Appeal details
Counselvise Citation
[2017] 126 COUNSELVISE.COM (IT) 7304 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 10 month(s) 25 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-10-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
21-09-2017
Assessment Year
2009-2010
Appeal Filed On
30-11-2015
Judgement Text
] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1553/PUN/2015 [ [ / ASSESSMENT YEAR : 2009-10 M/S. GREEN HOUSE PROPERTIES, 4/5, RIDDHI PARK, BELOW RATNAKAR BANK, TILAK WADI CORNER, NASHIK 422 002. PAN : AAKFG3348M. . / APPELLANT V/S ASST.COMMISSIONER OF INCOME TAX, CIRCLE (1), NASHIK. . / RESPONDENT ASSESSEE BY : SMT. DEEPA KHARE. REVENUE BY : SHRI AJAY MODI. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL OF THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 1, NASHIK DATED 01.10.2015 FOR THE ASSESSMENT YEAR 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- ASSESSEE IS A FIRM STATED TO BE DERIVING INCOME FROM BUSINESS RUNNING UNDER THE NAME AND STYLE OF GREEN HOUSE PROPERTIES. / DATE OF HEARING : 21.09.2017 / DATE OF PRONOUNCEMENT: 25.10.2017 2 ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2009-10 ON 23.09.2011 DECLARING TOTAL INCOME AT RS.47,11,268/-. AO NOTED THAT SINCE THE RETURN OF INCOME WAS NOT FILED WITHIN THE TIME PRESCRIBED U/S 139(1) AND 139(4) OF THE ACT, THE RETURN OF INCOME FILED BY THE ASSESSEE ON 23.09.2011 WAS TREATED AS NON EST. ON THE BASIS OF INFORMATION AVAILABLE ON RECORD, AO NOTED THAT INCOME TO THE TUNE OF RS.47,11,268/- HAS ESCAPED FROM ASSESSMENT AND ACCORDINGLY ISSUED NOTICE U/S 148 OF THE ACT. THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147/148 OF THE ACT VIDE ORDER DT.28.03.2013 AND THE TOTAL INCOME WAS DETERMINED AT RS.55,11,268/- INTER-ALIA BY DISALLOWING DEVELOPMENT EXPENDITURE OF RS.8,00,000/-. ON THE AFORESAID DISALLOWANCE OF DEVELOPMENT EXPENDITURE, AO VIDE ORDER DT.19.09.2013 LEVIED PENALTY OF RS.2,47,200/- U/S 271(1)(C) OF THE ACT ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALING THE INCOME. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.01.10.2015 (IN APPEAL NO.NSK/CIT(A)-1/657/2013-14) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LEARNED HONBLE COMMISSIONER OF INCOME TAX APPEALS I, NASHIK IS WRONG IN CONFIRMING THE PENALTY U/S 271(1)(C) FOR SUBMISSION OF INACCURATE PARTICULARS OF PROVIDING PROPORTIONATE EXPENDITURE OF LAND DEVELOPMENT, ELECTRICITY POLLS ROADS ETC. OF RS.8,00,000/- IN PROFIT AND LOSS ACCOUNT. 2. THE LEARNED ASSESSING OFFICER AND HONBLE COMMISSIONER OF INCOME TAX APPEALS I, NASHIK FAILED TO APPRECIATE THE FACT THAT LAND DEVELOPMENT, ROADS, ELECTRIC POLLS EXPENDITURES PERTAINING TO THE SALE OF LAND AND PERTAINING TO FINANCIAL YEAR 2008-09 (A.Y. 2009-10) THOUGH TO BE EXPENDED IN SUBSEQUENT YEARS. DOES NOT AMOUNT TO SUBMISSION OF INACCURATE PARTICULARS FOR A.Y. OF PENALTY U/S 271(1)(C). 3. THE LEARNED ASSESSING OFFICER AND HONBLE COMMISSIONER OF INCOME TAX APPEALS I, NASHIK HAS COMMITTED A MISTAKE OF CONFIRMING PENALTY U/S 271(1)(C) FOR INACCURATE PARTICULARS FOR DISALLOWANCE OF CLAIM OF EXPENDITURE OF RS.8,00,000/- 3 3. BEFORE US, LD.A.R. SUBMITTED THAT ALL THE GROUNDS ARE INTER- CONNECTED AND ARE WITH RESPECT TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 4. BEFORE US, LD.A.R. SUBMITTED THAT WHILE FRAMING THE ASSESSMENT U/S 143(3) R.W.S 147/148 OF THE ACT, AO HAD MADE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEVELOPMENT EXPENDITURE AMOUNTING TO RS.8,00,000/- AND DETERMINED THE TOTAL INCOME AT RS.55,11,268/- AS AGAINST THE INCOME OF RS.47,11,268/- DECLARED BY THE ASSESSEE. ON THE ADDITION MADE OF RS.8 LACS, AO LEVIED PENALTY OF RS.2,47,200/- U/S 271(1)(C) OF THE ACT. SHE POINTING TO THE ORDERS PASSED BY THE AO AND SUBMITTED THAT WHILE PASSING THE ASSESSMENT ORDER, AO HAS NOT RECORDED ANY SATISFACTION FOR LEVY OF PENALTY BUT WHILE PASSING THE PENALTY ORDER U/S 271(1)(C) OF THE ACT, THE AO HAS LEVIED PENALTY FOR CONCEALMENT OF INCOME AS WELL AS FOR FURNISHING INACCURATE PARTICULARS OF INCOME. SHE RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY (ITA NO.1154 OF 2014 ORDER DT.05.01.2017), SUBMITTED THAT WHEN INITIATION OF PENALTY IS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND PENALTY WAS LEVIED ON CONCEALMENT OF INCOME, THEN IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO ASSESSEE, PENALTY U/S 271(1)(C) CANNOT BE LEVIED. SHE THEREFORE SUBMITTED 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 MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN THE PRESENT CASE, PENALTY HAS BEEN LEVIED ON THE DISALLOWANCE OF DEVELOPMENT EXPENDITURE OF 4 RS.8,00,000/-. THE PERUSAL OF ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147/148 OF THE ACT REVEALS THAT AO HAD INITIATED PENALTY PROCEEDING BUT NO SATISFACTION WAS RECORDED WHILE PASSING THE ASSESSMENT ORDER. THEREAFTER IN THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT, AO HELD THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME AND HAD CONCEALED THE INCOME U/S 271(1)(C) OF THE ACT. IT IS A SETTLED LAW THAT WHILE LEVYING PENALTY FOR CONCEALMENT, THE AO HAS TO RECORD SATISFACTION AND THEREAFTER COME TO A FINDING IN RESPECT 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 ASSESSMENT AS TO WHETHER THE ASSESSEE HAD CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THEREAFTER, NOTICE U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT IS TO BE ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER THEREAFTER HAS TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR NON-SATISFACTION OF EITHER OF THE LIMBS. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HAS TO COME TO A FINDING AS TO WHETHER THE ASSESSEE HAS CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 WITH OTHER ITA NOS.953 OF 2014, 1097 OF 2014 AND 1226 OF 2014, VIDE JUDGMENT DATED 05.01.2017 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. IN THE PRESENT CASE, AS NOTED HEREINABOVE, IT IS SEEN THAT THE AO HAS NOT RECORDED ANY SATISFACTION FOR LEVY OF PENALTY IN THE ASSESSMENT ORDER BUT HAD LEVIED PENALTY ON BOTH THE LIMBS I.E., FOR CONCEALMENT OF INCOME AND FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WHILE 5 PASSING THE PENALTY ORDER. CONSIDERING THE AFORESAID FACTS IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SAMSON 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 POWER OF AO 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 ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 25 TH DAY OF OCTOBER, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 25 TH OCTOBER, 2017. YAMINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-2, NASHIK. CIT-2, NASHIK. , , / DR, ITAT, B PUNE; [ / GUARD FILE. / BY ORDER // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE.
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