Appeal details
Counselvise Citation
[2019] 115 COUNSELVISE.COM (IT) 7609 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 5 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
16-10-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2009-2010
Appeal Filed On
12-05-2017
Judgement Text
] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1190/PUN/2017 / ASSESSMENT YEAR : 2009-10 THE DY.COMMISSIONER OF INCOME TAX, CIRCLE-8, PUNE. . / APPELLANT V/S M/S. KSHITIJI ASSOCIATES, B-75, ANUGRAHA CO-OP HOUSING, DNYANESHWAR NAGAR, PIMPIRI, PUNE. PAN : AAIFK1377L. . / RESPONDENT !. / CO NO.15/PUN/2019 (ARISING OUT OF ITA NO1190/PUN/2017 / ASSESSMENT YEAR : 2009-10 M/S. KSHITIJI ASSOCIATES, B-75, ANUGRAHA CO-OP HOUSING, DNYANESHWAR NAGAR, PIMPIRI, PUNE. PAN : AAIFK1377L. . CROSS-OBJECTOR. V/S THE DY.COMMISSIONER OF INCOME TAX, CIRCLE-8, PUNE. . APPELLANT IN THE APPEAL. ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI PANKAJ GARG. / DATE OF HEARING : 22.08.2019 / DATE OF PRONOUNCEMENT: 16.10.2019 2 / ORDER PER ANIL CHATURVEDI, AM : 1. THE PRESENT APPEAL FILED BY THE REVENUE AND THE C.O. FILED B Y THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (A) 6, PUNE DATED 10.01.2017 FOR THE ASSESSMENT YEAR 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN THE BUS INESS AS BUILDER AND PROMOTER. ASSESSEE ELECTRONICALLY FILED HIS RETU RN OF INCOME FOR A.Y. 2009-10 ON 31.10.2009 DECLARING TOTAL INCOME AT RS. 96,28,370/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSES SMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.26.12.2011 AND THE T OTAL INCOME WAS ASSESSED AT RS.3,28,01,300/- INTER-ALIA BY MAKING ADDITION OF RS.2,31,72,934/- ON ACCOUNT OF SUPPRESSION OF SALES. ON THE AFORESAID ADDITION, AO VIDE ORDER DT.18.03.2014 LEVIED PENALTY OF RS.7 6,47,068/- U/S 271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.10.01.2017 (IN APPEAL NO.PN/CIT(A)-V/DCIT CIR-8/298/2014-15) DELETED THE PENALT Y LEVIED BY THE AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NO W IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD.CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED OF RS. 76,47,068/- WHEN THE APPELLANT'S AUDIT REPORT CLEARLY INDICATES THAT THE SALES ARE RECOGNIZED ON HANDING OVER THE POSSESSION OF FLATS, THOUGH THE AP PELLANT HAD FOLLOWED PROJECT COMPLETION METHOD FOR RECOGNITION OF REVEN UE. THE SALES HAVE BEEN RECOGNIZED CONTRARY TO ASESSEE'S OWN METHODOLOGY OF RECOGNITION OF REVENUE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN APPRECIATING THE FACT THAT THE EVEN WHEN POSSESS ION OF FLAT GIVEN BY ASSESSEE; THE INCOME WAS NOT OFFERED FOR TAXATION T HEREBY SUPPRESSING ITS PROFIT BY FURNISHING INACCURATE PARTICULARS OF INCO ME TO THE EXTENT OFRS.2,31,72,934/- 3 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE QUANTUM ADDITION WA S UPHELD BY THE LD.CIT(A) VIDE ORDER DATED 09/10/2012 & FURTHER THE HON'BLE ITAT HAS ALSO UPHELD THE QUANTUM ADDITION VIDE ORDER DATED 10/03/ 2014 & ALSO THE ASSESSEE HAS NOT FILED FURTHER APPEAL TO HON'BLE BO MBAY HIGH COURT ON THE ISSUE WHICH CONFIRMS THAT THE ASSESSEE HAS FURNISHE D INACCURATE PARTICULARS OF INCOME. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN APPLYING THE APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS 322 ITR 158 & HON'BLE PUNE ITAT DECIS ION IN THE CASE OF KANBY SOFTWARE INDIA LTD VS DCIT REPORTED IN 122 TT J 721 AS THE ASSESSEE'S CASE IS DIFFERENT AND ISSUE INVOLVED IS RELATED TO DELIBERATE POSTPONEMENT OF INCOME BY NOT FOLLOWING THE METHOD OF ACCOUNTING MENTIONED IN AUDIT REPORT AND NOT RELATED TO ANY DE DUCTION OR CLAIM AS MENTIONED IN CASE LAWS. 3. ON THE OTHER HAND, ASSESSEE VIDE C.O.NO.15/PUN/2019 HAS FILED THE FOLLOWING EFFECTIVE GROUND. THE LEARNED CIT(A) ERRED IN LAW AND ON FACT IN NO T APPRECIATING THE FACT THAT THE INITIATION OF PENALTY WAS ON A LIMB DIFFER ENT FROM THE ONE FOR LEVY OF PENALTY AND AS SUCH THE LEVY OF PENALTY OF RS.76,47 ,068/- WAS NOT JUSTIFIED IN LAW. 4. WITH RESPECT TO CROSS OBJECTIONS, ASSESSEE SUBMITTED THAT C.O OF THE ASSESSEE IS SUPPORTING THE ORDER OF LD.CIT(A) AND IF TH E APPEAL OF THE REVENUE IS DISMISSED THEN THE C.O. OF ASSESSEE WOULD BE RE NDERED ACADEMIC. 5. FIRST WE PROCEED WITH REVENUES APPEAL IN ITA NO.1190/ PUN/2017 FOR A.Y. 2009-10. 6. BEFORE US, LD. D.R. SUBMITTED THAT THOUGH THE REVENUE HAS RAISED VARIOUS GROUNDS BUT ALL THE GROUNDS ARE INTER-CONNECT ED AND THE SOLE CONTROVERSY IS WITH RESPECT TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 7. LD.D.R. SUPPORTED THE ORDER OF AO AND SUBMITTED THAT LD.CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED BY THE AO. ON THE ISSUE OF LEVY OF PENALTY, LD.A.R. SUBMITTED THAT WHILE PASSING THE ASSESSMENT ORDER AND 4 WHILE RECORDING SATISFACTION, AO WAS NOT CLEAR AS TO WHETHE R THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALME NT OF INCOME. I N SUPPORT OF HIS CONTENTION HE POINTED TO PARA 3.4 OF THE ASSESSMENT ORDER. THEREAFTER, HE SUBMITTED THAT IN THE PENALTY ORDER, AO HAD LEVIED THE PENALTY FOR FURNISHING INACCURATE PARTICULA RS OF INCOME. HE THEREFORE, RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY REPORTE D IN (2017) 392 ITR 4 (BOM) SUBMITTED THAT IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO ASSESSEE, PENALTY U/S 271(1)(C) CANNOT BE LEVIED. HE ALSO SU PPORTED THE ORDER OF LD.CIT(A) ON MERITS OF DELETION OF PENALTY. HE THUS SUPPORTED THE ORDER OF LD.CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPEC T TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. PENALTY OF RS.76,47,068/- U/S 271(1)(C ) OF THE ACT HAS BEEN LEVIED ON AMOUNT OF RS.2,31,72,934/- BEING TH E ADDITION MADE ON ACCOUNT OF SUPPRESSION OF SALES. THE PERUSAL OF ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT REVEALS THAT IN THE ASSESSMENT ORDER AO HAD NOT RECORDED CLEAR SATISFACTION AS TO WHETHER AS SESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME OR HAS CONCEALED PARTICULARS OF INCOME. THEREAFTER, IN THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT, AO HAD LEVIED PENALTY FOR FURNISHING INACCURATE PARTICULA RS OF INCOME. IT IS A SETTLED LAW THAT WHILE LEVYING PENALTY, TH E AO HAS TO RECORD CLEAR SATISFACTION AND THEREAFTER COME TO A FINDING IN RESPECT OF ONE OF THE LIMBS, WHICH IS SPECIFIED UNDER SECTION 271(1)(C) OF THE AC T. THE FIRST STEP IS TO RECORD SATISFACTION WHILE COMPLETING THE ASS ESSMENT AS TO WHETHER THE ASSESSEE HAD FURNISHED INACCURATE PARTICU LARS OF INCOME OR CONCEALED HIS INCOME. THEREAFTER, NOTICE U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT IS TO BE ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER 5 THEREAFTER HAS TO LEVY PENALTY UNDER SECTION 271(1)(C) OF TH E ACT FOR NON- SATISFACTION OF EITHER OF THE LIMBS. WHILE COMPLETING THE ASSES SMENT, THE ASSESSING OFFICER HAS TO COME TO A FINDING AS TO WHETHER T HE ASSESSEE HAS CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS O F INCOME. THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHE RY (SUPRA) HELD THAT WHERE INITIATION OF PENALTY IS ONE LIMB AND THE LEV Y OF PENALTY IS ON OTHER LIMB, THEN IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO THE ASSESSEE, THERE IS NO MERIT IN LEVY OF PENALTY. 9. CONSIDERING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SAMSON PERINC HERY (SUPRA), WE ARE OF THE VIEW THAT IN THE PRESENT CASE, THE BASIC C ONDITION FOR LEVY OF PENALTY HAS NOT BEEN FULFILLED AND THAT THE PENALTY ORDER SUFFERS FROM NON-EXERCISING OF JURISDICTION POWER AND THEREFORE PENALTY O RDER CANNOT BE UPHELD. WE ACCORDINGLY UPHOLD THE SET ASIDE THE PENALTY O RDER PASSED BY AO. WE FURTHER FIND THAT LD.CIT(A) ON MERITS HAS ALSO DELE TED THE PENALTY. BEFORE US, NO FALLACY IN THE FINDINGS OF LD.CIT(A) HAS B EEN POINTED BY LD. D.R. WE THEREFORE FIND NO REASON TO INTERFER E WITH THE ORDER OF LD.CIT(A). THUS, THE GROUNDS OF REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. 11. NOW WE WILL TAKE UP THE C.O OF ASSESSEE IN C.O.NO.15/PUN/ 2019 FOR A.Y. 2009-10. 11.1. AS FAR AS C.O.NO.15/PUN/2019 OF ASSESSEE IS CONCERN ED, IN VIEW OF LD.A.R.S SUBMISSION NOTED HEREINABOVE AND SINCE WE HAVE HEREIN ABOVE DISMISSED THE APPEAL OF REVENUE, WE FIND NO REASON TO ADJ UDICATE THE GROUNDS RAISED BY THE ASSESSEE IN THE C.O . THUS, THE C.O. OF THE ASSESSEE IS DISMISSED. 6 12. IN THE RESULT, THE APPEAL OF REVENUE AND CROSS-OBJ ECTIONS OF ASSESSEE ARE DISMISSED . ORDER PRONOUNCED ON 16 TH DAY OF OCTOBER, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) $ / JUDICIAL MEMBER %$ / ACCOUNTANT MEMBER PUNE; DATED : 16 TH OCTOBER, 2019. YAMINI &'()*)' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-6, PUNE. PR. CIT 5, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.
