Sohail Isaq Bhagwan, Baramati V. Deputy Commissioner of Income-tax, Circle -5 , Pune

ITA 24/PUN/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5254 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Reasonable cause
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 24 /P U N/201 9 / ASSESSMENT YEAR : 20 11 - 12 SOHAIL ISAQ BAGWAN, BAGWAN GALLI, KACHERI ROAD, BARAMATI . / APPELLANT PAN: A DQPB9359L VS. THE DY . COMMISSIONER OF INCOME TAX, CIRCLE 5 , PUNE . / RESPONDENT / APPELLANT BY : SHRI M.K. KULKARNI / RESPONDENT BY : SHRI PANKAJ GARG / DATE OF HEARING : 2 3 . 0 7 .201 9 / DATE OF PRONOUNCEMENT: 19 . 0 8 .201 9 / ORDE R PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 7 , PUNE , DATED 2 6 . 1 1 .201 8 RELATING TO ASSESSMENT YEAR 20 11 - 12 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESS EE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY UNDER SECTION 271( 1 ) (C) OF RS. 4 , 84 , 791/ - LEVIED BY A.O. WAS NOT SO LEVIABLE WITHOUT POINTING OUT ANY 'CONCEALMENT' OR 'FURNISHING INACCURATE PARTICULARS' OF INCOME. THE PENALTY LEVIED UNDER SECTION 271( 1 )(C) IS NOT SUSTAINABLE. IT BE QUASHED. ITA NO. 24 /P U N/20 1 9 SHRI SOHAIL ISAQ BAGWAN 2 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THERE WAS NO SATISFACTION RECORD ED BY THE AO UNDER WHICH LIMB OF THE SECTION , WHETHER 'CONCEALMENT' O R 'FURNISHING OF INACCURATE PARTICULARS' OF INCOME IS AVAILABLE. IN THE ABSENCE OF SUCH SATISFACTION THE PENALTY LEVIED BY AO AND CONFIRMED BY LD. CIT(A) IS NOT SUSTAINABLE. IT BE QUASHED . 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND CONSIDERING THE HON'BLE BOMBAY HIGH COURT AND OTHER JUDICIAL PRECEDENTS THE PENALTY LEVIED UNDER SECTION 271( 1 )(C) BY AO AND CONFIRMED BY LD. CIT(A) THOUGH THIS LEGAL POSITION WAS POINT ED OUT BEFORE LD. CIT(A) , THE LD. CIT(A) IGNORED ALL THIS LEGAL POSITION AND CONFIRMED THE PENALTY. IT BE DELETED. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. BRIEFLY, IN THE FACTS OF T HE CASE, THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF 45 , 14 , 26 0/ - . THE CASE OF ASSESSEE WAS PICKED UP FOR SCRUTINY UNDER CASS AND ADDITION OF 26,07,760/ - ON ACCOUNT OF SHORT TERM CAPITAL GAINS WAS MADE IN THE HANDS OF ASSESSEE. T HE ASSESSING OFFICER WHILE FINALIZING THE ASSESSMENT HAS HELD THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME . WHILE LEVYING PENALTY FOR CONCEALMENT, THE ASSESSING OFFICER HAD HELD THE ASSESSEE TO HAVE CONCEALED ITS INCOME BY FURNISHING INACCURA TE PARTICULARS OF INCOME. THEREAFTER, THE ASSESSING OFFICER HAD LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT AT 4,64,791/ - , WHICH WAS CONFIRMED BY CIT(A) AND THE ASSESSEE IS IN APPEAL AGAINST THE SAME. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY FOR CONCEALMENT UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT HAD MADE ADDITION OF 26,07,760/ - ON ACCOUNT OF SHORT TERM CAPITAL GAINS WAS MADE IN THE HANDS OF ASSESSEE. THEREAFTER, WHILE LEVYING PENALT Y, THE ASSESSING OFFICER HELD AS UNDER: - 08. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM SATISFIED THAT ASSESSEE WITHOUT SUFFICIENT AND REASONABLE CAUSE UNDER THE DELIBERATE INTENTION CONCEALED ITS INCOME BY FURNISHING INACCURATE PART ICULARS OF INCOME TO THE EXTENT OF RS.26,07,760/ - . THEREFORE, I CONSIDER THIS TO BE A FIT ITA NO. 24 /P U N/20 1 9 SHRI SOHAIL ISAQ BAGWAN 3 CASE FOR IMPOSING PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961 . ACCORDINGLY A PENALTY OF RS. 4,64,791/ - HEREBY IMPOSED U/S 271(1)(C) OF THE I.T. ACT, 1961. 6. THE ASSESSING OFFICER THUS, WHILE RECORDING SATISFACTION FOR INITIATING PENALTY PROCEEDINGS HAD HELD THE ASSESSEE TO HAVE CONCEALED THE PARTICULARS OF INCOME AND WHILE LEVYING PENALTY HAD HELD THE ASSESSEE TO HAVE CONCEALED ITS INCOME BY FURNISHING INACCURATE PARTICULARS OF INCOME . IN OTHER WORDS, THE ASSESSING OFFICER HAS FAILED TO COME TO FINDING AS TO WHICH LIMB OF SECTION 271(1)(C) OF THE ACT HAS NOT BEEN FULFILLED BY ASSESSEE. HENCE, PENALTY ORDER PASSED BY THE ASSESSING OFFICER SUFFERS FROM INFIRMITY I.E. IN NOT COMING TO FINDING AS TO WHICH LIMB OF SECTION 271(1)(C) OF THE ACT IS NOT SATISFIED. 7. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM), WHEREIN IT WAS HELD THAT WHERE THERE IS NO PROPER SATISFACTION FOR INITIATING PENALTY PROCEEDINGS AND IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO THE ASSESSEE, THERE IS NO MERIT IN LEVY OF PENALTY. IN THE PRESENT CASE, ASSESSING OFFICER HAS FAILED TO CO NCLUDE WHICH LIMB OF SECTION 271(1)(C) OF THE ACT IS APPLICABLE, HENCE ORDER SUFFERS FROM INFIRMITY. ACCORDINGLY, WE DELETE THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED. 8 . IN THE RESU LT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 19 TH DAY OF AUGUST , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 19 TH AUGUST , 201 9 . GCVSR ITA NO. 24 /P U N/20 1 9 SHRI SOHAIL ISAQ BAGWAN 4 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 7 , PUNE ; 4. THE PR. CIT - 6 , PUNE ; 5. 6. , , / DR B , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE