Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 123479 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-03-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
E
Next Hearing Date
09-01-2023
Assessment Year
2014-2015
Appeal Filed On
16-10-2022
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No. 2612/Mum/2022 (A.Y. 2014-15) M/s. Trimurti Heights & Properties Pvt. Ltd. 102, Arihant Building, 15 th Road, Khar (West), Mumbai-400 052. PAN: AACCT5299F ...... Appellant Vs. Dy.CIT-13(3)(2), 229, 2 nd Floor, Aayakar Bhavan, M.K. Road, Mumbai- 400 020. ..... Respondent Appellant by : Ms. Aarti Sathe / Ms. Aasavari Kadam Respondent by : Ms. Richa Gulati, Sr. DR Date of hearing : 10/01/2023 Date of pronouncement : 21/03/2023 ORDER PER GAGAN GOYAL, A.M: This appeal by assessee are directed against the order of Commissioner of Income Tax (Appeals)-21, Mumbai (for short ‘CIT(A)’) dated 17.08.2022 under section 250 of the Income Tax Act, 1961 (for short ‘the Act’) for A.Y. 2014-25. The assessee has raised the following grounds of appeal: “The appellant is in receipt of the order passed electronically by the Hon'ble National Faceless Appeal Centre [hereinafter referred to 'CIT(A)'] u/s. 250 of the Income-tax Act, 1961 (the Act) dated 17.08.2022 (impugned order') against the 2 ITA No. 2612/Mum/2022-M/s. Trimurti Heights & Properties Pvt. Ltd. order passed u/s 271(1)(c) of the Act by the learned Assessing Officer (hereinafter referred to 'learned AO') dated 18.03.2020. Being aggrieved by the order passed by the Hon'ble CIT(A), appellant prefers this appeal on the following grounds, which are without prejudice to each other. Ground No. 1-Penalty levied u/s. 271(1)(c) of the Act is bad in law and ought to be deleted 1.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in affirming the penalty levied by the learned AO u/s. 271(1)(c) of the Act inasmuch the claim of business loss on account of certain administrative expenditure towards incidental business activities was bonafide in nature and that mere non acceptance of claim does not ipso facto attracts penalty u/s. 271(1)(c) of the Act. 1.2 The learned CIT(A) failed to appreciate and ought to have held that the issue of allowability of business loss in absence of any business income is debatable in nature and thus, penalty ought not to be levied where two views are possible; 1.3 The learned CIT (A) failed to appreciate and ought to have held that penalty initiated on the sole ground of furnishing inaccurate particulars of income'. however, imposed additionally on the ground of 'concealment of income' which was not the charge against the appellant in the show cause notice issued u/s 274 r.w.s 271(1)(c) of the Act vitiates the entire penalty proceedings; thereby making the impugned penalty order as bad in law, 1.4 Without prejudice to the above, the learned CIT (A) erred in assuming the action of claiming business loss in revise return which was neither claimed in original return nor in earlier years as 'concealment of income' in as much as the concept of revise return enacted under the Act is to allow an assessee to make a claim which was not made earlier. Thus, any claim made in revise return could not automatically assumed to have been concealed by appellant and penalty levied u/s. 271(1)(c) of the Act thereon ought to be deleted. 1.5 Without prejudice to the above, the learned CIT(A) failed to appreciate and ought to have held that full and complete disclosure of all the material facts in relation to claim of business expenditure in financial statement, revise return of income, submissions, etc. during the course of assessment proceedings neither tantamount to 'furnishing inaccurate particulars of income' nor 'concealment of income' and penalty levied u/s. 271(1)(c) of the Act thereon ought to be deleted.” 3 ITA No. 2612/Mum/2022-M/s. Trimurti Heights & Properties Pvt. Ltd. 2. Brief facts of the case are that assessee filed its return of income at a loss of Rs 18,32,765/-. Subsequently case was selected for scrutiny vide notice dated 28- 08-2015. On 08-09-2015 assessee revised its return at a loss of Rs 94,03,712/-. In the original return assessee has not claimed any business loss but, in the revise return assessee claimed business loss to the tune of Rs 1, 14, 13,866/-. It is observed by the AO that assessee was not engaged in any business activity and for previous assessment years i.e. AY 2011-12, 2012-13 and 2013-14 assessee declared income under the head house property from letting out of property. In any of the year assessee neither offered any income under the head business and profession nor claimed any expense. In the year under consideration also assessee declared income under the head house property amounting to Rs 16,22,972/- and income from other sources amounting to Rs 3,87,182/-. 3. Assessee made investments in 4 companies which were not listed during the F.Y. 2010-11 and there was further no change in the holding of these shares. But assessee claimed loss on account of this investments’ as day to day monitoring and related expenses. The total amount invested by assessee are as under: 3,703 equity shares of optima securities Pvt Ltd of face value of Rs 1000/- each costing to assessee Rs 70,70,950/- 3,78,952 equity shares of Eko Vehicles Pvt Ltd of face value of Rs 10/- each costing to the assessee of Rs 1,90,29,629/- 1,60,000 equity shares of Batlibala and Karani financial consultant Pvt Ltd of face value of Rs 100/- each costing to the assessee of Rs 1,60,00,000/- 4 ITA No. 2612/Mum/2022-M/s. Trimurti Heights & Properties Pvt. Ltd. 2,500 equity shares of The Saraswat Co-operative Bank Ltd of face value of Rs 10/- each costing to the assessee of Rs 25,400/- 4. Assessee claimed that as apart of its business investments into equity shares of limited companies with a view to earn profit in the long term but the same investments do not result in any short-term or regular profit generation for the assessee. Certain expense claimed first time in the relevant year only and the same were disallowed by the AO. This results into initiation of penalty proceedings. 5. It is further observed that assessee has already lost its appeal before the Ld. CIT (A)-21, Mumbai in quantum appeal. There is no document on record which confirms that this matter of quantum appeal further travelled up to ITAT and its outcome, if any. 6. After an against appeal order in quantum appeal, AO imposed penalty vide his order dated 18-03-2020 amounting to Rs 38,79,571/- being minimum amount of the tax sought to be evaded. It is observed that assessee itself submitted that the said investments were made on long term basis to earn income. Assessee holding these investments, since FY 2010-11. We have perused the financials of the assessee that assessee had income under the head house property and income from other sources. Expense relevant to these two heads of income were being regularly claimed and allowed to the assessee. any further claim of expense looking at the revenue stream of the assessee is not allowable. 7. We have gone through the assessment order, penalty order and order of the Ld.CIT (A) on penalty. In our observation notice for penalty was issued on the ground of furnishing inaccurate particulars of income as per page 213 of the 5 ITA No. 2612/Mum/2022-M/s. Trimurti Heights & Properties Pvt. Ltd. paper book, whereas penalty order was passed on the ground of concealment of income as per para 11 of the penalty order dated: 18-03-2020. As it’s a settled position of law that there can’t be a difference between reasons supplied for levy of penalty and grounds taken in the penalty imposition order, order passed by AO u/s. 271(1)(c) is not sustainable and bad in law. In the result Ground No. 1.3 raised by the assessee is allowed and AO is directed to delete the penalty. 9. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 21 st day of March, 2023. / Sd/- SSd/- (VIKAS AWASTHY) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, दिन ांक/Dated: 21/03/2023 SK, Sr.PS Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकर आयुक्त CIT 4. दवभ गीय प्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्ड फ इल/Guard file. BY ORDER, //True Copy// (Dy. /Asstt. Registrar) ITAT, Mumbai
AI Insights
The case involves M/s. Trimurti Heights & Properties Pvt. Ltd., which appealed against the penalty imposed by the Deputy Commissioner of Income Tax under section 271(1)(c) for alleged concealment of income and furnishing of inaccurate particulars. The company had initially filed a return declaring a loss, which was later revised to claim a larger loss. The Assessing Officer disallowed certain expenses claimed under the revised return, leading to the imposition of a penalty. The Tribunal's decision focused on the procedural irregularity in the penalty imposition, specifically the mismatch between the notice and the penalty order regarding the grounds of concealment and furnishing of inaccurate particulars.
