Shrichand Trithdas Nainani, Ahmedabad V. The Income tax Officer, Ward-2(3), Ahmedabad

ITA 2548/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1914 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-12-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 27-11-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C
• Assessee Lawyers: A L THAKKAR
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING: 8/12/2009 DRAFTED ON: 8/12/20 09 ITA NO.2548/AHD/2006 ASSESSMENT YEAR : 2001-2002 SHRICHAND TIRTHDAS NAINANI PROP: S.T.TYRE HOUSE, MUNICIPAL SHOP NO.12, O/S. PREM GATE, AHMEDABAD. VS. THE INCOME TAX OFFICER, WARD 2(3), AHMEDABAD. PAN/GIR NO. : AASPN 2203 N (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI A.L.THAKKAR RESPONDENT BY: SHRI M.C.PANDIT SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD.CIT(APPEALS)-VI, AHMEDABAD, DATED 01.09.2006 IN APPEAL NO.CIT(A)0VI/WD.2(3)/60/2006-07. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE ASSESS EE IN THIS APPEAL IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERR ED IN CONFIRMING THE PENALTY OF RS. 87,244/- LEVIED BY THE LEARNED ASSES SING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT THE PENALTY ORDER PASSED BY THE LEARNED ASSESSING O FFICER IS BAD IN LAW AND ITA NO .2548/AHD/2006 M/S.SHRICHAND TIRTHDAS NAINANI ASST.YEAR -2001-2002 - 2 - HAS TO BE CANCELLED AS THE LEARNED ASSESSING OFFICE R HAS NOT ARRIVED AT ANY SPECIFIC FINDING IN THE PENALTY ORDER THAT WHETHER THE ASSESSEE HAS CONCEALED HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. HE RELIED ON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE C ASE OF NEW SORATHIA ENGINEERING CO. VS. COMMISSIONER OF INCOME TAX (200 6) 282 ITR 642 (GUJ). 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED O N THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. THE LEARNED ASSESSING OFFICER LEVIED PENALTY OF RS.87,244/- UND ER SECTION 271(1)(C) IN RESPECT OF DISALLOWANCE OF COMMISSION EXPENDITURE O F RS.3,40,250/-. THE LEARNED ASSESSING OFFICER IN THE PENALTY ORDER ARRI VED AT THE CONCLUSION AS UNDER:- THUS, ON THE FACTS AND CIRCUMSTANCES OF THE CASE I N ITS ENTIRETY AS EXPLAINED ABOVE, THE REASONABLY POINT TO ARRIVE AT CONCLUSION THAT THE ASSESSEE HAVE WILLFULLY FURNISHED INACCURATE PARTI CULARS OF INCOME AND CONCEALED PARTICULARS OF INCOME WITH A INTENT TO EV ADE TAX FOR RS.3,40,250/-. 6. ON APPEAL, LEARNED COMMISSIONER OF INCOME TAX(AP PEALS) CONFIRMED THE ABOVE LEVY OF PENALTY BY OBSERVING AS FOLLOWS:- APPELLANTS CONDUCT INVITES PENALTY UNDER SECTION 271(1)(C) ON BOTH THE COUNTS (I) CONCEALMENT OF INCOME AND (II) FURNI SHING OF INACCURATE PARTICULARS OF INCOME. IN VIEW OF THE ABOVE MATTER, THE PENALTY LEVIED IS CONFIRMED. 7. WE FIND THAT IN THE INSTANT CASE, NEITHER THE LE ARNED ASSESSING OFFICER NOR THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS COME TO A DEFINITE FINDING AS TO WHETHER THE ASSESSEE WAS GUI LTY OF CONCEALMENT OF INCOME OR THE ASSESSEE WAS GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF HIS ITA NO .2548/AHD/2006 M/S.SHRICHAND TIRTHDAS NAINANI ASST.YEAR -2001-2002 - 3 - INCOME. FROM THE ORDERS OF THE LOWER AUTHORITIES, I T APPEARS THAT ACCORDING TO THEM, THE ASSESSEE WAS GUILTY OF BOTH I.E. CONCEALM ENT OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME IN R ESPECT OF THE VERY SAME AMOUNT OF INCOME. 8. WE FIND THAT THE HON'BLE JURISDICTIONAL HIGH COU RT IN THE CASE OF NEW SORATHIA ENGINEERING CO. VS. COMMISSIONER OF INCOME TAX (2006) 282 ITR 642 (GUJ) HAS HELD AS UNDER: 11. IN THE CASE OF CIT VS. MANU ENGINEERING WORKS ( SUPRA) THIS IS WHAT IS LAID DOWN BY THIS COURT AT PAGE NO. 310 OF THE REPO RTS : '.. WE FIND FROM THE ORDER OF THE IAC, IN THE PENALTY PROCEEDIN GS, THAT IS, THE FINAL CONCLUSION AS EXPRESSED IN PARA 4 OF THE ORDER : 'I AM OF THE OPINION THAT IT WILL HAVE TO BE SAID THAT THE ASSESSEE HAD CONCE ALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PARTICULARS OF SUC H INCOME'. NOW, THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOT ICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CASE OR A QUASI CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDING AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSE SSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR-CUT FINDING WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IA C WAS LIABLE TO BE STRUCK DOWN.' THE PENALTY ORDER AND THE ORDER OF CI T(A) SHOW THAT NO CLEAR-CUT FINDING HAS BEEN REACHED. THE TRIBUNAL HA S FAILED TO APPRECIATE THIS LEGAL ISSUE. APPLYING THE RATIO TO THE FACTS O F THE CASE IT IS APPARENT THAT THE ORDER OF PENALTY CANNOT BE SUSTAINED AND T HE TRIBUNAL COULD NOT HAVE SUSTAINED THE SAME. THE TRIBUNAL HAVING FAILED TO TAKE INTO CONSIDERATION AND DEAL WITH THE DECISION OF THE JUR ISDICTIONAL HIGH COURT IT WOULD CONSTITUTE AN ERROR IN LAW WHICH GOES TO T HE VERY BASIS OF THE CONTROVERSY INVOLVED AND HENCE, THE IMPUGNED ORDER OF THE TRIBUNAL CANNOT BE UPHELD. 9. IN VIEW OF THE ABOVE, SETTLED POSITION OF LAW AS THE LOWER AUTHORITIES HAVE IN THE INSTANT CASE, NOT GIVEN A SPECIFIC FIND ING AS TO WHETHER THE ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME OR HE WAS GUILT Y OF FURNISHING OF INACCURATE PARTICULARS OF INCOME IN OUR CONSIDERED VIEW THE ORDERS OF THE LOWER AUTHORITIES ARE NOT SUSTAINABLE IN LAW. WE TH EREFORE, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES. THUS, THE APPEAL OF THE A SSESSEE IS ALLOWED. ITA NO .2548/AHD/2006 M/S.SHRICHAND TIRTHDAS NAINANI ASST.YEAR -2001-2002 - 4 - 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON 8/12/2009. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 8/12/2009 PREPARED AND COMPARED BY : PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD