Radeshyam Ganeshlal dhoot, Latur V. Income-tax Officer,

ITA 1116/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7261 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-10-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 23-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Unexplained investment

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1116/PUN/2014 / ASSESSMENT YEAR : 2008-09 RADHESHYAM GANESHLAL DHOOT, RADIKA INVESTMENT, YAPARI DHARMSHALA, MAIN ROAD, LATUR 413 512 PAN : ABLPD6544K . /APPELLANT VS. ITO, CENTRAL-1, NASHIK . / RESPONDENT / APPELLANT BY : SHRI SUHAS BORA / RESPONDENT BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 30.10.2017 / DATE OF PRONOUNCEMENT: 30.10.2017 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A)-I, NASHIK DATED 13-03-2014 FOR THE A.Y.2008-09 IN CONNECTION WITH LEVY OF PENALTY U/S.271(1)(C) OF THE I.T. ACT, 1961. 2. BRIEFLY STATED RELEVANT FACTS ARE THAT ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF SUB-BROKER FOR THE SHARES TRADING. SEARCH ACTION U/S.132 OF THE ACT WAS CARRIED IN THE BHUTADA GROUP OF ASSESSEE AT LATUR ON 28-08-2008. CONSEQUENTLY, SURVEY U/S.133A OF THE ACT WAS ALSO C ARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 28-08-2008. DURING THE SAID SEARCH ACTION, ASSESSEE DECLARED UNDISCLOSED INCOME OF RS.17.50 LA KHS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARES FOR A.Y. 2008-09. EVENTUALLY, THE AO ASSESSED THE INCOME OF THE ASSESSEE AT RS.15,64,660 /-. THEREAFTER, THE AO ITA NO.1116/PUN/2014 RADESHYAM GANESHLAL DHOOT 2 LEVIED PENALTY OF RS.5,37,040/- U/S.271(1)(C) OF TH E ACT. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE AO. 3. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. PENALTY U/S.271(1)(C) R.W.S.274 LEVIED BY THE A O AND CONFIRMED BY CIT(A) IS BAD IN LAW ON ACCOUNT OF THE FOLLOWING RE ASONS : A. THE AO IN THE NOTICE ISSUED U/S.271(1)(C) R.W.S. 27 4 OF THE ACT DID NOT MENTION WHETHER THE NOTICE ISSUED FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. B. THE AO IN THE ASSESSMENT ORDER HAS MENTIONED THAT, PENALTY PROCEEDINGS U/S.274 R.W.S. 271(1)(C) OF THE I.T. ACT, 1961 ARE INITIATED SEPARATELY. C. THE AO IN THE PENALTY ORDER HAS LEVIED THE PENALTY ON THE GROUND THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. 4. ASSESSEE ALSO FILED ADDITIONAL GROUNDS WHICH REA D AS UNDER : 1. THE APPELLANT SUBMITS THAT THE IMPUGNED PENALTY ORDER LEVIED BY THE LD. AO IS PATENTLY ILLEGAL, BAD IN LAW, VOID AB-INITIO AND BEING DEVOID OF MERITS THE SAME MAY PLEASE BE DELETED. 2. WITHOUT PREJUDICE TO ABOVE GROUNDS, PENALTY MAY PLEASE BE DELETED IN TOTO AS THERE WAS NO CONCEALMENT OF INCOME CONSIDER ING BONAFIDE OF THE ASSESSEE. 3. APPELLANT PRAYS FOR JUST & EQUITABLE RELIEF. 5. REFERRING TO THE LEGAL ISSUES IN THE GROUNDS ABO VE, THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE ADD ITIONAL GROUNDS RAISED BEFORE THE TRIBUNAL ARE PURELY LEGAL IN NATURE AND NO FRES H FACTS ARE REQUIRED FOR ADJUDICATION OF THE SAME. FOR THE ABOVE LEGAL PROP OSITION, HE RELIED ON THE FOLLOWING DECISIONS/JUDGMENTS AND SUBMITTED THAT T HE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE SHOULD BE ADMITTED. 1. KANHAIYALAL D. JAIN VS. ACIT ITA NOS. 1201 TO 120 5/PUN/2014 FOR A.YRS. 2003-04 TO 2007-08 ORDER DATED 30-11-201 6. 2. HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PE RINCHERY JUDGMENT DATED 05-01-2017. 3. NATIONAL THERMAL POWER CO. LTD. VS. CIT 229 ITR 383 (SC) ITA NO.1116/PUN/2014 RADESHYAM GANESHLAL DHOOT 3 6. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE BEING PURELY LEGAL IN NATURE AND NO FRESH FACTS ARE REQUIRED TO BE INVESTIGATED, THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE ADMITTED FOR ADJUDICATION. 7. BRINGING OUR ATTENTION TO PARA NO.5 OF THE ASSES SMENT ORDER, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITIONAL INCOME O F RS.17,50,000/- OFFERED BY THE ASSESSEE IN THE RETURN OF INCOME AND DOES NOT A TTRACT PENAL PROVISIONS. REFERRING TO THE ISSUE OF SATISFACTION, LD. COUNS EL FOR THE ASSESSEE SUBMITTED THAT THE AO INITIATED THE PENALTY PROCEEDINGS BY ST ATING PENALTY PROCEEDINGS U/S.274 R.W.S. 271(1)(C) ARE SEPARATELY INITIATED. FURTHER, BRINGING OUR ATTENTION TO PARA 6 OF THE PENALTY ORDER, LD. COUNS EL FOR THE ASSESSEE SUBMITTED THAT NO PARTICULAR LIMB SPECIFIED IN CLAUSE (C) IS SPECIFIED WHILE INITIATING/ISSUING THE NOTICE U/S.274 R.W.S. 271(1)(C) OF THE ACT DATE D 23-06-2011. THE PENALTY WAS LEVIED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME . HE ALSO RELIED ON THE FOLLOWING DECISIONS/JUDGMENT TO SUPPO RT HIS CASE. COPIES OF THE SAID ORDERS HAVE BEEN FILED BEFORE US. 1. ACIT VS. SHRI YOGESH NATHU MURKUTE ITA NO.1151/PU N/2015 ORDER DATED 31-07-2017 2. M/S. ORBIT ENTERPRISES VS. ITO ITA NOS. 1596 & 15 97/MUM/2014 ORDER DATED 01-09-2017 3. CIT VS. M/S. SSAS EMARALD MEADOWS ITA NO.380/201 5 JUDGMENT DATED 23-11-2015 (KARNATAKA HIGH COURT) 8. LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORD ERS OF THE AO AND THE CIT(A). 9. WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS O F THE REVENUE AUTHORITIES. WE HAVE ALSO CONSIDERED THE DECISIONS RELIED UPON BY THE LD. AR FOR THE ASSESSEE. AFTER GOING THROUGH THE ASSESSME NT ORDER AND THE PENALTY ITA NO.1116/PUN/2014 RADESHYAM GANESHLAL DHOOT 4 ORDERS, WE FIND IT RELEVANT TO EXTRACT PARA NO.5 OF THE ASSESSMENT ORDER AND PARA 6 OF THE PENALTY ORDER AND THE SAME READ AS UN DER : 05. . . . . . . . .THE ASSESSEE ACCORDINGLY ADMITT ED AND MADE TOTAL DECLARATION OF ADDITIONAL INCOME OF RS.17,50,000/- FOR A.Y. 200 8-09. AS THE ADDITIONAL INCOME OF RS.17,50,000/- IS OFFERED FOR TAXATION ON LY AFTER THE SURVEY ACTION AND ISSUE OF NOTICE U/S.148 OF THE I.T. ACT, 1961. PENALTY PROCEEDINGS U/S.274 R.W.S. 271(1)(C) ARE SEPARATELY INITIATED . 10. FROM THE ABOVE, IT IS EVIDENT THAT IT IS THE CA SE OF NOT MENTIONING ANY OF THE LIMBS SPECIFIED IN CLAUSE (C) OF THE SAID SECTI ON 271(1) OF THE ACT. 6. I AM THEREFORE, SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.17,50,000 /-. HENCE, I THEREFORE LEVY THE MINIMUM PENALTY U/S.271(1)(C) AT RS.5,37,040/- FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND COMMITTED DEFAULT. SUCH DEFAULT HAD ATTRACTED THE PENALTY U/S.271(1)(C) OF THE I.T. ACT , 1961. . . . . . . 11. FROM THE ABOVE, IT IS EVIDENT THAT THE AO HAS N OT SPECIFIED ANY OF THE LIMBS OF CLAUSE (C) OF SECTION 271(1) OF THE ACT WH ILE INITIATING THE PENALTY PROCEEDINGS UNDER THE SAID SECTION. HE HOWEVER LEV IED THE PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.17,50,000/-. IN ANY CASE, THE NOTICE ISSUED U/S .274 R.W.S. 271(1)(C) OF THE ACT DOES NOT SPECIFY ANY OF THE TWO LIMBS OF SAID C LAUSE (C) FOR WHICH THE PENALTY IS PROPOSED IN THE PRESENT CASE. CONSIDERI NG THE ABOVE STATED FACTS AND THE FAILURE OF THE AO IN NOT SPECIFYING THE LIM BS, IN OUR OPINION, IT IS A CASE OF REFLECTING THE AMBIGUITY IN THE MIND OF THE AO WHILE INITIATING THE PENALTY PROCEEDINGS. IN SUCH CIRCUMSTANCES, THE SUSTAINABI LITY OF THE PENALTY ORDER BECOMES VERY DIFFICULT. FURTHER, OUR VIEW GETS STR ENGTH BY THE JUDGMENTS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. SHRI SAMSON PERINCHERY DATED 05-01-2017, HONBLE KARNATAKA HIGH COURT IN T HE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 AND ALSO THE CONSISTENT VIEW OF THE TRIBUNALS ON THE ISSUE, AS RELIED UPON BY THE ASSESSEE. ITA NO.1116/PUN/2014 RADESHYAM GANESHLAL DHOOT 5 12. IN VIEW OF THE ABOVE DISCUSSION, WE REVERSE THE ORDER OF THE CIT(A) AND DELETE THE PENALTY LEVIED BY THE AO. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE INCLUDING ADDITIONAL GROUNDS ARE ALLOWED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCTOBER, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 30 TH OCTOBER, 2017. / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE THE APPELLANT THE RESPONDENT THE CIT(A)-I, NASHIK CIT-I, NASHIK , , B BENCH PUNE; / GUARD FILE.