NEIA TRUST, MUMBAI V. ACIT (E) 2(1), MUMBAI

ITA 2475/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8726 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTURU KUMAR SAIKA
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c); 274; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2475/MUM/2017(A.Y. 2010-11) NEIA TRUST, NIRMAL, 5 TH FLOOR, 241/242, BACKBAY RECLAMATION, NARIMAN POINT, MUMBAI 400 012. PAN:AAATN 9999F ...... APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX - (EXEMPTION)2(1), ROOM NO.510, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI -400012. ..... RESPONDENT APPELLANT BY : MS. ARATI VISSANJI RESPONDENT BY : SHRI SANTURU KUMAR SAIKA DATE OF HEARING : 11/09/2019 DATE OF PRONOUNCEMENT : 11/09/2019 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF CIT(A)-1, MUMBAI DATED 12/01/2017 FOR ASSESSMENT YEAR 2010-11 CONFIRMING LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME T AX ACT 1961 (IN SHORT THE ACT). 2. MS. ARATHI VISSANJI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE TRIBUNAL IN ITA NO.544/MUM/2014 VIDE ORDER DATED 18/01/2019 HAS DELETED THE ADDITION MADE BY THE AUTHORITIES BE LOW, HENCE, NO 2 ITA NO.2475/MUM/2017(A.Y. 2010-11) PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIA BLE. THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE FURNISHED A COPY OF TRIBUNAL ORDER IN ITA NO.544/MUM/2014(SUPRA) ALLOWING ASSESSEES CLAIM OF EXEMPTION UNDER SECTION 11 & 12 OF THE ACT. 3. ON THE OTHER HAND, SHRI SANTURU KUMAR SAIKA APP EARING ON BEHALF OF THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE TRI BUNAL HAS GRANTED PART RELIEF TO THE ASSESSEE. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRES ENTATIVES OF RIVAL SIDES HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE ASSESSING OFFICER VIDE ORDER DATED 25/03/2015 HAS LEVIED PENALTY UNDE R SECTION 271(1)(C) OF THE ACT IN RESPECT OF DISALLOWANCE OF ASSESSEES CL AIM OF EXEMPTION UNDER SECTION 11 & 12 OF THE ACT. THE ASSESSEE CHALLEN GED THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE MADE BY ASSESSING OFFIC ER IN APPEAL BEFORE THE TRIBUNAL IN ITA NO.544/MUM/2014(SUPRA). THE CO -ORDINATE BENCH OF THE TRIBUNAL AFTER EXAMINING THE ISSUE ALLOWED THE APPEAL OF THE ASSESSEE IN TOTO. ONCE THE ADDITION/DISALLOWANCE HAS BEEN DELETED BY THE TRIBUNAL, THE PENALTY LEVIED ON ADDITION/DISALLOWAN CE DOES NOT SURVIVE. 5. WE FURTHER OBSERVE THAT IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS NOT RECORDED SATISFACTION FOR INITIATI NG PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT . THE ASSESSING OFFICER IN LAST PARA I.E. PARA 19 OF THE ORDER HAS MERELY STATED THAT PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) INITIATED ISSUE NOTICE UNDER SEC TION 274 R.W.S. 271(1)(C) THE ASSESSING OFFICER HAS NOT MENTIONED THE CHARGE UNDER SECTION 271(1)(C) OF THE ACT FOR WHICH PENALTY IS BEING LE VIED. HOWEVER, WHILE 3 ITA NO.2475/MUM/2017(A.Y. 2010-11) PASSING THE ORDER UNDER SECTION 271(1)(C) OF THE AC T, THE ASSESSING OFFICER LEVIED PENALTY FOR FURNISHING INACCURATE PARTICU LARS OF INCOME. PROPER RECORDING OF SATISFACTION SPECIFYING CHARGE FOR W HICH PENALTY PROCEEDINGS ARE INITIATED IS ONE OF THE MANDATORY CONDITION FOR LEVY OF PENALTY ( CIT & ANR. V. MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565(KAR) . ). THE HONBLE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. SAMSON PERINCHERY REPORTED AS 392 ITR 4(BOM) HAS H ELD THAT PENALTY CANNOT BE LEVIED ON A CHARGE OTHER THAN FOR WHICH SATISFACTION HAS BEEN RECORDED. THE RELEVANT EXTRACT OF THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT READS AS UNDER:- 6. THE ABOVE SUBMISSION ON THE PART OF THE REVENUE IS IN THE FACE OF THE DECISION OF THE SUPREME COURT IN T. ASHOK PAI V. CIT [2007] 292 ITR 11/161 TAXMAN 340 [RELIED UPON IN MANJUNATH COTTON & GINNING FACTORY (SUPRA)] - WHERE IN IT IS OBSERVED THAT CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME IN SECTION 271(1)(C) OF THE ACT, CARRY DIFFERENT MEANINGS/CONNOTATIONS. THEREFORE, THE SAT ISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BREACHES MENTIONED UN DER SECTION 271(1)(C) OF THE ACT, FOR INITIATION OF PENALTY PROCEEDINGS WILL NOT WARRANT/ PERMIT PENALTY BEING IMPOSED FOR THE OTHER BREACH. THIS IS MORE SO, AS AN ASSESSEE WOULD RESPO ND TO THE GROUND ON WHICH THE PENALTY HAS BEEN INITIATED/NOTICE ISSUED. IT MUST, THEREFORE, F OLLOW THAT THE ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON THE GROUND OF WHICH THE PENALTY PROCEE DINGS HAS BEEN INITIATED, AND IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSEE HAS NO NOTI CE. 6. THUS IN VIEW OF OUR ABOVE OBSERVATION, THE PENA LTY PROCEEDINGS ARE LIABLE TO BE QUASHED. THE IMPUGNED ORDER IS SET-A SIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT AFTER HEARING TH E APPEAL ON WEDNESDAY, THE 11 TH DAY OF SEPTEMBER 2019. SD/- SD/- (RAJESH KUMAR ) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 11/09/2019 4 ITA NO.2475/MUM/2017(A.Y. 2010-11) VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI