ISMAILBHAI SAVDIBHAI HIRA,AHMEDABAD V. THE ITO, WARD-5(3)(1), AHMEDABAD

ITA 205/AHD/2024

AI Insights

The case involves a series of appeals by Ismailbhai Savdibhai Hira against penalties imposed by the Income Tax Officer for the assessment years 2009-10, 2010-11, 2011-12, and 2014-15. The penalties were confirmed by the Commissioner of Income-tax (Appeals) and challenged before the Tribunal. The primary legal contention revolved around the applicability of penalties under Section 271(1)(c) for 'concealment of income' and 'furnishing of inaccurate particulars of income'. The Tribunal's decision was based on the lack of specific findings in the penalty order and the nature of the assessee's income declarations under the relevant sections of the Income-tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298914 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: PRITESH L. SHAH
• Section: 271(1)(c); 132; 68; 205; 153C; 274

Judgement Text

"आयकर अपीलीय अिधकरण, अहमदा बा द \u0012ा यपीठ ‘C’ अहमदा बा द । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTNAT MEMBER ITA Nos. 204 to 207/Ahd/2024 Assessment Year: 2009-10, 2010-11, 2011-12 & 2014-15 Ismailbhai Savdibhai Hira, 103, Emerald Residency-2, Near Rajiv Gandhi Bhavan, Kochrab, Ellisbridge, Ahmedabad- 380006 [PAN : ABGPH 0488 J] बनाम/ Vs. Income Tax Officer, Ward 5(3)(1), Ahmedabad (Appellant) (Respondent) Assessee by Shri Pritesh L. Shah, AR Revenue by Shri Rignesh Das, Sr DR Date of Hearing 26.03.2025 Date of Pronouncement 28.03.2025 आदेश/ O R D E R PER MS. SUCHITRA KAMBLE, JUDICIAL MEMBER : This bunch of four appeals filed by the assessee are directed against separate orders of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)” for short], of even dated 11.01.2024, confirming penalties of Rs.3,24,355/-, Rs.6,28,546/-, Rs.3,50,906/- and Rs.1,65,074/-, imposed in proceedings u/s 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as “the Act” for short] for Assessment Years 2009-10, 2010-11, 2011-12 & 2014-15 respectively. 2. These are the common appeals and that is why we are taking ITA No. 204/Ahd/2024 as the lead case. The grounds of appeal raised by the assessee in this appeal are as follows: - ITA Nos. 204 to 207/Ahd/2024 Ismailbhai Savdibhai Hira Vs. ITO AY : 2009-10, 2010-11, 2011-12 & 2014-15 [2] “1. The learned CIT(A) erred in law and on facts in confirming the penalty of Rs.3,24,355/- under Section 271(1)(c) of the Income-tax Act, 1961, such penalty is requested to be deleted. 2. Your appellant prays for leave to add, to alter and/or to amend the above ground before the final hearing of the appeal.” 3. The assessee filed his return of income for AY 2009-10 on 31.08.2015 declaring total income amounting to Rs.45,055/-. A search action u/s 132 of the Act was carried out in the case of Shri Vikas A. Shah on 03.01.2013 and certain documents were found in the name of assessee i.e. Shri Ismail Savadibhai Hira. After following the procedures, a notice u/s 153C of the Act was issued thereby recording the reasons for re-opening on 27.02.2015 and thereafter the assessee filed his return of income. The Assessing Officer made addition u/s 68 of the Act in respect of cash/clearing deposits in bank account with Bank of India and also made addition related to the same section thereby making additions of Rs.1,16,902/- and Rs.5,51,003/-. The Assessing Officer also made addition of Rs.5,30,180/- u/s 69 of the Act on account of unexplained income in respect of trial balance of M/s. Red Carpet Resorts Pvt Ltd. The assessment was completed on 18.12.2015. The CIT(A) granted partial relief and confirmed the addition of Rs.1,05,338/- u/s 68 of the Act and also that of Rs.5,51,003/- under the same section related to the said addition. The CIT(A) also confirmed the addition of Rs.5,30,180/- u/s 69 of the Act. 4. Being aggrieved by the order of the CIT(A), the assessee filed appeal before the Tribunal and the Tribunal vide order dated 24.06.2022 granted further relief and confirmed the addition of Rs.5,51,003/- made u/s 68 of the Act and the addition of Rs.5,30,180/- made u/s 69 of the Act. 5. The assessee preferred appeal before the Hon’ble Gujarat High Court which is at the admission stage as of today. Meanwhile, the Assessing Officer ITA Nos. 204 to 207/Ahd/2024 Ismailbhai Savdibhai Hira Vs. ITO AY : 2009-10, 2010-11, 2011-12 & 2014-15 [3] initiated proceedings u/s 271(1)(c) of the Act by issuing notice dated 15.02.2023 u/s. 271(1)(c) of the Act. The assessee filed submissions and after taking cognizance of the same submissions, the Assessing Officer levied penalty of Rs.3,24,355/- in respect of concealment of income u/s 271(1)(c) of the Act. 6. Being aggrieved by the penalty order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 7. The Ld. AR submitted that in the initial assessment order the penalty u/s 271(1)(c) was initiated for furnishing of inaccurate particulars of income and the concealment of income for the two components which was confirmed by the Tribunal in quantum appeal. The Ld. AR submitted that the notice issued u/s. 271(1)(c) of the Act is also related to the ‘furnishing of inaccurate particulars of income’ only and not that of ‘concealment of income’. The Ld. AR further submitted that the Assessing Officer imposed penalty for ‘concealment of income’. Therefore, Ld. AR submitted that the assessee has never furnished inaccurate particulars or concealed any income as the assessee has filed the return of income declaring total income u/s. 153C of the Act. The addition itself categorically mentions that the assessee willfully and deliberately concealed its unexplained income while not disclosing the bank account number with Syndicate Bank; but related to the account with Bank of India, the assessee has categorically given the details and therefore, the additions made cannot be treated as furnishing of inaccurate particulars or concealment of income as the assessee has not maintained any books of accounts which is the finding in the quantum appeal of the assessee. 8. The Ld. DR relied upon the assessment order, order of the penalty and the order of the CIT(A). ITA Nos. 204 to 207/Ahd/2024 Ismailbhai Savdibhai Hira Vs. ITO AY : 2009-10, 2010-11, 2011-12 & 2014-15 [4] 9. We have heard both the parties and perused all the relevant material available on record. From the perusal of the assessment order, it can be seen that the penalties imposed on the component of addition of Rs.5,51,003/- was initiated for ‘concealment of income’ u/s 271(1)(c) and addition of Rs.5,30,180/- was initiated for ‘furnishing of inaccurate particulars of income’. In the assessment order, in paragraph No.6, it has only initiated penalty u/s 271(1)(c) r.w.s. 274 for ‘furnishing inaccurate particulars of income’; and when the notice u/s 274 r.w.s. u/s 271(1)(c) has been issued, the same was for ‘furnishing of inaccurate particulars’ only. Since the assessee has not maintained the books of accounts as mentioned in the order of the assessee in quantum appeal being IT(SS)A Nos. 454 to 457/Ahd/2017, order dated 24.06.2022, the question of concealment of income and furnishing of inaccurate particulars will not come into picture as the assessee has filed return of income u/s 153C of the Act when the notice u/s 153C r.w.s. 153A(1)(a) of the Act was issued to the assessee on 27.02.2015. The penalty provisions act independently and while invoking the penalty u/s 271(1)(c), both the limbs can be invoked jointly or separately with the additions made by the Assessing Officer, but while invoking Section 271(1)(c) of the Act, the Assessing Officer has to categorically mention in the assessment order as well as in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act that why there is a component of concealment of income or why there is a component of furnishing of inaccurate particulars on the part of the assessee. By not giving any reason or any finding of the assessee’s conduct, the invocation of penalty u/s 271(1)(c) fails and in the present case the Assessing Officer has not given the details in the penalty order as to how the assessee has made concealment of income related to addition of Rs.5,51,003/- u/s 68 of the Act and to the addition of Rs.5,30,180/- u/s 69 of the Act as these components were already there in the bank account transactions maintained by the assessee and therefore it cannot be treated as concealment of income. Thus, the penalty imposed by the Assessing ITA Nos. 204 to 207/Ahd/2024 Ismailbhai Savdibhai Hira Vs. ITO AY : 2009-10, 2010-11, 2011-12 & 2014-15 [5] Officer u/s 271(1)(c) of the Act is not justified and, therefore, appeal filed by the assessee in ITA No. 204/Ahd/2024 is allowed. 10. As regards to ITA Nos. 205 to 207/Ahd/2024, the same are identical to ITA No. 204/Ahd/2024 and the Ld. DR also stated that these are identical appeals. Hence, the same are also allowed. 11. In the result, all the four appeals of the assessee are allowed. Order pronounced in the open Court on 28th March 2025 at Ahmedabad. Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SUCHITRA R. KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad, Dated 28/03/2025 **btk आदेश की \u0018ितिलिप अ\u001aेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. \u0018 थ / The Respondent. 3. संबंिधत आयकर आयु\" / Concerned CIT 4. आयकर आयु\" ) अपील ( / The CIT(A)- 5. िवभागीय \u0018ितिनिध , अिधकरण अपीलीय आयकर , /DR,ITAT, Ahmedabad, 6. गाड' फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Ahmedabad 1. Date of dictation …………27.03.2025….. 1. Date on which the typed draft is placed before the Dictating Member :..… 27.03.2025… 2. Other Member……27.03.2025….………….. 3. Date on which the approved draft comes to the Sr.P.S./P.S……27.03.2025…. 4. Date on which the fair order is placed before the Dictating Member for pronouncement…28.03.2025………. 5. Date on which the fair order comes back to the Sr.P.S./P.S………28.03.2025…….. 6. Date on which the file goes to the Bench Clerk………28.03.2025……….….…… 7. Date on which the file goes to the Head Clerk……. 8. The date on which the file goes to the Assistant Registrar for signature on the order………… 9. Date of Despatch of the Order "