Trilokchand Tejandas Kalani, Mumbai V. Income-tax Officer,

ITA 1611/PUN/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9195 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-08-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 22-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Search and seizure; Retrospective amendment
• Section: 271(1)(c); 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER . / ITA NO.1611/PUN/2014 / ASSESSMENT YEAR : 2009-10 SH. MOHINDER TRILOKCHAND KALANI, LEGAL HEIR OF LATE SHRI TRILOKCHAND KALANI 3201, VERONA, CLIFF AVENUE ROAD, HIRANANDANI ESTATE, MUMBAI 400 076 PAN : AJDPK9428N VS. ITO, CENTRAL-3, NASHIK APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, NASHIK ON 26-06-2014 CONFIRMING THE PENALTY OF RS.45,20,741/- IMP OSED BY THE ASSESSING OFFICER U/S.271(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT KALANI GROUP OF CASES WAS SUBJECTED TO SEARCH AND SEIZURE ACTION U/S.132(1 ) OF THE ACT. THE ASSESSEE IS PART OF THE KALANI GROUP. THE AO C OMPLETED APPELLANT BY SHRI RAKESH JOSHI RESPONDENT BY SHRI ABHIJIT HALDER DATE OF HEARING 03-10-2019 DATE OF PRONOUNCEMENT 04-10-2019 ITA NO.1611/PUN/2014 A.Y. 2009-10 2 THE ASSESSMENT FOR THE A.Y. 2009-10 AT RS.1,35,25,208/- AS AGAINST THE RETURNED INCOME OF RS.1,32,50,079/-. SUCH RETURNED INCOME INCLUDED A SUBSTANTIAL AMOUNT OF INCOME SURRENDERED BY THE ASSESSEE. THEREAFTER, PENALTY WAS IMPOSED ON THE TOTAL A SSESSED INCOME AMOUNTING TO RS.45,20,741/-, BEING, 100% OF THE A MOUNT OF TAX SOUGHT TO BE EVADED, WHICH CAME TO BE AFFIRMED IN THE FIRST APPEAL. AGGRIEVED THEREBY, THE ASSESSEE HAS APPROACHED THE TRIBUNAL. 3. THE MAIN CONTENTION PUT FORTH ON BEHALF OF THE ASSES SEE IS THAT THE AO FAILED TO RECORD PROPER SATISFACTION IN TERMS OF SE CTION 271(1)(C) IN THE ASSESSMENT ORDER AS WELL AS THE NOTICE AND THE PENALTY ORDER WITHOUT CLEARLY INDICATING WHETHER IT WAS A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULAR S OF INCOME AND HENCE THE PENALTY BE QUASHED. 4. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELE VANT MATERIAL ON RECORD. THE ASSESSMENT ORDER HAS BEEN GONE THROUGH IN WHICH IT IS SEEN THAT THE AO, AT THE END OF THE ORDER, HAS G IVEN DIRECTION FOR INITIATING PENALTY PROCEEDINGS. AFTER THE INSERTION OF SUB-SECTION (1B) TO SECTION 271 BY THE FINANCE ACT, 2008, WITH RETROSPECTIVE EFFECT FROM 1.4.1989, ONCE THE AO ISSUES DIR ECTION IN THE ASSESSMENT ORDER TO INITIATE PENALTY PROCEEDINGS U/S.271(1) (C) ITA NO.1611/PUN/2014 A.Y. 2009-10 3 OF THE ACT, THE AO SHOULD BE DEEMED TO HAVE RECORDED PRO PER SATISFACTION WITH REFERENCE TO EACH OF THE ADDITION/DISALLOWANCE AS TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF IN COME. IN THAT VIEW OF THE MATTER, THE CONTENTION OF THE ASSESSEE RE GARDING IMPROPER RECORDING OF SATISFACTION IN THE ASSESSMENT ORDER BECOMES DEVOID OF MERIT AND IS THUS JETTISONED. 5. WE HAVE PERUSED A COPY OF NOTICE ISSUED BY THE AO U/S.271(1)(C) R.W.S. 274 OF THE ACT, WHICH RECORDS THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. THEREAFTER, PENALTY ORDER CAM E TO BE PASSED ON 24-09-2013. PARA 18 OF THE PENALTY ORDER IS M ATERIAL FOR OUR PURPOSE, WHICH STATES: AS PER THE REASON DESCRIBED IN THE ASSESSMENT ORDER FOR MAKING THE ADDITIONS AND ALSO THE S AME ARE MENTIONED ABOVE, THESE AMOUNTS ARE IN THE NATURE OF CONCEALMENT/FURNISHING INACCURATE PARTICULARS OF INCOME FOR THE A.Y. 2010-11 . THUS, IT IS EVIDENT THAT THE AO SIMULTANEOUSLY INVOKED BOTH THE LIMBS OF THE PENALTY SECTION AND PROCEEDED WITHOUT SPECIFYING IF IT WAS A CASE OF CONCEALMENT OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. SUCH AN ISS UE HAS COME UP FOR CONSIDERATION BEFORE VARIOUS COURTS. THE HO NBLE GUJARAT HIGH COURT IN NEW SORATHIA ENGINEERING COMPANY VS. ITA NO.1611/PUN/2014 A.Y. 2009-10 4 CIT (2006) 282 ITR 642 (GUJ.) HAS HELD THAT IN THE ABSENCE OF A SPECIFIC FINDING IN THE PENALTY ORDER AS TO WHETHER THERE WAS A CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULAR S OF INCOME, THE PENALTY ORDER U/S.271(1)(C) COULD NOT BE SUSTAIN ED. RECENTLY, THE THIRD MEMBER AMRITSAR BENCH OF THE TRIBUNAL IN HPCL MITTAL ENERGY LTD. AND ANOTHER VS. ACIT AND ANOTHER (2018) 169 DTR 001 (AMRITSAR TRIBUNAL) (TM) HAS ALSO TAKEN SIMILAR VIEW. IN VIEW OF THE FACT THAT NEITHER THE PENALTY NOTI CE NOR THE PENALTY ORDER REFER TO A CLEAR CUT SPECIFIC CHARGE AS TO WHETHER THE ASSESSEE CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, THE PENALTY ORDER HAS TO BE STRUCK D OWN. WE ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2019. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VI CE PRESIDENT PUNE; DATED : 04 TH OCTOBER, 2019 ITA NO.1611/PUN/2014 A.Y. 2009-10 5 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-1, NASHIK 4. 5. 6. THE CCIT, NASHIK , , / DR A, ITAT, PUNE; / GUARD FILE. / TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 03-10-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 03-10-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *