Zaheer Abdulhamid Mulani, Pune V. Income-tax Officer, Pune

ITA 1185/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0975 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 12-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K SRINIVASAN
• Keywords: Principle of natural justice; Revised return; Set aside
• Section: 271(1)(c); 143(3); 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO.1185/PUN/2017 / ASSESSMENT YEAR : 2011-12 ZAHEER ABDULHAMID MULANI FLAT NO. 604, D-WING, GAGAN AVENUE, OPP. SAI SERVICE STATION, KONDHWA (KURD), PUNE-411 048. PAN : AIVPM7557R ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD-7(2), PUNE. / RESPONDENT ASSESSEE BY : SHRI K. SRINIVASAN REVENUE BY : SHRI SUDHENDU DAS / DATE OF HEARING : 25.03.2019 / DATE OF PRONOUNCEMENT : 26.03.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE LD. CIT(APPEALS), PUNE DATED 23.12.2016 FOR THE ASSESSMEN T YEAR 2011-12 AS PER GROUNDS OF APPEAL ON RECORD. 2 ITA NO.1185 /PUN/2017 A.Y.2011-12 2. THE CRUX OF THE GRIEVANCE OF THE ASSESSEE IS WITH REG ARD TO CONFIRMATION OF PENALTY LEVIED U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HE REINAFTER REFERRED TO AS THE ACT). 3. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE IS A SALARIED INDIVIDUAL WHO DERIVES SALARY FROM (I) EATON TECHNOLOGIES PVT. LTD (II) HUTCHISON 3 GLO BAL SERVICES PVT. LTD (III) AXA TECHNOLOGIES SHARES SERVICES PVT. LTD. THE ASSESSMENT U/S. 143(3) WAS COMPLETED ON 29.03.2014 ASSESSING TOTAL TAXABLE INCOME OF RS. 39,89,650/-. THE CASE WAS SELECTED FOR SCRUTINY AS PER THE SCRUTINY SELECTION NORMS UNDER CASS AND THE REQUIRED NOTICES DUL Y ISSUED AND SERVED ON THE ASSESSEE. PENALTY WAS INITIATED IN THE ASSESSMENT ORDER FOR FURNISHING INACCURATE PARTICULARS AND CONCEALMENT OF INCOME FOR THE FA ILURE OF THE ASSESSEE TO OFFER RS.4,54,653/- AND RS. 1,71,721/- SALARY RECEIVED FROM TWO CONCERNS, FAILURE TO DISCLOSE INTEREST AMOUNT OF RS. 8,121/- AND TO EXPLAIN THE SOURCE OF CASH DEPOSITS AMOUNTING TO RS. 32,50,000/-. 4. AT THE TIME OF HEARING THE LD. AR OF THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT THE NOTICE ISSUED U/S.274 R.W.S.271(1)(C) OF TH E ACT ALONG WITH PENALTY ORDER IS VAGUE AS TO THE LIMB ON WHICH PENALTY U/ S. 271(1)(C) OF THE ACT IS INITIATED. THE LD. AR CONTENDED THAT IT IS SETTLED PR INCIPLE OF LAW IF THE CHARGE IS NOT SPECIFIC THEN THE PENALTY U/S.271(1)(C) OF THE A CT CANNOT BE LEVIED. THAT IN SUPPORT OF HIS CONTENTIONS, THE LD. AR OF THE ASSESSEE RELIED ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CAS E OF CIT VS. SAMSON PERINCHERY IN ITA NO.1154 OF 2014 AND THE DECISIO N OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATH C OTTON AND GINNING FACTORY REPORTED AS 359 ITR 565. THE LD. AR FURTHER SU BMITTED THAT THE ASSESSEE HAS FILED REVISED RETURN ON 18.12.2013 IN COMPLIAN CE TO SECTION 139(5) OF THE ACT. SINCE REVISED RETURN WAS FILED BEFORE ASSE SSMENT WAS 3 ITA NO.1185 /PUN/2017 A.Y.2011-12 COMPLETED I.E. ON 29.03.2014 AND IN THAT REVISED RETURN, THE ASSESSEE HAS REFLECTED THE SALARY AND THE INTEREST COMPONENT WHICH WAS NOT INC LUDED IN THE ORIGINAL RETURN AND THEREBY IN COMPLIANCE TO SECTION 139(5) OF THE ACT, THERE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHING OF INACCURAT E PARTICULARS OF INCOME SO FAR AS THE ASSESSEE IS CONCERNED. 5. PER CONTRA, THE LD. DR HAS RELIED ON THE ORDERS OF SU B-ORDINATE AUTHORITIES. 6. WE HAVE PERUSED THE CASE RECORDS AND CONSIDERED T HE JUDICIAL PRONOUNCEMENT PLACED BEFORE US. THE FACTS REVEAL THAT IN THE NOTICE ISSUED U/S.274 R.W.S. 271(1)(C) OF THE ACT AS WELL AS PENALTY ORDER, T HE CHARGE FOR WHICH PENALTY U/S.271(1) (C) OF THE ACT HAS BEEN LEVIED, IS NOT SPECIFIC AND BOTH THE LIMBS OF CHARGE ARE MENTIONED THERE I.E. CONCEA LMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THAT TAKING GUIDANCE FROM THE DECISION OF THE HON'BLE BOM BAY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY (SUPRA.) W HEREIN THE HON'BLE BOMBAY HIGH COURT HAS CONSIDERED THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATH COTTON AND GINNIN G FACTORY (SUPRA.), THE LEGAL PROPOSITION THAT COMES OUT AND WHICH IS BINDING I N NATURE IS THAT THE ASSESSING OFFICER SHOULD BE CLEAR AS TO WHICH OF THE TW O LIMBS UNDER WHICH PENALTY IS IMPOSABLE, HAS BEEN CONTRAVENED OR INDICA TE THAT BOTH HAVE BEEN CONTRAVENED WHILE INITIATING PENALTY PROCEEDINGS. IT CA NNOT BE THAT THE INITIATION WOULD BE ONLY ON ONE LIMB I.E. FOR FURNISHING INACCURAT E PARTICULARS OF INCOME WHILE IMPOSITION OF PENALTY ON THE OTHER LIMB I.E. CONC EALMENT OF INCOME. 7. THE SANCTITY IN TERMS OF NATURAL JUSTICE WITH REGARD T O THIS PROPOSITION IS THAT THE ASSESSEE UNDER THE SCHEME OF WELFARE LEGISLAT ION WHICH IS 4 ITA NO.1185 /PUN/2017 A.Y.2011-12 EMBEDDED IN THE INCOME TAX ACT, 1961 SHOULD GET AN OPP ORTUNITY TO PREPARE HIMSELF FOR THE DEFENSE AS REGARDS TO THE EXACT CHARGE ON WHICH PENALTY IS IMPOSED UPON HIM U/S. 271(1)(C) OF THE ACT. IN THE INSTANT CA SE, THE CHARGE IS VAGUE AND THEREFORE, LEVY OF PENALTY IS NOT WARRANTED. FU RTHERMORE, THE REVISED RETURN FILED BY THE ASSESSEE IS IN CONFORMITY WITH S ECTION 139(5) OF THE ACT WHEREIN ALL THE PARTICULARS OF INCOME HAVE BEEN DISCLOSED. TAKING TOTALITY OF FACTS AND LEGAL SCENARIO INTO CONSIDERATI ON, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND DIRECT THE AS SESSING OFFICER TO DELETE THE PENALTY FROM THE HANDS OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 26 TH DAY OF MARCH, 2019. SD/- SD/- R.S.SYAL PA RTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 26 TH MARCH, 2019. SB !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS), PUNE-5. 4. THE PR. CIT, PUNE-4, PUNE. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 5 ITA NO.1185 /PUN/2017 A.Y.2011-12 DATE 1 DRAFT DICTATED ON 25 .03 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 2 6 .03 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER