Pradeep Sugamchand Kawadiya, Ahmedabad V. ITO, Ward-3(1)(4), Ahmedabad

ITA 110/AHD/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2326 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-09-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 09-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ADITI SHETH
• Section: 271(1)(c); 274

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MSMADHUMITA ROY,JUDICIAL MEMBER ./ ITA NO.110/AHD/2018 & / ASSTT. YEAR:2013-2014 PRADEEP SUGAMCHANDKAWADIYA , 302, PRESTIGE TOWER, B/H JUDGES BUNGLOWS, BODAKDEV, VASTRAPUR, AHMEDABAD. PAN: AGGPK6400Q VS. I.T.O, WARD 3(1)(4), AHMEDABAD ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SMT ADITISHETH , A.R REVENUE BY : SHRI SATISH SOLANKI , SR. DR / DATE OF HEARING : 26/09/2019 / DATE OF PRONOUNCEMENT: 06/12/2019 *+/ O R D E R PER MS MADHUMITA ROY, JUDICIAL MEMBER: THE INSTANT APPEAL FILED AT THE INSTANCE OF THE AS SESSEE IS DIRECTED AGAINST THE ORDER DATED 15.11.2017, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-9, AHMEDABAD, ( IN SHORT LD. CIT(A)) ARISING OUT OF THE ORDER DATED 29.06.2016 PASSED BY THE AOUNDER S ECTION 271(1)(C) OF THE INCOME TAX ACT, 1961(HEREIN AFTER REFERRED TO AS T HE ACT)FOR THE ASSESSMENT YEAR 2011-2012, WHEREBY AND WHEREUNDER THE PENALTY TO THE TUNE OF RS.3,24,613/- LEVIED BY THE AO HAS BEEN CONFIRMED. 2. THE SHORT POINT INVOLVED IN THIS CASE AS TO WHET HER THE PENALTY IS SUSTAINABLE WHEN THE SAME HAS BEEN INITIATED AND LE VIED WITHOUT SPECIFYING ITA NO.110/AHD/2018 A.Y.2013-2014 2 THE ALLEGED GUILT COMMITTED BY THE ASSESSEE EITHER FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 3. BRIEF FACTS LEADING TO THIS CASE IS THIS THAT T HE ASSESSMENT ORDER WAS FINALIZED U/S.143(3) R.W.S 147 OF THE ACT ON 31.12. 2015 BY THE LD.AO WHEREUPON PENALTY PROCEEDING U/S.271(1)(C) OF THE A CT WAS ALSO INITIATED FOR CONCEALMENT OF INCOME AND FOR FURNISHING OF INACCU RATE PARTICULARS OF INCOME. FINALLY, THE SAME WAS IMPOSED FOR BOTH THE COUNTS WHICH WAS IN TURN CONFIRMED BY THE ''LD.CIT (A)''. 4. HEARD THE PARTIES, PERUSED THE RELEVANT MATERIAL S RECORDS AVAILABLE ON RECORDS. AS IT APPEARS THAT 4 AND 5 OF THE AO ORDE R PENALTY PROCEEDING WAS INITIATED FOR CONCEALMENT OF INCOME AND INACCURATE PARTICULARS OF INCOME. FURTHER THAT THE SHOW-CAUSE NOTICE DATED 21.12.201 5 U/S.274 R.W.S 271(1)(C) OF THE ACT HAS NOT SPECIFIED THE EXACT CH ARGE WHETHER THE PROCEEDING IS SOUGHT TO BE INITIATED FOR CONCEALMENT OF INCOM E OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SAME WAS BROUGHT TO OUR NOTICE BY THE LD. COUNSEL APPEARING FOR THE ASSESSEE WHICH IS AVAILAB LE AT PAGE 10 OF THE PAPER BOOK SUBMITTED BEFORE US. IT IS A SETTLED PRINCIPAL OF LAW THAT CONCEALMENT AND FURNISHING OF INACCURATE PARTICULAR OF INCOME CARRY DIFFERENT CONNOTATIONS. IN THIS REGARD THE LD. COUNSEL APPEARING FOR THE ASSES SEE RELIED UPON THE JUDGMENT PASSED BY THE HONBLE APEX COURT IN THE MA TTER OF CIT VS. SSAS EMERALD MEADOWS [2016] 73 TAXMANN.COM 248(SC) WHER E THE ORDER PASSED BY THE HONBLE HIGH COURT QUASHING THE NOTICE ISSUE D BY THE ASSESSING OFFICER U/S.274 R.W.S 271(1)(C) OF THE ACT, HOLDING IT BAD IN LAW SINCE THE SAME DOES NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(1) (C) OF THE ACT, PENALTY PROCEEDING HAS BEEN INITIATED; COPY WHEREOF HAS ALS O BEEN SUBMITTED BEFORE US. EVEN THE PENALTY ORDER U/S. 271(1)(C) OF THE A CT DATED 29.06.2016 LEVIED ITA NO.110/AHD/2018 A.Y.2013-2014 3 PENALTY BOTH FOR CONSCIOUSLY AND DELIBERATELY CONCE ALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF CAPITAL GAI N TO THE TUNE OF RS.16,23,063/- THUS WITHOUT SPECIFYING THE GUILT CO MMITTED BY THE ASSESSEE U/S.271(1)(C) OF THE ACT THOUGH MANDATED UNDER SECT ION 271(1)(C) OF THE ACT. THE SAME IS APPEARING AT PAGE 3 OF THE PENALTY ORDE R IMPUGNED BEFORE US. 5. FURTHER THAT IN THE ORDER IMPOSING PENALTY THE L D. ITO IN ITS PENALTIMATE PARAGRAPH WHILE DEALING WITH THE GUILT COMMITTED BY THE ASSESSEE CLUBBED BOTH THE LIMBS BEING FURNISHING OF INACCURA TE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME TOO, THE RELEVANT PORTION WHEREOF IS AS FOLLOWS:- IT IS UNDISPUTED FACT THAT THE DEFAULT WAS DETECTE D DURING THE COURSE OF SCRUTINY ASSESSMENT. IF THE CASE WAS OT SELECTED FOR SCRUTI NY THAN THE OFFENCE/DEFAULT WOULD HAVE NOT BEEN DETECTED. THE ASSESSEE HAS COMMITTED DEFAULT WITHIN THE MEANING OF PENALTY U/S. 271(1)(C) OF THE INCOME-TAX ACT, HAS C ONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HENCE, I AM SATISFIED THAT THE ASSESSEE HAS COMMITTED DEFAULT WITHIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME-TAX ACT AND ACCORDINGLY, PENALTY IS LEVI ED ON THE PART OF THE INCOME. I LEVY PENALTY OF RS. 1,34,987/- BEING 100% OF TAX SOUGHT TO BE EVADED AS AGAINST THE MAXIMUM 300% LEVIABLE OF RS. 4,04,961/-. 6. FURTHER THIS PARTICULAR ASPECT OF THE MATTER IS NEITHER BEEN CONSIDERED EVEN AT THE APPELLATE STAGE BY THE LD. CIT(A). THU S, THIS IS AN ADMITTED POSITION THAT THE AUTHORITIES BELOW HAS FAILED TO C OME TO A DEFINITE FINDING REGARDING THE CHARGE/GUILT COMMITTED BY THE ASSESSE E AS MANDATED UNDER SECTION 271(1)(C) OF THE ACT WHILE EITHER ISSUING O F SHOW-CAUSE UNDER SECTION 271(1)(C) R.W.S. 274 OF THE ACT OR AT THE FINAL STA GE OF ISSUING PENALTY BOTH OF WHICH SUFFER FROM AMBIGUITY IN THE LIGHT OF THE JUD GMENT PASSED IN THE MATTER OF SNITA TRANSPORT PVT. LTD.-VS-ACIT REPORTED IN 42 TAXMANN.COM 54 WHEREBY AND WHEREUNDER THE PRINCIPLE OF SPECIFYING THE GUIL T COMMITTED BY THE ASSESSEE IN THE SHOW-CAUSE UNDER SECTION 271(1)(C) AS WELL AS IN THE PENALTY ORDER BY THE AO HAS BEEN DIRECTED TO BE APPLIED. T HE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW: ITA NO.110/AHD/2018 A.Y.2013-2014 4 9. REGARDING THE CONTENTION THAT THE ASSESSING OFFIC ER WAS AMBIVALENT REGARDING UNDER WHICH HEAD THE PENALTY WAS BEING IM POSED NAMELY FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS, WE MAY RECORD THAT THOUGH IN THE ASSESSMENT ORDER THE ASSESSING OFFICE R DID ORDER INITIATION OF PENALTY ON BOTH COUNTS, IN THE ULTIMATE ORDER OF PENALTY TH AT HE PASSED, HE CLEARLY HELD THAT LEVY OF PENALTY IS SUSTAINED IN VIEW OF THE FACT TH AT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME. THUS INSOFAR AS FINAL ORDER OF PENALTY WAS CONCERNED, THE ASSESSING OFFICER WAS CLEAR AND PENALTY WAS IMPOSED FOR CONCEALING PARTICULARS OF INCOME. IN LIGHT OF THIS, WE MAY PERUSE THE DECISIO N OF THIS COURT IN CASE OF MANU ENGINEERING WORKS (SUPRA). IN THE SAID DECISION, TH E DIVISION BENCH CAME TO THE CONCLUSION THAT LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE FOR PENALTY, BUT IT WAS INCUMBENT UPON THE ASSESSING AUTHORITY T O COME TO A POSITIVE FINDING AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE A SSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURN ISHED BY THEM. IF NO SUCH CLEAR CUT FINDING IS REACHED BY THE AUTHORITY, PENALTY CA NNOT BE LEVIED. IT WAS A CASE IN WHICH IN FINAL CONCLUSION THE AUTHORITY HAD RECORDE D THAT 'I AM OF THE OPINION THAT IT WILL HAVE TO BE SAID THAT THE ASSESSEE HAD CONCE ALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.' I T WAS IN THIS RESPECT THE BENCH OBSERVED THAT 'NOW THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CASE OR A QUASI-CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSI TIVE FINDING AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHE R ANY INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR CUT FINDING WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE O RDER OF PENALTY PASSED BY THE IAC WAS LIABLE TO BE STRUCK DOWN.' THE PRINCIPLE LAID DOWN BY THE HONBLE JURISDICTION AL HIGH COURT IN THE ABOVE CASE IS SQUARELY APPLICABLE TO THE FACTS OF T HE CASE IN HAND. AT THE COST OF REPETITION WE OBSERVE THAT THE AO HAS NOT MENTIO NED THE SPECIFIC CHARGE IN ITS PENALTY ORDERS AS TO WHETHER IT WAS LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. NO SU CH DEFINITE FINDING IS REFLECTING FROM THE ORDERS IMPUGNED BEFORE US. THE REFORE, IN OUR CONSIDERED VIEW, THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LEARNED CIT (A) IS NOT SUSTAINABLE IN THE EYE OF LAW. THE PENALTY IS, THUS, DELETED. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. AS WE HAVE DELETED THE PENALTY IMPOSED BY THE LEAR NED AO & CONFIRMED BY THE LEARNED CIT(A) ON THE TECHNICAL GR OUND, I.E. NO SPECIFIC CHARGE HAS BEEN ASSIGNED AS DISCUSSED ABOVE, WE ARE INCLINED TO REFRAIN ITA NO.110/AHD/2018 A.Y.2013-2014 5 OURSELVES FROM ADJUDICATING THE GROUNDS OF APPEAL O F ASSESSEE RAISED ON MERITS. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 06/12/20 19AT AHMEDABAD. SD/- SD/- ( WASEEM AHMED ) ACCOUTANT MEMBER ( MS MADHUMITA ROY ) JUDICIAL MEMBER AHMEDABAD; DATED 06/12/2019 TANMAY, SR. PS TRUE COPY *+ , -./0 1*0. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. $%& '' , / DR, ITAT, 6. &)* + / GUARD FILE. *+ 2 3 / BY ORDER, 4/3 56 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION : 13-11-2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. : 06-12-2019 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE