SAMEERA SHAIKH, NEW PANVEL V. ITO 21(3)(2), MUMBAI

ITA 1328/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7881 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 24-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: VALLABHDAS D PARMAR
• Keywords: Initiation of penalty proceedings; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 1328 /MUM/ 2017 ASSESSMENT YEAR: 2009 - 10 MS. SAMEERA SHAIKH PLOT NO. 15/17, ROAD NO. 5, SECTOR - 19, NEAR RELIANCE COLONY NEW PANVEL - 410206 VS. ITO - 21(3)(2) C - 11, 5 TH FLOOR, PRATYAKH KAR BHAVAN, BKC, COMPLEX BANDRA (E) MUMBAI - 400051. PAN NO. BFBPS5476M APPELLANT RESPONDENT ASSESSEE BY : MR. VALLABHDAS D. PARMAR , AR REVENUE BY : MR. V. JUSTIN , DR DATE OF HEARING : 13/11/2017 DATE OF PRONOUNCEMENT : 27/12/2017 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2009 - 1 0 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 38 , MUMBAI AND ARISES OUT OF THE PENALTY ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS THAT THE ORDER OF PENALTY PASSED U/S 271(1)(C) IS BAD IN LAW AS THE NOTICE ISSUED U/S 274 R.W.S 271(1)(C) IS NOT DISCERNIBLE AS TO WHETHER THE PENALTY PROCEEDING IS INITIATED FOR FURNISHING INACCURATE PAR TICULARS OF INCOME OR MS. SAMEERA SHAIKH ITA NO. 1328/MUM/2017 2 FOR CONCEALING PARTICULARS OF INCOME AND THEREFORE, THE IMPUGNED ORDER PASSED BE CANCELLED. ALSO IT IS STATED THAT THE LD. CIT(A) ERRED IN CONFIRMING MINIMUM PENALTY OF RS.2,40,402/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE H AD VOLUNTARILY OFFERED FOR TAXATION THE AMOUNT OF RS.4,50,000/ - ON ACCOUNT OF LOAN AND RS.3,28,000/ - ON CASH DEPOSITED IN BANK ACCOUNT FOR BUYING PEACE AND TO REDUCE LITIGATION. THE LD. COUNSEL OF THE ASSESSEE FILES AN APPLICATION FOR ADMISSION OF THE AD DITIONAL GROUNDS. WE FIND THAT THE ADDITIONAL GROUNDS ELABORATE THE ORIGINAL GROUNDS FILED BY THE ASSESSEE ALONG WITH FORM NO. 36. THEREFORE, WE ADMIT THE ADDITIONAL GROUND OF APPEAL FILED BY THE ASSESSEE 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER (AO) MADE AN ADDITION OF RS.4,50,000/ - ON ACCOUNT OF UNPROVED LOAN AND RS.3,28,000/ - ON ACCOUNT OF CASH DEPOSITS TO THE INCOME SHOWN BY THE ASSESSEE. THE ASSESSEE AGREED FOR THE ABOVE ADDITIONS AS SHE WAS NOT IN A POSITION TO PRODUCE THE SUPPORTING EVIDENCE AND ALSO TO AVOID FURTHER LITIGATION. SUBSEQUENTLY, THE AO IMPOSED A MINIMUM PENALTY OF RS.2,40,402/ - U/S 271(1)(C) ON THE ABOVE AMOUNT OF RS.7,78,000/ - (RS.4,50,000/ - PLUS RS.3,28,000/ - ). 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) AGREED WITH THE REASONS GIVEN BY MS. SAMEERA SHAIKH ITA NO. 1328/MUM/2017 3 THE AO FOR IMPOSING PENALTY U/S 271(1)(C) AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5. BEFORE US, THE LD. COUNS EL OF THE ASSESSEE SUBMITS THAT IT IS NOT CLEAR FROM THE NOTICE ISSUED U/S 274 R.W.S 271(1)(C) AS TO WHETHER THE PENALTY PROCEEDING IS INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR FOR CONCEALMENT OF INCOME. RELIANCE IS PLACED BY HIM ON THE DECISION IN THE CASE OF CIT V. MAN J UNATH COTTON & GINNING FACTORY (2013) 359 ITR 565 (KARNATAKA), CIT V. VIRGO MARKETING (P) LTD . 171 TAXMAN 156 (DELHI). ON THE OTHER HAND, THE LD. DR RELIES ON THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT M ATERIALS ON RECORD. WE FIND THAT IN THE ASSESSMENT ORDER DATED 10.02.2014, THE AO HAS INITIATED THE PENALTY STATING THE ASSESSEE HAS CONCEALED/FURNISHED INACCURATE PARTICULARS OF INCOME. IN THE NOTICE U/S 274 R.W.S 271(1)(C), THE AO HAS NOT MENTIONED WHE THER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HER INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THE PENALTY ORDER DATED 22.08.2014, THE AO HAS IMPOSED THE PENALTY OF RS.2,40,402/ - BY MENTIONING THAT THE ASSESSEE HAD CONCEALED THE PARTI CULARS OF HER INCOME. BEFORE A PENALTY IS IMPOSED, THE ASSESSEE MUST BE APPRISED OF THE PRECISE CHARGE BROUGHT AGAINST HER. SHE MUST BE TOLD DISTINCTLY WHETHER SHE IS HELD GUILTY OF HAVING CONCEALED THE PARTICULARS OF HER INCOME OR OF HAVING FURNISHED IN ACCURATE PARTICULARS THEREOF. SECTION 274(1) PROVIDES MS. SAMEERA SHAIKH ITA NO. 1328/MUM/2017 4 FOR A REASONABLE OPPORTUNITY TO BE GIVEN TO THE ASSESSEE SO THAT SHE CAN UNDERSTAND THE CHARGE. THE BASIS OF THE ISSUANCE OF NOTICE SHOULD REMAIN THE SAME WHILE IMPOSING PENALTY. IF THE NOTICE IS ISSUED IN THE CONTEXT OF CONCEALMENT OF INCOME, THEN THE PENALTY CANNOT BE LEVIED BY SHIFTING THE BASIS TO INACCURACY OF PARTICULARS. THIS IS TO ENSURE THAT THE ASSESSEE GETS AN ADEQUATE OPPORTUNITY IN RESPECT OF THE DEFAULT WHICH IS DETEC TED AND ALLEGED AGAINST HER AND WHICH FORMS THE BASIS OF THE ISSUANCE OF THE NOTICE U/S 271(1)(C) AND ALSO TO ENSURE THAT SHE IS NOT PUT TO PERIL OF ANSWERING AGAINST SOMETHING WHICH NEVER WAS SPECIFICALLY DETERMINED AS HER DEFAULT. WE MAY REFER HERE TO TH E JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN A.M. SHAH & CO. V. CIT (1999) 238 ITR 415, 433 (GUJ). THE SAME ISSUE ALSO AROSE IN CIT VS. SHRI SAMSON PERINCHERY IN ITA NO. 953, 1097, 1154 & 1226/2014 , BEFORE THE HONBLE BOMBAY HIGH COURT . WE EXTRACT BELO W THE DECISION DATED 05.01.2017 OF THE HONBLE HIGH COURT : 5. THE GRIEVANCE OF THE REVENUE BEFORE US IS THAT THERE IS NO DIFFERENCE BETWEEN FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. THUS, DISTINCTION DRAWN BY THE IMPUGNED ORDER IS BETWEEN TWEEDLEDUM AND TWEEDLEDEE. IN THE ABOVE VIEW, T HE DELETION OF THE PENALTY IS UNJUSTIFIED. 6. THE ABOVE SUBMISSION ON THE PART OF THE REVENUE IS IN THE FACE OF THE DECISION OF THE SUPREME COURT IN ASHOK PAI VS. CIT 292 ITR 11 [RELIED UPON IN MANJUNATH COTTON & GINNING FACTORY (SUPRA)] WHEREIN IT IS O BSERVED THAT CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME IN SECTION 271(1)(C) OF THE ACT, CARRY DIFFERENT MEANING/CONNOTATIONS. THEREFORE, THE SATISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BREACHES ME NTIONED UNDER SECTION 271(1)(C) OF THE ACT, FOR INITIATION OF PENALTY PROCEEDINGS WILL NOT WARRANT/PERMIT PENALTY BEING IMPOSED FOR THE OTHER BREACH. THIS IS MORE SO, AS MS. SAMEERA SHAIKH ITA NO. 1328/MUM/2017 5 AN ASSESSEE WOULD RESPOND TO THE GROUND ON WHICH THE PENALTY HAS BEEN INITIATED/NOTICE ISSUED. IT MUST, THEREFORE, FOLLOW THAT THE ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON THE GROUND OF WHICH THE PENALTY PROCEEDINGS HAS BEEN INITIATED, AND IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSEE HAS NO NOTICE. 7. THEREFORE, THE ISSUE HERE IN STANDS CONCLUDED IN FAVOUR OF THE RESPONDENT - ASSESSEE BY THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATH COTTON AND GINNING FACTORY (SUPRA). NOTHING HAS BEEN SHOWN TO US IN THE PRESENT FACTS WHICH WOULD WARRANT OUR TAKING A VIEW DIFFER ENT FROM THE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATH COTTON AND GINNING FACTORY (SUPRA). 6.1 FACTS BEING SIMILAR, WE FOLLOW THE DECISION MENTIONED AT PARA 6 HEREINBEFORE AND DELETE THE PENALTY OF RS.2,40,402/ - IMPOSED BY THE AO. 7. IN THE RESULT, TH E APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/12/2017. SD/ - SD/ - ( D.T. GARASIA ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 27/12/2017 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI