Abhibav Kumar Choudhary, Ranchi V. DCIT Central Circle-1, Ranchi

ITA 181/RAN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0012 (ITAT-RANCHI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 22-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ORAM
• Assessee Lawyers: S K PODAR DEVESH PODAR
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 181/RAN/2015 ASSESSMENT YEAR : 2003 - 04 ABHINAV KUMAR CHOUDHARY, NORTH MARKET ROAD, UPPER BAZAR, RANCHI. VS. DCIT, CENTRAL CIRCLE - 1, RANCHI PAN/GIR NO. ABIPC 2628 M (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : S/ SHRI S.K.PODAR /DEVESH PODAR , AR REVENUE BY : SHRI CHAUDHURY ORAM , DR DATE OF HEARING : 8 /12/ 2016 DATE OF PRONOUNCEMENT : 8 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT (A) - 3, PATNA , DATED 14.10.2015 , FOR THE ASSESSMENT YEAR 2003 - 04 . 2. THE ONLY ISSUED INVOLVED IN THIS APPE AL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.11,132/ - U/S.271(1)(C) OF THE ACT. 3. I HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER FOUND THAT INVESTMENT IN RATANLAL COMMERCIAL COMPLEX DURING THE FINANCIAL YEAR 2002 - 03 WAS RS.20,000/ - AGAINST WHICH 2 ITA NO. 181/RAN/2015 ASSESSMENT YEAR :2003 - 04 THE ASSESSEE HAD SHOWN RS.12,300/ - . SINCE THE SOURCE OF INVESTMENT OF RS.7700/ - W AS NOT EXPLAINED, SAME WAS ADDED AS UNEXPLAINED INVESTMENT. FURTHER, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD MADE INVESTMENT IN PURCHASE OF A BIKE OF RS.45,306/ - . THIS INVESTMENT WAS NOT FOUND IN THE BALANCE SHEET OF THE ASSESSEE FOR THE ASSESS MENT YEAR 2003 - 04. THEREFORE, IT WAS ADDED AS UNEXPLAINED INVESTMENT. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C) OF THE ACT OF RS.20,000/ - . 4. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. BEFORE ME LD A.R. O F THE ASSESSEE ARGUED THAT IN THE ASSESSMENT ORDER DATED 29.12.2006 U/S.153C/144 OF THE ACT, THE ASSESSING OFFICER HAS STATED THAT PENALTY PROCEEDINGS U/S.271(1)(C) IS INITIATED AS THE ASSESSEE HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS OF INCOME IN THE INCOME TAX RETURN FILED ON 14.9.2006. HE OBSERVED THAT IN THE PENALTY ORDER DATED 22.5.2007, THE ASSESSING OFFICER HAS LEVIED PENALTY FOR CONCEALMENT OF INCOME. HENCE, IT WAS HIS SUBMISSION THAT THE PENALTY ORDER WAS NOT MAINTAINABLE AS THE PENALTY PROCEEDINGS IS INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THE PENALTY ORDER WAS BASED ON CONCEALMENT OF INCOME OF THE ASSESSEE. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF ITAT KOLKATA IN THE CASE OF SUVAPRASANNA BHATRACHARYA VS ACIT (ITA NO.1303/KOL/2010 FOR A.Y. 2006 - 07) ORDER DATED 6.11.2015 AND SUBMITTED THAT IN THAT JUDGMENT THE TRIBUNAL HAS RELIED ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT 3 ITA NO. 181/RAN/2015 ASSESSMENT YEAR :2003 - 04 VS. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 (KAR) , WHEREIN, IT WAS HELD THAT NOTICE U/S.274 OF THE ACT SPECIFICALLY STATES AS TO WHETHER PENALTY IS BEING PROPOSED TO BE IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME . FURTHER, THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING, 122 ITR 306 (GUJ) AND HONBLE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING, 171` TAXMAN 156 HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR P ENALTY IS NOT SUSTAINABLE. 6. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. I FIND THAT IN THE INSTANT CASE, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE BUT WHILE PASSING THE PENALTY ORDER U/S.271(1)(C) OF THE ACT, HE LEVIED PENALTY ON THE GROUND OF CONCEALMENT OF INCOME BY THE ASSESSEE. THUS, THE DECISIONS OF HONBLE KARNATA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY, HO NBLE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING (SUPRA) APPLIES TO THE FA C TS OF THE ASSESSEES CASE. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS (SUPRA), I SET ASIDE THE OR DERS OF LOWER AUTHORITIES AND DELETE THE PENALTY OF RS.20,000/ - LEVIED U/S.271(1)(C) OF THE ACT AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 4 ITA NO. 181/RAN/2015 ASSESSMENT YEAR :2003 - 04 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 8 /12/2016 IN THE PRESENCE OF PARTIES. SD/ - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 8 /12 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : ABHINAV KUMAR CHOUDHARY, NORTH MARKET ROAD, UPPER BAZAR, RANCHI. 2. THE RESPONDENT. DCIT, CENTRAL CIRCLE - 1, RANCHI 3. THE CIT(A) - 3, PATNA 4. CIT , PATNA 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//