Assistant Commissioner of Income -tax, V. M/s. Ashray Premises Pvt. Ltd., Pune

ITA 2526/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2595 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 01-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIPIN GUJARATHI
• Keywords: Initiation of penalty proceedings; Revised return

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 NO. 2526/PUN/2016 / ASSESSMENT YEAR : 2012-13 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), PUNE ....... / APPELLANT / V/S. M/S. ASHRAY PREMISES PVT. LTD. OFFICE NO. 3 & 4, BLUE HILLS SOCIETY, NAGAR ROAD, YERAWADA, PUNE-411 006 PAN : AAACA8294P / RESPONDENT REVENUE BY : SHRI PANKAJ GARG ASSESSEE BY : SHRI VIPIN GUJARATHI / DATE OF HEARING : 01.08.2018 / DATE OF PRONOUNCEMENT : 21.08.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY REVENUE AGAINST THE ORDER OF CIT (APPEA LS)-12, PUNE, DATED 12.08.2016 FOR THE A.Y.2012-13. 2. GROUNDS RAISED BY THE REVENUE ARE EXTRACTED HERE AS UND ER: 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE BASIS OF HON'BLE GUJARAT HIGH COURTS DECISION IN THE CASE OF LMP PRECISION ENGG. CO. LTD . WHICH IN FACT IS IN FAVOUR OF THE REVENUE AND NOT IN ASSESSEES FAVOUR, WITHOUT G OING THROUGH THE ENTIRE FACTS OF THE CASE? 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE AC T WITHOUT APPRECIATING THE FACT THAT THE REVISED RETURN WAS FILED BY THE ASSESSEE A FTER RECEIPT OF NOTICE U/S.143(3) OF THE ACT, I.E. AFTER THE CASE WAS SELE CTED FOR SCRUTINY? 3. THE ORDER OF THE LD. CIT(A) MAY BE VACATED AND T HE ASSESSING OFFICER BE RESTORED. 2 ITA NO.2526/PUN/2016 M/S. ASHRAY PREMISES PVT. LTD. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND MODIFY ANY OF THE ABOVE GROUND OF APPEAL. 3. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION OF RESIDENTIAL AND COMMERCIAL PROJECTS INCLUDING DEVELOPMENT OF TECH PARKS AND REAL ESTATE IN AND AROUND PUNE. ASSESSEE FILED THE ORIGINAL RETURN OF INCOME ON 20.09.2012 FO R THE ASSESSMENT YEAR DECLARING TOTAL INCOME AT RS.2,66,84,675/-. DURING THE A SSESSMENT, AO ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.3,50,84,6 75/-. THE ASSESSING OFFICER INITIATED PENALTY U/S. 271(1)(C) OF THE ACT IN RESPECT O F INTEREST INCOME OF RS.84,00,000/- WHICH WAS DISCLOSED IN THE REVISED RETURN. THEREAFTER, ASSESSING OFFICER LEVIED PENALTY OF RS.27,72,000/- TREATING TH E AMOUNT OF RS.84,00,000/- AS CONCEALED INCOME. IN THE FIRST APPELLATE P ROCEEDINGS, THE CIT(A) DELETED THE PENALTY SO LEVIED BY THE AO U/S. 271(1)(C) OF THE ACT. 4. AGGRIEVED WITH THE ORDER OF CIT(A), THE REVENUE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL WITH THE GROUNDS EXTRACTED ABOVE. 5. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED ORALLY THAT THIS IS A CASE WHERE THE AO FAILED TO RECORD VALID SA TISFACTION IN THE ASSESSMENT ORDER DURING WHICH THE PENALTY PROCEEDINGS W ERE INITIATED. HIGHLIGHTING THE LEGAL REQUIREMENT OF MAKING A SPECIFIC REFERENCE TO THE SP ECIFIC LIMB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT AND RELYING ON VARIOUS BINDING JUDGMENTS IN THE CASE CIT VS. SHRI SAMSON PERINCHERY ( 2017) 392 ITR 4 (BOM.) AS WELL AS THE JUDGMENT OF HONBLE KARNATAKA HIGH C OURT 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 ASSESSMEN T ORDER AS WELL AS THE PENALTY ORDER HIGHLIGHTING THE ABOVE LEGAL DEFICIENCIES. FUR THER, HE SUBMITTED 3 ITA NO.2526/PUN/2016 M/S. ASHRAY PREMISES PVT. LTD. THAT IF RELIEF IS GRANTED ON THE LEGAL ISSUE, THERE IS NO NE ED FOR ADJUDICATING THE GROUNDS RAISED ON THE MERITS OF THE PENALTY. 6. PER CONTRA, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDER OF THE AO. 7. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS O F THE REVENUE ON THE LEGAL ISSUE RAISED ORALLY. FIRSTLY, AS ARGUED BY THE LD. CO UNSEL, WE WOULD LIKE TO ADJUDICATE THE ISSUE ON THE LEGAL ISSUE, I.E. RECORDING O F PROPER SATISFACTION BY THE AO. WE PERUSED THE ORDER OF THE AO AND FIND TH E SATISFACTION RECORDED BY THE AO FOR INITIATING THE PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT IS RELEVANT FOR EXTRACTION. THEREFORE, THE SAME IS REPRODUCED AS UND ER: 05 . THE PROCEEDINGS U/S.271(1)(C) ARE SEPARATELY INIT IATED AGAINST THE ASSESSEE FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.84,00,000/- IN THE RETURN FILED U/S.139(1). 7.1 WE ALSO PERUSED THE PENALTY ORDER DATED 21.08.2015 A ND 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 UNDER: 8. I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND MADE ITSELF LIABLE FOR LEVY OF PENALTY U/S.271 (1)(C) OF THE ACT, 1961. ACCORDINGLY, ORDER U/S.271(1)(C) OF THE I.T.ACT, 19 61, LEVYING PENALTY OF RS.27,72,000/- IS PASSED. FROM THE ABOVE, IT IS EVIDENT THAT AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS IN THE ASSESSMENT, AO MENTIONED BOTH LIMBS OF CLAUSE (C) OF SECTION 271(1) OF THE ACT WHEREAS AT THE TIME OF LEVYING PE NALTY AO MENTIONED ONLY ONE LIMB. THIS MANNER OF RECORDING OF SATISFACTION SUGG ESTS THE EXISTENCE OF AMBIGUITY WITH REFERENCE TO APPLICABILITY OF SPECIFIC LIMB. THER EFORE, WE ARE OF THE OPINION THAT CONSIDERING THE ABOVE REFERRED BINDING JUDGMENTS SUCH PENALTY ORDER IS UNSUSTAINABLE IN LAW LEGALLY. AO IS UNDER O BLIGATION TO SPECIFY 4 ITA NO.2526/PUN/2016 M/S. ASHRAY PREMISES PVT. LTD. THE CORRECT LIMB AT THE TIME OF INITIATION AS WELL AS AT THE TIME OF LEVY OF PENALTY. THEREFORE, WE ARE OF THE VIEW, THAT THE ASSESSEE IS ENTITLED TO RELIEF ON THE LEGAL ISSUE. ACCORDINGLY, WE HOLD THAT THE GROUNDS OF APPEAL ON THE MERITS ARE DISMISSED AS ACADEMIC. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED ON TECHNICALITIES. ORDER PRONOUNCED 21 ST DAY OF AUGUST, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 21 ST AUGUST, 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.