Shree Balaji Promoters and Builders, Pune V. Income-tax Officer, Ward - 3 (2), Pune

ITA 234/PUN/2019

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0973 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 12-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 234/PUN/2019 / ASSESSMENT YEAR : 2006-07 SHREE BALAJI PROMOTERS AND BUILDERS, C/O. PARTNER SHRI GOPAL KASHINATH KELE, NANDADEEP1, OPPOSITE RASIK LODGE, 767/11, DECCAN GYMKHANA, PUNE-411 004. PAN : AAWFS4199N .... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD-3(2), PUNE. / RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : SHRI PANKAJ GARG / DATE OF HEARING : 25.03.2019 / DATE OF PRONOUNCEMENT : 26.03.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE LD. CIT(APPEALS)-3, PUNE DATED 28.12.2018 FOR THE ASSESSME NT YEAR 2006-07 AS PER GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 234/PUN/2019 A.Y.2006-07 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO IMPOSITION OF PENALTY LEVIED U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) BY THE ASSESSING OFFICER AND THE SAME BEING CONFIRMED BY THE LD. CIT(APPEALS) RELYING ON THE DECISION OF THE HON'BLE BOMB AY HIGH COURT IN THE CASE OF SMT. KAUSHALYA REPORTED AS 216 ITR 660. 3. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE VE HEMENTLY ARGUED THAT THE NOTICE ISSUED U/S. 274 R.W.S. 271(1) OF THE ACT D ID NOT SPECIFY THE EXACT LIMB/ CHARGE FOR WHICH PENALTY U/S.271(1)(C) IS LEVIED. THE NOTICE IS VAGUE IN NATURE SINCE IT MENTIONS BOTH THE LIMBS OF SECTION 271(1)(C) OF THE ACT I.E. CONCEALMENT OF INCOME AND FURNISHING OF INACCURAT E PARTICULARS OF INCOME. THAT FURTHER IN THE PENALTY ORDER ALSO, IT IS MENT IONED THAT PENALTY U/S.271(1)(C) OF THE ACT IS LEVIED FOR CONCEALING AND FURNISHING O F INACCURATE PARTICULARS OF INCOME. THE LD. AR CONTENDED THAT IT IS SET TLED PRINCIPLE OF LAW IF THE CHARGE IS NOT SPECIFIC THEN THE PENALTY U/S.271(1)(C) OF T HE ACT CANNOT BE LEVIED. THAT IN SUPPORT OF HIS CONTENTIONS, THE LD. AR OF THE ASSESSEE RELIED ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CAS E OF CIT VS. SAMSON PERINCHERY IN ITA NO.1154 OF 2014 AND THE DECISIO N OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATH C OTTON AND GINNING FACTORY REPORTED AS 359 ITR 565 WHEREIN IT HAS BEEN H ELD THAT THE SATISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ON E OF THE TWO BREACHES U/S.271(1)(C) OF THE ACT FOR INITIATION OF PENALTY PRO CEEDINGS WOULD NOT PERMIT PENALTY BEING IMPOSED FOR THE OTHER BREACH. T HUS, THE ORDER IMPOSING PENALTY WAS TO BE MADE ONLY ON THE GROUND ON WHICH THE PENALTY PROCEEDINGS WERE INITIATED AND IT COULD NOT BE A FRESH GRO UND OF WHICH THE ASSESSEE HAD NO NOTICE. 3 ITA NO. 234/PUN/2019 A.Y.2006-07 4. ON THE OTHER HAND, THE LD. DR VEHEMENTLY ARGUED TH AT THE LD. CIT(APPEALS) HAS CONFIRMED THE PENALTY RELIED ON THE DECISIO N OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA (SUPRA.) A ND HAS PLACED RELIANCE ON THE ORDER OF THE SUB-ORDINATE AUTHORITIES. 5. WE HAVE PERUSED THE CASE RECORDS AND ANALYSED TH E FACTS AND CIRCUMSTANCES OF THE CASE AND HAVE GIVEN CONSIDERABLE TH OUGHT TO THE JUDICIAL PRONOUNCEMENTS PLACED BEFORE US. WE OBSERVE THAT THE LD. CIT(APP EALS) RELIED ON THE DECISION OF SMT. KAUSHALYA (SUPRA.) WHICH IS AN EARLIER DECISION AND HAVE CONFIRMED THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT. HOWE VER, THE LAW OF THE LAND AS ON DATE SHOULD DEFINITELY BE THE LAW LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHE RY (SUPRA.) WHICH IS AT A LATER DATE THAN THAT LAID DOWN IN SMT. KAUSHALYA S CASE AND THEREFORE, IS A PRESENT JUDGMENT ON THE SUBJECT. THE HON'BLE BOMBAY HIG H COURT THEREIN HAD APPLIED THE FINDINGS OF THE HON'BLE KARNATAKA HIGH COUR T IN THE CASE OF CIT VS. MANJUNATH COTTON AND GINNING FACTORY (SUPRA). THE BINDING PROPOSITION, THEREFORE, IS THAT ASSESSING OFFICER SHOULD BE C LEAR AS TO WHICH OF THE TWO LIMBS UNDER WHICH PENALTY IS IMPOSABLE, HAS BEEN C ONTRAVENED OR INDICATE THAT BOTH HAVE BEEN CONTRAVENED WHILE INITIATING PENALTY PROCEEDINGS. THIS IS TO PROVIDE AN OPPORTUNITY TO THE ASS ESSEE TO PREPARE HIMSELF FOR THE DEFENSE AS REGARDS TO THE EXACT CHARGE O N WHICH PENALTY IS IMPOSED UPON HIM U/S. 271(1)(C) OF THE ACT. IN THE INSTANT CA SE, THE CHARGE IS VAGUE AND THEREFORE, LEVY OF PENALTY IS NOT WARRANTED. IN THE TOTALITY OF FACTS AND CIRCUMSTANCES, WHEN NOTICE O F PENALTY IS NOT SPECIFIC ABOUT THE CHARGE, WHEN PENALTY ORDER ITSELF IS NOT SPECIFIC ABOUT THE EXACT LIMB/CHARGE, BOTH ARE VAGUE IN NATURE. IN SUCH CIRC UMSTANCES, WE SET 4 ITA NO. 234/PUN/2019 A.Y.2006-07 ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND DIRECT THE AS SESSING OFFICER TO DELETE PENALTY FROM THE HANDS OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 26 TH DAY OF MARCH, 2019. SD/- SD/- R.S.SYAL PA RTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 26 TH MARCH, 2019. SB !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-3, PUNE. 4. THE PR. CIT-2, PUNE. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 5 ITA NO. 234/PUN/2019 A.Y.2006-07 DATE 1 DRAFT DICTATED ON 25 .03 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 2 6 .03 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 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 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