M/s. Namrata City Centre, Pune V. Deputy Commissioner of Income-tax,

ITA 2450/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5355 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 18-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Assessee Lawyers: V L JAIN
• Keywords: Initiation of penalty proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , , ' BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NOS.2449 & 2450/PUN/2016 $ $ / ASSESSMENT YEARS : 2011-12 & 2012-13 M/S. NAMRATA CITY CENTRE, 592, RAVIWAR PETH, TALEGAON DABHADE, MAVAL, PUNE PAN : AAAAN6057F ....... / APPELLANT / V/S. DCIT, CENTRAL CIRCLE-2(1), PUNE / RESPONDENT ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI MUKESH JHA / DATE OF HEARING : 28.06.2018 / DATE OF PRONOUNCEMENT : 18.07.2018 / ORDER PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS FILED BY ASSESSEE AGAINST THE CON SOLIDATED ORDER OF CIT(A)-12, PUNE, DATED 12-08-2016 FOR THE A.YRS. 2011-12 & 2012-13. THESE APPEALS ARE FILED IN CONNECTION WITH THE PE NALTY LEVIED U/S.271(1)(C) OF THE ACT. ASSESSEE RAISED SIMILAR GROUND IN B OTH THE APPEALS. WE SHALL FIRST TAKE UP APPEAL ITA NO.2449/PUN/2016. ITA NO.2449/PUN/2016 A.Y. 2011-12 2. THE SOLITARY GROUND RAISED BY THE ASSESSEE IS EXTRAC TED HERE AS UNDER : 2 ITA NOS.2449 & 2450/PUN/2016 M/S. NAMRATA CITY CENTRE THE CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.5,96,374/- LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . 3. BRIEFLY STATED RELEVANT FACTS FOR THE A.Y. 2011-12 INCLUD E THAT THE ASSESSEE IS A FIRM AND FILED THE RETURN OF INCOME ON 27-09- 2011 DECLARING TOTAL LOSS OF RS.7,31,023/-. THERE WAS SEARCH ACTIO N U/S.132 OF THE ACT IN THE NAMRATA GROUP OF CASES ON 12-02-2013 . CERTAIN INCRIMINATING DOCUMENTS WERE SEIZED. ASSESSEE DISCLOSED A DDITIONAL INCOME AT RS.31.47 LAKHS ON ACCOUNT OF RECEIPT OF ON-MONE Y ABOVE THE AGREEMENT VALUE OF FLATS/SHOPS. IN RESPONSE TO NOTICE U/ S.153C OF THE ACT, ASSESSEE FILED THE RETURN OF INCOME ON 09-12-2013 DE CLARING TOTAL INCOME OF RS.24,16,677/- AND THE INCOME RETURNED WAS ACCE PTED. HOWEVER, THE AO LEVIED PENALTY OF RS.5,96,374/- U/S.271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PAR TICULARS. IN THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) UPHELD THE PENA LTY LEVIED BY THE AO. SIMILARLY, FOR THE A.Y. 2012-13, THE AO LEVIED PENALTY OF RS.42,17,130/- WITH IDENTICAL SATISFACTION. CIT(A) CONFIRMED TH E SAID PENALTY BASED ON THE REASONING GIVEN IN A.Y. 2011-12. 4. AGGRIEVED WITH THE ORDER OF CIT(A) THE ASSESSEE IS IN AP PEAL BEFORE THE TRIBUNAL WITH THE AFORESAID GROUND EXTRACTED ABOVE FO R BOTH THE ASSESSMENT YEARS. 5. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE RAISED AN ORAL GROUND WHICH IS LEGAL IN NATURE AND SUBMITTED THAT TH IS IS A CASE WHERE THE AO FAILED TO RECORD VALID SATISFACTION IN THE ASS ESSMENT ORDER DURING WHICH THE PENALTY PROCEEDINGS WERE INITIATED. HIGHLIGH TING THE 3 ITA NOS.2449 & 2450/PUN/2016 M/S. NAMRATA CITY CENTRE LEGAL REQUIREMENT OF MAKING A SPECIFIC REFERENCE TO OF THE LI MB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT AND RELYING ON VARIOUS BIND ING JUDGMENTS IN THE CASE CIT VS. SAMSON PERINCHERY (2017) 392 ITR 4 (B OM.) AS WELL AS THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565, LD. COUNSEL DEMONSTRATED THAT THE PENALTY LEVIED BY THE AO IS UNSUS TAINABLE IN LAW. IN THIS REGARD, HE BROUGHT OUR ATTENTION TO THE ASSESS MENT ORDER AS WELL AS THE PENALTY ORDER HIGHLIGHTING THE ABOVE LEGAL DEFICIENCIES. 6. PER CONTRA, LD. DR FOR THE REVENUE RELIED ON THE ORDER S OF AO/CIT(A). 7. WE HEARD BOTH THE PARTIES ON THIS SPECIFIC LEGAL ISSUE, I.E . RECORDING OF PROPER SATISFACTION BY THE AO. WE PERUSED THE ORDER OF THE AO AND FIND THE SATISFACTION RECORDED BY THE AO FOR INITIATING THE P ENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT IS RELEVANT FOR EXTRACTION. THERE FORE, THE SAME IS REPRODUCED AS UNDER : 5. THE DISCLOSURE IN RESPECT OF A.Y. 2011-12 HAS B EEN ADHERED BY THE ASSESSEE WHILE FILING RETURN IN RESPONSE TO NOTICE U/S.153C. THESE FACTS ALSO PROVE THAT THE ABOVE STATED ON-MONEY HAD BEEN RECEIVED BY THE ASSESSEE BUT IT WAS NOT DISCLOSED BY IT WHILE FILIN G ITS ORIGINAL RETURN OF INCOME ON 27-09-2011. THIS UNDISCLOSED INCOME OF R S.31.47 LAKHS COULD NOT HAVE COME TO THE NOTICE OF THE DEPARTMENT BUT F OR THE SEARCH/SURVEY ACTION IN THE CASE OF THE ASSESSEE GROUP. HENCE, T HESE FACTS PROVE THAT THERE WAS A CONCEALMENT OF INCOME IN THE ORIGINAL R ETURN OF INCOME AND HENCE THE UNDERSIGNED IS SATISFIED THAT THE ASSESSE E IS LIABLE FOR PENALTY PROCEEDINGS U/S.271(1)(C) OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS, ACCORDINGLY, PENAL PROCEEDINGS U/S.271(1)(C) ARE HEREBY SEPARATELY INITIATED. 7.1 WE ALSO PERUSED THE PENALTY ORDER DATED 28-09-2015 AND FIND THE SATISFACTION RECORDED BY THE AO FOR LEVYING THE PENALTY U/ S.271(1)(C) OF THE ACT IS RELEVANT FOR EXTRACTION. THE SAID SATISFACTION READS AS U NDER : 4 ITA NOS.2449 & 2450/PUN/2016 M/S. NAMRATA CITY CENTRE 07. IN VIEW OF THE ABOVE FACTS, I AM SATISFIED THA T THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME AND THEREBY HAS CONCEALED HIS INCOME FOR THE A.Y. 2011-12. THEREFORE, I CONSIDER THIS TO BE A FIT CASE FOR IMPOSING PENALTY U/S.271(1)(C) OF THE I.T. ACT, 1961. ACCORDINGLY, A PENALTY OF RS.5,96,374/- IS HEREBY I MPOSED ON THE ASSESSEE U/S.271(1)(C) OF THE I.T. ACT, 1961 WHICH IS CALCULATED AS UNDER.. FROM THE ABOVE, IT IS EVIDENT THAT AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS IN THE ASSESSMENT, AO MENTIONED BOTH THE LIM BS OF CLAUSE (C) OF SECTION 271(1) OF THE ACT. IT HAPPENS ONLY WHEN THE AO SUFFERS FROM AMBIGUITY IN HIS MIND. THUS, THIS MANNER OF RECORDING OF SATIS FACTION SUGGESTS THE EXISTENCE OF AMBIGUITY WITH REFERENCE TO APP LICABILITY OF SPECIFIC LIMB. THEREFORE, WE ARE OF THE OPINION THAT CONSIDERING THE ABOVE REFERR ED BINDING JUDGMENTS SUCH PENALTY ORDER IS UNSUSTAINABLE IN LA W LEGALLY. AO IS UNDER OBLIGATION TO SPECIFY THE CORRECT LIMB AT THE TIME OF INITIATION AS WELL AS AT THE TIME OF LEVY OF PENALTY. IN VIEW OF THE A BOVE DELIBERATION ON THIS ISSUE, WE ARE OF THE OPINION THAT THE PENALTY ORDE R IS LIABLE TO BE QUASHED ON THIS LEGAL ISSUE. THUS, THE ORDER OF CIT(A) IS SET-ASIDE AND DIRECT THE AO TO DELETE THE PENALTY. ACCORDINGLY, THE S OLITARY GROUND RAISED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.2450/PUN/2016 A.Y. 2012-13 9. THE FACTS, ISSUES, DECISION OF AO/CIT(A) AND THE ARGUMENTS OF THE PARTIES ARE COMMON. THEREFORE, OUR DECISION GIVEN IN ITA NO.2449/PUN/2016 SETTING ASIDE THE ORDER OF CIT(A) SHALL AP PLY TO THIS APPEAL TOO. ACCORDINGLY, THE GROUND RAISED BY THE ASSES SEE IN THIS APPEAL IS ALLOWED. 5 ITA NOS.2449 & 2450/PUN/2016 M/S. NAMRATA CITY CENTRE 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 11. TO SUM UP, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON 18 TH DAY OF JULY, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 18 TH JULY, 2018. SATISH ' ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-12, PUNE. 4. THE PR. CIT, CENTRAL, PUNE. 5. , , # , / DR, ITAT, B BENCH, PUNE. 6. & / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.