Smt. Bhartiben Prahaladbhai Sewani, Ahmedabad V. DCIT, Central Circle-1(4), Ahmedabad

ITA 1530/AHD/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6331 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 11-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BIREN SHAH
• Section: 271(1)(c); 153A; 274; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ITA NO. 1530/AHD/2018 (ASSESSMENT YEAR : 2011-12) SMT. BHARTIBEN PRAHLADBHAI SEWANI, 48, ASHWAMEGH BUNGLOWS III, NR. SOMESHWAR DERASAR, SATELLITE ROAD, AHMEDABAD. VS. DY. CIT., CENTRAL CIRCLE 1(3), AHMEDABAD. [PAN NO. ACSPS 5476 L] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI SATISH SOLANKI, SR. D.R. RESPONDENT BY : SHRI BIREN SHAH, A.R. DATE OF HEARING 23/09/2019 DATE OF PRONOUNCEMENT 17/10/2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 13.04.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 11, AHMEDABAD ARISING OUT OF THE ORDER DATED 27.03.2017 PASSED BY THE DCIT, CENTRAL CIRCLE 1(4), AHMEDABAD UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) FOR THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS LEADING TO THIS CASE IS THIS THA T A SEARCH U/S. 132 OF THE ACT WAS CONDUCTED IN THE CASE OF SEWANI GROUP ON 20.12.2011 IN WHICH THE ASSESSEE WAS ALSO COVERED. CONSEQUENTLY, PROCEEDING U/S 153A WAS INIT IATED BY AND UNDER A NOTICE DATED 21.12.2012 WHEREUPON ON 28.03.2013, THE ASSESSEE FI LED THE RETURN OF INCOME FOR A.Y. - 2 - ITA NO.1530/AHD/2018 SMT. BHARTIBEN PRAHALAD BHAI SEWANI VS DCIT ASST.YEAR 2011-12 2011-12 U/S 153A OF THE ACT DECLARING TOTAL INCOME OF RS.71,54,330/-. SUBSEQUENTLY FOLLOWING ADDITIONS WERE MADE UPON FINALIZING THE A SSESSMENT U/S 153 OF THE ACT: A. DISALLOWANCE MADE ON ACCOUNT OF EXCESS LOSS CLAIMED UNDER THE HEAD OF INCOME FROM HOUSE PROPERTY RS.8,85,062/- B. ADDITION ON ACCOUNT OF CAPITAL GAIN NOT SHOWN IN RETURN ON INCOME. RS.72,897/- C. DISALLOWANCE MADE ON ACCOUNT OF EXCESS INTEREST RS.6,73,557/- PENALTY PROCEEDING WAS ALSO INITIATED U/S 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSING O FFICER. HOWEVER, WHILE IMPOSING PENALTY BY AND UNDER THE ORDER DATED 27.03.2017, TH E LEARNED DCIT, CENTRAL CIRCLE 1(4), AHMEDABAD IMPOSED PENALTY AMOUNTING TO RS.4,9 6,650/- U/S 271(1)(C) OF THE ACT IN THE FOLLOWING MANNER: IN VIEW OF THE ABOVE, ON THE BASIS OF THE FACTS A ND CIRCUMSTANCES OF THE CASE, I AM SATISFIED THAT THE ASSESSEE HAS COMMITTED DEFAUL T U/S 271(1)(C) OF THE ACT BY WAY OF FURNISHING OF INACCURATE PARTICULARS OF INCO ME / CONCEALMENT OF INCOME AND FIT CASE FOR LAVING PENALTY U/S 271(1)(C) OF THE AC T THUS, THE REVENUE HAS NOT BEEN SATISFIED TO THE SPE CIFIC GUILT COMMITTED BY THE ASSESSEE. NO SPECIFIC CONCLUSION, THEREFORE, HAS BE EN MADE BY THE ASSESSING OFFICER WHILE IMPOSING PENALTY. WE FIND THAT THOUGH THE LEA RNED CIT(A) IN APPEAL HAS REJECTED SUCH PENALTY TO THE TUNE OF RS.1,97,339/- THEREBY D ELETED RS.2,99,311/- BUT THE BASIC AMBIGUITY PREVAILING IN THE ORDER PASSED BY THE LEA RNED AO IN NOT MENTIONING THE SPECIFIC COMMISSION OF OFFENCE HAS NOT BEEN TAKEN C ARE OF. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LEARNED ADVOCATE APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ORDER OF PENALTY DOES NOT FULFILL THE CRITERIA LAID DOWN UNDER SECTION 271(1)(C) OF THE ACT. SPECIFIC C HARGE, THOUGH REQUIRES TO BE - 3 - ITA NO.1530/AHD/2018 SMT. BHARTIBEN PRAHALAD BHAI SEWANI VS DCIT ASST.YEAR 2011-12 MENTIONED IN THE PENALTY ORDER AS TO WHETHER PENALT Y IS BEING IMPOSED FOR CONCEALMENT OF INCOME OR FOR INACCURATE PARTICULARS OF INCOME AS H ELD BY DIFFERENT HIGH COURTS HAS NOT BEEN MENTIONED AND THUS THE PENALTY IS INVALID AS T HE CASE MADE OUT BY THE ASSESSEE. THE LEARNED AO HAS NEITHER SPECIFIED THE ALLEGED GUILT COMMITTED BY ASSESSEE BY FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME WHICH IS NOTHING BUT NON APPLICATION OF MIND AS SUBMITTED BY THE LEARNED AR. IN THIS ASPECT, LEARNED AR RELIED UPON THE JUDGMENT PASSED BY THE HONBLE JURISDICTIO NAL HIGH COURT IN THE MATTER OF SNITA TRANSPORT PVT. LTD-VS-ACIT REPORTED IN 42 TAXMANN.C OM 54 WHERE IT WAS FURTHER HELD THAT WHILE IMPOSING PENALTY U/S 271(1)(C) OF THE AC T THE AO SHOULD APPLY HIS MIND AND TO MAKE IT CLEAR AS TO WHETHER HE HAS PROCEEDED AND FI NALIZED ON THE BASIS THAT THE TAX PAYER HAS CONCEALED HIS INCOME OR HE HAD FURNISHED INACCU RATE PARTICULARS OF INCOME, WHICH ACCORDING TO THE LEARNED AR, HAS NOT BEEN FOLLOWED IN THE INSTANT CASE BY THE LEARNED AO WHILE IMPOSING PENALTY AGAINST THE ASSESSEE AT T HE FINAL STAGE. THE LEARNED AR ALSO RELIED UPON THE JUDGMENT PASSED BY THE GUJARAT HIGH COURT IN THE CASE OF CIT-VS-JYOTI LTD. REPORTED IN [2013] 34 TAXMANN.COM 65 (GUJARAT) AND ALSO RELIED UPON THE ORDER PASSED BY THE HONBLE TRIBUNA L, AHMEDABAD BENCHES IN THE CASE OF DHARMESH DHULABHAI PRAJAPATI-VS-ITO IN ITA NO.1570/ AHD/2017 FOR A.Y. 2011-12 AND ALSO THE CASE OF SMT. USHABEN ATULBHAI SHAH IN ITA NO.197/AHD/2017 FOR A.Y 2012-13. THE ORDER PASSED BY THE HONBLE TRIBUNAL IN ITA NO. 99/AHD/2017 FOR A.Y. 2008-09 HAS ALSO BEEN RELIED UPON BY THE LEARNED AR. ON THE CON TRARY THE LEARNED DR RELIED UPON THE ORDER PASSED BY THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RESPECTIVE PARTIES, WE HAVE AL SO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ORDER IMPOSIN G PENALTY HAS NOT SPECIFIED THE GUILT COMMITTED BY THE ASSESSEE. IN SIMILAR CIRCUMSTANCES THE HONBLE COURT PASSED AN ORDER IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION WHEREO F IS AS FOLLOWS: - 4 - ITA NO.1530/AHD/2018 SMT. BHARTIBEN PRAHALAD BHAI SEWANI VS DCIT ASST.YEAR 2011-12 4. WITH ASSISTANCE OF THE LD.REPRESENTATIVES, WE H AVE GONE THROUGH THE RECORD CAREFULLY. IN THE CASE OF SNITA TRANSPORT P.LTD. (S UPRA), HONBLE JURISDICTIONAL HIGH COURT HAS OBSERVED THAT WHILE ISSUING NOTICE UNDER SECTION 271(1)(C) R.W.S. 274 PROVIDE AN OPPORTUNITY TO EXPLAIN AS TO WHY PENALTY BE NOT IMPOSED. IF AN ASSESSING OFFICER USED EXPRESSION OR IN BETWEEN THE CONCEALMENT OF INCOM E/FURNISHING INACCURATE PARTICULARS, THEN THAT SHOW CAUSE NOTICE BE NOT FATAL TO THE PRO CEEDINGS, BUT WHILE VISITING THE ASSESSEE WITH PENALTY THE LD.AO OUGHT TO HAVE ITA N O.99/AHD/2017 - 3 - RECORDED A SPECIFIC FINDING, FOR WHICH BREACH, HE HAS VISITED THE ASSESSEE WITH PENALTY I.E. WHETHER HE HAS VISITED THE ASSESSEE WITH PENALTY FOR CONCEALME NT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE PENALTY ORDER HE CANN OT USE BOTH THE EXPRESSION. THE DISCUSSION MADE BY THE HONBLE COURT IN PARA-9 IS W ORTH TO NOTE. IT READS AS UNDER: 9. REGARDING THE CONTENTION THAT THE ASSESSING OFF ICER WAS AMBIVALENT REGARDING UNDER WHICH HEAD THE PENALTY WAS BEING IMPOSED NAME LY FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS, WE MAY RECORD THAT THOUGH IN THE ASSESSMENT ORDER THE ASSESSING OFFICE R DID ORDER INITIATION OF PENALTY ON BOTH COUNTS, IN THE ULTIMATE ORDER OF PE NALTY THAT HE PASSED, HE CLEARLY HELD THAT LEVY OF PENALTY IS SUSTAINED IN VIEW OF T HE FACT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME. THUS INSOFAR A S FINAL ORDER OF PENALTY WAS CONCERNED, THE ASSESSING OFFICER WAS CLEAR AND PENA LTY WAS IMPOSED FOR CONCEALING PARTICULARS OF INCOME. IN LIGHT OF THIS, WE MAY PERUSE THE DECISION OF THIS COURT IN CASE OF MANU ENGINEERING WORKS (SUPRA ). IN THE SAID DECISION, THE DIVISION BENCH CAME TO THE CONCLUSION THAT LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE FOR PENALTY, BUT IT WAS INCUMBE NT UPON THE ASSESSING AUTHORITY TO COME TO A POSITIVE FINDING AS TO WHETHER THERE W AS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY THEM. IF NO SUCH CLEAR CUT FINDING IS REACHED BY THE AUTHORITY, PENALTY CANNOT BE LEVIED. IT WAS A CASE IN WHICH IN FINAL C ONCLUSION THE AUTHORITY HAD RECORDED THAT 'I AM OF THE OPINION THAT IT WILL HAV E TO BE SAID THAT THE ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISH ED INACCURATE PARTICULARS OF SUCH INCOME.' IT WAS IN THIS RESPECT THE BENCH OBSE RVED THAT 'NOW THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CASE OR A QUASI-CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDING AS TO WHETHER THE RE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULA RS OF SUCH INCOME HAD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR CUT FINDIN G WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED B Y THE IAC WAS LIABLE TO BE STRUCK DOWN.' 5. IF THE PENALTY ORDER IS PERUSED IN THE LIGHT OF THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT, THEN IT WILL REVEAL THAT THE LD.AO WAS ITA NO.99/AHD/2017 - 4 - NOT SPECIFIC IN HIS FINDING FOR WHICH HE HAS VISITED THE ASSESSE E WITH PENALTY. THEREFORE, THIS ORDER IS NOT IN LINE OF LAW LAID DOWN BY THE HONBLE JURISDI CTIONAL HIGH COURT, AND HENCE NOT SUSTAINABLE. THE LD.CIT(A) HAS ERRED IN UPHOLDING T HIS ORDER OF THE AO. WE ALLOW THIS APPEAL OF THE ASSESSEE AND QUASH THE PENALTY ORDER. - 5 - ITA NO.1530/AHD/2018 SMT. BHARTIBEN PRAHALAD BHAI SEWANI VS DCIT ASST.YEAR 2011-12 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . IN A NUT SHELL IT APPEARS FROM THE PENALTY ORDERS T HAT THE LEARNED AO HAS NOT LEVIED THE PENALTY ON THE SPECIFIC CHARGE AS MANDATED U/S 271 (1)(C) OF THE ACT. IN SUCH FACTS AND CIRCUMSTANCES THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SNITA TRANSPORT PVT. LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX REPO RTED IN 42 TAXMANN.COM 54 HAS HELD THAT PENALTY CANNOT BE IMPOSED WITHOUT MENTIONING T HE SPECIFIC CHARGE. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW: 9. REGARDING THE CONTENTION THAT THE ASSESSING OFFIC ER WAS AMBIVALENT REGARDING UNDER WHICH HEAD THE PENALTY WAS BEING IMPOSED NAME LY FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS, WE MAY RECORD THAT THOUGH IN THE ASSESSMENT ORDER THE ASSESSING OFFICER DID ORDER IN ITIATION OF PENALTY ON BOTH COUNTS, IN THE ULTIMATE ORDER OF PENALTY THAT HE PASSED, HE CL EARLY HELD THAT LEVY OF PENALTY IS SUSTAINED IN VIEW OF THE FACT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME. THUS INSOFAR AS FINAL ORDER OF PENALTY WAS CONCERNE D, THE ASSESSING OFFICER WAS CLEAR AND PENALTY WAS IMPOSED FOR CONCEALING PARTICULARS OF I NCOME. IN LIGHT OF THIS, WE MAY PERUSE THE DECISION OF THIS COURT IN CASE OF MANU ENGINEER ING WORKS (SUPRA). IN THE SAID DECISION, THE DIVISION BENCH CAME TO THE CONCLUSION THAT LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE FOR PENALTY, BUT IT WAS INCUMBENT UPON THE ASSESSING AUTHORITY TO COME TO A POSITIVE FINDING AS TO WHETHER THERE W AS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF S UCH INCOME HAD BEEN FURNISHED BY THEM. IF NO SUCH CLEAR CUT FINDING IS REACHED BY TH E AUTHORITY, PENALTY CANNOT BE LEVIED. IT WAS A CASE IN WHICH IN FINAL CONCLUSION THE AUTHORI TY HAD RECORDED THAT 'I AM OF THE OPINION THAT IT WILL HAVE TO BE SAID THAT THE ASSES SEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PARTICULARS OF SUCH INC OME.' IT WAS IN THIS RESPECT THE BENCH OBSERVED THAT 'NOW THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CA SE OR A QUASI-CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDIN G AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER AN Y INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR CUT FINDING WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IAC WAS LIABLE TO BE STRUCK DOWN.' THE PRINCIPLES LAID DOWN BY THE HONBLE JURISDICTI ONAL HIGH COURT IN THE ABOVE CASE ARE SQUARELY APPLICABLE TO THE FACTS OF THE CA SE IN HAND. AT THE COST OF REPETITION WE OBSERVE THAT THE AO HAS NOT MENTIONED THE SPECIFIC CHARGE IN ITS PENALTY ORDERS WHETHER IT WAS LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISH ING INACCURATE PARTICULARS OF INCOME. - 6 - ITA NO.1530/AHD/2018 SMT. BHARTIBEN PRAHALAD BHAI SEWANI VS DCIT ASST.YEAR 2011-12 THEREFORE, RESPECTFULLY RELYING UPON THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT, WE ARE OF THE OPINION THAT THE PENALTY LEVIED BY TH E AO AND CONFIRMED BY THE LEARNED CIT (A) IS NOT SUSTAINABLE IN THE EYE OF LAW. THE P ENALTY, THEREFORE, IS DELETED. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 17/10/2019 SD/- SD/- ( WASEEM AHMED ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 17/10/2019 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-11, AHMEDABAD. 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 25.09.2019 (COVERED CASE 3) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26.09.2019 3. OTHER MEMBER. 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 16.10.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER