Appeal details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 1631 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-08-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Assessment Year
2012-2013
Appeal Filed On
22-11-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 2660 /P U N/20 16 / ASSESSMENT YEAR : 201 2 - 13 M/S PRATHAMESH CONSTRUCTIONS, PLOT NO.44, MIRAJ MIDC, MIRAJ DIST., SANGLI - 416410 . / APPELLANT PAN: AAFFP2620Q VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2, SANGLI . / RESPONDENT ASSESSEE BY : S MT. JYOTI CHANDEKAR REVENUE BY : SHRI K.J. KAWADE / DATE OF HEARING : 2 3 . 0 8 .201 8 / DATE OF PRONOUNCEMENT: 30 . 0 8 .201 8 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF CIT(A) - I , KOLHAPUR , DATED 2 7 .0 9 .20 16 RELATING TO ASSESSMENT YEAR 20 12 - 13 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 GROUNDS OF APPEAL: - 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) - KOLHAPUR WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY THE A. O . OF RS.22,75,000/ - UNDER S. 271( 1 )(C) OF THE ACT. THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THE FACTUAL POSITION THAT THE ASSESSEE HAD AGREED TO DECLARE AND ALSO DECLARED AND PAID THE ENTIRE TAXES THEREON. THERE WAS NO TAX PAYABLE AS FAR AS AGREED ADDITION WAS CONCERNED. THE PENALTY THEREFORE, WAS NOT LEVIABLE. THE PENALTY LEVIED AND CONFIRMED BY LD. CIT(A) BE QUASHED. 2 ITA NO. 2660 /PUN/20 16 PRATHAMESH CONSTRUCTIONS 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE FACTS ON RECORD SHOW THAT PENALTY PROCEEDINGS WERE INITIATED BY A. O . FOR 'CONCEALMENT OF INCOME' WHILE THE PENALTY IS LEVIED FOR 'TAX SOUGHT TO BE EVADED BY FURNISHING INACCURATE PARTICULARS OF INCOME'. SO INITIATION OF PENALTY PROCEEDINGS WAS NOT ON ANY 'SPECIFIC CHARGE' AGAINST THE ASSESSEE. THE PENALTY LEVIED IS UNSUSTAI NABLE IN LAW. IT BE QUASHED. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE PENALTY U/S 271( 1 )(C) IS NOT LEVIABLE SINCE THERE IS NEITHER 'CONCEALMENT OF INCOME' NOR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME'. THE JUDGMENT RELIED UPON O F THE HON'BLE SUPREME COURT IN THE CASE OF MAK DATA (P) LTD. (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. THE PENALTY LEVIED BE QUASHED. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE HON'BLE SUPREME COURT DISMISSED THE SLP FI LED BY THE REVENUE WHERE HON'BLE KARNATAKA HIGH COURT IN ITA 380 OF 2015 WHEREBY HIGH COURT HAD HELD THAT THE NOTICE U/S 274 R.W.S 271( 1 )(C) WAS BAD IN LAW AS IT DID NOT SPECIFY UNDER WHICH LIMB OF S. 271( 1 )(C) THE PENALTY PROCEEDINGS WERE INITIATED I.E. WHETHER FOR 'CONCEALMENT' OR 'FOR FURNISHING INACCURATE PARTICULARS OF INCOME'. THEREFORE, PENALTY LEVIED U/S 271( 1 )(C) AND CONFIRMED BY LD. CIT(A) IS BAD IN LAW BEING NOT SUSTAINABLE. IT BE QUASHED. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAIN ST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE CASE, ASSESSMENT IN THE CASE OF ASSESSEE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT. THE EXPENDITURE CLAIMED BY THE ASSESSEE FOR SUB - CONTRACT WORK WAS HELD TO BE BO GUS EXPENDITURE. THE ASSESSING OFFICER THUS, DISALLOWED SUM OF 73,56,445/ - . THE ASSESSING OFFICER RECORDED SATISFACTION THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. AFTER I SSUING SHOW CAUSE NOTICE TO THE ASSESSEE, THE ASSESSING OFFICER PASSED PENALTY ORDER UNDER SECTION 271(1)(C) OF THE ACT BY HOLDING THAT THE ASSESSEE TO HAVE CONCEALED PARTICULARS OF INCOME OF 73,56,445/ - . THE ASSESSING OFFICER THEREAFTER, OBSERVED THAT THE ASSESSEE TO HAVE EVADED TAX BY CONCEALING SUCH PARTICULARS AMOUNTING TO 22,73,142/ - . HOWEVER, WHILE LEVYING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT, THE ASSESSING OFFICER HELD THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AN D LEVIED PENALTY OF 22,75,000/ - . 3 ITA NO. 2660 /PUN/20 16 PRATHAMESH CONSTRUCTIONS 5. THE CIT(A) HAS UPHELD THE SAID LEVY OF PENALTY. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE FIRST ISSUE WHICH HAS BEEN RAISED BEFORE US IS THE JURISDICTIONAL ISSUE THAT WHERE PENALTY PROCEEDINGS WERE INITIATED FOR CONCEALMENT OF INCOME AND WERE LEVIED FOR TAX SOUGHT TO BE EVADED BY FURNISHING INACCURATE PARTICULARS OF INCOME , IN SUCH CIRCUMSTANCES THE PENALTY LEVIED WAS UNSUSTAINABLE IN LAW. 8. WE HAVE ALREADY DECIDED SIMILAR ISSUE IN SERIES OF CASES, WHEREIN IT HAS BEEN HELD THAT WHILE LEVYING PENALTY FOR CONCEALMENT UNDER SECTION 271(1)(C) OF THE ACT, THE ASSESSING OFFICER MUST RECORD SATISFACTION AS TO WHETHER THE ASSESSEE HAS CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCO ME AND ACCORDINGLY ISSUE SHOW CAUSE NOTICE TO THE ASSESSEE. THEREAFTER, IT WA S INCUMBENT UPON THE ASSESSING OFFICER TO LEVY PENALTY ON THE LIMB, OF WHICH SHOW CAUSE NOTICE HAS BEEN ISSUED. IT IS ALSO INCUMBENT UPON THE ASSESSING OFFICER TO RECORD SATISFA CTION AND LEVY PENALTY ON ONE OF THE LIMBS OF SECTION 271(1)(C) OF THE ACT AND THE PENALTY PROCEEDINGS COULD NOT BE INITIATED AND COMPLETED ON BOTH THE LIMBS ESPECIALLY IN THE CASE WHERE ONLY ONE ADDITION HAS BEEN MADE IN THE HANDS OF ASSESSEE. 9. THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY IN INCOME TAX APPEAL NO.1154 OF 2014 WITH OTHER INCOME TAX APPEALS NOS.953 OF 2014, 1097 OF 2014 AND 1226 OF 2014, JUDGMENT DATED 05.01.2017 HELD THAT WHERE THERE IS NO PROPER SATISFACTION FOR LEV Y OF PENALTY AND IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO THE ASSESSEE, THERE IS NO MERIT IN LEVY OF PENALTY. 4 ITA NO. 2660 /PUN/20 16 PRATHAMESH CONSTRUCTIONS 10. APPLYING THE SAID PRINCIPLE, WE HOLD THAT IN THE PRESENT CASE, WHERE THE ASSESSING OFFICER HAS RECORDED SATISFACTION WHILE INITIATING PE NALTY PROCEEDINGS FOR CONCEALMENT OF INCOME AND HAD FINALLY LEVIED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME, PENALTY ORDER PASSED BY THE ASSESSING OFFICER IS NOT SUSTAINABLE IN LAW. ACCORDINGLY, WE HOLD SO AND DELETE PENALTY LEVIED UNDER SE CTION 271(1)(C) OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 1 1 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 3 0 T H DAY OF AUGUST , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 3 0 T H AUGUST , 201 8 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I, KOLHAPUR ; 4. THE PR. CIT - I , KOLHAPUR ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE
