Rajendra Bansilal Raisoni, Pune V. Assistant Commissioner of Income tax, Nashik

ITA 1094/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0100 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-09-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: VIPIN GUJRATHI
• Keywords: Search and seizure; Salary income; Initiation of penalty proceedings
• Section: 271(1)(c); 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.1094/PUN/2017 / ASSESSMENT YEAR : 2006-07 RAJENDRA BANSILAL RAISONI, 45, MOTI BAUG, BIBVEWADI, SATARA ROAD, PUNE-411037. PAN : AASPR4761K ....... / APPELLANT / V/S. ACIT, CENTRAL CIRCLE-1, NASHIK. / RESPONDENT ASSESSEE BY : SHRI VIPIN GUJRATHI REVENUE BY : SHRI S. P. WALIMBE / DATE OF HEARING : 18.09.2019 / DATE OF PRONOUNCEMENT : 20.09.2019 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-12, PUNE DATED 21.02.2017 FOR THE ASSESSMENT YEAR 2006-07. 2. THE EFFECTIVE GROUND RAISED BY THE ASSESSEE IS AS UNDER :- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONOURABLE CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS.6,50,480/- UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 LEVIED BY THE LEARNED ASSESSING OFFICER WITHOUT APPRECIATING THE FACT OF THE CASE. THE APPELLANT HEREBY PRAYS YOUR HONOUR THAT THE PENALTY LEVIED U/S 271(1)(C) MAY PLEASE BE DELETED. 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF HIRING OF TIPPERS AND WAS EARLIER ENGAGED IN BUSINESS OF 2 ITA NO.1094/PUN/2017 TRADING THROUGH PROPRIETARY CONCERN M/S SHUBHAM EXPORTS. THE ASSESSEE ALSO EARNED INCOME FROM SALARY FROM ASHOKA BUILDERS PVT. LTD. AND PROFIT ON LAND SALE CONSIDERATION. A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CONDUCTED ON 30.04.2010 AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE. NOTICE U/S 153A OF THE ACT WAS ISSUED. IN RESPONSE, THE ASSESSEE FILED THE RETURN OF INCOME ON 17.10.2011 DECLARING TOTAL INCOME AT RS.20,94,430/- AND AGRICULTURAL INCOME OF RS.53,070/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON 26.03.2013 U/S 143(3) R.W. S. 153A OF THE ACT. FURTHER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT STATING THAT CONCEALED INCOME IN VIEW OF EXPLANATION 5A TO 271(1)(C) OF THE ACT. (PARA 8 OF THE ASSESSMENT ORDER). 4. EVENTUALLY, THE PENALTY WAS ALSO LEVIED FOLLOWING DUE PROCEDURES. IN THE PENALTY ORDER, THE ASSESSING OFFICER CLEARLY STATED THAT THE LEVY OF PENALTY IS FOR THE DEFAULT OF CONCEALED PARTICULARS OF HIS INCOME TO THE TUNE OF RS.20,94,425/- BY FURNISHING INACCURATE PARTICULARS IN RESPECT OF THE SAME. (PARA 04 OF THE PENALTY ORDER). 5. THE CIT(A), RELYING ON THE VARIOUS JUDGEMENTS OF THE HIGH COURT, CONFIRMED THE PENALTY AS LEVIED BY THE ASSESSING OFFICER. THE CONTENTS OF PARA 3.2 TO 3.7 OF THE APPELLATE ORDER ARE RELEVANT IN THIS REGARD. 3 ITA NO.1094/PUN/2017 6. AGGRIEVED WITH THE SAID DECISION OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE ABOVE EXTRACTED GROUND. 7. ACCORDING TO THE LD. AR, THE ORDER OF THE CIT(A) SHALL HAVE TO BE SET-ASIDE ON THE LEGAL ISSUE RELATING TO THE AMBIGUITY IN THE MIND OF THE ASSESSING OFFICER WHILE DEALING WITH THE INITIATION AND LEVY OF PENALTY. HIGHLIGHTING THE LEGAL REQUIREMENT OF MAKING A SPECIFIC REFERENCE TO THE SPECIFIC LIMB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT AND RELYING ON VARIOUS BINDING JUDGMENTS IN THE CASE CIT VS. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM.) AS WELL AS THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565, LD. COUNSEL DEMONSTRATED THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW AND THE SAME IS WRONGLY UPHELD BY THE CIT(A). 8. ON THE OTHER HAND, LD. DR FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HEARD BOTH THE PARTIES ON THIS LEGAL ISSUE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THIS IS A CASE WHERE THE ASSESSING OFFICER FAILED TO RECORD PROPER SATISFACTION WHILE INITIATING AND LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT. IN THIS REGARD, WE PURSED THE ORDERS OF THE REVENUE AUTHORITIES. ON PERUSAL OF PARA 8 OF THE ASSESSMENT ORDER, WE FIND THE FOLLOWING IS THE REASONS FOR INITIATION OF PENALTY PROCEEDINGS :- 8. . CONCEALED INCOME IN VIEW OF EXPLANATION 5A TO 271(1)(C) OF THE ACT. 4 ITA NO.1094/PUN/2017 10. FURTHER, WE ALSO PERUSED THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER ON 30.09.2013. ON PERUSAL OF PENALTY ORDER, WE FIND THE FOLLOWING IS THE REASONS FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT :- 04. .. CONCEALED PARTICULARS OF HIS INCOME TO THE TUNE OF RS.20,94,425/- BY FURNISHING INACCURATE PARTICULARS IN RESPECT OF THE SAME. 11. THE ABOVE EXTRACTS REVEAL THAT THE ASSESSING OFFICER SUFFERS FROM AMBIGUITY IN HIS MIND WHILE RECORDING THE SATISFACTION AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVY OF PENALTY THEREOF. 12. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE LEGAL REQUIREMENT OF MAKING A CLEAR CUT REFERENCE TO THE APPLICABLE LIMB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT, IS NOT MET BY THE ASSESSING OFFICER WHILE INITIATING AND LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT. THUS, THE SATISFACTION OF THE ASSESSING OFFICER SUFFERS FROM AMBIGUITY IN HIS MIND. 13. THEREFORE, CONSIDERING THE ABOVE REFERRED BINDING JUDGMENTS, WE ARE OF THE VIEW THAT SUCH PENALTY IS UNSUSTAINABLE IN LAW LEGALLY. IT IS A SETTLED LEGAL PROPOSITION THAT THE ASSESSING OFFICER IS UNDER OBLIGATION TO SPECIFY THE APPROPRIATE LIMB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT AT THE TIME OF INITIATION AS WELL AS AT THE TIME OF LEVY OF PENALTY. IN VIEW OF THE ABOVE DELIBERATION ON THIS ISSUE, WITHOUT GOING INTO THE MERITS OF THE CASE, WE SET- ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ENTIRE 5 ITA NO.1094/PUN/2017 PENALTY IMPOSED BY HIM. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED ON LEGAL ISSUE. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 20 TH DAY OF SEPTEMBER, 2019. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 20 TH SEPTEMBER, 2019 SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-12, PUNE. 4. THE PR. CIT, CENTRAL NAGPUR. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.