Jagdish Bhagwan Mirchandani, Nashik V. Assistant Commissioner of Income-tax,

ITA 1620/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9207 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-01-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 10-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1620/PUN/2015 / ASSESSMENT YEAR : 2010-11 JAGDISH BHAGWAN MIRCHANDANI, SURVEY 52A, PLOT NO.13-15, BLESSINGS BUNGALOW, SERENE MEADOWS, GANGAPUR ROAD, NASHIK 422013. PAN : AETPM3224P. . / APPELLANT V/S ASST.COMMISSIONER OF INCOME TAX, CIRCLE-1, NASHIK. . / RESPONDENT ASSESSEE BY : SHRI C.H. NANIWADEKAR. REVENUE BY : SHRI AJAY MODI, JCIT. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 1, NASHIK, DT.01.10.2015 FOR THE ASSESSMENT YEAR 2010-11. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER : ASSESSEE IS AN INDIVIDUAL AND STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF PRESS PARTS AND GASKETS ET C. / DATE OF HEARING : 08.01.2018 / DATE OF PRONOUNCEMENT: 28.02.2018 2 ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2010-11 ON 30 .09.2010 DECLARING TOTAL INCOME OF RS.63,75,450/-. THE CASE WAS SELE CTED FOR SCRUTINY AND THEREAFTER, ASSESSMENT WAS FRAMED U/S 1 43(3) OF THE ACT VIDE ORDER DT.27.12.2012 AND THE TOTAL INCOME WA S DETERMINED AT RS.69,79,664/- INTER-ALIA BY MAKING ADDITIO N OF RS.5,40,000/- ON ACCOUNT OF UNSECURED LOANS U/S 69A OF T HE ACT, DISALLOWANCE OF RS.14,234/- FOR INVESTMENT MADE IN SHARES AN D MUTUAL FUNDS AND DISALLOWANCE OF RS.50,000/- ON ACCOUNT OF EXPENDITURE UNDER THE HEAD WAGES AND OTHER EXPENSE S. ON THE DISALLOWANCE OF RS.5,40,000/- ON ACCOUNT OF ADDITION U/S 69A OF THE ACT, AO VIDE ORDER DT.27.06.2013 LEVIED PENALTY OF RS.1,66,860/- U/S 271(1)(C) OF THE ACT. AGGRIEVED BY THE P ENALTY ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.01.10.2015 (IN APPEAL NO.NSK/CIT(A)-1/489/2013-1 4) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE O RDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAIS ED THE FOLLOWING EFFECTIVE GROUND : THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) E RRED ON FACTS AND IN LAW IN CONFIRMING PENALTY U/S 271(1)(C) AMOU NTING TO RS.1,66,860/-. HE FAILED TO APPRECIATE CONTENTIONS AND ARGUMENTS ADVANCED BY THE ASSESSEE IN ITS BEHALF. 3. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT THE ASSESSEE HAD INADVERTENTLY SHOWN RS.5,40,000/- AS UNSECURED LOANS BUT WHEN IT CAME TO HIS KNOWLEDGE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HE OFFERED IT AS INCOME. HE THEREFORE SUBMITT ED THAT THERE WAS NO CONCEALMENT OF INCOME. HE THEREAFTER POINTIN G TO THE ASSESSMENT ORDER SUBMITTED THAT AO HAS INITIATED PENALT Y FOR CONCEALMENT OF INCOME BUT IN THE NOTICE DATED 21.05.2013 ISSUED 3 U/S 274 R.W.S. 271(1)(C) OF THE ACT, AO HAD GIVEN NOTICE FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING OF INACCURA TE PARTICULARS OF INCOME. HE THEREAFTER SUBMITTED THAT WHILE P ASSING THE PENALTY ORDER U/S 271(1)(C) OF THE ACT, THE AO HAS LE VIED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. HE THEREFORE RELYING ON THE DECISION OF HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. SAMSON PERINCHERY (ITA NO.1154 OF 201 4 ORDER DT.05.01.2017), SUBMITTED THAT IN THE ABSENCE OF PROPER SHO W CAUSE NOTICE TO ASSESSEE, PENALTY U/S 271(1)(C) CANNOT BE LEVIED AND THEREFORE URGED THAT PENALTY LEVIED BY AO BE DELETED . LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 4. 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 C ASE, PENALTY HAS BEEN LEVIED AT RS.1,66,860/- ON ADDITION OF RS.5,40,000/- U/S 69A OF THE ACT ON ACCOUNT OF UNSECURED LOANS. IN THE PRESENT CASE, THE PERUSAL OF ASSESSMENT ORDER PASSED U/S 143(3) REVEALS THAT IN THE ASSESSMENT ORDER AO HAD REC ORDED SATISFACTION FOR LEVY OF PENALTY ON ACCOUNT OF CONCEALMENT O F INCOME. THEREAFTER IN THE PENALTY ORDER PASSED U/S 271 (1)(C) OF THE ACT, AO HELD THAT ASSESSEE HAD FURNISHED INACCURATE PART ICULARS OF INCOME. EVEN IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT, AO HAD STATED THAT THE PENALTY IS FOR CONCEALING T HE PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS A SETTLED LAW THAT WHILE LEVYING PENALTY FOR CONCEALMENT, THE AO HAS TO RECORD SATISFACTION AND THEREAFTER COM E TO A FINDING IN RESPECT OF ONE OF THE LIMBS, WHICH IS SPECIFIED U NDER 4 SECTION 271(1)(C) OF THE ACT. THE FIRST STEP IS TO RECORD SA TISFACTION WHILE COMPLETING THE ASSESSMENT AS TO WHETHER THE ASSES SEE 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 TH E 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 FURNISH ED INACCURATE PARTICULARS OF INCOME. THE HONBLE BOMBAY HIGH C OURT IN CIT VS. SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 W ITH OTHER ITA NOS.953 OF 2014, 1097 OF 2014 AND 1226 OF 2014 , VIDE JUDGMENT DATED 05.01.2017 HELD THAT WHERE INITIATION OF PE NALTY IS ONE LIMB AND THE LEVY OF PENALTY IS ON OTHER LIMB, THEN IN T HE ABSENCE OF PROPER SHOW CAUSE NOTICE TO THE ASSESSEE, T HERE IS NO MERIT IN LEVY OF PENALTY. 5. IN THE PRESENT CASE, AS NOTED HEREINABOVE, IT IS SEEN THAT THE AO IN THE ASSESSMENT ORDER HAS RECORDED THE CASE T O BE OF CONCEALMENT OF INCOME BUT IN THE PENALTY ORDER PASSED U/ S 271(1)(C) OF THE ACT HE HAD LEVIED PENALTY ON ACCOUNT OF FUR NISHING OF INACCURATE PARTICULARS OF INCOME. CONSIDERING THE AFORESA ID FACTS IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COU RT IN THE CASE OF SAMSON PERINCHERY (SUPRA), WE ARE OF THE VIEW THAT IN THE PRESENT CASE THE BASIC CONDITION FOR LEVY OF PENALTY H AS NOT BEEN FULFILLED AND THAT THE PENALTY ORDER SUFFERS FROM NON- EXERCISING OF JURISDICTION POWER OF AO AND THEREFORE PENALTY ORDER 5 CANNOT BE UPHELD. WE ACCORDINGLY SET ASIDE THE PENALTY ORDER PASSED BY AO. THUS, THE GROUND OF ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 28 TH DAY OF FEBRUARY, 2018. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; DATED : 28 TH FEBRUARY, 2018. YAMINI '#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. CIT(A)-1, NASHIK. PRL.CIT-1, NASHIK. '#$ %%&',) &', / DR, ITAT, A PUNE; $+,-/ GUARD FILE. / BY ORDER , T// ///TRUE TRUE COPY // TRUE COPY // ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.