Nareshbhai Ganeshbhai Patel, Ahmedabad V. ITO, Ward-1(2)(3), Ahmedabad

ITA 1921/AHD/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3482 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 11-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Section: 271(1)(c); 143(3); 54F; 274; 22; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER NARESHBHAI GANESHBHAI PATEL, HATHI NO. CHAORO, NEAR MOISALE PARINI POLE, DARIYAPUR, AHMEDABAD-380001 PAN: ABGPP6943C (APPELLANT) VS THE ITO, WARD-1(2)(3), AHMEDABAD (RESPONDENT) REVENUE BY: SHRI S.S. SHUKLA, SR. D.R. ASSESSEE BY: SHRI PRITESH SHAH, A.R . DATE OF HEARING : 17-03-2021 DATE OF PRONOUNCEMENT : 03-06-20 21 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2012-13, ARISES FRO M ORDER OF THE CIT(A)-10, AHMEDABAD DATED 29-06-2018, IN PROCEEDI NGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT TH E ACT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) IN CONFIRMING THE PENALTY OF RS . 98,004/- U/S. 271(1)(C) OF THE ACT. ITA NO. 1921/AHD/2018 ASSESSMENT YEAR 2012-13 I.T.A NO. 1921/AHD/2018 A.Y. 2012-13 PAGE NO NARESHBHAI GANESHBHAI PATEL VS. ITO 2 3. THE BRIEF FACT IS THAT ASSESSMENT U/S. 143(3) OF THE ACT WAS FINALIZED ON 11 TH NOV, 2014. VIDE THE AFORESAID ASSESSMENT, THE AS SESSING OFFICER NOTICED THAT ASSESSEE HAS SHOWN RS. 7,30,000/- AS S HORT TERM CAPITAL GAIN ON SALE OF ASSET AND WRONGLY CLAIMED LONG TERM CAPITAL GAIN OF RS. 7,30,000/- UNDER SECTION 54F OF THE ACT. CONSIDERING THE CLA IM OF THE ASSESSEE AS WRONGLY CLAIMED, THE ASSESSING OFFICER ADDED THE AF ORESAID AMOUNT TO THE TOTAL INCOME. ON APPEAL, LD. CIT(A) HAS CONFIRMED THIS ADDITION. THEREAFTER, THE ASSESSING OFFICER VIDE ORDER U/S. 2 71(1)(C) DATED 23 RD MARCH, 2017 HAS LEVIED MINIMUM PENALTY TO THE AMOUNT OF RS . 98,040/-. THE LD. CIT(A) HAS SUSTAINED THE PENALTY LEVIED BY THE ASSE SSING OFFICER. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US, THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT THE ASSESSING OFFICER HAS NOT RECORDED A FIRM CONCLUSION IN THE PENALTY ORDER WHETHER IT IS BEING IMPOSED FOR FURNISHING INACCURATE PARTICULARS OF IN COME OR CONCEALMENT OF INCOME. THE LD. ASSESSING OFFICER HAS USED BOTH TH E EXPRESSION IN THE PENALTY ORDER HENCE ORDER IS NOT SUSTAINABLE. THE LD. COUNSEL RELIED UPON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SUNITA TRANSPORT PVT. LTD. VS. ACIT, 42 TAXMANN.COM AND CONTENDED THAT WH ILE IMPOSING PENALTY THE ASSESSING OFFICER HAS TO RECORD A CATEGORICAL F INDINGS WHETHER SUCH PENALTY IS BEING IMPOSED FOR FURNISHING OF INACCURA TE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THE LD. COUNSEL HAS SUBM ITTED THAT ON IDENTICAL ISSUE AND SIMILAR FACT THE ITAT AHMEDABAD IN THE CA SE OF SHRI DIVYESH CHHAGANLAL PATEL VS. ITO VIDE ITA NO. 3196/AHD/2016 DATED 31-11-2019 HAS ADJUDICATED THE ISSUE IN FAVOUR OF THE ASSESSEE AFTER FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF SUNITA TRANSPORT I.T.A NO. 1921/AHD/2018 A.Y. 2012-13 PAGE NO NARESHBHAI GANESHBHAI PATEL VS. ITO 3 PVT. LTD. VS. ACIT (2014) TAXMANN.COM 54 (GUJ). SI MILARLY SURAT BENCH OF THE ITAT IN THE CASE OF SHARAD BACHUBBHAI VYAS VS. DCIT CENTRAL CIR-1 VIDE IT(SS)A NO. 349/AHD/2019 HAS ALSO CANCELLED TH E PENALTY LEVIED ON SIMILAR FACTS AFTER FOLLOWING THE DECISION OF HONB LE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF SUNITA TRANSPORT SU PRA. THE LD. COUNSEL ALSO CONTENDED THAT ASSESSEE HAS NOT FURNISHED INACCURAT E PARTICULARS OF INCOME BUT THE ASSESSEE CLAIMED THE SHORT TERM CAPITAL GAI N AGAINST THE PURCHASE OF NEW RESIDENCE BONAFIDELY. THE LD. COUNSEL HAS ALSO SUBMITTED THAT ASSESSEE HAS FILED THE TRUE PARTICULARS OF INCOME IN THE PRO FIT AND LOSS ACCOUNT AND IN THE BALANCE SHEET. HOWEVER, ON MERE DISALLOWANCE O F CLAIM MADE BY THE ASSESSEE IN THE RETURN OF INCOME, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. IN THIS REGAR D, THE LD. COUNSEL HAS PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO-CHEMICAL P. LTD. 230 CTR 320, 3 22 ITR 158. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF CIT(A). 5. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS SHOWN RS. 7,30,000/- AS SHORT TERM CAPITAL GAIN ON SALE O F ASSET AND CLAIMED EXEMPTION U/S. 54F AS INVESTMENT IN JBR FLATS. TH E ASSESSING OFFICER HELD THAT EXEMPTION U/S. 54F IS NOT ALLOWABLE AGAINST SH ORT TERM CAPITAL GAIN THEREFORE CLAIM OF DEDUCTION WAS DISALLOWED AND AMO UNT OF RS. 7,30,000/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. DUR ING THE COURSE OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT, THE ASSESSEE EXPLAINED THAT DISALLOWANCE OF CLAIM U/S. 54F NOT TO BE CONSIDERED AS FURNISHING INACCURATE I.T.A NO. 1921/AHD/2018 A.Y. 2012-13 PAGE NO NARESHBHAI GANESHBHAI PATEL VS. ITO 4 PARTICULARS OF INCOME BECAUSE ASSESSEE HAS SHOWN TH E COMPLETE PARTICULARS OF THE TRANSACTION IN THE P & L A/C AND RETURN OF INCOME. BECAUSE OF TECHNICAL NATURE OF ISSUE THE CLAIM OF EXEMPTION MA DE U/S. 54F BE NOT CONSIDERED AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE HAVE PERUSED THE COPY OF THE NOTICE UNDER SECTION 274 RE AD WITH SECTION 271(1)(C) OF THE ACT DATED 03-11-2015 PLACED IN THE PAPER BOO K WHEREIN THE ASSESSING OFFICER HAS MENTIONED THAT ASSESSEE HAVE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. UNDER SUCH CIRCUMSTANCES WHILE PASSING FINAL ORDER THE ASSESSI NG OFFICER HAS TO RECORD A SPECIFIC FINDING FOR WHICH BREACH HE HAS VISITED TH E ASSESSEE WITH PENALTY I.E. FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULAR OF INCOME AS LAID DOWN IN THE DECISION OF JURISDICTIONAL HIGH CO URT OF GUJARAT IN THE CASE OF SUNITA TRANSPORT AS SUPRA. IN PARA 7 OF THE P ENALTY ORDER U/S. 271(1)(C), THE ASSESSING OFFICER HELD THAT IT IS FOUND TO BE A FIT CASE TO LEVY PENALTY U/S. 271(1)(C) OF THE I.T. ACT, 1961, FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME TO THE EXTENT OF RS. 7,30,000 /- WHICH INDICATE THAT ASSESSING OFFICER HAS NOT RECORDED SPECIFIC FINDING IN RESPECT OF REASON FOR IMPOSING PENALTY IN THE FINAL PENALTY ORDER. THE H ONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SUNITA TRANSPORT PVT. LTD. VS. ACIT REPORTED IN 42 TAXMANN. CON 54 OBSERVED THAT LANGUAGE AND/OR MAY B E PROPER IN ISSUING A NOTICE BUT THAT PENALTY CANNOT BE IMPOSED WITHOUT M ENTIONING THE SPECIFIC CHARGES IN THE FINAL PENALTY ORDER. THE RELEVANT E XTRACT OF THE ORDER IS REPRODUCED AS UNDER:- 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. HON'BLE GUJARAT HIGH COURT HAS CONSIDERED THIS ASPECT IN TH E CASE OF SNITA TRANSPORT (SUPRA). REFERENCE TO PARA 9 OF THIS JUDGMENT IS WORTH TO NOTE. IT REA DS AS UNDER: '9. REGARDING THE CONTENTION THAT THE ASSESSING OFF ICER WAS AMBIVALENT REGARDING UNDER WHICH HEAD THE PENALTY WAS BEING IMPOSED NAMELY FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS, WE MAY RECORD THAT THOUGH IN THE I.T.A NO. 1921/AHD/2018 A.Y. 2012-13 PAGE NO NARESHBHAI GANESHBHAI PATEL VS. ITO 5 ASSESSMENT ORDER THE ASSESSING OFFICER DID ORDER IN ITIATION OF PENALTY ON BOTH COUNTS, IN THE ULTIMATE ORDER OF PENALTY THAT HE PASSED, HE CL EARLY HELD THAT LEVY OF PENALTY IS SUSTAINED IN VIEW OF THE FACT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME. THUS INSOFAR AS FINAL ORDER OF PENALTY WAS CONCERNE D, THE ASSESSING OFFICER WAS CLEAR AND PENALTY WAS IMPOSED FOR CONCEALING PARTICULARS OF I NCOME. IN LIGHT OF THIS, WE MAY PERUSE THE DECISION OF THIS COURT IN CASE OF MANN ENGINEER ING WORKS (SUPRA). IN THE SAID DECISION, THE DIVISION BENCH CAME TO THE CONCLUSION THAT LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE FOR PENALTY, BUT IT WAS INCUMBENT UPON THE ASSESSING AUTHORITY TO COME TO A POSITIVE FINDING AS TO WHETHER THERE W AS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF S UCH INCOME HAD BEEN FURNISHED BY THEM. IF NO SUCH CLEAR CUT FINDING IS REACHED BY TH E AUTHORITY, PENALTY CANNOT BE LEVIED. IT WAS A CASE IN WHICH IN FINAL CONCLUSION THE AUTHORI TY HAD RECORDED THAT '1 AM OF THE OPINION THAT IT WILL HAVE TO BE SAID THAT THE ASSES SEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PARTICULARS OF SUCH INC OME. ' IT WAS IN THIS RESPECT THE BENCH OBSERVED THAT 'NOW THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CA SE OR A QUASICRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDIN G AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER AN Y INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR CUT FINDING WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IAC WAS LIABLE TO BE STRUCK DOWN. ' ON IDENTICAL ISSUE AND FACTS ITAT SURAT IN THE CASE OF SHARAT BACHUBHAI VYAS VS. DCIT VIDE IT(SS)A NO. 349/AHD/2014 DATED 1 6.11.2018 HELD THAT WHILE PASSING FINAL ORDER THE ASSESSING OFFICER HAS TO RECORD A SPECIFIC FINDING ACCEPTING THE FACT THAT PENALTY IS BEING IM POSED FOR FURNISHING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. THE ITAT AHMEDABAD IN THE CASE OF DIVYESH CHHAGANLAL PATEL VS. ITO VIDE I TA NO. 3196/AHD/2016 DATED 31-11-2019 AFTER FOLLOWING THE DECISION OF HO NBLE JURISDICTIONAL HIGH COURT AS FOLLOWS:- 6. AS PER THE ABOVE JUDGMENT IF AN ASSESSING OFFIC ER USED EXPRESSION 'OR' IN BETWEEN THE CONCEALMENT OF INCOME/FURNISHING INACCURATE PARTICU LARS, THEN THAT SHOW CAUSE NOTICE BE NOT FATAL TO THE PROCEEDINGS, BUT WHILE VISITING THE ASSESSEE WITH PENALTY THE ID.AO OUGHT TO HAVE RECORDED A SPECIFIC FINDING, FOR WHICH BREACH, HE HAS VISITED THE ASSESSEE WITH PENALTY I.E. WHETHER HE HAS VISITED THE ASSESSEE WITH PENALTY FOR CONCEALMENT O F INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE PENALTY ORDER HE CANNOT USE BOTH THE EXPRESSION. WHILE ISSUING SHOW CAUSE NOTICE UNDER SECTION 274 R.W.S. 271(L)(C) OF THE ACT FOR I NVITING EXPLANATION OF THE ASSESSEE, AS TO WHY PENALTY UNDER SECTION 271(L)(C) OF THE ACT BE NOT I MPOSED UPON THE ASSESSEE, CAN USE EXPRESSION 'OR' BETWEEN FURNISHING INACCURATE PARTICULARS VIS- A-VIS CONCEALMENT OF INCOME. HOWEVER, WHILE ADJUDICATING THE ISSUE REGARDING IMPOSITION OF PENA LTY, THE ID.AO HAS TO RECORD A CONCLUSIVE FINDING FOR WHICH HE IS IMPOSING THE PENALTY, I.E. WHETHER HE IS IMPOSING PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR FOR CONCEALMENT OF INCOME. THE ID.AO CANNOT USE PHRASE THAT 'PENALTY IS BEING IMPOSED FOR FURNISHING INACCURATE PARTICULARS/CONCEALMENT OF INCOME'. THIS PHRASEOLOGY DOES NOT DISCLOSE THE FORMATION OF OPIN ION AT THE END OF THE ASSESSING OFFICER, AND SUCH PENALTY ORDER IS NOT SUSTAINABLE. I.T.A NO. 1921/AHD/2018 A.Y. 2012-13 PAGE NO NARESHBHAI GANESHBHAI PATEL VS. ITO 6 WE HAVE ALSO CONSIDERED THE SIMILAR DECISION OF ITA T AHMEDABAD IN THE CASE OF SH. HASMUKH JAYANTILAL THAKKAR VS. ITO VIDE ITA NO. 32/AHD/2017 WHEREIN PENALTY WAS DELETED FOLLOWING THE DECISION OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF SUNITA TRANSPORT BECAUSE OF NOT MENTIONING SPECIFIC CHARGES IN THE PENALTY ORDER. IN THE LIGHT OF THE ABOVE FACTS AND FINDINGS WE OBSERVE THAT THE ASSESSING OFFICER HAS NOT MENTIONE D THE SPECIFIC CHARGE IN PENALTY ORDER WHETHER IT WAS LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THERE FORE, THE PRINCIPLES LAID DOWN BY THE HONBLE HIGH COURT AS SUPRA ARE SQUAREL Y APPLICABLE TO THE FACTS OF THIS CASE AND SUCH PENALTY ORDER IS NOT SUSTAINA BLE. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03-06-2021 SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 03/06/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , I.T.A NO. 1921/AHD/2018 A.Y. 2012-13 PAGE NO NARESHBHAI GANESHBHAI PATEL VS. ITO 7 / ,