Champion Dealers (Mumbai) Pvt.Ltd, Pune V. Income tax Officer,

ITA 257/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5192 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 01-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAVE
• Keywords: Reasonable cause
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 2 5 7 /P U N/201 7 / ASSESSMENT YEAR : 20 1 1 - 1 2 CHAMPION DEALERS (MUMBAI) PVT. LTD., 1 ST FLOOR, VANDAN, 47/5, PAUD ROAD, ERANDWANE, PUNE 411038 . / APPELLANT PAN: A ADCC9080C VS. THE INCOME TAX OFFICER, WARD 1 (1), PUNE . / RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : S HRI HITENDRA NINAVE / DATE OF HEARING : 13 . 12 .201 8 / DATE OF PRONOUNCEMENT : 05 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 1 , PUNE , DATED 16 . 0 3 .201 6 RELATING TO ASSESSMENT YEAR 20 1 1 - 1 2 AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL: - ON FACTS AND IN LAW, 1.0 THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED U/S. 271(1)(C) BY THE ASSESSING OFFICER OF RS.2,50,000/ - . 2.0 THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE FACTS THAT THE ASSESSEE OFFERED THE ADDITIONAL INCOME IN ORDER TO BUY PEACE AND AVOID LITIGATION AND IT IS THE CASE OF MERE ESTIMATION OF INCOME. ITA NO. 257 /P U N/20 1 7 CHAMPION DEALERS (MUMBAI) PVT. LTD. 2 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECT ION 271(1)(C) OF THE ACT AT 2,50,000/ - . 4. THE ASSESSEE HAS RAISED ADDITIONAL GROUND OF APPEAL AND HAS POINTED OUT THAT THE SAME MAY BE ADJUDICATED FIRST. THE ADDITIONAL GROUND OF APPEAL READS AS UNDER: - 1] THE ASSESSEE SUBMITS THAT NO PROPER SATISFACT ION HAS BEEN RECORDED BY THE LEARNED A.O. IN THE ASSESSMENT ORDER AND ACCORDINGLY, THE PENALTY LEVIED U/S. 271(1)(C) IS INVALID IN LAW. 5. THE PRESENT APPEAL WAS FILED AFTER DELAY OF 222 DAYS. THE ASSESSEE HAS FILED PETITION EXPLAINING THE REASONS FOR DE LAY ALONG WITH AN AFFIDAVIT IN THIS REGARD. AFTER GOING THROUGH THE REASONS FOR THE AFORESAID DELAY, WE FIND THAT THERE WAS REASONABLE CAUSE IN NOT FILING THE PRESENT APPEAL IN TIME AND CONSEQUENTLY, WE CONDONE THE DELAY OF 222 DAYS. 6. THE PERUSAL OF AS SESSMENT ORDER REFLECTS THAT AFTER MAKING ADDITION IN THE HANDS OF ASSESSEE, THE ASSESSING OFFICER HAD RECORDED SATISFACTION FOR INITIATING PENALTY PROCEEDINGS FOR CONCEALMENT, WHEREIN HE HAS RECORDED THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS O F INCOME / CONCEALMENT OF INCOME. RECORDING OF SATISFACTION ON BOTH LIMBS OF SECTION 271(1)(C) OF THE ACT IS INCORRECT. IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO COME TO A FINDING AS TO WHICH LIMB OF SECTION 271(1)(C) OF THE ACT HAS NOT BEEN FULFILL ED BY ASSESSEE. THE ASSESSING OFFICER HAS FAILED TO RECORD THE SAME AND HENCE, SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE IS NOT CORRECT. IN THIS REGARD, WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERIN CHERY (2017) 392 ITR 4 (BOM), WHEREIN IT WAS HELD THAT WHERE THERE IS NO PROPER SATISFACTION FOR INITIATING PENALTY PROCEEDINGS AND IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO THE ASSESSEE, THERE IS NO MERIT IN LEVY OF PENALTY. ITA NO. 257 /P U N/20 1 7 CHAMPION DEALERS (MUMBAI) PVT. LTD. 3 7. BEFORE PARTING, WE MAY ALSO POINT OUT THAT PENALTY IN FINAL HAS BEEN LEVIED FOR COMMITTING DEFAULT WITHIN MEANING OF SECTION 271(1)(C) OF THE ACT WITHOUT MENTIONING EXACT LIMB. HENCE, PENALTY ORDER PASSED BY THE ASSESSING OFFICER ALSO SUFFERS FROM INFIRMITY I.E. IN NOT COMING T O FINDING AS TO WHICH LIMB OF SECTION 271(1)(C) OF THE ACT IS NOT SATISFIED. IN VIEW THEREOF, BOTH ON ACCOUNT OF SATISFACTION AND FINAL ORDER OF LEVY OF PENALTY, WE HOLD THAT THE SAME SUFFERS FROM INFIRMITY AND THERE IS NO MERIT IN LEVY OF PENALTY FOR CONCEALMENT IN THE PRESENT CASE. THE ADDITIONAL GROUND OF APPEAL RAISED BY ASSESSEE IS THUS, ALLOWED. 8 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 5 TH DAY OF FEBRUARY , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 5 TH FEBRUARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 1 , PUNE ; 4. THE PR. CIT - 1 , PUNE ; 5. 6. , , / DR B , ITAT, PUNE ; / GUARD FILE . / BY ORD ER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE