Rahul Shantaram Sawale, Nashik V. Assistant Commissioner of Income-tax,

ITA 1162/PUN/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5856 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-04-2018
• Assessment Year: 2004-2005
• Appeal Filed On: 19-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Search and seizure; Loose papers
• Section: 271(1)(c); 133A; 153A; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JM . / ITA NO S.1162, 1163 & 1164 /P U N/201 5 / ASSESSMENT YEAR S : 20 0 4 - 05, 2005 - 06 & 2010 - 11 SHRI RAHUL SHANTARAM SAWALE, 28, AMBALIKA BUNGLOW, BEHIND HOTEL TAPASVI, INDIRA NAGAR, NASHIK 422009 PAN : AJYPS8506L ....... / APPELLANT / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK / RESPONDENT ASSESSEE BY : S HRI SANKET JOSHI REVENUE BY : S HRI SUDHENDU DAS / DATE OF HEARING : 2 8 - 11 - 2018 / DATE OF PRONOUNCEMENT : 31 - 01 - 201 9 / ORDER PER VIKAS AWASTHY, JM : TH E TWO APPEALS IN ITA NOS. 1162 & 1163/PUN/2015 HAVE BEEN FILED BY THE ASSESSEE ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX 2 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 (APPEALS) - I, NASHIK DATED 13 - 05 - 2014 COMMON ORDER FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 CONFIRMING LEVY OF PENALTY U/S. 271(1)(C) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) . ITA NO. 1164/PUN/2015 IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - I, NASHIK DATED 26 - 06 - 2014 FOR THE ASSESSMENT YEAR 2010 - 11 CONFIRMING LEVY OF PENALTY U/S. 271AAA OF THE ACT. SINCE, THE PENALTY IN ALL THESE APPEALS ARE LEVIED ON THE BASIS OF ADDITION S RESULTING FROM SEARCH AND SEIZURE ACTION U/S. 132(1) OF THE ACT IN THE CASE OF ASSESSEE , THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DISPOSED OF VIDE THIS COMMO N ORDER. FOR THE SAKE OF CONVENIENCE THE FACTS ARE NARRATED FROM THE APPEAL OF ASSESSEE IN ITA NO. 1162/PUN/2015 FOR ASSESSMENT YEAR 2004 - 05. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : A SEARCH AND SEIZURE ACTION U/S. 132(1) OF THE ACT WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 06 - 01 - 2010 AND SURVEY ACTION U/S. 133A OF THE ACT AT THE OFFICE PREMISES OF THE ASSESSEE ON THE SAME DATE. DURING SEARCH CERTAIN BOOKS OF ACCOUNT AND OTHER DOCUMENTS WE RE SEIZED. THE ASSESSEE DECLARED ADDITIONAL INCOME OF RS.10,35,950/ - IN THE RETURN OF INCOME FILED U/S. 153A OF THE ACT FOR THE ASSESSMENT YEAR 2004 - 05. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE FURTHER OFFERED RENTAL INCOME RS.18,000/ - PER ANNUM FROM HIS MALEGAON HOUSE PROPERTY AND RS.6,000/ - PER ANNUM FROM SHOP AT NASHIK AGGREGATING RENTAL INCOME TO RS.24,000/ - . THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) R.W. EXPLANATION 5A OF THE ACT IN RESPECT OF ABOVE TWO INCOMES OF THE ASS ESSEE. THE PENALTY PROCEEDINGS WERE INITIATED FOR CONCEALING THE PARTICULARS OF 3 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 INCOME WITHIN THE MEANING OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT. THEREAFTER, THE ASSESSING OFFICER VIDE ORDER DATED 29 - 06 - 2012 LEVIED PENALTY OF RS.3,51,775/ - I N RESPECT OF ADDITIONAL INCOME DECLARED IN THE RETURN OF INCOME FILED IN RESPONSE TO SECTION 153A AND THE RENTAL INCOME OFFERED DURING ASSESSMENT PROCEEDINGS. AGGRIEVED AGAINST ORDER LEVYING PENALTY U/S. 271(1)(C), THE ASSESSEE FILED APPEAL BEFORE THE C OMMISSIONER OF INCOME TAX (APPEALS). THE FIRST APPELLATE AUTHORITY DISMISSED THE APPEAL OF ASSESSEE AND CONFIRMED LEVY OF PENALTY. AGAINST THE SAID ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE ASSESSEE IN SECOND APPEAL BEFORE THE TR IBUNAL APART FROM ASSAILING LEVY OF PENALTY ON MERITS HA S RAISED ADDITIONAL GROUND OF APPEAL. THE ADDITIONAL GROUND RAISED BY ASSESSEE READS AS UNDER : 1] THE LEARNED A.O. ERRED IN INITIATING THE PENALTY PROCEEDINGS U/S. 271(1)(C) AND SUBSEQUENTLY LEVYING THE PENALTY U/S. 271(1)(C) ON THE WRONG CHARGE OF 'CONCEALMENT OF PARTICULARS OF INCOME' IN RESPECT OF THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE TOW ARDS AMOUNTS REFLECTED IN BALANCE SHEET AS 'ADVANCES FROM CUSTOMERS' OF RS.7,25,500/ - AND 'GIFTS FROM RELATIVES' OF RS.3,10,450/ - AND HENCE, THE PENALTY ORDER MAY BE DECLARED AS BAD IN LAW. 4. SHRI SANKET JOSHI APPEARING ON BEHALF OF THE ASSESSEE FAIRLY CONCEDED AT THE OUTSET THAT THE TRIBUNAL HAS CONFIRMED LEVY OF PENALTY U/S. 271(1)(C) ON SIMILAR SET OF FACTS ON MERITS IN THE APPEAL S BY DEPARTMENT IN ITA NOS. 1251 TO 1254/PN/2013 FOR ASSESSMENT YEAR S 2006 - 07 TO 2009 - 10 DECIDED ON 29 - 01 - 2016 QUA A DDITIONAL INCOME OFFERED IN STATEMENT RECORDED U/S. 132(4) OF THE ACT. THE LD. AR SUBMITTED THAT THE ASSESSEE IN PRESENT SET OF APPEAL S HAS RAIS ED ADDITIONAL GROUND ASSAILING LEVY OF 4 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 PENALTY U/S. 271(1)(C) ON WRONG CHARGE. THE LD. AR SUBMITTED THAT THE P ENALTY U/S. 271(1)(C) HAS BEEN LEVIED IN RESPECT OF AMOUNTS REFLECTED IN THE BALANCE SHEET AS AD VANCES FROM C USTOMERS RS.7,25,500/ - AND G IFTS FROM RELATIVES RS.3,10,450/ - . THUS, IT IS NOT A CASE OF CONCEALMENT OF PARTICULARS OF INCOME . A T THE BEST , IT CAN BE A CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. AR SUBMITTED THAT IN THE INSTANT CASE, THE ASSESSEE HAS OFFERED ADDITIONAL INCOME ON ACCOUNT OF 'ADVANCES RECEIVED AGAINST BOOKING OF PLOTS/ FLATS' WHICH WERE CREDITED TO THE B ALANCE S HEET AND ON ACCOUNT OF 'GIFT FROM RELATIVES' WHICH WERE CREDITED TO THE C APITAL ACCOUNT IN THE B ALANCE S HEET. IN THE STATEMENT RECORDED U/S . 132(4), THE ASSESSEE ADMITTED THAT HE WAS NOT IN A POSITION TO FURNISH DOCUMENTARY EVIDENCES IN SUPPORT OF THE ABOVE AMOUNTS REFLECTED IN B ALANCE S HEET , THEREFORE, THE ASSESSEE OFFERED THESE AMOUNTS SHOWN AS ADVANCE S/ GIFTS IN THE B ALANCE S HEET AS HIS (ADDITIONAL) 'INCOME'. THUS, THESE AMOUNTS WERE ALREADY I NTRODUCED AND REFLECTED IN THE B ALANCE S HEET FILED PRIO R TO SEARCH. IT IS NOT A CASE THAT THESE AMOUNTS WERE NOT AT ALL REFLECTED IN THE BALANCE S HEETS OR THAT THEY WERE KEPT HIDDEN/ OUTSIDE THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND AS A RESULT OF CERTAIN LOOSE PAPERS ETC. SEIZED IN THE COURSE OF SEARCH, IT WA S FOUND THAT THE ASSESSEE HAD CONCEALED THIS INCOME. THEREFORE, IF AT ALL PENALTY U/S . 271 (1)(C) WAS TO BE LEVIED, THEN THE SAME SHOULD HAVE BEEN INITIATED AND LEVIED ON THE CHARGE OF 'FURNISHING OF INACCURATE PARTICULARS OF INCOME' AND CERTAINLY NOT ON TH E CHARGE OF 'CONCEALMENT OF INCOME'. THE PENALTY PROCEEDINGS U/S . 271(1)(C) INITIATED AND LEVIED BY THE ASSESSING OFFICER ON THE WRONG CHARGE OF 'CONCEALM ENT OF INCOME' ARE BAD IN LAW. THE LD. AR TO BUTTRESS HIS SUBMISSIONS PLACED RELIANCE ON THE DECISION OF AMRITSAR THIRD BENCH OF THE TRIBUNAL IN ITA NOS. 554 & 5 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 555/ASR/2014 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 IN THE CASE OF HPCL MITTAL ENERGY LTD. VS. ACIT DECIDED ON 07 - 05 - 2018 AND THE DECISION OF PUNE BENCH OF TRIBUNAL IN ITA NOS. 356 TO 359/P U N/2015 IN THE CASE OF M/S. ORIENTAL CLEARING AGENCIES VS. DCIT FOR ASSESSMENT YEARS 2005 - 06 TO 2007 - 08 & 2010 - 11 DECIDED ON 10 - 11 - 2017. 5. THE LD. AR POINTED THAT SO FAR AS PENALTY U/S. 27 1(1)(C) ON RENTAL INCOME IS CONCERNED, THE SAME WAS DELETED BY THE TRIBUNAL IN SUBSEQUENT ASSESSMENT YEARS 2006 - 07 TO 2009 - 10 (SUPRA). 6. ON THE OTHER HAND SHRI SUDHENDU DAS REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBMITTED THAT THE PENALTY HAS BEEN RIGHTLY INITIATED AND LEVIED FOR CONCEALMENT OF INCOME. THE ASSESSEE HAD DISCLOSED ADDITIONAL INCOME IN RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A. THE SAID INCOME WAS NEVER DECLARED BY THE ASSESSEE IN THE ORIGINAL RETURN , HENCE IT IS THE CASE OF CONCEALMENT OF INCOME. 7. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE ASSESSEE HAS ASSAILED LEVY OF PENALTY U/S. 271(1)(C) R.W. EXPLANATION 5 A . THE LD. AR HAS ADMITTED THAT ON MERITS THE TRIBUNAL HAS CONFIRMED LEVY OF PENALTY IN RESPECT OF ADDITIONAL INCOME DECLARED IN ASSESSMENT YEAR S 2006 - 07 TO 2009 - 10. 8. THE ASSESSEE IN THE PRESENT APPEAL HAS RAISED ADDITIONAL GROUND CHALLE NGING LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT ON WRONG CHARGE OF 6 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 CONCEALMENT OF INCOME. THE ASSESSEE HAS QUESTIONED THE CORRECTNESS OF CHARGE FOR LEVY OF PENALTY U/S. 271(1)(C) FOR THE FIRST TIME BEFORE TRIBUNAL BY RAISING ADDITIONAL GROUND OF APPEAL . THE ISSUE RAISED BY ASSESSEE BY WAY OF ADDITIONAL GROUND OF APPEAL GOES TO THE ROOT OF PENALTY PROCEEDINGS AND IS LEGAL IN NATURE. THE FACTS ARE ALREADY ON RECORD, NO NEW APPRECIATION OF DOCUMENTS IS REQUIRED. IN LINE WITH THE LAW LAID DOWN BY THE HON BLE SUPREME COURT OF INDIA IN THE CASE OF NTPC VS. COMMISSIONER OF INCOME TAX REPORTED AS 229 ITR 383 THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTED FOR ADJUDICATION. 9 . THE PENALTY HAS BEEN LEVIED IN RESPECT OF ADDITIONAL INCOME DECLARED BY TH E ASSESSEE IN SEARCH PROCEEDINGS. THE LD. AR HAS POINTED THAT IN THE ASSESSMENT YEAR 2004 - 05 , THE ADDITIONAL INCOME ADMITTED BY THE ASSESSEE WAS ON ACCOUNT OF : I . ADVANCES RECEIVED AGAINST SALE OF PLOTS/FLATS CREDITED TO BALANCE SHEET RS.7,25,500/ - . II . GIFT FROM RELATIVES CREDITED TO C APITAL A CCOUNT I N BALANCE SHEET RS.3,10,450/ - _______________ TOTAL RS.10,35,950/ - THE CONTENTION OF THE ASSESSEE IS THAT SINCE, THE AFORESAID AMOUNTS HAVE ALREADY BEEN REFLECTED IN THE BALANCE SHEET , IT IS NOT A CASE WHEREIN THE AMOUNTS HAVE NOT BEEN DISCLOSED OR HAVE BEEN CONCEALED IN THE REGULAR BOOKS OF ACCOUNT. THE SAID AMOUNTS HAVE BEEN OFFERED AS ADDITIONAL INCOME , AS THE ASSESSEE FAILED TO FURNISH DOCUMENTARY EVIDENCES IN SUPPORT OF THE ABOVE AMOU NTS REFLECTED IN THE BALANCE SHEET. WE FIND MERIT IN THE SUBMISSIONS OF LD. AR OF ASSESSEE. 7 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 10. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF T. ASHOK PAI VS. COMMISSIONER OF INCOME TAX REPORTED AS 292 ITR 11 HAS HELD : 24. CONCEALMENT OF INCOME' AND 'FURNISHING OF INACCURATE PARTICULARS' CARRY DIFFERENT CONNOTATIONS. CONCEALMENT REFERS TO A DELIBERATE ACT ON THE PART OF THE ASSESSEE. A MERE OMISSION OR NEGLIGENCE WOULD NOT CONSTITUTE A DELIBERATE ACT OF SUPPRESSIO VERI OR SUGGESTIO FALSI. THUS , THESE TWO EXPRESSIONS HAVING DIFFERENT MEANINGS CANNOT BE USED INTERCHANGEABLY OR CAN BE SUBSTITUTED FOR EACH OTHER. 11. THE CO - ORDINATE BENCH OF TRIBUNAL IN THE CASE OF M/S. ORIENTAL CLEARING AGENCIES VS. DCIT (SUPRA) IN SIMILAR CIRCUMSTANCES WHERE W RONG CHARGE FOR LEVY OF PENALTY U/S. 271(1)(C) WAS INVOKED DELETED PENALTY. THE RELEVANT EXTRACT OF THE FINDINGS OF TRIBUNAL ARE REPRODUCED HERE - IN - BELOW : 9. THE HONBLE APEX COURT IN THE CASE OF T. ASHOK PAI VS. COMMISSIONER OF INCOME TAX (SUPRA) HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATION. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF NAYAN C. SHAH VS. INCOME TAX OFFICER (SUPRA) HAS FURTHER ELABORATED THE MEANING OF THESE TWO EXP RESSIONS BY PLACING RELIANCE ON THE DECISION RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUCTS (P.) LTD. (SUPRA). THE FINDINGS OF THE HONBLE HIGH COURT ARE AS UNDER : 8. AT THIS JUNCTURE IT MAY BE APPOSITE TO REFER TO THE DEC ISION OF THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V. RELIANCE PETROPRODUCTS PVT. LTD. , (2010) 322 ITR 158, WHEREIN THE COURT WHILE INTERPRETING THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT, HAS HELD THAT A GLANCE AT THE SAID PROVISION WOULD SUGGEST THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE I NCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. IN THE FACTS OF THAT CASE, THE COURT FOUND THAT IT WAS NOT A CASE OF CONCEALMENT OF THE PARTICULARS OF THE INCOME, NOR WAS IT THE CASE OF THE REVENUE EI THER. HOWEVER, THE COUNSEL FOR THE REVENUE SUGGESTED THAT BY MAKING AN INCORRECT CLAIM FOR THE EXPENDITURE ON INTEREST, THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. THE COURT OBSERVED THAT IT HAD TO ONLY SEE AS TO WHETHER IN THAT CASE, AS A MATTER OF FACT, THE ASSESSEE HAD GIVEN INACCURATE PARTICULARS. THE COURT NOTED THAT AS PER LAW LEXICON, THE MEANING OF THE WORD PARTICULAR IS A DETAIL OR DETAILS (IN THE PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFO RE, THE WORD PARTICULAR USED IN SECTION 271(1)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. THE COURT 8 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 FURTHER OBSERVED THAT IN WEBSTERS DICTIONARY, THE WORD INACCURATE HAS BEEN DEFINED AS: NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACC ORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT. THE COURT OBSERVED THAT READING THE WORDS INACCURATE AND PARTICULARS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CO RRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. THE COURT NOTED THAT IT WAS AN ADMITTED POSITION THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. 10. THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ANAND VIPIN SANGHAVI V S. DEPUTY COMMISSIONER OF INCOME TAX IN ITA NOS. 2183 TO 2185/PUN/2014 FOR ASSESSMENT YEARS 2007 - 08 TO 2009 - 10 DECIDED ON 31 - 10 - 2017 WHILE EXPLAINING THESE TWO EXPRESSIONS HAS OBSERVED AS UNDER : 11. THE LAW LAID DOWN BY THE HON'BLE APEX COURT AND HON'BL E HIGH COURT CLEARLY ESTABLISHES THAT FURNISHING INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME ARE TWO DIFFERENT CHARGES. THERE SHOULD BE NO AMBIGUITY IN THE MIND OF ASSESSING OFFICER AT THE TIME OF RECORDING SATISFACTION AND THEREAFTER, A T THE TIME OF LEVYING PENALTY WITH RESPECT TO THE CHARGE FOR LEVYING PENALTY U/S. 271(1) (C) OF THE ACT. THE ASSESSING OFFICER SHOULD BE CLEAR IN HIS MIND AT THE TIME OF RECORDING SATISFACTION THE LIMB OF CLAUSE (C) OF SUB SECTION (1) OF SECTION 271 THAT H AS TO BE INVOKED. THE WORD CONCEALMENT MEANS ACT OF HIDING SOMETHING OR PREVENTING IT FROM BEING KNOWN. THE EXPRESSION CONCEALMENT OF INCOME DENOTES WITHHOLDING OR HIDING INFORMATION ABOUT INCOME OR INVESTMENT IN THE BOOKS OR IN THE RETURN OF INCOME. SUCH ACT OF CONCEALMENT IS GENERALLY DELIBERATE. ON THE OTHER HAND, INACCURATE PARTICULARS DENOTE THAT SOME INFORMATION IS FURNISHED AND THE SAID INFORMATION IS WRONG, INCORRECT, FALSE, DEFECTIVE OR INCOMPLETE. FOR PARTICULARS TO BE INACCURATE, THERE H AS TO BE FIRST FURNISHING OF INFORMATION OR PARTICULARS. 11. XXXXXXXXXX 12. WHERE THE ASSESSEE HAS COMPLETELY WITHHELD INFORMATION ABOUT THE INCOME GENERATED AND THERE IS NO MENTION OF SUCH INCOME EITHER IN THE BOOKS OR THE RETURN OF INCOME, SUCH SUPPRESSION OF INCOME WOULD FALL WITHIN THE EXPRESSION CONCEALMENT OF INCOME. IT IS NOT S O IN THE PRESENT CASE. THE ASSESSEE HAS MADE WRONGFUL CLAIM OF BOGUS EXPENDITURE, THEREFORE, IT WOULD BE A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. THUS, IN OUR CONSIDERED VIEW THE ASSESSING OFFICER WHILE RECORDING SATISFACTION FOR LEVYING PENALTY HAS ERRED IN INVOKING WRONG LIMB OF SECTION 271(1)(C). CONSEQUENTLY, THE PENALTY HAS BEEN LEVIED UNDER WRONG CHARGE FOR CONCEALMENT OF INCOME. IT IS A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND NOT CONCEALMENT OF INCOME. SINCE, THE PENALTY U/S. 271(1)(C) HAS BEEN LEVIED ON WRONG CHARGE, THE SAME IS UNSUSTAINABLE. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. 9 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 12. IN THE PRESENT CASE AS HAS BEEN POINTED BY THE LD. AR THE AMOUNTS WERE DULY REFLECTED IN THE BALANCE SHEET UNDER THE HEAD A DVANCES FROM CUSTOMERS AND C APITAL A CCOUNT . THIS FACT HAS NOT BEEN DISPUTED BY THE REVENUE. THUS, IT CANNOT BE SAID THAT THERE WAS A CONCEALMENT OF INCOME . THE ASSESSEE PURPORTEDLY OFFERED THE AMOUNT AS ADDITIONAL INCOME AS THE ASSESSEE FAILED TO SUBSTANTIATE THE SOURCE OF AMOUNTS . HENCE, IN THE LIGHT OF FACTS OF CASE IT IS A CASE OF FURNISHING INACCURATE PARTICULARS AND NOT CONCEALMENT. WE OBSERVE THAT THE ASSESSING OFFICER IN ASSESSMENT ORDER WHI LE RECORDING SATISFACTION FOR INITIATING PENALTY HAS INVOKED THE CHARGE OF CONCEALMENT OF INCOME WITHIN THE MEANING OF SECTION 5A TO SECTION 271(1)(C) AND HAS LEVIED PENALTY FOR THE SIMILAR REASONS. SINCE, WRONG CHARGE HAS BEEN INVOKED FOR RECORDING OF SA TISFACTION AND LEVY OF PENALTY, THE PENALTY IS NOT SUSTAINABLE. IT IS A WELL SETTLED LAW THAT PENAL PROVISIONS ARE TO CONSTRUED STRICTLY AND THERE IS NO MARGIN OF ERROR WHEN PENALTIES ARE TO BE LEVIED. THUS, IN OUR CONSIDERED VIEW PENALTY ON THE ADDITION OF RS.10,35,950/ - IS BAD IN LAW AND DESERVES TO BE DELETED. WE HOLD AND DIRECT ACCORDINGLY. 13. IN SO FAR AS LEVY OF PENALTY ON RENTAL INCOME RS. 24,000/ - IS CONCERNED , WE FIND THAT THE TRIBUNAL IN THE APPEAL BY THE DEPARTMENT IN ITA NOS.1251 TO 1254/PN/ 2013 (SUPRA) HAS UPHELD THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING PENALTY . FOLLOWING THE ORDER OF CO - ORDINATE BENCH ON THE ISSUE OF PENALTY ON RENTAL INCOME, THE PENALTY LEVIED ON ADDITION OF RS.24,000/ - IS DELETED. 1 4 . IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO. 1162/PUN/2015 IS ALLOWED. 10 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 ITA NO. 1163/PUN/2015 (A.Y. 2005 - 06) 1 5 . THE PENALTY U/S. 271(1)(C) R.W. EXPLANATION 5A IN ASSESSMENT YEAR 2005 - 06 HAS BEEN LEVIED IN RESPECT OF ADDITIONAL INCOME DECLARED RS.11,53,000/ - IN STATEMENT RECORDED U/S. 132(4) OF THE ACT. BOTH THE SIDES ARE UNANIMOUS IN STATING THAT THE FACTS IN ASSESSMENT YEAR 2005 - 06 ARE IDENTICAL TO ASSESSMENT YEAR 2004 - 05. THE AMOUNT OF RS.11,53,000/ - WAS REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE ON ACCOUNT OF ADVANCES RECEIVED AGAINST SALE OF PLOTS /FLATS . THE ASSESSEE HAS RAISED ADDITIONAL GROUND IDENTICAL TO ONE RAISE D IN ITA NO. 1162/PUN/2015 (SUPRA). FOR THE S AKE OF COMPLETENESS THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2005 - 06 IS REPRODUCED HERE - IN - BELOW : 1] THE LEARNED A.O. ERRED IN INITIATING THE PENALTY PROCEEDINGS U/S. 271(1)(C) AND SUBSEQUENTLY LEVYING THE PENALTY U/S. 271(1)(C) ON THE WRONG CHARGE OF 'CONCEALMENT OF PARTICULARS OF INCOME' IN RESPECT OF THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE TOW ARDS AMOUNTS REFLECTED IN BALANCE SHEET AS 'ADVANCES FROM CUSTOMERS' OF RS. 11,53,000/ - AND HE NCE, THE PENALTY ORDER MAY BE DECLARED AS BAD IN LAW. 16. AS THE FACTS IN ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 ARE SIMILAR AND LEVY OF PENALTY HAS BEEN CHALL ENGED BY RAISING IDENTICAL ADDITIONAL GROUND, THE FINDINGS GIVEN BY US WHILE ADJUDICATING THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2004 - 05 WOULD MUTATIS MUTANDIS APPLY TO ASSESSMENT YEAR 2005 - 06. ACCORDINGLY, THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2 005 - 06 IS ALLOWED . 1 7 . IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO. 1163/PUN/2015 IS ALLOWED. 11 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 ITA NO. 116 4 /PUN/2015 (A.Y. 20 10 - 11 ) 1 8 . THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - I NASHIK CONFIRMING LEVY OF PENALTY U/S. 271AAA OF THE ACT. THE ASSESSING OFFICER VIDE ORDER DATED 29 - 06 - 2012 LEVIED PENALTY OF RS.1,91,815/ - IN RESPECT OF TOTAL UNDISCLOSED INCOME OF RS. 19,18,149/ - . AGAINST THE SAID ORDER LEVYING PENALTY U/S. 271AAA, THE ASSESSE E FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) PARTLY ACCEPTED THE APPEAL OF ASSESSEE AND RESTRICTED PENALTY ON THE ADDITION OF RS.5,61,199/ - AND CONFIRMED LEVY OF PENALTY U/S. 271AAA OF RS.56,120/ - . THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL ASSAILING PENALTY CONFIRMED BY THE FIRST APPELLATE AUTHORITY. 19. THE LD. AR REITERATED THE SUBMISSIONS MADE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 20. THE LD. DR VEHEMENTLY SUPPORTED THE IM PUGNED ORDER. THE LD. DR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) WAS QUITE CONSIDERATE IN RESTRICTING LEVY OF PENALTY TO RS.56,120/ - . 21. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. THE LD. AR HAS NOT BEEN ABLE TO SHOW ANY PERVERSITY IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN PARTLY CONFIRMING LEVY OF PENALTY U/S. 271AAA OF THE ACT. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE WELL REASONED ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, THE SAME IS UPHELD AND THE APPEAL OF ASSESSEE IS DISMISSED. 12 ITA N OS.1162 TO 1164/PUN/2015, A.YS. 2004 - 05, 2005 - 06 & 2010 - 11 2 2 . IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO. 1164/PUN/2015 IS DISMISSED. 2 3 . T O SUM UP, THE APPEALS OF ASSESSEE IN ITA NOS. 1162 & 1163/PUN/2015 ARE ALLOWED AND ITA NO. 1164/PUN/2015 IS DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 31 ST DAY OF JANUARY, 201 9 . SD/ - SD/ - ( R.S. SYAL ) (VIKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 31 ST JANUARY, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - I, NASHIK 4. THE COMMISSIONER OF INCOME TAX (CENTRAL), NAGPUR 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / / / TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE