Subhash Sakharam Jadhav, Pune V. Income-tax Officer,

ITA 2153/PUN/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8571 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 14-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHEI
• Assessee Lawyers: ATUL GAIKWAD
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . .. . / ITA NO.2153/PUN/2016 / ASSESSMENT YEAR : 2011-12 SUBHASH SAKHARAM JADHAV, GAT NO.529, NEAR GHANSHAM TRADERS, JADHAVWADI, CHIKHALI, HAVELI, PUNE 411 062 PAN : AATPJ4927E ....... / APPELLANT / V/S. ITO, WARD-10(4), PUNE / RESPONDENT ASSESSEE BY : SHRI ATUL GAIKWAD REVENUE BY : SHRI SANJEEV GHEI / DATE OF HEARING : 11-10-2018 / DATE OF PRONOUNCEMENT : 31-12-2018 / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-9, PUNE DATED 07-06-2016 FOR THE ASSESSMENT YEAR 2011-12 CONFIRMING LE VY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2 ITA NO. 2153/PUN/2016 SUBHASH SAKHARAM JADHAV 2. SHRI ATUL GAIKWAD APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED, AT THE OUTSET, THAT THE PENALTY LEVIED U/S.271(1 )(C) SUFFERS FROM DEFECT IN RECORDING SATISFACTION. THE ASSESSING OFFICER WHILE RECORDING SATISFACTION FOR LEVY OF PENALTY U/S.271(1)(C) HAS MEN TIONED BOTH THE LIMBS OF SECTION 271(1)(C) OF THE ACT. THUS, AMBIG UITY IN NOT MENTIONING SPECIFIC CHARGE FOR WHICH PENALTY IS TO BE LEVIED IS CONSPICUOUS WRIT LARGE. WHILE PASSING THE ORDER LEVYING P ENALTY, ASSESSING OFFICER INVOKED ONLY ONE CHARGE, I.E. CONCEALMENT OF INCOME. 3. ON THE OTHER HAND, SHRI SANJEEV GHEI REPRESENTING TH E DEPARTMENT VEHEMENTLY DEFENDED THE ORDER CONFIRMING LEV Y OF PENALTY. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT PENALT Y U/S.271(1)(C) OF THE ACT IS LEVIED IN RESPECT OF NON-DISCLOSURE OF LONG TERM CAPITAL GAIN IN THE RETURN OF INCOME. THE LD. DR SUBM ITTED THAT, WHILE LEVYING PENALTY U/S.271(1)(C), THE ASSESSING OFFICER HAS CATEGORICALLY MENTIONED THAT THE PENALTY IS BEING LEVIED FOR CONCEALMENT. THERE IS NO AMBIGUITY OR VAGUENESS IN THE M IND OF ASSESSING OFFICER WHILE LEVY OF PENALTY. 4. BOTH SIDES HEARD. ORDERS OF AUTHORITIES BELOW PERUSED . THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF LONG TERM CAP ITAL GAINS NOT SHOWN IN THE RETURN OF INCOME. CONSEQUENTLY, PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT WERE INITIATED. THE AO WHILE RECORDIN G SATISFACTION FOR INITIATION OF PENALTY OBSERVED AS UNDER : SINCE THE INCOME DERIVED FROM LTCG NOT SHOWN IN TH E ORIGINAL RETURN FILED, PENAL PROCEEDINGS U/S.271(1)(C) INITIATED SEPA RATELY FOR FURNISHING INACCURATE PARTICULARS/CONCEALING IN COME. 3 ITA NO. 2153/PUN/2016 SUBHASH SAKHARAM JADHAV A PERUSAL OF THE SATISFACTION RECORDED CLEARLY SHOWS THAT THERE WAS AMBIGUITY IN THE MIND OF ASSESSING OFFICER WITH REGARD TO T HE CHARGE FOR LEVY OF PENALTY U/S.271(1)(C). THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF T. ASHOK PAI VS. CIT REPORTED AS 292 ITR 11 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS CARRY DIFFERENT CONNOTATIONS. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY 3 59 ITR 565 HAS HELD THAT IF THE SPECIFIC CHARGE ON WHICH PENALTY IS B EING LEVIED IS NOT COMMUNICATED TO THE ASSESSEE, PRINCIPLES OF NATURAL J USTICE ARE OFFENDED AS THE ASSESSEE WOULD NOT BE IN A POSITION TO DE FEND THE CASE PROPERLY. IN THE PRESENT CASE, THE ASSESSING OFFICER WHILE RECORDING SATISFACTION MENTIONED BOTH THE CHARGES OF SECTION 271(1)(C) FOR LEVY OF PENALTY. IN THE FACTS OF THE CASE AND THE DECISIONS DISCU SSED ABOVE, WE ARE OF CONSIDERED OPINION THAT RECORDING OF SATISFACTION BY THE ASSESSING OFFICER FOR INITIATING PENALTY PROCEEDINGS FALLS SHORT OF LEGAL REQUIREMENT AND HENCE, THE PENALTY PROCEEDINGS ARISING TH EREFROM ARE VITIATED. THE ORDER LEVYING PENALTY IS THEREFORE, QUASHED AND THE APPEAL OF ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 31 ST DAY OF DECEMBER, 2018. SD/- SD/- (D. KARUNAKARA RAO) (VIKAS AWASTHY) ACCOUNTANT MEMBER JU DICIAL MEMBER / PUNE; / DATED : 31 ST DECEMBER, 2018 SATISH 4 ITA NO. 2153/PUN/2016 SUBHASH SAKHARAM JADHAV / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. () / THE CIT(A)-9, PUNE 4. / THE PR.CIT-5, PUNE 5. , , $ , / DR, ITAT, A BENCH, PUNE. 6. ' / GUARD FILE. // // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY, , / ITAT, PUNE 5 ITA NO. 2153/PUN/2016 SUBHASH SAKHARAM JADHAV DATE 1. DRAFT DICTATED ON 27-12-18 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 28-12-18 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER.