Smt. Shakuntala Devi, Kanpur V. Income Tax Officer-2(4), Kanpur

ITA 275/LKW/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4134 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 16-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO.275/LKW/2016 ASSESSMENT YEAR 2011-12 INCOME TAX OFFICER, (2)4 KANPUR VS SMT. SHAKUNTALA DEVI, 122/497, SHASTRI NAGAR, KANPUR PAN ABDPD 5825 C (RESPONDENT) (APPELLANT) NONE APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 04 /0 7 /2016 DATE OF HEARING 29 / 07 /2016 DATE OF PRONOUNCEMENT ORDER PER MAHAVIR PRASAD, JM: THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT (A)-I, KANPUR DATED 29.03.2016 FOR THE AY 2008-09 BY WHICH THE CIT(A) HAS CONFIRMED THE LEVY OF PENALTY BY THE AO U/S 271(1)( C) OF THE INCOME-TAX ACT, 1961 [THE ACT FOR SHORT]. 2. WE NOTED THAT THE PENALTY ORDER PASSED U/S 271(1) (C) OF THE ACT AND POINTED OUT THAT THE AO HAS LEVIED THE PENALTY U/S 271(1)(C) FOR CONCEALING TRUE PARTICULARS OF INCOME AND FURNISHING INACCURAT E PARTICULARS OF INCOME. THIS ISSUE IS DIRECTLY COVERED BY THE DECISION OF T HE JURISDICTIONAL HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. V CIT ( 2006) 282 ITR 642 (GUJ), IN WHICH THE HONBLE HIGH COURT HAS CLEARLY HELD TH AT IT IS INCUMBENT UPON ITA NO. 27 5 / LKW /201 6 2 THE AO TO STATE WHETHER PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER AN Y INACCURATE PARTICULARS OF INCOME HAD BEEN FURNISHED BY THE ASSESSEE. THE A O IN THIS CASE HAS NOT CLEARLY LAID DOWN WHAT DEFECT HAS BEEN COMMITTED BY THE ASSESSEE. THEREFORE, PENALTY MUST BE DELETED. 3. AGGRIEVED, ASSESSEE HAS PREFERRED AN APPEAL BEFO RE THE CIT(A) AND CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE PENALTY OF RS.11,00,000/- LEVIED U/S 271(1)(C) OF THE ACT. 4. THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE AC T AND THE AO HAS LEVIED THE PENALTY U/S 271(1)(C) FOR CONCEALING TRU E PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. TH IS ISSUE IS DIRECTLY COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF NEW SORATHIA 2 ENGINEERING CO. V CIT (2006) 282 ITR 642 (GUJ), IN WHICH THE HONBLE HIGH COURT HAS CLEARLY HELD THAT IT IS INCUMBENT UPON TH E AO TO STATE WHETHER PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF PARTICUL ARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF I NCOME HAD BEEN FURNISHED BY THE ASSESSEE. THE AO IN THIS CASE HAS NOT CLEARLY LAID DOWN WHAT DEFECT HAS BEEN COMMITTED BY THE ASSESSEE. THE REFORE, PENALTY MUST BE DELETED. 3 THE LEARNED DR, ON THE OTHER HAND, RE LIED ON THE ORDER OF THE AUTHORITIES BELOW AND CONTENDED THAT SINCE THE ADDI TION HAS BEEN SUSTAINED IN VIEW OF EXPLANATION 1 TO SECTION 271(1)(C), IT I S DEEMED THAT THE ASSESSEE HAS SUBMITTED INACCURATE PARTICULARS OF INCOME. THE AO HAS RIGHTLY LEVIED THE PENALTY. 5. WE HAVE HEARD THE SUBMISSION OF LD. DR OF THE REV ENUE, GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE ORD ER OF THE HONBLE GUJARAT ITA NO. 27 5 / LKW /201 6 3 HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. V CIT (2006) 282 ITR 642 (GUJ). WE FIND THAT IN THIS CASE THE HONBL E HIGH COURT HAS HELD AS UNDER:- IT IS INCUMBENT UPON THE ASSESSING OFFICER TO STAT E WHETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF I NCOME HAD BEEN FURNISHED BY THE ASSESSEE. WHERE THE TRIBUNAL FAILS TO TAKE INTO CONSIDERATION AND DEAL WITH THE DECISION OF THE JURISDICTIONAL HIGH COURT IT WOULD CONSTITUTE AN ERROR IN LAW WHICH GOES TO THE VERY BASIS OF THE CONTROVERSY INVOLVED. AN ADDITION OF RS.61,000 WAS MADE TO THE INCOME OF THE ASSESSEE IN THE ASSESSMENT YEAR 1981-82. PENALTY WAS IMPOSED. T HE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONE R (APPEALS) WHO 3 UPHELD THE PENALTY BY OBSERVING . . . THEREFORE, R S.61,000 CLEARLY IS INCOME WHICH IS CONCEALED OR IN WHICH INACCURATE PA RTICULARS OF INCOME HAVE BEEN FURNISHED. THE ASSESSEE, THEREFORE, FILE D SECOND APPEAL BEFORE THE TRIBUNAL BUT DID NOT SUCCEED. ONE OF THE CONTENTIONS RAISED BEFORE THE TRIBUNAL WAS BASED ON A DECISION OF THE COURT IN THE CASE OF CIT V. MANU ENGINEERING WORKS [1980] 122 ITR 306 (G UJ). IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE PENALT Y COULD NOT BE SUSTAINED IN THE ABSENCE OF A CLEAR-CUT FINDING BY THE ASSESSING OFFICER. THE TRIBUNAL DID NOT DEAL WITH THE CONTENTION AND U PHELD THE ORDER OF PENALTY. ON A REFERENCE: HELD, THAT THE PENALTY ORDER AND THE ORDER OF THE C OMMISSIONER (APPEALS) SHOWED THAT NO CLEAR-CUT FINDING HAD BEEN REACHED. THE TRIBUNAL HAD FAILED TO APPRECIATE THIS LEGAL ISSUE. THE RATIO IN CIT V. MANU ENGINEERING WORKS [1980] 122 ITR 306 (GUJ) WAS APPLICABLE AND THE ORDER OF PENALTY COULD NOT BE UPHELD BY THE TRI BUNAL. THE ORDER WAS INVALID. CIT V MANU ENGINEERING WORKS (1980) 122 ITR 306 (GU J) FOLLOWED. A M SHAH AND CO. V CIT (1999) 238 ITR 415 (GUJ) AND CIT V VINAYCHAND HARILAL (1979) 120 ITR 752 (GUJ) REFERRE D TO. 6. WE NOTED FROM THE PENALTY ORDER THAT THE AO IN TH IS CASE HAS NOT CLEARLY LAID DOWN WHETHER THE ASSESSEE HAS CONCEALE D THE PARTICULARS OF INCOME OR WHETHER THE ASSESSEE HAS FURNISHED INACCU RATE PARTICULARS OF HIS ITA NO. 27 5 / LKW /201 6 4 INCOME. THE AO HAS LEVIED THE PENALTY BY OBSERVING THAT HE IS CONVINCED THAT THE ASSESSEE IS LIABLE TO PENALTY U/S 271(1)(C ) OF THE ACT FOR CONCEALING TRUE PARTICULARS OF INCOME AND FURNISHING INACCURAT E PARTICULARS OF HIS INCOME. THE HONBLE HIGH COURT IN THE AFORESAID DEC ISION HAS CLEARLY LAID DOWN THAT THE AO IS BOUND TO STATE WHETHER THE PENA LTY IS LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME OR 4 WHETHER I T HAS BEEN LEVIED FOR FILING INACCURATE PARTICULARS OF INCOME BY THE ASSE SSEE. THUS, IN OUR VIEW, THE AFORESAID DECISION IS DULY APPLICABLE TO THE FA CTS OF THE CASE BECAUSE IN PENALTY FAILURE TO FURNISH RETURN/CONCEALMENT OF IN COME HAS TO BE SPECIFIC BUT IN THE PRESENT CASE THERE ARE NO CLEAR FINDINGS FOR IMPOSING OF PENALTY SO SAME IS NOT SUSTAINABLE. ACCORDINGLY, PENALTY PROCE EDING AGAINST THE ASSESSEE ARE VITIATED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (P.K. BANSAL) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29/07/2016 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR