Marvel Realtors., Pune V. ACIT, Pune

ITA 2475/PUN/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1880 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 13-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Opportunity of being heard; Documents seized
• Section: 69C; 40A(3); 143(3); 153A; 27; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 2429/PN/2012 %' ( ')( / ASSESSMENT YEAR : 2008-09 ACIT, CENTRAL CIRCLE 1(1), PUNE ....... / APPELLANT ' / V/S. M/S. MARVAL HOMES, JEWEL TOWERS, SECOND FLOOR, LANE NO. 5, ABOVE HOTEL GREAT PUNJAB, KOREGAON PARK, PUNE PAN : AALFM5447Q / RESPONDENT / ITA NO. 2430/PN/2012 %' ( ')( / ASSESSMENT YEAR : 2007-08 ACIT, CENTRAL CIRCLE 1(1), PUNE ....... / APPELLANT ' / V/S. M/S. MARVAL REALTORS, JEWEL TOWERS, SECOND FLOOR, LANE NO. 5, ABOVE HOTEL GREAT PUNJAB, KOREGAON PARK, PUNE PAN : AAHFM1681N / RESPONDENT 2 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 / ITA NOS. 2474 & 2475/PN/2012 %' ( ')( / ASSESSMENT YEARS : 2007-08 & 2006-07 MARVAL REALTORS, MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO. : 84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 PAN : AAHFM1681N ....... / APPELLANT ' / V/S. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), PUNE / RESPONDENT ASSESSEE BY : SHRI SHARAD SHAH REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 17-02-2016 / DATE OF PRONOUNCEMENT : 16-05-2016 * / ORDER PER VIKAS AWASTHY, JM : ITA NO. 2429/PN/2012 HAS BEEN FILED BY THE REVENUE AGAIN ST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DAT ED 09-07-2012 DELETING THE PENALTY LEVIED U/S. 271AAA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE ASSESSMENT YEAR 2008-09. ITA NO. 2430/PN/2012 HAS BEEN FILED BY THE REVENUE AGAIN ST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DAT ED 26-07- 3 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 2012 PASSED U/S. 271(1)(C) FOR THE ASSESSMENT YEAR 2007-08. THE REVENUE HAS ASSAILED THE FINDINGS OF COMMISSIO NER OF INCOME TAX (APPEALS) IN DELETING THE PENALTY IN RESPECT OF DISALLOWANCE OF EXPENSES MADE U/S. 40A(3) AND 40(A)(IA) AND GRANTING TELESC OPIC BENEFIT TO THE ASSESSEE FOR COMPUTING OF PENALTY LEVIED U/ S. 271(1)(C) OF THE ACT. THE ASSESSEE IN ITA NO. 2474/PN/2012 HAS FILED CROSS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) UPHOLDING THE PENALTY AND ALSO LEVYING PENALTY U/S. 271(1)(C) AFTER RECO RDING SATISFACTION IN THE ASSESSMENT ORDER U/S. 271AAA OF THE ACT. ITA NO. 2475/PN/2012 HAS BEEN FILED BY THE ASSESSEE ASS AILING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) DATED 26 -07-2012 FOR THE ASSESSMENT YEAR 2006-07 CONFIRMING THE LEVY OF PE NALTY U/S. 271(1)(C) AND ALSO RAISING AN ADDITIONAL GROUND CHALLENGING THE VALIDITY OF SHOW CAUSE NOTICE. AS PER THE CONTENTIONS OF THE ASS ESSEE NO REASON HAS BEEN SPECIFIED IN THE SHOW CAUSE NOTICE ISSUED U/S. 27 4 R.W.S. 271(1)(C) FOR LEVY OF PENALTY, I.E. WHETHER THE PENALTY IS LEVIED FO R CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: A SEARCH ACTION U/S. 132 OF THE ACT WAS CONDUCTED IN THE CASE OF MARVEL GROUP ON 22-05-2008. M/S. MARVEL REALTOR PVT. LTD. IS THE FLAGSHIP COMPANY OF THE GROUP AND THE ASSESSEES ARE PARTNERSH IP FIRMS OF THE MARVEL GROUP. DURING THE COURSE OF SEARCH ACTION STAT EMENT OF SHRI VISHWAJEET JHAWAR WAS RECORDED U/S. 132(4) OF THE ACT ON 22-05-2008 WHEREIN HE DECLARED ADDITIONAL INCOME OF ` 11 CRORES OVER AND ABOVE HIS REGULAR INCOME. THE SAID INCOME WAS DECLARED IN RESPECT O F ENTIRE MARVEL GROUP OF COMPANIES. IN HIS SUBSEQUENT STATEMENT DATED 4 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 02-06-2008, SHRI VISHWAJEET JHAWAR STATED THAT AMOUNT OF ` 11 CRORES DECLARED AS ADDITIONAL INCOME IS TO BE BIFURCATED IN TWO ASS ESSMENT YEARS I.E. ` 2 CRORES IN ASSESSMENT YEAR 2008-09 AND ` 9 CRORES IN ASSESSMENT YEAR 2009-10. THE ASSESSMENTS WERE COMPLE TED AND THE ADDITIONS WERE MADE IN THE RESPECTIVE ASSESSMENT YEARS. CONSEQUENT TO THE ASSESSMENTS MADE, PENALTY PROCEEDINGS WERE INITIAT ED IN THE CASE OF GROUP CONCERNS U/S. 271AAA AND 271(1)(C) OF THE AC T. IN ASSESSMENT YEARS 2006-07 AND 2007-08 PENALTIES WERE LE VIED U/S. 271(1)(C) AND IN RESPECT OF ASSESSMENT YEAR 2008-09 PENALT Y U/S. 271AAA WAS LEVIED IN THE CASE OF ASSESSEE VIDE ORDER DATED 30-06-2 011. SINCE, ALL THE APPEALS ARE ARISING FROM SAME SET OF FACTS, THE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMMON ORDER. FOR THE SAKE OF CONVENIENCE THE APPEA LS ARE TAKEN UP IN SERIATIM. ITA NO. 2429/PN/2012 (A.Y. 2008-09) AGGRIEVED BY THE PENALTY ORDER DATED 30-06-2011 PASSE D U/S. 271AAA, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CO MMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPE ALS) AFTER CONSIDERING THE DOCUMENTS ON RECORD AND THE SUBMISSIONS MADE BY THE ASSESSEE HELD THAT THE THREE CONDITIONS LAID DOWN U/S. 27 1AAA(2) ARE SATISFIED. THE ASSESSEE HAS ADMITTED THE UNDISCLOSED INCOM E AND HAS BEEN ABLE TO EXPLAIN THE MANNER IN WHICH THE INCOME HAS B EEN DERIVED. THE ASSESSEE HAS PAID TAXES TOGETHER WITH INTEREST THE REON. ACCORDINGLY, THE COMMISSIONER OF INCOME TAX (APPEALS) DIREC TED THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S. 271AAA. NOW, THE REVENUE IS IN APPEAL AGAINST THE FINDINGS OF FIRST APPELLATE AUTHORITY. 5 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 3. SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT SUB MITTED THAT THE ASSESSEE HAS NOT SPECIFIED THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS EARNED. THE LD. DR VEHEMENTLY SU PPORTED THE FINDINGS OF ASSESSING OFFICER IMPOSING PENALTY U/S. 271AAA AND PRAYED FOR REVERSING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 4. ON THE OTHER HAND SHRI SHARAD SHAH APPEARING ON BE HALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FULLY EXPLAINED THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED BY THE ASSESSEE . THE LD. AR FURTHER SUBMITTED THAT IN A STATEMENT RECORDED U/S. 132 (4) ON 22-05-2008 IN REPLY TO QUESTION NO. 20 SHRI VISHWAJEET J HAWAR HAD CATEGORICALLY STATED THAT HE IS VOLUNTARILY DISCLOSING ADDIT IONAL INCOME OF ` 11 CRORES OVER AND ABOVE THE REGULAR INCOME. THEREAFTE R, SHRI JHAWAR STATED THAT THE DETAILED BREAKUP OF ADDITIONAL INC OME WOULD BE DECLARED IN TWO DAY, WHICH WAS SUBSEQUENTLY GIVEN. THE ASSESSEE HAD ALSO STATED THAT THE ADDITIONAL INCOME IS VOLUNTARILY DECLAR ED TO ENJOY THE BENEFIT OF IMMUNITY FROM PENALTY U/S. 271AAA OF THE ACT . THE LD. AR FURTHER CONTENDED THAT THE ADDITIONAL INCOME VOLUNTARIL Y DECLARED WAS IN RESPECT OF VARIOUS GROUP CONCERNS. PENALTY PROCE EDINGS U/S. 271AAA WAS DROPPED IN THE CASE OF OTHER GROUP ASSESSE E. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR REFERRED TO PAGES 64 TO 104 OF THE PAPER BOOK. THE LD. AR PRAYED FOR DISMISSING THE APPEAL OF THE RE VENUE AND SUSTAINING THE ORDER OF FIRST APPELLATE AUTHORITY. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO EXAMINED THE DOCUMENTS PLACED ON RECORD IN TH E FORM OF PAPER BOOK BY THE ASSESSEE IN SUPPORT OF HIS CONTENTION . PENALTY OF ` 13,10,000/- U/S. 271AAA WAS LEVIED ON THE ASSESSEE ON AC COUNT OF 6 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 ADDITIONAL INCOME OF ` 1,31,00,000/- DECLARED DURING THE ASSESSMENT PROCEEDINGS CONSEQUENT TO SEARCH ACTION IN THE CASE OF MARVEL GROUP. DURING THE COURSE OF SEARCH ON 25-05-2008 STATEMENT O F SHRI VISHWAJEET JHAWAR WAS RECORDED U/S. 132(4). SHRI VISHWAJ EET JHAWAR VOLUNTARILY DECLARED ADDITIONAL INCOME OF ` 11 CRORES IN ADDITION TO THE REGULAR INCOME. THE SAID ADDITIONAL INCOME DECLARED WAS IN R ESPECT OF ALL THE GROUP CONCERNS. THE RELEVANT EXTRACT OF STATEME NT OF SHRI VISHWAJEET JHAWAR RECORDED ON 25-05-2008 AND HIS SUBM ISSIONS DATED 02-06-2008 ARE REPRODUCED HERE-IN-UNDER: Q. 20 I AM DRAWING YOUR ATTENTION TO SECTION 271 AAA R.W.S. 132(4) OF THE IT ACT WHICH STATES THAT IF YOU DECLARE AN UNDI SCLOSED INCOME, YOU MAY GET IMMUNITY FROM PENALTY. CONSIDERING THIS PL EASE REPLY? ANS:- CASH RECEIPTS SHOWN FROM THE IMPOUNDED SHEETS AT PANDOO NAIGS PREMISES AS WELL AS DOCUMENTS SEIZED FROM OUR OFFIC ES AND ALSO CASH EXPENSES INCURRED ARE NOT ACCOUNTED. HENCE I VOLUNTARILY DEC LARE ADDITIONAL INCOME OF RS.11,00,00,000/- (RS. ELEVEN CRORE) OVER AND ABOVE MY REGULAR INCOME SHOWN IN CONCERN. I WIL L SUBMIT THE DETAILED BREAKUP OF ADDITIONAL INCOME IN 2 DAYS. AS I HAVE DECLARED THE ADDITIONAL INCOME VOLUNTARILY I MAY BE GRANTED IMMUNITY FROM THE PENALTY. SHRI VISHWAJEET JHAVAR VIDE HIS SUBMISSION DTD.02-0 6-2008 STATED AS UNDER: 'THERE WAS A SEARCH ON MARVEL GROUP ON 22-05-2008 D URING THE COURSE OF WHICH IN THE STATEMENT U/ S. 132(4), AS A DIRECTOR / PARTNER OF THE VARIOUS ENTITIES IN THIS GROUP, I HA VE MADE A DECLARATION OF INCOME OF RS.11 CRS. LATER ON, AGAIN I WAS QUESTIONED BY YOUR HONOUR ON 26-05-2008 AND MY STAT EMENT WAS RECORDED IN WHICH I REITERATED THAT I WOULD PAY TAX ON THE ABOVE INCOME IS DISCLOSED FOR TWO YEARS I.E. A. Y.2008-09 & A. Y. 2009-10 FOR WHICH THE RETURNS HAVE NOT BECOME DUE SO FAR AND IN FACT, THE ACCOUNTING YEAR FOR A.Y. 2009-1 0 IS JUST STARTED. THE AMOUNT OF INCOME WHICH I HAVE DISCLOSED IS BIFURCAT ED IN THESE TWO YEARS AS RS.2 CRORES FOR A. Y.2008-09 AND RS.9 CRORES FOR A. Y. 2009-10. THUS, FROM THE PERUSAL OF ABOVE STATEMENT IT IS EVIDENT TH AT THE ADDITIONAL INCOME WAS DECLARED TO SEEK IMMUNITY FROM PENALTY U/S. 271AAA OF THE ACT. 7 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 6. FOR SEEKING IMMUNITY FROM LEVY OF PENALTY U/S. 271AAA, T HREE CONDITIONS HAVE TO BE SATISFIED AS PER SUB-SECTION (2) OF SE CTION 271AAA OF THE ACT. (I). THE ASSESSEE IN THE STATEMENT RECORDED DURING THE C OURSE OF SEARCH U/S. 132(4) SHOULD ADMIT THE UNDISCLOSED INCOME A ND SPECIFY THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II). THE ASSESSEE SHOULD SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED; AND (III). PAYS THE TAX TOGETHER WITH INTEREST THEREON. THE COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER HAS G IVEN A FINDING THAT THE ASSESSEE HAS SATISFIED ALL THE ABOVE MEN TIONED THREE CONDITIONS AND DIRECTED THE ASSESSING OFFICER TO DELETE THE PENALTY. THE LD. AR HAS FURTHER BROUGHT TO OUR NOTICE THAT THE PENA LTY LEVIED U/S. 271AAA IN THE CASE OF OTHER GROUP CONCERNS WERE DROPP ED BY THE ASSESSING OFFICER. FROM THE PERUSAL OF ORDER IN THE CASE O F MARVEL REALTORS AT PAGE 64 OF THE PAPER BOOK WE FIND THAT PENA LTY PROCEEDINGS U/S. 271AAA HAS BEEN DROPPED BY THE ASSESSEE. SIMILARLY , THE PENALTY PROCEEDINGS U/S. 271AAA WERE DROPPED IN THE CASE OF MAR VEL REALTORS AND DEVELOPERS LIMITED, HALLMARK MARVEL REALTORS AND MARVE L BHARUCHA REALTORS (PAGES 102 TO 104 OF THE PAPER BOOK). 7. THE ASSESSEE IN THE PRESENT CASE HAS ADMITTED THE ADDITIONAL AMOUNT IN HIS STATEMENT RECORDED U/S. 132(4) OF THE ACT. DURING THE COURSE OF ASSESSMENT THE ADDITIONAL INCOME DECLARED BY TH E ASSESSEE HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. THE ASSESS EE HAS NOT FILED ANY APPEAL AGAINST THE ASSESSMENT ORDER ALTHOUGH ADDITIO NS /DISALLOWANCES WERE MADE U/S. 40A(3) AND U/S. 40(A)(IA) OF THE A CT. THE ASSESSEE HAS BEEN ABLE TO SHOW THAT THE ACTUAL AS SESSMENT OF 8 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 UNDISCLOSED INCOME MADE BY THE ASSESSING OFFICER WITHOUT T HE DISALLOWANCE U/S. 40A(3) AND U/S. 40(A)(IA) WERE LESS THAN THE A MOUNT OF DISCLOSURE MADE. THE UNDISCLOSED INCOME WAS EARNED BY THE ASSESSEE ON ACCOUNT OF UNACCOUNTED SALES RECEIPT FROM IT S CUSTOMERS. THE ASSESSEE UTILIZED THE INCOME FROM UNACCOUNTED SALES F OR PURCHASE OF LAND, ETC. THE ASSESSEE HAS PAID THE TAXES AND INTERE ST IN RESPECT OF THE ADDITIONAL INCOME DECLARED. THESE FACTS HAVE NOT BEE N DISPUTED BY THE ASSESSING OFFICER. THUS, ALL THE THREE CONDITIONS LAID DOW N U/S. 271AAA(2) ARE SATISFIED. THUS, IN VIEW OF THE FACT THAT THE A SSESSEE HAS BEEN ABLE TO SATISFY THE CONDITIONS SET OUT U/S. 271AAA(2 ) FOR SEEKING IMMUNITY AND THE FACT THAT PENALTY PROCEEDINGS U/S. 271A AA IN THE CASE OF SIMILARLY SITUATED GROUP CONCERNS HAVE BEEN DROP PED, WE FIND NO REASON TO REVERSE THE WELL REASONED ORDER OF COMMISSIONER OF IN COME TAX (APPEALS). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED B EING DEVOID OF ANY MERIT. ITA NOS. 2430 & 2474/PN/2012 (A.Y. 2007-08) 9. THESE CROSS APPEALS BY THE REVENUE AND THE ASSESS EE ARE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) DATED 26 -07-2012 PARTLY CONFIRMING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT , FOR ASSESSMENT YEAR 2007-08. 10. THE LD. AR OF THE ASSESSEE HAS RAISED ADDITIONAL GROU NDS AGAINST THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. IN THE ADDITION AL GROUND THE ASSESSEE HAS CHALLENGED THE LEVY OF PENALTY ON THE GROUND THAT THE SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER IN THE A SSESSMENT 9 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 ORDER FOR LEVY OF PENALTY U/S. 271AAA WHEREAS THE PENALTY HAS BEEN LEVIED U/S. 271(1)(C) OF THE ACT. THE LD. AR REFERRED TO ASSE SSMENT ORDER DATED 31-12-2010 FOR ASSESSMENT YEAR 2007-08 PASSED U/S. 143(3) R.W.S. 153A OF THE ACT AND SUBMITTED THAT IN PARA 4.5 THE ASSESSING OFFICER HAS SPECIFICALLY STATED THAT THE PENALTY PROCEEDING S U/S. 271AAA OF THE ACT ARE INITIATED SEPARATELY. WHEREAS, PENALTY HAS BEEN LEVIED UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THE LD. AR CONTENDED THAT THE PENALTY PROCEEDINGS ARE LIABLE TO BE SET ASIDE ON THIS GROUND ALONE. 11. ON THE OTHER HAND THE LD. DR CONTENDED THAT ALTHOU GH IN PARA 4.5 IT IS STATED THAT THE PENALTY PROCEEDINGS U/S. 271AAA ARE INITIATED SEPARATELY, HOWEVER, IN PARA 5 OF THE SAME ORDER THE A SSESSING OFFICER HAS OBSERVED TO INITIATE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT . 12. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PE RUSED. THE ASSESSEE IN RESPONSE TO NOTICE U/S. 153A FOR THE ASSESS MENT YEAR 2007- 08 FILED RETURN OF INCOME DECLARING TOTAL INCOME OF ` 4,22,75,076/-. THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME OF THE ASSESSE E AS ` 5,33,70,796/-. IN PENULTIMATE PARA 4.5 THE ASSESSING OFFICER HAS OBSERVED AS UNDER : 4.5 FOR THE YEAR UNDER CONSIDERATION, THE PROFIT O N ACCOUNT OF UNDISCLOSED TRANSACTIONS AFTER DISALLOWANCE U/S. 40 A(3) & 40(A)(IA) OF THE I.T. ACT IS OF RS.1,41,10,300/- (T HE WORKING IS ENCLOSED WITH THE ORDER AS ANNEXURE A). THEREFOR E, THE AMOUNT OF RS.1,41,10,300/- ADDED TO THE TOTAL INCOME OF TH E ASSESSEE FOR A.Y. 2008-09. THE PENALTY PROCEEDINGS U/S. 271AAA OF THE I.T. ACT ARE INITIATED SEPARATELY. 10 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 13. THEREAFTER, IN PARA 5 OF THE ASSESSMENT ORDER THE A SSESSING OFFICER OBSERVED AS UNDER: 5. ASSESSED U/S. 143(3) R.W.S. 153A OF THE I.T. AC T. CHARGE INTEREST UNDER SECTION 234B, 234C AND 234D, WITHDRAW EXCESS INTEREST GRANTED U/S. 244A. ISSUE DEMAND NOTICE. INITIATE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT, 1 961. 14. THUS, FROM THE ASSESSMENT ORDER IT IS EVIDENT THAT THE ASSESSING OFFICER IS NOT SURE AS TO WHETHER THE PENALTY IS TO BE LEV IED U/S. 271AAA OR U/S. 271(1)(C) OF THE ACT. THEREAFTER, THE ASSESSING OFFIC ER ISSUED NOTICE DATED 31-12-2010 TO THE ASSESSEE FOR LEVY OF PEN ALTY U/S. 271(1)(C) OF THE ACT. FOR LEVY OF PENALTY, THE ASSESSING OFFIC ER HAS TO GIVE SPECIFIC REASONS AND SATISFACTION HAS TO BE RECORDED FOR LEVYING THE PENALTY. THE PENALTY CANNOT BE LEVIED IN CASUAL MANNER BY CITING THE PROVISIONS OF ONE SECTION AND LEVYING THE PENALTY UNDER TH E PROVISIONS OF ANOTHER SECTION. THUS, IN VIEW OF THE FACT THAT THE ASS ESSING OFFICER HIMSELF WAS NOT CLEAR AS TO UNDER WHAT PROVISIONS THE PENALTY IS LEVIAB LE ON THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT PEN ALTY PROCEEDINGS INITIATED ARE VOID AB INITIO. ACCORDINGLY, THE SUBSEQUENT PR OCEEDINGS ARISING FROM THE ISSUANCE OF NOTICE FOR LEVY OF PENALTY ARE VITIATED. WE ACCEPT THE ADDITIONAL GROUND NO. 1 RAISED BY THE ASSESSE E VIDE APPLICATION DATED 16-12-2016 AND DELETE THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. SINCE, THE ENTIRE PENALTY HAS BEEN DE LETED ON ACCOUNT OF TECHNICAL DEFECT, THE GROUNDS RAISED IN THE APP EAL OF REVENUE DO NOT SURVIVE. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR THE AS SESSMENT YEAR 2007-08 IS ACCEPTED AND THAT OF THE REVENUE IS DISMISSED. 11 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 ITA NO. 2475/PN/2012 (A.Y. 2006-07) 16. THE ASSESSEE HAS FILED APPEAL AGAINST THE ORDER OF C OMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE LEVY OF PENALTY U/S. 2 71(1)(C) OF THE ACT. THE ASSESSEE IN ITS RETURN OF INCOME IN RESPON SE TO NOTICE ISSUED U/S. 153A DECLARED TOTAL INCOME OF ` 7,75,530/- FOR THE ASSESSMENT YEAR 2006-07. THE ASSESSING OFFICER VIDE ORDE R DATED 31-12-2010 PASSED U/S. 143(3) R.W.S. 153A ASSESSED THE TOTAL INCOME OF THE ASSESSEE AS ` 9,20,033/- AND ADDITION OF ` 1,44,503/- WAS MADE BY THE ASSESSEE U/S. 69C OF THE ACT. PENALTY PROCEEDINGS U /S. 271(1)(C) WERE INITIATED AGAINST THE ASSESSEE AND A PENALTY OF ` 48,640/- WAS LEVIED ON THE SUM OF ` 1,44,503/-. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMIS SIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER CONFIRMED THE LE VY OF PENALTY. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE HAS ASSAILED THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING FOLLOWING GROUNDS : 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, NO PENALTY IS LE VIABLE IN TERMS OF PROVISIONS OF SECTION 271 (1 )(C). IT F URTHER BE HELD THAT, PENALTY PROCEEDINGS INITIATED BY THE AO U/S. 271 (1 )(C) & LEVY OF PENALTY BY THE AO IN TERMS OF THE SAID SECTION IS U NWARRANTED, UNJUSTIFIED, IMPROPER AND DESERVES TO BE DELETED. T HE PENALTY IMPOSED BY THE AO U/S.271 (1)(C) BE DELETED. THE 1 ST APPELLATE AUTHORITY SHOULD HAVE DELETED THE PENALTY IMPOSED B Y THE ASSESSING OFFICER AS PER PROVISIONS OF LAW AND FACTS PREVAILI NG IN THE CASE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 2. WITHOUT PREJUDICE TO GROUND NO: 1 AND IN ALTERNATIV E IT BE HELD THAT ORDER PASSED BY THE 1 ST APPELLATE AUTHORITY RESTORING THE ISSUE FOR RE- ADJUDICATION BY THE AO IS IMPROPER, UNJUSTIFIED AND UNWARRANTED. THE 1 ST APPELLATE AUTHORITY SHOULD HAVE DELETED THE PENALT Y IMPOSED BY THE AO IN TERMS OF PROVISIONS OF SEE. 271 (1)(C) OF THE ACT. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 12 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 THEREAFTER, THE ASSESSEE FILED AN ADDITIONAL GROUND VIDE APP LICATION DATED 16-02-2016 WHICH READS AS UNDER: THE SHOW CAUSE NOTICE U/S. 274 R.W.S. 271(1)(C) FO R LEVY OF PENALTY IS WITHOUT SPECIFYING THE CHARGE AS WHETHER THE ASSESS EE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS, THEREFORE, PENALTY ORDER IS VOID. 17. THE LD. AR SUBMITTED THAT IN NOTICE U/S. 274 R.W.S. 271 (1)(C) ISSUED TO THE ASSESSEE ON 31-12-2010 AND IN THE SUBSE QUENT NOTICE DATED 20-06-2011, THE ASSESSING OFFICER HAS NOT SPECIFIED T HE REASONS FOR LEVY OF PENALTY. THEREFORE, THE NOTICE LEVYING PENALTY IS ITSELF DEFECTIVE AND VOID. THE LD. AR PRAYED FOR DISMISSING THE IMPU GNED ORDER AND DELETING THE PENALTY. 18. PER CONTRA THE LD. DR SUBMITTED THAT A PERUSAL OF NO TICE ISSUED U/S. 274 R.W.S. 271(1)(C) CLEARLY SHOW THAT THE PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INAC CURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER SATISFY AND LEV Y OF PENALTY FOR BOTH CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING O F INACCURATE PARTICULARS OF INCOME. 19. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESE NTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO EXAMINED THE NOTICES ISSUED U/S. 274 R.W.S. 271( 1)(C) OF THE ACT WHICH HAVE BEEN PLACED ON RECORD BY THE LD. AR OF T HE ASSESSEE. A PERUSAL OF NOTICES SHOW THAT THE ASSESSING OFFICER HAS SPE CIFICALLY STATED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME AND HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THE RELEVA NT EXTRACT OF THE NOTICE DATED 31-12-2010 IS REPRODUCED HERE-IN-UNDER: WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE A.Y.2006-07, IT APPEARS TO ME THAT YOU:- 13 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 HAVE CONCEALED THE PARTICULARS OF YOUR INCOME AND F URNISHED INACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11. 45 A.M. ON 25-01- 2011 AT ABOVE ADDRESS AND SHOW CAUSE WHY AN ORDER IMPOS ING A PENALTY ON YOU SHOULD NOT BE MADE U/S. 271 OF THE I NCOME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPRESENTATIV E YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH W ILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE U/S. 271(1)(C). 20. THE SUBSEQUENT NOTICE ISSUED U/S. 274 R.W.S. 271(1)(C) OF THE ACT ON 20-06-2011 IS IDENTICALLY WORDED. WE DO NOT FIND MERIT IN THE SUBMISSIONS OF THE LD. AR THAT THE NOTICES ISSUED FOR LEVY OF PENALTY ARE DEFECTIVE FOR THE REASON THAT IT HAS NOT BEEN SPECIFICALLY MENTIONED THAT UNDER WHAT CHARGE PENALTY HAS TO BE LEVIED. A PERUSAL O F THE ASSESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS R ECORDED SATISFACTION FOR LEVY OF PENALTY U/S. 271(1)(C) FOR CONCEALMENT OF TAXABLE INCOME. THEREAFTER, IN THE ORDER LEVYING PENALTY THE ASSES SING OFFICER HAS CONCLUDED THAT THE PENALTY HAS BEEN LEVIED FOR CONCE ALMENT OF INCOME. IN THE NOTICES ISSUED U/S. 274 R.W.S. 271(1)(C) TH E ASSESSING OFFICER HAS MENTIONED THAT THE ASSESSEE HAS CONCEALED PA RTICULARS OF INCOME AS WELL AS FURNISHED INACCURATE PARTICULARS OF INCOME. WE DO NOT CONCUR WITH THE SUBMISSIONS OF THE LD. AR OF T HE ASSESSEE. WHILE RECORDING SATISFACTION THE ASSESSING OFFICER HAS CATEGORICALLY MENTIONED THAT THE PENALTY PROCEEDINGS ARE INITIATED FOR CONCEALMENT OF INCOME AND FINALLY WHEN THE PENALTY IS LEVIED FINDING HAS BEEN GIVEN IN UNEQUIVOCAL TERMS THAT THE PENALTY IS LE VIED FOR CONCEALMENT OF INCOME. MERELY MENTIONING OF BOTH THE CHAR GES IN NOTICE WOULD NOT VITIATE THE PENALTY PROCEEDINGS. THE LD. AR OF THE 14 ITA NOS. 2429, 2430, 2474 & 2475/PN/2012 ASSESSEE HAS NOT SUBSTANTIATED ANY OTHER GROUND RAISE D IN THE GROUNDS OF APPEAL. ACCORDINGLY, THE SAME ARE DISMISSED. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED AND ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE LEVY OF PENALTY U/S. 271(1)(C) IS UPHELD. 22. IN THE RESULT, THE APPEAL OF THE REVENUE FOR ASSESSM ENT YEARS 2007-08 AND 2008-09 AND THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2006-07 ARE DISMISSED AND THE APPEAL OF THE ASSESS EE FOR ASSESSMENT YEAR 2007-08 IS ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 16 TH DAY OF MAY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 16 TH MAY, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, PUNE 4. ' / THE CIT, CENTRAL, PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE