SHRI AJAYKUMAR BATRA, Bandara V. THE ACIT, CIRCLE- 7, Nagpur

ITA 19/NAG/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5399 (ITAT-NAGPUR)
• Duration Of Justice: 4 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 14-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U U KASAR JT
• Assessee Lawyers: KAILASH M JOGANI; MUKESH R AGARWAL
• Keywords: Initiation of penalty proceedings; Revised return
• Section: 271(1)(c); 133A; 143(1)

Judgement Text

UKXIQJ , UKXIQJ IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.19/NAG/2015 / ASSESSMENT YEAR : 201011 AJAYKUMAR BATRA, PROP. M/S. SAIBABA CONSTRUCTION, RAJGOPALCHARI WARD, BANDARA-441904. PAN : ABJPA9287H ....... / APPELLANT / V/S. ACIT, CIRCLE-7, NAGPUR. / RESPONDENT ASSESSEE BY : SHRI KAILASH M. JOGANI, CA & SHRI MUKESH R. AGARWAL, ADV. REVENUE BY : SHRI U. U. KASAR, JT. CIT / DATE OF HEARING : 29.03.2019 / DATE OF PRONOUNCEMENT : 25.04.2019 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-II, NAGPUR DATED 22.09.2014 FOR THE ASSESSMENT YEAR 2010-11. 2 ITA NO.19/NAG/2015 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THE ORDER PASSED IS ILLEGAL, INVALID AND BAD IN LAW. 2. THE ACT OF LEARNED A.O. LEVYING THE PENALTY OF RS.16,97,544/- U/S 271(1)(C) IS UNJUSTIFIED. 3. THE LEARNED A.O. ERRED IN CHARGING PENALTY U/S 271(1)(C) FOR CONCEALMENT OF INCOME. BUT THERE IS NO CONCEALMENT AT ALL. THE INCOME OFFERED U/S. 133A WAS JUT TO COVER UP THE DISCREPANCIES, AVOID FURTHER LITIGATION AND TO BUY A PEACE. 4. ANY OTHER GROUND SHALL BE PRAYED AT THE TIME OF HEARING. 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.95,76,190/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, THE ASSESSEE FILED THE REVISED RETURN OF INCOME DECLARING TOTAL INCOME AT RS.1,46,76,192/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE OFFERED AN ADDITIONAL INCOME OF RS.50 LAKHS. IN THE RESULT, THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.1,46,76,192/-. HENCE, CONSIDERING THE SAID ADDITIONAL INCOME, WHICH WAS NOT DECLARED IN THE ORIGINAL RETURN OF INCOME, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS RECORDING THE SATISFACTION THAT IT IS A CASE OF BOTH THE CASE 3 ITA NO.19/NAG/2015 OF CONCEALMENT OF INCOME AND FILING OF INACCURATE PARTICULARS OF INCOME (PARA 3 OF THE ASSESSMENT ORDER). 4. THE CIT(A), AFTER CONSIDERING THE WRITTEN SUBMISSION OF THE ASSESSEE AND FOLLOWING PRECEDING YEARS DECISION IN ASSESSEES OWN CASE I.E. ASSESSMENT YEAR 2009-10, CONFIRMED THE PENALTY AS LEVIED BY THE ASSESSING OFFICER. THE CONTENTS OF PARA 6 ONWARDS OF THE APPELLATE ORDER ARE RELEVANT IN THIS REGARD. 5. AGGRIEVED WITH THE SAID DECISION OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE ABOVE EXTRACTED GROUNDS. 6. ACCORDING TO THE LD. AR, THE ORDER OF THE CIT(A) SHALL HAVE TO BE SET-ASIDE ON THE LEGAL ISSUE. HIGHLIGHTING THE LEGAL REQUIREMENT OF MAKING A SPECIFIC REFERENCE TO THE SPECIFIC LIMB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT AND RELYING ON VARIOUS BINDING JUDGMENTS IN THE CASE CIT VS. 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, LD. COUNSEL 4 ITA NO.19/NAG/2015 DEMONSTRATED THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW AND THE SAME IS WRONGLY UPHELD BY THE CIT(A). 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THIS IS A CASE WHERE THE ASSESSING OFFICER FAILED TO RECORD PROPER SATISFACTION WHILE INITIATING AND LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT. IN THIS REGARD, WE PURSED THE ORDERS OF THE REVENUE AUTHORITIES. ON PERUSAL OF PARA 3 OF THE ASSESSMENT ORDER, WE FIND THE FOLLOWING IS THE REASONS FOR INITIATION OF PENALTY PROCEEDINGS :- 3. CONCEALMENT OF INCOME AND FILING OF INACCURATE PARTICULARS OF INCOME. 9. FURTHER, WE ALSO PERUSED THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER ON 29.04.2012. ON PERUSAL OF PARA 5 OF THE PENALTY ORDER, WE FIND THE FOLLOWING IS THE REASONS FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT :- 5. . ASSESSEE HAS CONCEALED HIS INCOME 5 ITA NO.19/NAG/2015 10. THE ABOVE EXTRACTS REVEAL THAT THE ASSESSING OFFICER SUFFERS FROM AMBIGUITY IN HIS MIND WHILE RECORDING THE SATISFACTION AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. 11. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE LEGAL REQUIREMENT OF MAKING A CLEAR CUT REFERENCE TO THE APPLICABLE LIMB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT, IS NOT MET BY THE ASSESSING OFFICER WHILE INITIATING AND LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT. THUS, THE SATISFACTION OF THE ASSESSING OFFICER SUFFERS FROM AMBIGUITY IN HIS MIND. 12. THEREFORE, CONSIDERING THE ABOVE REFERRED BINDING JUDGMENTS, WE ARE OF THE VIEW THAT SUCH PENALTY IS UNSUSTAINABLE IN LAW LEGALLY. IT IS A SETTLED LEGAL PROPOSITION THAT THE ASSESSING OFFICER IS UNDER 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. IN VIEW OF THE ABOVE DELIBERATION ON THIS ISSUE, WITHOUT GOING INTO THE MERITS OF THE CASE, WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ENTIRE PENALTY IMPOSED BY 6 ITA NO.19/NAG/2015 HIM. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED ON LEGAL ISSUE. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 25 TH DAY OF APRIL, 2019. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER UKXIQJ / NAGPUR; / DATED : 25 TH APRIL, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A) 4. THE CIT 5. , , UKXIQJ , UKXIQJ / DR, ITAT, NAGPUR BENCH, NAGPUR. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , UKXIQJ / ITAT, NAGPUR.