Narendra P. Musale, Nashik V. Income-tax Officer,

ITA 1521/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0883 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-11-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 11-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Peak credit; Initiation of penalty proceedings; Revised return; Set aside
• Section: 271(1)(c); 44AD; 143(3); 69; 148

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. 2226, 1520, 1521, 1853/PUN/2016 AND ITA NO.153/PUN/2017 / ASSESSMENT YEARS: 2011-12, 2012-13 & 2013-14 SHRI NARENDRA P. MUSALE, 1 ST FLOOR, GANESH APARTMENT, NEAR BUS STAND, SATPUR, NASHIK-422 007 PAN : AFFPM7810N .... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD-1(4), NASHIK. / RESPONDENT ASSESSEE BY : SHRI SANKET JOSHI REVENUE BY : SHRI SUDHENDU DAS. / DATE OF HEARING : 25.03.2019 / DATE OF PRONOUNCEMENT : 27.03.2019 / ORDER PER BENCH : THESE BUNCH OF APPEALS PREFERRED BY THE ASSESSEE EMAN ATES FROM THE DIFFERENT ORDERS OF THE LD. CIT(APPEALS) FOR SEPARATE ASSESS MENT YEARS AS PER GROUNDS OF APPEAL ON RECORD. THESE CASES WERE HEARD TOGETHER. SINCE FACTS ARE SIMILA R AND ISSUES ARE COMMON, THESE APPEALS ARE BEING DISPOSED OF VIDE THIS CONS OLIDATED ORDER. WE WOULD FIRST TAKE THE APPEAL IN ITA NO.2226/PUN/2016. 2 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 ITA NO.2226/PUN/2016 A.Y.2011-12 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO.2226/PUN/2016 READS AS UNDER: 1) IN THE FACTS AND IN LAW THE CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.53,63,000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOS ITS IN BANK ACCOUNTS. 2) ON THE FACTS AND IN LAW THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE AMOUNT OF RS.53,43,000/- HAS BEEN DEP OSITED OUT OF ADVANCE RECEIVED IN RESPECT OF AGREEMENT TO SALE OF ANCESTRAL LAND AT VILLAGE MAUJE VAKHARI TAL. DEOLA DIST. NASHIK. THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THERE IS ALSO CASH W ITHDRAWAL OF RS. 40,50,000/- IN THE SAID BANK ACCOUNTS AND THE CLOSI NG BALANCE IS NOT MUCH. 3) ON THE FACTS AND IN LAW THE CIT(A) HAS ERRED IN CONSIDERING THE CASH DEPOSITS AT RS.53.63,000/- AS AGAINST RS.53,43,000/- DUE TO CALCULATION MISTAKE. 4) ON THE FACTS AND IN LAW THE CIT(A) HAS ERRED IN MAKING ADDITION OF RS.25,200/- ON ACCOUNT OF DEEMED VALUE OF THE FLAT WHICH HAS BEEN USED MAINLY FOR THE PURPOSE OF BUSINESS. 5) ON THE FACTS AND IN LAW THE CIT(A) HAS ERRED IN MAKING ENHANCEMENT OF INCOME BY RS.64,36,209/- IN RESPECT OF ALLEGED U NEXPLAINED DEPOSITS IN BANK OF BARODA, WHICH WERE ALREADY ASSESSED BY T HE A.O. U/S. 143(3) R.W.S. 147 OF THE ACT AND THE ABOVE FACT WAS POINTE D OUT TO THE CIT(A) IN WRITTEN SUBMISSION FILED. 6) ON THE FACTS AND IN LAW THE CIT(A) AND A.O. HAVE ERRED IN CONSIDERING THE TOTAL DEPOSITS IN BANK AS INCOME OF THE APPELLA NT WITHOUT CONSIDERING THE FACT THAT CHEQUES DEPOSITED WERE DISHONORED. 7) ON THE FACTS AND IN LAW THE CIT(A) HAS ERRED IN NOT ACCEPTING THE FACT THAT THE UNDISCLOSED DEPOSITS IN BANK ACCOUNTS REPR ESENT SALE PROCEEDS OF THE GOODS TRADED AND HENCE ONLY PROFIT @ 11 % SHOULD BE ADDED AS INCOME AND NOT ENTIRE DEPOSITS IN BANKS. 8) ON THE FACTS AND IN LAW THE CIT(A) SHOULD HAVE A T THE MOST CONFIRMED THE ADDITION OF PEAK DEPOSITS I.E. PEAK BALANCE IN THE BANK ACCOUNTS NOT DISCLOSED IN THE BOOKS OF ACCOUNTS AFTER REDUCING T HE PEAK BALANCE IN UNDISCLOSED BANK ACCOUNTS TO BE TAXED IN PRECEDING YEARS AND INCOME OFFERED TO TAX IN THE PRECEDING YEARS AND CURRENT Y EAR. 9) YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER ABOVE OR ANY OTHER GROUND/S OF APPEAL. 3. AT THE VERY OUTSET, WE OBSERVE THAT THERE IS DELAY OF 72 DAYS. THE ASSESSEE HAS FILED AFFIDAVIT ALONG WITH PETITION REGARDING CON DONATION OF DELAY. WE HAVE PERUSED THE DOCUMENTS AND ARE CONVINCED WITH THE REASONS 3 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 SUBMITTED BEFORE US. THE LD. DR HAS ALSO CONCEDED TO CON DONATION OF THE DELAY. WE, THEREFORE, IN VIEW OF THE RELEVANT DOCUMENTS PLA CED BEFORE US AND THE JUSTIFIED REASONS THEREIN AND THE SUBMISSIONS OF THE P ARTIES CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING ON MERITS. 4. THAT WITH REGARD TO THE GROUND NOS. 1, 2 AND 3, THE FACTS ON RECORD ARE THAT AS PER AIR INFORMATION RECEIVED THE ASSESSEE HAS D EPOSITED CASH IN THREE SAVING BANK ACCOUNT WITH VISHWAS CO-OPERATIVE BANK. INFOR MATION U/S.133(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS REQUISITIONED FROM THE BANK AND THE SAME IS AS UNDER: IN THE THIRD ACCOUNT THE ASSESSING OFFICER HAS STATED TH AT RS.10,51,207 / - ARE TRANSFERRED FROM THE FIRST AND SECOND ACCOUNT. THE REFORE THE ASSESSING OFFICER HAS INFERRED THAT, DELETING THE AMOUNT TOTAL OF THE RECEIPTS COMES TO RS. 54,01,723/ -. OUT OF THE AMOUNT RS. 57,930/ - IS THE INTEREST PAID TO THE ASSESSEE. HENCE, THE ASSESSING OFFICER HAS TAKEN TOTAL CASH DEPOSIT AT RS. 53,63,000/ - AND HAS ADDED IT TO THE TOTAL INCOME UNDER SECTION 69 OF THE ACT. THE ASSESSEE STATED THAT THE C ASH DEPOSIT IN THE BANK ACCOUNT WAS OUT OF THE TRANSACTION FROM SALE OF LAND THA T HE ENTERED WITH GIRISH POPAT MUSALE FOR GAT NO.1362, 274, 278, 339 AT PIMPLEG AON, VAKHARI FOR 68 LACS. SHRI GIRISH MUSALE PAID 59 LACS IN CASH. THE S AATE KHAT WAS EXECUTED ON 3.05.2010. THIS TRANSACTION WAS NOT REGISTERE D. AT THE TIME OF REMAND PROCEEDINGS ON EXAMINATION BY THE ASSESSING OFFICE R SHRI GIRISH POPAT MUSALE ADMITTED THAT HE HAS PAID CASH OF RS.59 LA CS TO THE ASSESSEE ACCOUNT NO. TOTAL RECEIPTS 23/2259 RS.20,62,071/- 23/6/30 RS.10,31,867/- 23/2322 RS.33,58,992/- 4 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 SOURCED OUT OF HIS AGRICULTURAL INCOME AND PENSIONERY BENE FIT OF HIS FATHER. HOWEVER, NO EVIDENCES WERE PRODUCED BEFORE THE ASSESSIN G OFFICER TO SUBSTANTIATE ITS STATEMENT. SHRI GIRISH POPAT MUSALE IS NEIT HER ASSESSED TO TAX NOR FILES HIS RETURN OF INCOME. THE ASSESSING OFFICER IN TH E REMAND PROCEEDINGS CAME TO THE CONCLUSION THAT AFTER GOING THRO UGH THE SATHE KHAT, GAT NO.1362, 274, 278 & 339 ARE THE SAME GAT NOS. WHICH WAS YET TO BE PURCHASED BY SHRI GIRISH POPAT MUSALE AND THEREFORE, THE SOURCES STATED BY SHRI GIRISH POPAT MUSALE ARE AMBIGUOUS. 5. THE ASSESSEE FILED REJOINDER REGARDING REMAND REPORT OF THE ASSESSING OFFICER. THE LD. CIT(APPEALS) OBSERVED THAT THE ENTIRE TRAN SACTION IS CARRIED OUT IN CASH. HE FURTHER OBSERVED THAT IN THE INSTANT CAS E NO DOCUMENT HAS BEEN PLACED IN RESPECT OF SALE OF AGRICULTURAL PRODUCE. NO DOCUMENTARY EVIDENCE HAS BEEN PRODUCED DURING THE COURSE OF ANY PR OCEEDING BEFORE THE ASSESSING OFFICER OR BEFORE HIM TO EXPLAIN THE AVAILABILITY OF C ASH WITH SHRI GIRISH POPAT MUSALE AND BELONGS TO ASSESSEES EXTENDED FAMILY. THERE WAS NO DIRECT EVIDENCE PRODUCED BEFORE THE LD. CIT(APPEALS) TO SU BSTANTIATE THE GENUINENESS OF TRANSACTION OF SALE OF LAND TO SHRI GIRISH POP AT MUSALE FROM WHOM HE HAS ALLEGEDLY RECEIVED ADVANCE FOR SALE OF CO-PER CERNARY LAND. SHRI GIRISH POPAT MUSALE IS NEITHER ASSESSED TO TAX NOR FILES HIS RETURN OF INCOME. THE LD. CIT(APPEALS) AFTER ANALYSING THE ENTIRE FACTS OF T HE CASE CAME TO THE CONCLUSION THAT THE SOURCE OF CASH ALLEGED TO HAVE BEEN GIVEN TO THE ASSESSEE BY SHRI GIRISH POPAT MUSALE WAS NOT CONVINCINGLY ANSWERED AND THAT THE GENUINENESS OF TRANSACTION IS NOT PROVED AND THEREFORE, IT IS CLEAR CASE OF UNEXPLAINED CASH DEPOSITS. THE LD. CIT(APPEALS) IN HIS ELABORA TE ORDER, THEREAFTER, GOES ON TO REFER VARIOUS JUDICIAL PRONOUNCEME NTS ON THE SUBJECT AND ULTIMATELY HAS UPHELD THE ADDITION U/S.69 OF THE ACT MADE BY THE ASSESSING OFFICER. 5 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 6. WE HAVE PERUSED THE CASE RECORDS AND ANALYSED THE FACTS AND CIRCUMSTANCES IN THIS CASE AND HAVE GIVEN CONSIDERABLE TH OUGHT TO THE FINDINGS OF THE LD. CIT(APPEALS). THE FACTS REVEAL THAT THE AS SESSEE IS DOING REGULAR DEPOSITS IN THE AFORESAID ACCOUNTS WITHOUT DISCLOSIN G THEM IN HIS RETURN OF INCOME AND THUS EVADING TAX. IT WAS FIRST THRO UGH THE AIR INFORMATION THAT HE WAS TAKEN INTO TASK IN 2011-12 AND T HEREAFTER, HE HAS EXECUTED SAATE KHAT WITH HIS RELATIVE WHICH WAS ALSO NOT REGISTERED AND WAS LATER CANCELLED. THE ENTIRE TRANSACTION WAS CARRIED IN CAS H SO THAT ANY TRAIL OF MONEY CANNOT BE ESTABLISHED. FOR THE CASH DEPOSIT IN SAM E ACCOUNT DURING 147 PROCEEDINGS AND IN PRECEDING YEAR AND IN SUCCEEDING YEAR THE ASSESSEE HAS STATED THAT THE DEPOSITS ARE RESULT OF ITS UNACCOUN TED PURCHASE AND SALES AND HAS OFFERED IT FOR TAXATION UNDER SECTION 44AD OF THE ACT. THESE ARE SOME OF THE FACTS WHICH COMES FROM THE FINDINGS OF THE LD. CIT(A PPEALS). IN CONSIDERATION OF THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY WITH THE FINDINGS OF THE LD. CIT(APPEALS) IN RESPECT OF THESE GROUNDS AND THE SAME IS THEREFORE, UPHELD. THUS, GROUND NOS. 1, 2 AND 3 RAISED IN APPEAL BY THE ASSESSEE ARE DISMISSED . 7. THE LD. AR OF THE ASSESSEE HAS NOT PRESSED GROUN D NO.4 AND HENCE, GROUND NO.4 IS DISMISSED AS NOT PRESSED . 8. WITH REGARD TO GROUND NOS. 5 TO 8, THE LD. AR OF THE ASS ESSEE PLACED BEFORE US IN THE PAPER BOOK, THE COPY OF ORDER PASSED BY THE PUNE BENCH OF THE TRIBUNAL IN ITA NOS.1517 TO 1519/PUN/2016 FOR THE AS SESSMENT YEARS 2008-09 TO 2010-11 IN ASSESSEES OWN CASE WHEREIN ON THE SAME ISSUE, THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS APPLIED GP RATE @15 % WITH REGARD TO THE ADDITIONAL INCOME IN THE HANDS OF THE ASSESSEE. THE LD . AR OF THE ASSESSEE PRAYED THAT THIS DECISION MAY BE FOLLOWED IN THE INTEREST OF J USTICE. 6 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 9. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE R IVAL CONTENTIONS. WE FIND THAT ON THE SIMILAR ISSUE, THE PUNE BENCH OF THE TRIBUN AL IN ASSESSEES OWN CASE HAS OBSERVED AND HELD AS UNDER: 9. ON PERUSAL OF THE RECORD AND AFTER HEARING RIVA L CONTENTIONS, THE ISSUE WHICH IS RAISED FOR ADJUDICATION IS ON ACCOUNT OF C REDITS IN THE BANK ACCOUNTS MAINTAINED BY THE ASSESSEE, BUT UNDISCLOSE D IN THE RETURN OF INCOME. THE ASSESSEE EXPLAINED THE NATURE OF CREDIT S AND DEBITS OF THE SAID BANK ACCOUNTS AND CLAIMED THAT THE SAME RELATE D TO HIS BUSINESS OF SALE AND PURCHASE OF HARDWARE ITEMS. UNDISPUTEDLY, THE SAID BANK ACCOUNT WITH BANK OF BARODA WAS UNDISCLOSED BANK AC COUNT AND THE SAID RECEIPTS NEED TO BE INCLUDED IN THE TOTAL RECE IPTS DECLARED FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT, HAD DECLARED GROSS PROFIT ON TH E SAID RECEIPTS AND HAD FILED ADDITIONAL INCOME IN THIS REGARD. IN THE ASSESSMENT YEAR 2008- 09, THE GP DECLARED IN THE BOOKS OF ACCOUNT WAS 9.0 3% AND ON THE ADDITIONAL SALES, ASSESSEE DECLARED GP OF 8%. SIMIL ARLY, IN ASSESSMENT YEAR 2009-10, THE GP ORIGINALLY DECLARED BY THE ASS ESSEE ON ACCOUNT OF SALES WAS 9.40% AND IN ASSESSMENT YEAR 2010-11, IT WAS 9.38%. HOWEVER, THE GP DECLARED ON THE ADDITIONAL SALES IN BOTH THESE ASSESSMENT YEARS WAS AT THE RATE OF 11%. THE ASSESS EE HAS FILED THE COPY OF BANK STATEMENTS AT PAGE NO. 26-39 OF THE PA PER BOOK. ON PERUSAL OF THE SAID BANK STATEMENT REFLECTS THAT AGAINST TH E CREDITS ON DIFFERENT DATES, THERE WERE WITHDRAWALS ALSO FROM SAID BANK A CCOUNT ON DAY TO DAY BASIS. SOME OF THE WITHDRAWALS WERE IN CHEQUES ISSUED TO DIFFERENT PARTIES AND SOME OF THE WITHDRAWALS WERE ON ACCOUNT OF CASH WITHDRAWAL. THE ASSESSEE SYSTEMATICALLY FOLLOWED TH IS PROCEDURE FROM MONTH TO MONTH AND YEAR TO YEAR. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, THERE IS MERIT IN THE PLEA OF TH E ASSESSEE THAT SAID BANK ACCOUNT I.E BANK OF BARODA WAS USED FOR BOTH U NACCOUNTED SALES AND PURCHASES. ACCORDINGLY, CREDIT OF PURCHASES MAD E FROM THAT ACCOUNT IS TO BE ALLOWED IN THE HANDS OF THE ASSESSEE. HOWE VER, SINCE COMPLETE DETAILS WERE NOT AVAILABLE, THE INCOME IN THE HANDS OF THE ASSESSEE ON ACCOUNTS OF SAID UNACCOUNTED BUSINESS NEEDS TO BE E STIMATED. 10. THE ASSESSEE IN THE DIFFERENT YEARS UNDER APPEA L HAD DECLARED GP RATE OF 9.03% TO 9.40%. ON THE ADDITIONAL INCOME, T HE ASSESSEE HAD ALSO DECLARED VARYING RATES OF GP I.E 8% TO 11% AND OFFE RED THE SAME IN THE REVISED RETURN OF INCOME. HOWEVER, IN FAIRNESS GP R ATE OF 15% NEEDS TO BE APPLIED TO WORK OUT THE ADDITIONAL INCOME IN THE HANDS OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE AFORESAID DECISION IN RESPECT OF UNE XPLAINED DEPOSIT IN BANK OF BARODA, WE DIRECT THE ASSESSING OFFICER T O APPLY GP RATE AT 15% TO WORK OUT ADDITIONAL INCOME IN THE HANDS OF THE ASS ESSEE. THUS, GROUND NOS. 5 TO 8 RAISED IN APPEAL BY THE ASSESSEE ARE PARTLY ALLOWED . 10. GROUND NO.9 IS GENERAL IN NATURE AND HENCE, NO ADJUD ICATION IS REQUIRED. 7 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 11. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.2226/ PUN/2016 IS PARTLY ALLOWED. ITA NO.1520/PUN/2016 A.Y.2011-12 12. NOW COMING TO ITA NO.1520/PUN/2016, THEREIN ASSESSM ENT WAS COMPLETED U/S.143(3) R.W.S.147 OF THE ACT WHEREIN SAME ADDIT IONS ARE MADE AS IN ITA NO. 2226/PUN/2016. THAT EVEN, THE ENHANCEMENT AND THE ADDITIONS UPHELD BY THE LD. CIT(APPEALS) ARE ALSO SAME. THAT FOR THE SAME GRIEVANCE, NO TWO APPEALS CAN BE PREFERRED BEFORE THIS A UGUST FORUM. THAT SINCE WE HAVE ALREADY DECIDED THE ISSUE IN ITA NO.2226/PUN/2016, T HEREFORE, ON THE SAME ADDITIONS IN ITA NO.1520/PUN/2016 BECOMES IN FRUCTUOUS AND HENCE, IS DISMISSED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.1520/ PUN/2016 IS DISMISSED. ITA NO.1521/PUN/2016 ITA NO.153/PUN/2017 A.YS. 2012-13 & 2013-14 14. AT THE VERY OUTSET, IN ITA NO.153/PUN/2017, WE OBS ERVE THAT THERE IS A DELAY OF 20 DAYS. THE ASSESSEE HAS FILED AFFIDAVIT ALONG WITH P ETITION REGARDING CONDONATION OF DELAY. WE HAVE PERUSED THE DOCUMENTS AN D ARE CONVINCED WITH THE REASONS SUBMITTED BEFORE US. THE LD. DR HAS ALS O CONCEDED TO CONDONATION OF THE DELAY. WE, THEREFORE, IN VIEW OF THE RELEV ANT DOCUMENTS PLACED BEFORE US AND THE JUSTIFIED REASONS THEREIN AND TH E SUBMISSIONS OF THE PARTIES CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING ON MERITS. 15. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE LD. C IT(APPEALS) HAS PASSED AN EX-PARTE ORDER. WITH RESPECT TO THE ADDITIONS , THOUGH WRITTEN SUBMISSIONS WERE FILED, IT WAS ONLY STATEMENT ON FACTS THA T WERE CONSIDERED AND THERE WAS NO SEPARATE WRITTEN SUBMISSIONS FILED BEFORE THE LD. 8 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 CIT(APPEALS). THEREFORE, RIGHTS AND LIABILITIES OF THE PARTIES WERE YET TO BE DECIDED ON MERITS BY THE FIRST APPELLATE AUTHORITY. THE LD .AR OF THE ASSESSEE PRAYED THAT ONE FINAL OPPORTUNITY MAY BE PROVIDED TO THE ASSESSEE SO THAT HE CAN REPRESENT THE CASE ON MERITS BEFORE THE LD.CIT(APPE ALS) WITH REQUISITE DOCUMENTARY EVIDENCES AND DETAILS. 16. THE LD. DR FAIRLY CONCEDED TO THE REQUEST OF THE LD. AR. 17. WE HAVE PERUSED THE APPELLATE ORDERS OF THE FIRST A PPELLATE AUTHORITY IN ITA NO.1521/PUN/2016 AND ITA NO.153/PUN/2017. WE FIND TH AT THE LD. CIT(APPEALS) PASSED AN EX-PARTE ORDER WHEREIN RIGHTS AND LIABILITIES OF THE PARTIES HEREIN ARE YET TO BE DETERMINED. THAT AFTER HEA RING BOTH THE PARTIES AND IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDERS OF THE LD. CIT(APPEALS) IN BOTH THE APPEALS IN ITA NO. 1521/PUN/2016 AND ITA N O.153/PUN/2017 AND RESTORE THE SAME TO THE FILE OF THE LD. CIT(APPEALS) FOR READJUDICATIO N AFTER COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.1521/ PUN/2016 AND ITA NO.153/PUN/2017 ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1853/PUN/2016 A.Y.2011-12 19. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE VE HEMENTLY ARGUED THAT WHILE INITIATING PENALTY PROCEEDINGS U/S.271(1)(C) OF THE AC T, THE ASSESSING OFFICER MENTIONED THAT PENALTY PROCEEDINGS U/S.27 1(1)(C) ARE INITIATED FOR CONCEALMENT OF INCOME. HOWEVER, IN THE PENALTY O RDER, THE ASSESSING OFFICER MENTIONED BOTH THE LIMBS OF SECTION 271(1)(C ) OF THE ACT I.E. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTIC ULARS OF INCOME. THE LD. AR CONTENDED THAT IT IS SETTLED PRINCIPLE OF LAW IF TH E CHARGE IS NOT SPECIFIC THEN THE PENALTY U/S.271(1)(C) OF THE ACT CANNOT BE LEVIED. THAT IN SUPPORT OF HIS CONTENTIONS, THE LD. AR OF THE ASSESSEE RELIED ON THE D ECISION OF 9 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAM SON PERINCHERY IN ITA NO.1154 OF 2014 AND THE DECISION OF HON'BLE KARNAT AKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATH COTTON AND GINNING FACTOR Y REPORTED AS 359 ITR 565 WHEREIN IT HAS BEEN HELD THAT THE SATISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BREACHES U/S.271(1)(C) OF THE ACT FOR INITIATION OF PENALTY PROCEEDINGS WOULD NOT PERMIT PENALTY BE ING IMPOSED FOR THE OTHER BREACH. THUS, THE ORDER IMPOSING PENALTY WAS T O BE MADE ONLY ON THE GROUND ON WHICH THE PENALTY PROCEEDINGS WERE INITIATE D AND IT COULD NOT BE A FRESH GROUND OF WHICH THE ASSESSEE HAD NO NOTICE. 20. WE HAVE PERUSED THE CASE RECORDS AND CONSIDERED T HE JUDICIAL PRONOUNCEMENT PLACED BEFORE US. THE FACTS REVEAL THAT IN ITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AS WELL AS PENALTY ORD ER, THE CHARGE FOR WHICH PENALTY U/S.271(1) (C) OF THE ACT HAS BEEN LEVIED, IS NO T SPECIFIC. IT APPEARS THAT WHILE INITIATING PENALTY PROCEEDINGS, THE ASSES SING OFFICER MENTIONED ONE LIMB I.E. CONCEALMENT OF INCOME BUT AT THE TIME OF LEVYING PENALTY, HE MENTIONED BOTH THE LIMBS I.E. CONCEALMENT OF INC OME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS APPAR ENT THAT THERE IS AMBIGUITY IN THE MIND OF ASSESSING OFFICER AS TO WHICH LIMB/C HARGE, PENALTY IS TO BE LEVIED. 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 10 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 OF INCOME WHILE IMPOSITION OF PENALTY ON THE OTHER LIMB I.E. CONC EALMENT OF INCOME. 21. 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 EMBEDDED IN THE INCOME TAX ACT, 1961 SHOULD GET AN OPP ORTUNITY TO PREPARE HIMSELF FOR THE DEFENSE AS REGARDS TO THE EXACT CHARGE O N 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. TA KING TOTALITY OF FACTS AND LEGAL SCENARIO INTO CONSIDERATION, WE SET ASIDE THE ORD ER OF THE LD. CIT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY FROM THE HANDS OF THE ASSESSEE. 22. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.1853/P UN/2016 IS ALLOWED. 23. TO SUM UP, ORDER PRONOUNCED ON 27 TH DAY OF MARCH, 2019. SD/- SD/- R.S.SYAL PA RTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 27 TH MARCH, 2019. SB ITA 2226/PUN/2016 PARTLY ALLOWED ITA 1520/PUN/2016 DISMISSED ITA 1521/PUN/2016 ALLOWED FOR STATISTICAL PURPOSE. ITA 153/PUN/2017 ALLOWED FOR STATISTICAL PURPOSE ITA 1853/PUN/2016 ALLOWED 11 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-1, NASHIK. 4. THE PR. CIT-1, NASHIK. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 12 NARENDRA P. MUSALE A.YS.2011-12, 2012-13 & 2013-14 DATE 1 DRAFT DICTATED ON 25 .03 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 26 .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