Komal Santram Murjani, V. Assistant Commissioner of Income-tax,

ITA 1713/PUN/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9571 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAH B ANA PARVEEN
• Keywords: Reason to believe
• Section: 271(1)(c); 133A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / ITA NO. 1713 /P U N/201 6 / ASSESSMENT YEAR : 20 07 - 08 KOMAL SANTRAM MURJANI, C/O SHRI SURESH N. OTWANI, ADVOCATE, 10 9 , 110, TILSON SHOPPING CENTRE, KALAYN - AMBERNATH ROAD, ULHASNAGAR 421 003. PAN : AMWPM7598P . / APPELLANT VS. ACIT, CIRCLE - 3, NANDED. . / RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : MS. SAH B ANA PARVEEN / DATE OF HEARING : 27 . 1 1 .2018 / D ATE OF PRONOUNCEMENT: 17 . 1 2 .201 8 DATE OF HEARING : 27 . 1 1 .2018 D ATE OF PRONOUNCEMENT: 17 . 1 2 .201 8 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2 , AURANGABAD DATED 19.05.2016 FOR THE ASSESSMENT YEAR 20 07 - 08 . 2. THE GROUND S RAISED BY THE ASSESSEE ARE AS UNDER : - 1) THE REVENUE AUTHORITIES I.E., A.O. AS WELL AS THE FIRST APPELLATE AUTHORITY I.E., CIT(A) - 2, AURANGABAD FAILED TO BRING OUT THE SHORTCOMING OR FACT OF NOT FURNISHING INACCURATE PARTICULARS AND CONCEALING THE INCOME BY APPELLANT. 2) THE A.O. AS WELL AS THE FIRST APPELLATE AUTHORITY (FAA) HAS SIMPLY GONE ONE SUMMARIES OF DECLARATION MADE DURING 133A PROCEEDINGS WHICH IS NOT COLLABORATED BY THE A.O. INSPITE OF ACCEPTING THE FACTUAL ERROR AND MISTAKES IN THE WORKING OF INVENTORY OF STOCK. 3) THE APP EAL IS IN TIME AND ORDER. 4) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS ON OR BEFORE THE FINAL DATE OF HEARING. ITA NO. 1713 /PUN /201 6 2 3 . BRIEFLY STATED THE RELEVANT FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RETAIL TRADING IN SAREE S. ASSESSEE FILED THE RETURN OF INCOME ON 31.10.2007 DECLARING INCOME OF RS.7,34,090/ - . THE ASSESSING OFFICER MADE VARIOUS ADDITIONS ON ACCOUNT OF DISALLOWANCE OF EXPENSES AND EXCESS STOCK AND DETERMINED THE TOTAL INCOME OF RS.8,28,583/ - . SUBSEQUENTLY, THE ASSESSING OFFICER LEVIED THE PENALTY U/S 271(1)( C ) OF THE ACT AND PASSED PENALTY ORDER ON 25.06.2010. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS BY GIVING HIS SATISFACTION THAT REVOLVES AROUND THE DEFAULT FURNISHING OF INACCURATE PARTICULAR O F INCO ME. WHILE LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT , THE ASSESSING OFFICER INVOKED BOTH THE LIMITS I.E. FURNISHING OF INACCURATE PARTICULARS OF INCOME AS WELL AS THE CONCEALMENT OF PARTICULARS OF INCOME. 4 . THE CIT(A) CONFIRMED THE PENALTY. HOW EVER, THE ISSUE RELATES TO THE SATISFACTION OF THE ASSESSING OFFICER QUA THE LIMBS OF CLAUSE (C) OF SECTION 271(1) OF THE ACT WAS NOT RAISED. 5 . BEFORE US, THERE IS NONE REPRESENT ON THE BEHALF OF THE ASSESSEE DESPITE THE SERVICE OF NOTICE. HOWEVER, LD. DR FOR THE REVENUE FAIRLY NARRATED THE ABOVE FACTS OF THE CASE AND SUBMITTED THAT THIS IS THE CASE WHERE THE SATISFACTION OF THE ASSESSING OFFICER IS NOT GIVING IN ACCORDANCE WITH SETTLED LEGAL PROPOSITION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE CIT V S. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM.) AS WELL AS THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 . 6. ON HEARING THE LD. DR FOR THE REVENUE, WE PERUSED THE ORDER OF THE ASSE SSING OFFICER . IT IS NOTICED FROM THE CONTENTS OF PARA 7. 3 OF THE ORDER OF ITA NO. 1713 /PUN /201 6 3 ASSESSING OFFICER THAT THE SATISFACTION FOR INITIATING THE PENALTY U/S 271(1)(C) OF THE ACT IS GIVEN MENTIONING THE FOLLOWING . THE RELEVANT LINES ARE EXTRACTED HEREUNDER : - 7.3 T HE ASSESSEE HAS SUBMITTED INACCURATE PARTICULARS OF INCOME, THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT INITIATED ARE SEPARATELY. ABSENCE, ANY SPECIFIC LIMB OF THE SAID CLAUSE (C) IS OBVIOUS. 7 . FURTHER, WE ALSO PERUSED THE PENALTY ORDER AN D FIND PARA 3 IS RELEVANT TO EXTRACT AND THE SAME IS AS UNDER : - 3. . HENCE, I HAVE THEREFORE, REASON TO BELIEVE THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME AND FURNISHED INACCURATE PARTICULAR OF HIS INCOME , THEREFORE, LEVY A PENALTY U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961 OF RS.25,889/ - WHICH IS 100% OF TAX SOUGHT TO BE EVADED. 8 . FROM THE ABOVE, IT IS EVIDENT THAT THE SATISFACTION GIVEN BY THE ASSESSING OFFICER SUFFERS FROM THE AMBIGUITY IN THE MIND OF THE ASSESSING OFFICER WHI LE RECORDING THE SATISFACTION AT THE TIME OF INITIATING THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THEREFORE, CONSIDERING THE ABOVE BINDING JUDGEMENT AT PARA 5 (SUPRA) ON THE ISSUE, WE ARE OF THE OPINION THAT SUCH PENALTY ORDER IS UNSUSTAINABLE IN LAW LEGALLY. THE BINDING JUDGMENTS INCLUDE THE APEX COURT JUDGEMENT IN THE CASE OF SHRI SAMSON PERINCHERY (SUPRA) AND MANJUNATH A COTTON AND GINNING FACTORY (SUPRA) . IT IS A SETTLED LEGAL PROPOSITION FROM THE SAID JUDGEMENTS, THE ASSESSING OFFICER IS UNDE R OBLIGATION TO SPECIFY THE APPROPRIATE LIMB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT AT THE TIME OF INITIATION AS WELL AS AT THE TIME OF LEVY OF PENALTY. 9 . IN VIEW OF THE ABOVE DELIBERATION ON THIS ISSUE, WITHOUT GOING INTO THE MERITS OF THE PENALTY , WE ARE OF THE OPINION THAT THE PENALTY ORDER IS LIABLE TO BE QUASHED ON THIS LEGAL ISSUE. THUS, THE ORDER OF CIT(A) IS SET - ASIDE AND ITA NO. 1713 /PUN /201 6 4 DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY ON LEGAL GROUND . THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE AR E ALLOWED. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 17 TH D AY OF DECEMBER , 2018 . SD/ - SD/ - (SUSHMA CHOWLA) ( D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE ; DATED : 17 TH DECEMBER , 2018 . SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A) - 2, AURANGABAD ; 4. THE PR. CIT - 2, AURANGABAD ; 5. 5. , , A / DR A , ITAT, PUNE; 6. / GUARD FILE . // TRUE COPY // / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE