MADHULI CO-OPERATIVE HOUSING SOCIETY LTD., MUMBAI V. ACIT 18(1), MUMBAI

ITA 1542/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1945 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 14-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIK
• Keywords: Initiation of penalty proceedings; Revised return
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 1542 / / 2019 (%. .2010-11 ) ITA NO. 1542/MUM/2019 (A.Y.2010-11) MADHULI CO-OP HSG.SOC.LTD, 20, MADHULI APARTMENT, BEHIND POONAM CHAMBERS, WORLI, MUMBAI 400 018 PAN: AAAAM2256K / VS. : / APPELLANT THE ACIT 18(1), C-10, 7 TH FLOOR, PRATYAKSHA KAR BHAWAN, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI 400 051 : / RESPONDENT ASSESSEE BY : NONE REVENUE BY : MS KAVITA P. KAUSHIK / DATE OF HEARING : 17/09/2020 / DATE OF PRONOUNCEMENT : 24/11/2020 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-26, MUMBAI ( IN SHORT THE CIT (A)) DATED 24/12/2018 FOR THE ASSESSMENT YEAR 2010-11 CONFIRMING LEVY OF PENALT Y UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2 ITA NO. 1542/MUM/2019 (A.Y.2010-11) 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE : THE ASSESSEE IS A CO-OPERATIVE HOUSING SOCIETY. THE ASSESSEE IN ITS ORIGINAL RETURN OF INCOME FAILED TO DISCLOSE RENTAL INCOME FROM M/S. AMMA LINES. THE A SSESSEE THEREAFTER, FILED REVISED RETURN OF INCOME ALBEIT BEYOND THE DUE DATE, DIS CLOSING RENTAL RECEIPTS OF RS.33,60,000/- FROM M/S. AMMA LINES. THE ASSESSING OFFICER IN ASSESSMENT PROCEEDING UNDER SECTION 143(3) OF THE ACT INITIATE D PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALING THE PARTICULARS OF INCOM E. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 07 /11/2012. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY OF RS.7,45,000/- U NDER SECTION 271(1)(C) OF THE ACT VIDE ORDER DATED 13/03/2013 FOR FURNISHING INACCURA TE PARTICULARS FOR NON-DISCLOSURE OF RENTAL RECEIPTS. AGGRIEVED, BY THE PENALTY ORDE R DATED 13/03/2013, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) VIDE IM PUGNED ORDER DISMISSED THE APPEAL OF ASSESSEE AND CONFIRMED THE LEVY OF PENALTY. 3. MS. KAVITA P. KAUSHIK, REPRESENTING THE DEPARTME NT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE AP PEAL OF ASSESSEE. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE A SSESSEE FAILED TO DISCLOSE RENTAL RECEIPTS IN THE ORIGINAL RETURN OF INCOME. IT WAS ONLY AFTER PASSING OF THE ASSESSMENT ORDER IN ASSESSMENT YEAR 2009-10 THAT THE ASSESSEE REVISED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 BEYOND TIME LIMIT DISCLOSIN G RENTAL INCOME FROM M/S. AMMA LINES. THE ASSESSING OFFICER WAS JUSTIFIED IN LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR NON-DISCLOSURE OF RENTAL I NCOME. 4. THE SUBMISSIONS MADE BY LD.DEPARTMENTAL REPRESEN TATIVE AND ORDERS OF AUTHORITIES BELOW CONSIDERED. A PERUSAL OF THE ASS ESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT DATED 07/11/2012 REVEAL T HAT PENALTY FOR NON-DISCLOSURE OF RENTAL INCOME IN THE RETURN OF INCOME WAS INITIATE D ON THE GROUND OF CONCEALING PARTICULARS OF INCOME. THE RELEVANT EXTRACT OF THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER HAS INITIATED PENALTY IS REPRODUC ED HEREIN BELOW. 3 ITA NO. 1542/MUM/2019 (A.Y.2010-11) 5............. AS THE ASSESSEE HAS FAILED TO DISC LOSE RENTAL RECEIPTS I.E. LICENCE FEES RECEIVED FRO M M/S. AMMA LINES TO AN EXTENT OF RS.2,80,000/- X 12 MONTHS = RS.33,60,000/- AND LAWN/GARDEN HIRE CHARGES OF RS.1,21,000/- THE SAME IS REQUIRED TO BE ADDED TO ITS TOTAL INCOME. SINCE THE ASSESSEE HAS CONCEALED PARTICULA RS OF ITS INCOME, PENALTY PROCEEDINGS UNDER SECTION. 271(1)(C) IS INITIATED SEPARATELY. THEREAFTER, THE ASSESSING OFFICER PASSED ORDER UND ER SECTION 271(1)(C) OF THE ACT LEVYING PENALTY DATED 13/03/2013. IN ORDER LEV YING PENALTY, THE ASSESSING OFFICER IN PARA-1 AND PARA 5.1 OBSERVED THAT THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED FOR FURNISHING INACCURATE PARTICULARS. THE RELEVANT EXTRACT OF PARA-1 AND PARA 5.1 OF PENALTY ORDER ARE REPRODUCED HEREIN BELOW: .............PENALTY PROCEEDINGS U/S 271(1)(C) WE RE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME FOR NON DISCLOSURE OF RENTAL RECEIPTS AMOUNTING TO RS.24,20,999/- XXX XXX 5.1 IN THE ASSESSMENT ORDER ITSELF PENALTY PROCEED INGS U/S.271(1)(C) WERE INITIATED ON THE GROUND OF FURNISHING OF INACCURATE PARTICULARS OF I NCOME AND ISSUED NOTICE U/S .274 R.W.S. 271(1)(C) OF THE I.T. ACT, 1961. FOR THE SAKE OF B REVITY THE CONCLUDING PARAGRAPH OF THE ASSESSMENT ORDER IS REPRODUCED AS UNDER: A PERUSAL OF THE ASSESSMENT ORDER AND THE ORDER LEV YING PENALTY SHOWS THAT THE ASSESSING OFFICER WAS NOT CLEAR AS TO UNDER WHICH L IMB OF SECTION 271(1)(C) OF THE ACT PENALTY IS TO BE LEVIED. THERE WAS AMBIGUITY IN TH E MIND OF ASSESSING OFFICER FOR INVOKING THE CORRECT LIMB OF SECTION 271(1)(C) OF T HE ACT WHILE INITIATING PENALTY PROCEEDINGS AND AT THE TIME OF LEVY OF PENALTY. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF T. ASHOK PAI VS. CIT, 292 ITR 11 H AS HELD THAT FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME ARE TWO DI FFERENT EXPRESSIONS HAVING DIFFERENT CONNOTATIONS. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY REPORTED AS 88 TAXAMANN.COM 413 H AS HELD THAT ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON GROUND FOR WHICH PENALTY PROCEEDINGS HAVE BEEN INITIATED. THE RELEVANT EXTRACT OF THE SAME IS REP RODUCED AS UNDER:- 6. . THE ABOVE SUBMISSION ON THE PART OF THE REVEN UE IS IN THE FACE OF THE DECISION OF THE SUPREME COURT IN T. ASHOK PAI V. CIT[2007] 292 ITR 11/161 TAXMAN 340 [RELIED UPON IN 4 ITA NO. 1542/MUM/2019 (A.Y.2010-11) MANJUNATH COTTON & GINNING FACTORY (SUPRA)] - WHERE IN IT IS OBSERVED THAT CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME IN SECTION 271(L)(C) OF THE ACT, CARRY DIFFERENT MEANINGS/CONNOTATIONS. THEREFORE. T HE SATISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BREACHES MENTION ED UNDER SECTION 271(L)(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 AN ASSESSEE WOULD RESPO ND TO THE GROUND ON WHICH THE PENALTY HAS BEEN INITIATED/NOTICE ISSUED. IT MUST, THEREFOR E, FOLLOW THAT THE ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON THE GROUND OF WHICH THE PENA LTY PROCEEDINGS HAS BEEN INITIATED, AND IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSE E HAS NO NOTICE. 5. IN THE INSTANT CASE, THE ASSESSING OFFICER HAS I NITIATED PENALTY FOR CONCEALMENT OF PARTICULARS AND HAS LEVIED PENAL TY FOR FURNISHING INACCURATE PARTICULARS. THE ASSESSING OFFICER HAS LEVIED PENA LTY UNDER SECTION 271(1)(C) OF THE ACT, FOR THE REASON DIFFERENT FROM THE REASON FOR I NITIATING PENALTY. THE REASON FOR INITIATING PENALTY AND REASON FOR LEVY OF PENALTY H AS TO BE CONSISTENT. IF THERE IS AMBIGUITY WITH REGARDING TO LIMB FOR WHICH PENALTY IS INITIATED AND LEVIED, THE PENALTY ORDER IS UNSUSTAINABLE. IN THE PRESENT CASE, THE M ANNER IN WHICH PENALTY HAS BEEN LEVIED IS CLEARLY IN VIOLATION OF THE LAW EXPOUNDED BY THE HON'BLE SUPREME COURT OF INDIA AND THE HON'BLE JURISDICTIONAL HIGH COURT. THEREFORE, PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT IS QUASHED. 6. IN THE RESULT, THE IMPUGNED ORDER IS QUASHED AND APPEAL BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON TUESDAY THE 24 TH DAY OF NOVEMBER, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 24 /11/2020 VM , SR. PS(O/S) 5 ITA NO. 1542/MUM/2019 (A.Y.2010-11) COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *+ / THE RESPONDENT. 3. ,+ ( )/ THE CIT(A)- 4. ,+ CIT 5. -.*+% , . . . , / DR, ITAT, MUMBAI 6. ./012 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI