|Aggrieved by the same, the appellant filed an appeal|before the Commissioner of Income Tax (Appeals) VI,Bengaluru. The appeal was allowed. Aggrieved by tnesame, the Revenue preferred an appeal before theTribunal. Tne Tribunal allowed the appeal. Aggrieved|by the same, the present appeal is filed. 4 2. By the order dated 28-6-2011, the appeal was.admitted to consider the following substantial questions Of law; /.Whether the Tribunal was Justified inlaw in confirming the penalty of|Rs.1,97,5/72/- levied under Section2/1(1)(c) of the Income-tax Act,|1961, on the facts and circumstance|of the case?law in confirming the penalty of|Rs.1,97,5/72/- levied under Section2/1(1)(c) of the Income-tax Act,|1961, on the facts and circumstance|of the case? ieWnhetner the Tribunal was Justified inlaw in nolding tnat tne Assessing|Officer has recorded the satisfaction|for initiating the penaity proceedingson the facts and circumstance of theCase?|law in nolding tnat tne Assessing|Officer has recorded the satisfaction|for initiating the penaity proceedingson the facts and circumstance of theCase?| II.Whetner the Tribunal was Justified in|law in nolaing tnat the appellant Nasconcealed tne particulars of income|or furnished inaccurate particulars ofincomeOTFthe|factsandcircumstance of the case?law in nolaing tnat the appellant Nasconcealed tne particulars of income|or furnished inaccurate particulars ofincomeOTFthe|factsandcircumstance of the case? 3 Learned counsels submit that the aforesaid|substantial questions of law would not arise for'consideration. Tney have advanced arguments on the|Same. They plead that the appeal requires to be)considered and heard on the following substantial|question of law; “Whether the levy of penalty under section2/1(1)(c) of the Act is sustainable in lawwhen the notice issued under section 7/4of the Act by the assessing officer does not|indicate the specific ground for initiation ofpenalty proceedings and is thus not inaccordance with the provisions of law onthe facts and circumstances of the case?” 3 Learned counsels submit that the aforesaid|substantial questions of law would not arise for'consideration. Tney have advanced arguments on the|Same. They plead that the appeal requires to be)considered and heard on the following substantial|question of law; “Whether the levy of penalty under section2/1(1)(c) of the Act is sustainable in lawwhen the notice issued under section 7/4of the Act by the assessing officer does not|indicate the specific ground for initiation ofpenalty proceedings and is thus not inaccordance with the provisions of law onthe facts and circumstances of the case?” 4. Learned counsel for the appellant contends|tnat the said substantial question of law is covered by the judgment of this Court in the case of)THECOMMISSIONER OF INCOME TAX AND ANOTHER vv. 6| MANJIUNA THCOTTONANDGINNINGFACTORY1(2013) 359 ITR 565}. Following the aforesaid judgment of this Court,the substantial question of law is answered in favour of the assessee and against the Revenue. The appeal Is,accordingly, disposed off. | SD/-SD/-|JUDGE|JUDGE KVK