Prakash Harishchandra Kanhekar, Pune V. Deputy Commissioner of Income tax, Pune

ITA 1200/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0382 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 15-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARI KRISHAN
• Keywords: Set aside
• Section: 271(1)(c); 143(3); 274

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1200/PUN/2017 / ASSESSMENT YEAR : 2013-14 PRAKASH HARISHCHANDRA KANHEKAR, 572, SHANIWAR PETH, UTTEKAR HEIGHTS, OPP. KESARIWADA, PUNE 411 030. PAN : ADIPK5624R. . / APPELLANT V/S THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 11, PUNE. . / RESPONDENT ASSESSEE BY : SHRI HARI KRISHAN. REVENUE BY : SHRI SHASHANK DEOGADKAR. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) PUNE -1 DATED 27.0 2.2017 FOR THE ASSESSMENT YEAR 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE PROFESSION AS ARCHITECT. ASSESSEE ELECTRONICALLY FILED HIS RETURN OF INCOME FOR A.Y. 20 13-14 ON 18.10.2013 DECLARING TOTAL INCOME AT RS.41,03,020/-. THE C ASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAM ED U/S / DATE OF HEARING : 05.08.2019 / DATE OF PRONOUNCEMENT: 06.09.2019 2 143(3) OF THE ACT VIDE ORDER DT.30.03.206 AND THE TOTAL INCOME WAS DETERMINED AT RS.97,65,490/- INTER-ALIA BY MAKING CERTAIN ADDITIONS / DISALLOWANCES AGGREGATING TO RS.49,03,703/-. ON THE AFOR ESAID ADDITIONS/DISALLOWANCES, AO VIDE ORDER DT. 30.03.2016 LEV IED PENALTY OF RS.15,00,000/- U/S 271(1)(C) OF THE ACT. AGGRIE VED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.27.02.2017 (IN APPEAL NO.CIT(A), PUNE-1/10756/2016 -17) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE O RDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAIS ED THE FOLLOWING EFFECTIVE GROUND : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD . CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL O F THE ASSESSEE AND SUSTAINING THE PENALTY LEVIED U/S. 271(1)(C) BY THE A .O . HOLDING THAT THE PROCEEDINGS CAN BE INITIATED ON BOTH THE COUNTS THA T IS CONCEA L MENT AND ALSO FURNISHING OF INACCURATE PARTICULARS OF I NCOME . T HE FINDING OF THE L D . CIT(A) IS CONTRARY VARIOUS DECISIONS OF THE TRIBUNA LS, HIGH COURTS INC L U DI NG THE JURISDICTIONAL BOMBAY HIGH COURT. THE ORDER OF THE LD. CIT(A) BE S ET ASIDE CANCELLING THE PENALTY LEVIED U/S. 271(1)( C) WITHOUT ANY SPE CI FI C CHARGE. 3. THE CASE FILE REVEALS THAT THERE IS DELAY OF 8 DAYS IN FILIN G THE APPEAL. AS THE DELAY IN FILING THE APPEAL IS OF VERY FEW DAYS, WE ARE OF THE VIEW THAT THE DELAY IN FILING THE APPEAL CAN BE CONDON ED. IN VIEW OF THESE FACTS, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 4. ON MERITS OF LEVY OF PENALTY, LD.A.R. SUBMITTED THAT WHILE PASSING THE ASSESSMENT ORDER AND WHILE RECORDING SATISFA CTION, AO WAS NOT CLEAR AS TO WHETHER THE ASSESSEE HAD FURNISHE D INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME, MORE SO HE HAS RECORDED SATISFACTION FOR CONCEALMENT OF INCOME AS WELL AS FO R FURNISHING OF INACCURATE PARTICULARS OF INCOME AND IN SUPPOR T OF HIS CONTENTION, HE POINTED TO PAGE NO.3 OF THE ASSESSMENT ORDER. THEREAFTER, HE SUBMITTED THAT IN THE PENALTY ORDER ALSO, AO HAS NOT 3 SPECIFIED WHETHER THE PENALTY IS FOR CONCEALMENT OF INCOME O R FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND HAD LEVIED PENALTY ON BOTH THE LIMBS. HE THEREFORE, RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHE RY REPORTED IN (2017) 392 ITR 4 (BOM) SUBMITTED THAT IN THE A BSENCE OF PROPER SHOW CAUSE NOTICE TO ASSESSEE, PENALTY U/S 271(1 )(C) CANNOT BE LEVIED AND THEREFORE URGED THAT PENALTY LEVIED BY AO BE DELETED. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPEC T TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. BEFORE US, LD.A.R. SUBMITTED THAT WHILE FRAMING THE ASSESSMENT U/S 143(3) OF THE ACT, AO HAD MADE AGGREGATE ADDITIONS / DISALLOWANCES OF RS.49,03,703/-. 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 ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME OR HAS CONCEALED PARTICULARS OF INCOME, MORE SO HE HAS RE CORDED SATISFACTION FOR CONCEALMENT OF INCOME AS WELL AS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREAFTER, IN THE PENALT Y ORDER PASSED U/S 271(1)(C) OF THE ACT, AO HAD LEVIED PENALTY FOR CONCEALMENT OF INCOME AS WELL AS FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS A SETTLED LAW THAT WHILE LEVYING PENALTY, THE AO HAS TO RECORD CLEAR SATISFACTION AND THEREAFTER COME TO A FINDING IN RESPE CT OF ONE OF THE LIMBS, WHICH IS SPECIFIED UNDER SECTION 271(1)(C) OF THE ACT. THE FIRST STEP IS TO RECORD SATISFACTION WHILE COMPLETING THE ASS ESSMENT AS TO WHETHER THE ASSESSEE HAD FURNISHED INACCURATE PART ICULARS OF INCOME OR CONCEALED HIS INCOME. THEREAFTER, NOTICE U/S 274 READ WITH 4 SECTION 271(1)(C) OF THE ACT IS TO BE ISSUED TO THE ASSESS EE. THE ASSESSING OFFICER THEREAFTER HAS TO LEVY PENALTY UNDER SEC TION 271(1)(C) OF THE ACT FOR NON-SATISFACTION OF EITHER OF THE LIMBS. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HAS TO CO ME TO A FINDING AS TO WHETHER THE ASSESSEE HAS CONCEALED HIS IN COME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE HONBLE BOMB AY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY (SUPRA) HELD THAT WHERE INITIATION OF PENALTY IS ONE LIMB AND THE LEVY 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. 6. CONSIDERING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SAMSO N PERINCHERY (SUPRA), WE ARE OF THE VIEW THAT IN THE PRESENT CASE, THE BASIC CONDITION FOR LEVY OF PENALTY HAS NOT BEEN FULFILLED AND THAT THE PENALTY ORDER SUFFERS FROM NON-EXERCISING OF JURISDICTION PO WER AND THEREFORE PENALTY ORDER CANNOT BE UPHELD. WE ACCORDINGLY SET ASIDE THE PENALTY ORDER PASSED BY AO. THUS, THE GROUND OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 6 TH DAY OF SEPTEMBER, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 6 TH SEPTEMBER, 2019. YAMINI 5 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-1, NASHIK. PR.CIT-1, NASHIK. '#$ %%&',) &', / DR, ITAT, A PUNE; $,-./ GUARD FILE. / BY ORDER // TRUE COPY // /01%2&3 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.