Subhash Janardhan Shevatekar, Ahmednagar V. Income-tax Officer,

ITA 1092/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1156 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-09-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 23-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHETAN PATWARDHAN
• Keywords: Additional evidence
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / IT A NO. 1092 /P U N/201 6 / ASSESSMENT YEAR : 20 1 0 - 1 1 SUBHASH JANARDHAN SHEVATEKAR A/P KOLHAR, TAL: RAHATA, DIST. AHMEDNAGAR . / APPELLANT PAN: A QZPS1116J VS. THE INCOME TAX OFFICER , WARD NO.2, AHMEDNAGAR . / RESPONDENT / APPELLANT BY : SHRI CHETAN PATWARDHAN / RESPONDENT BY : SHRI RAJESH GAWALI / DATE OF HEARING : 19 . 1 1 .201 8 / DATE OF PRONOUNCEMENT: 30 . 1 1 .201 8 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 2 , PUNE , DATED 22 . 0 1 .201 6 RELATING TO ASSESSMENT YEAR 20 1 0 - 1 1 AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE A CT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL: - IT A NO. 1 092 /P U N/20 1 6 SUBHASH JANARDAN SHEVATEKAR 2 LEARNED COMMISSIONER OF INCOME TAX APPEAL II WAS NOT AT ALL JUSTIFIED IN DENYING THE ASSESSEES REPLY TO THE EVERY NOTICE U/S 274 R.W. 271(1)(C) WITHOUT GIVING ANY SATISFACTORY REASON. LE ARNED COMMISSIONER OF INCOME TAX APPEALS II FAIL TO CONSIDER ADDITIONAL EVIDENCE UNDER RULE 46A(1)(C), IS TOTALLY REVENUE MINDED AND MISERABLY FAIL TO CONSIDER THAT SEC. 271(1)(C) SHOULD BE USED AS A TOOL NOT LIKE AS A WEAPON. LEARNED COMMISSIONER OF INCO ME TAX APPEALS II HAS TOTALLY FAILED TO CONSIDER THE PLEADINGS OF THE ASSESSEE & EVIDENCE ON RECORD IN PROPER PERSPECTIVE. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. BRIEFLY, IN THE FA CTS OF THE CASE, THE ASSESSEE WAS CARRYING ON COMMISSION BUSINESS FOR R.M.P. INFOTECH PVT. LTD. AND HAD RECEIVED FACILITATION FEES FROM IT. DURING THE YEAR, THE ASSESSEE HAD SHOWN GROSS RECEIPTS FROM FACILITATION FEES OF 53,25,709/ - . HOWEVER, ON VERIFICATION OF PAYMENT ADVICE OF RMP INFOTECH PVT. LTD., THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD RECEIVED FACILITATION FEES OF 61,57,554/ - . THE ASSESSING OFFICER THUS, HELD THE ASSESSEE TO HAVE SHOWN THE GROSS RECE IPTS LESS BY 8,31,845/ - AND ADDITION TO THAT EXTENT WAS MADE IN THE HANDS OF ASSESSEE. SINCE THE ASSESSEE HAD SUPPRESSED THE RECEIPTS FROM FACILITATION FEES TO THE EXTENT OF 8,31,845/ - PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ARE INITIATE D, WAS THE CONCLUSION OF ASSESSING OFFICER. FURTHER, AT THE END OF ASSESSMENT ORDER, THE ASSESSING OFFICER DIRECTED THE ISSUE OF NOTICE UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALING THE INCOME TO THE EXTENT OF 8,31,845/ - , ON ACCOUNT OF SUPPRESSED FA CILITATION RECEIPTS. THE ASSESSING OFFICER WHILE LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT NOTED THAT THE ADDITION OF 8,31,845/ - WAS MADE ON ACCOUNT OF SUPPRESSED RECEIPTS FROM FACILITATION FEES , P ENALTY PROCEEDINGS WERE INITIATED FOR CONCEALIN G THE INCOME TO THE EXTENT OF 8,31,845/ - , AS PER PARA 1 OF PENALTY ORDER. FURTHER, VIDE PARA 4, THE IT A NO. 1 092 /P U N/20 1 6 SUBHASH JANARDAN SHEVATEKAR 3 ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD CONCEALED THE INCOME TO THE EXTENT OF 8,31,845/ - BY SUBMITTING INACCURATE PARTICULARS OF INCOME, THER EFORE, HE LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 5. THE CIT(A) HAS CONFIRMED THE LEVY OF PENALTY. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PRELIMINARY ISSU E RAISED IN THE PRESENT APPEAL IS THE LACK OF RECORDING OF SATISFACTION IN THE CASE AND AT BEST RECORDING THE SATISFACTION WHILE ISSUING NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT FOR CONCEALING THE INCOME AND THEREAFTER, LEVYIN G PENALTY FOR CONCEALING THE INCOME BY SUBMITTING INACCURATE PARTICULARS OF INCOME. 8. THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM) HAVE HELD THAT WHERE THERE IS NO PROPER SATISFACTION FOR INITIATING PENALTY PR OCEEDINGS AND IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO THE ASSESSEE, THERE IS NO MERIT IN LEVY OF PENALTY. 9. APPLYING THE SAID RATIO, WHERE THE ASSESSING OFFICER HAS FAILED TO RECORD PROPER SATISFACTION WHILE INITIATING PENALTY PROCEEDINGS OR IF WE CONSIDER THE LAST DIRECTION OF ASSESSING OFFICER FOR ISSUING NOTICE FOR CONCEALING THE INCOME, THEN PENALTY ORDER PASSED BY THE ASSESSING OFFICER HOLDING THE ASSESSEE TO HAVE CONCEALED THE INCOME BY SUBMITTING INACCURATE PARTICULARS OF INCOME, SUFFERS FROM INFIRMITY, IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT. IT A NO. 1 092 /P U N/20 1 6 SUBHASH JANARDAN SHEVATEKAR 4 ACCORDINGLY, WE HOLD THAT PENALTY ORDER PASSED IN THE PRESENT CASE IS BOTH INVALID AND BAD IN LAW. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED. 10 . IN THE RESULT , APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF NOVEMBER , 201 8 . SD/ - SD/ - ( D.KARUNAKARA RAO ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 30 TH NOVEMBER , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPO NDENT; 3. ( ) / THE CIT(A) - 2 , PUNE ; 4. THE PR. CIT - 1, PUNE ; 5. 6. , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE