Jamnagiri Harigiri Giri, Nanded V. Income-tax Officer, Ward - 3, Nanded

ITA 1796/PUN/2018

AI Insights

The case involves Jamnagiri Harigiri Giri, the appellant, who derived income from a Ladies Emporium Shop and filed a return declaring an income of Rs.1,51,474 for the assessment year 2010-11. The Income Tax Officer (ITO) made an addition of Rs.13,00,000 as unexplained cash credit under section 68 of the Income Tax Act, 1961, which was partially sustained by the ITAT in a previous appeal. Subsequently, a penalty was levied under section 271(1)(c) for the addition made, which was contested in this appeal. The main contention was the procedural validity of the penalty, particularly the satisfaction of the Assessing Officer as required by law, which was found lacking.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 137069 (ITAT-PUNE)
• Duration Of Justice: 18 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-11-2022
• Assessment Year: misc
• Appeal Filed On: 21-03-2004
• Other Referred Cases: Mohd. Farhan A. Shaikh vs. DCIT 434 ITR 1 (Bombay)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 68; 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1796/PUN/2018 िनधाᭅरण वषᭅ / Assessment Year: 2010-11 Jamnagiri Harigiri Giri, C/o Suresh General Stores & Ladies Emporium, Ardhpur, Dist. Nanded – 431704. PAN : ARSPG9988J Vs. ITO, Ward-3, Nanded. Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)- 1, Aurangabad [‘the CIT(A)’] dated 06.08.2018 for the assessment year 2010-11. 2. Briefly, the facts of the case are that the appellant is an individual derived income from Ladies Emporium Shop. The Return of Income for the assessment year 2010-11 was filed on 23.11.2013 declaring total income of Rs.1,51,474/-. Against the Assessee by : Shri Kishor B. Phadke Revenue by : Shri Ramnath P. Murkunde Date of hearing : 25.11.2022 Date of pronouncement : 08.12.2022 ITA No.1796/PUN/2018 2 said return of income, the assessment was completed by the Income Tax Officer, Ward-1, Nanded (‘the Assessing Officer’) vide order dated 29.03.2015 passed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (‘the Act’) at a total income of Rs.25,43,570/-. While doing so, the Assessing Officer made addition of Rs.13,00,000/- on account of unexplained cash credit u/s 68 of the Act. 3. Being aggrieved by the above addition, an appeal was filed before the ld. CIT(A), who vide order dated 06.03.2017 confirmed the addition of Rs.13,00,000/- on account of unsecured loans. However, on further appeal before the ITAT, the ITAT vide order dated 16.10.2018 sustained addition of Rs.4,10,500/- out of total addition of Rs.13,00,000/-. Subsequently, the Assessing Officer passed an order levying penalty of Rs.3,49,625/- vide order dated 02.02.2018 passed u/s 271(1)(c) of the Act. Even on appeal before the ld. CIT(A), the same was confirmed. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. 5. It is submitted that the Assessing Officer had not reached the satisfaction by striking out the relevant column/limb of the show- ITA No.1796/PUN/2018 3 cause notice. Therefore, penalty proceedings are vitiated placing reliance on the decision of the Hon’ble Bombay High Court in the case of Mohd. Farhan A. Shaikh vs. DCIT 434 ITR 1 (Bombay). Without prejudice to the above, ld. AR submitted that mere addition does not entail levy of penalty. 6. On the other hand, ld. Sr. DR supported the orders of the lower authorities submits that no interference is called for. 7. We heard the rival submissions and perused the material on record. The only issue in the present appeal relates to the validity of levy of penalty u/s 271(1)(c) of the Act. The penalty was levied u/s 271(1)(c) with regard to the addition on account of cash credit of Rs.13,00,000/- u/s 68 which had been challenged in appeal before the ITAT. We have gone through the order of penalty, wherein, the Assessing Officer had not stated which particulars of income filed by the assessee are found to be inaccurate or false leading to the addition and mere addition does not entail levy of penalty u/s 271(1)(c) of the Act. Therefore, in the circumstances, we are of the considered opinion that it is not a fit case for levy of penalty u/s ITA No.1796/PUN/2018 4 271(1)(c) of the Act. Accordingly, we direct the Assessing Officer to delete the penalty made u/s 271(1)(c) of the Act. 8. In the result, the appeal filed by the assessee stands allowed. Order pronounced on this 08 th day of December, 2022. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 08 th December, 2022. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-1, Aurangabad. 4. The Pr. CIT-1, Aurangabad. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.