Avinash Jineshwar Naik, Kolhapur V. Income-tax Officer, Ward - 1(4), Kolhapur

ITA 2144/PUN/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4787 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 12-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA B DOND
• Keywords: Depreciation; Salary income
• Section: 271(1)(c); 113; 73; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER I.T.A. NO. 2140 TO 2144 /PUN/2017 ASSESSMENT YEAR S : 2002 - 03 TO 2006 - 07 AVINASH J. NAIK, F - 4 TULJAI CIR LCLE, NAGALA PARK, KOLHAPUR. PAN ; AASPN 4101 F APPELLANT VS. I.T.O. WARD 1(4), KOLHAPUR RESPONDENT APPELLANT BY : SHRI M.K. KULKARNI RESPONDENT BY : SHRI RAJENDRA B. DOND DATE OF HEARING : 20 - 02 - 2020 DATE OF PRONOU NCEMENT: 21 - 02 - 2020 ORDER PER GEORGE MATHAN, JUDICIAL MEMBER: TH ESE FIVE APPEAL S FI LED BY THE ASSESSEE ARE DIRECTED AGAINST CONSOLIDATED ORDER OF THE LEARNED CIT(A) - 2, KOLHAPUR IN APPEAL NO. KOP/264, 259, 260, 261 & 262/2009 - 10 FOR A.Y. NO. 2002 - 03 T O 2006 - 07 DATED 15 - 1 - 2010 RESPECTIVELY CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO THE ACT). 2. SHRI M.K. KULKARNI, IS REPRESENTED FOR THE ASSESSEE AND SHRI RAJENDRA B. DOND IS REPRESENTED FOR THE R EVENUE. ITA NO. 2140 TO 2144 /PUN/2017 AVINASH J. NAIK A.Y. 2002 - 03 TO 2006 - 07 2 3. IT WAS SUBMITTED BY THE LEARNED A.R. THAT THE PENALTY HAS BEEN LEVIED U/S 271(1)(C) OF THE ACT. IT WAS HIS SUBMISSION THAT THERE WAS SURVEY ON THE PREMISES OF THE ASSESSEE WHO IS AN ARCHITECT AT KOLHAPUR AND WAS HAVING PROFESSIONAL INCOME AS ALSO SALARY INCOME. THE ASSESSEE HAD FILED RETURN S OF INCOME FOR RELEVANT ASSESSMENT YEARS DISCLOSING NET TAXABLE INCOME AT RS. 1,50,000/ - FOR A.Y. 2002 - 03, RS. 1,66,000/ - FOR A.Y. 2003 - 04, RS. 1,88,500/ - FOR A.Y. 2004 - 05, RS. 2,50,000/ - FOR A.Y. 2005 - 06 AND RS. 3,00,000/ - FOR A.Y. 2006 - 07. NOTICES HAVE BEEN ISSUED U/S 148 OF THE ACT ON 12 - 2 - 2007 AND IN RESPONSE TO THE SAME, THE ASSESSEE HAD FILED HIS RETURN S OF INCOME FOR ALL THE FIVE ASSESSMENT YEARS ON 7 - 3 - 2007 . FOR A.Y. 2002 - 03, THE ASSESSEE HAD DISC LOSED THE INCOME AT RS. 1,59,829/ - AND AGRIC ULTURE INCOME OF RS. 1,00,000/ - , F OR A.Y. THE ASSESSEE HAD DISCLOSED INCOME OF RS. 1,65,610/ - AND AGRICULTURAL INCOME OF RS. 1,00,000/ - , F OR A.Y. 2004 - 05, THE ASSESSEE HAD DISCLOSED INCOME OF RS. 1,88,618/ - AND AGRICULTURAL INCOME OF RS. 1,00,000/ - , F OR A.Y. 2005 - 06 THE ASSESSEE HAD DISCLOSED INCOME OF RS. 2,56,800/ - AND AGRICULTURAL INCOME OF RS. 1,50,000/ - AND FOR A.Y. 2006 - 07 THE ASSESSEE HAD DISCLOSED INCOME OF RS. 3,00,400/ - AND THE AGRICULTURAL INCOME OF RS . 1,80,000/ - . 4. THE ASSESSMENTS CAME TO BE COMPLETED WHEREIN THE A.O HAD MADE ADHOC DISALLOWANCES OUT OF PETROL EXPENSES, TELEPHONE EXPENSES, DEPRECIATION AND CONSTRUCTION EXPENSES. ON APPEAL, THE LEARNED CIT(A) HAD DELETED THE ADDITIONS MADE FOR ALL THE FIVE YEARS AND CONSEQUENTLY, THE ASSESSED INCOME WAS RESTORED TO THE RETURNED INCOME. A SHOW CAUSE NOTICE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT HAD BEEN ISSUED TO THE ASSESSEE AND THE ASSESSEE HAD RESPONDED EXPLAINING THE FACTS VIDE LETTER DAT ED 7 - 9 - 2009. IT WAS ALSO CATEGORICALLY ADMITTED THAT THE ASSESSEE HAD FURNISHED RETURN S OF INCOME AND HAD ALSO PAID ALL THE TAXES ON THE INCOME DECLARED. IT WAS HIS SUBMISSION THAT ITA NO. 2140 TO 2144 /PUN/2017 AVINASH J. NAIK A.Y. 2002 - 03 TO 2006 - 07 3 IN THE ASSESSMENT ORDERS, PENALTY HAS BEEN INITIATED FOR CONCEALING THE P ARTICULARS OF INCOME. HOWEVER, IN THE PENALTY ORDER, THE PENALTY HAS BEEN LEVIED FOR FURNISHING OF INACCURATE PARTICULAR OF ASSESSEES INCOME. IT WAS HIS SUBMISSION THAT AT THE OUTSET, THE EXPLANATION GIVEN BY THE ASSESSEE HAS NOT BEEN REJECTED. IT WAS ALSO HIS SUBMISSION THAT THE PENALTY HAS BEEN LEVIED FOR REASONS OTHER THAN THE REASONS RAISED IN THE INITIATION PROCEEDINGS. 5 . IN REPLY, THE LEARNED D.R HAS VEHEMENTLY SUPPORTED ORDER OF THE A.O AND THE CIT(A). IT WAS HIS SUBMISSION THAT THE PENALTY A S CONFIRMED BY THE LEARNED CIT(A) WAS LIABLE TO BE CONFIRMED. 6 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. AT THE OUTSET, A PERUSAL OF THE PENALTY ORDER SHOWS THAT THE A.O HAS REJECTED THE ASSESSEES SUB MISSION AS IRRELEVANT AND NOT TENABLE. THE EXPLANATION GIVEN BY THE ASSESSEE HAS NOT BEEN FOUND TO BE FALSE OR NOT PLAUSIBLE. IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT BANGALORE VS. ASHOK T. PAI (2007) 292 ITR 11 (SC) , THE PENALTY I S N OT LEVIABLE IN THE PRESENT CASE INSOFAR AS EXPLANATION OF THE ASSESSEE IS A PLAUSIBLE EXPLANATION. MERE REJECTION OF AN EXPLANATION OF THE ASSESSEE WILL NOT MAKE THE ASSESSEE LIABLE FOR PENALTY. FURTHER, A PERUSAL OF THE ASSESSMENT ORDER S CLEARLY SHOW S THAT THE PENALTY HAS BEEN INITIATED FOR CONCEALMENT OF INCOME. A PERUSAL OF THE PENALTY ORDER SHOWS THAT THE A.O HAS LEVIED THE PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TWO REASONS ARE DIFFERENT. T HE A.O HAS INITIATED PENALTY F OR ONE REASON BUT HAS LEVIED THE PENALTY FOR ANOTHER. SUCH PENALTY CANNOT BE CONFIRMED IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SSAS EMARALD MEADOW REPORTED AT (2016) 73 TAXMANN.COM 248 (SC), AS ALSO THE DECISION OF HO NBLE HIGH COURT OF BOMBAY ITA NO. 2140 TO 2144 /PUN/2017 AVINASH J. NAIK A.Y. 2002 - 03 TO 2006 - 07 4 IN THE CASE OF PRINCIPAL C.I.T. (CENTRAL) BANGALURU VS. GOA COASTAL RESORTS AND RECREATION (P) LTD. REPORTED AT (2020) 113 TAXMANN.COM 574 (BOMBAY) AS ALSO THE DECISION OF CO - ORDINATE BENCH OF THIS TRIBUNAL IN ITA NO. 1718/PUN/20 17 AND OTHERS DATED 19 - 07 - 2019. THIS BEING SO, RESPECTFULLY FOLLOWING THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS (SUPRA), AS ALSO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GOA COASTAL RESOR TS AND RECREATION (P) LTD (SUPRA) AND ALSO DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL CITED SUPRA, THE PENALTY LEVIED BY THE A.O AND CONFIRMED BY THE LEARNED CIT(A) STANDS DELETED. 7 . IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. OR DER PRONOUNCED IN OPEN COURT ON THIS 21 ST DAY OF FEBRUARY 20 20 . SD/ - SD/ - ( ANIL CHATURVEDI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE ; DATED : 21 ST FEBRUARY 2020 . ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE PR. CCIT PUNE 4. THE PR. CIT 3 PUNE 5. THE ADDL. CIT RANGE 6 , PUNE 6. THE ASSESSING OFFICER 7. THE D.R. ITAT PUNE BENCH B 8. GUARD FILE TRUE COPY BY ORDER SR. PRIVATE SE CRETARY ITAT PUNE BENCH, PUNE ITA NO. 2140 TO 2144 /PUN/2017 AVINASH J. NAIK A.Y. 2002 - 03 TO 2006 - 07 5 1 DRAFT DICTATED ON 20 . 02 .20 20 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 20 . 02 .20 20 SR. PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR. PS/PS 21 - 02 - 2020 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR. PS/PS 7 DATE OF UPLOADING OF ORDER SR. PS/PS 8 FILE SENT TO BENCH CLERK 21 - 02 - 2020 SR. PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER