Meghraj Kesaji Chaudhari, Nashik V. Deputy Commissioner of Income tax,

ITA 2786/PUN/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8562 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 09-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHAI
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.2786/PUN/2016 / ASSESSMENT YEAR : 2012-13 MEGHRAJ KESAJI CHAUDHARI, PROP. MADHUR FOOD PLAZA, PIPELINE ROAD, ANADWALLI, NASHIK. PAN : AEHPC0396N ....... / APPELLANT / V/S. DCIT, CIRCLE- 1, NASHIK. / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI SANJEEV GHAI. / DATE OF HEARING : 31.12.2018 / DATE OF PRONOUNCEMENT : 31.12.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-1, NASHIK DATED 03.10.2016 FOR THE ASSESSMENT YEAR 2012-13 AND IT RELATES TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 2. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHALF OF THE ASSESSEE. IN VIEW OF THE SMALLNESS OF ISSUE, WE PROCEED TO DECIDE THE ISSUE AFTER HEARING THE LD. DR FOR THE REVENUE. 3. ON PERUSAL OF THE RECORDS IN CONNECTION WITH THE LEGAL ISSUE FOR RECORDING OF SATISFACTION, WE FIND THE APPEAL IS REQUIRED TO BE ALLOWED IN FAVOUR OF THE ASSESSEE WITHOUT GOING INTO THE MERITS OF THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN THIS REGARD, WE PERUSED THE ASSESSMENT ORDER AS WELL AS PENALTY ORDER. WE FIND THE ISSUE RELATING TO THE RECORDING OF 2 ITA NO.2786/PUN/2016 SATISFACTION IN THE ASSESSMENT PROCEEDINGS FOR ENABLING THE ASSESSING OFFICER TO ISSUE NOTICE U/S 274 OF THE ACT IS COMMON OR SIGNIFICANT. IN THIS REGARD, WE PERUSED THE ORDER OF THE ASSESSING OFFICER IN GENERAL AND CONTENTS OF PARA 03.3 IN PARTICULAR. FOR THE SAKE OF COMPLETENESS, THE RELEVANT LINES RELATING TO THE SATISFACTION IS EXTRACTED AS FOLLOWS :- 03.3 .. HOWEVER, THE PENALTY PROCEEDING UNDER SECTION 271(1)(C) READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961 INITIATED SEPARATELY FOR CONCEALMENT AND FURNISHING INACCURATE PARTICULARS OF INCOME ON TOTAL AMOUNT OF DISCLOSURE MADE DURING THE SURVEY PROCEEDINGS. 4. SIMILARLY, WE ALSO PERUSED THE PENALTY ORDER DATED 27.08.2015 AND FIND THE CONTENTS OF PARA 5 ARE RELEVANT TO EXTRACT AND THE SAME ARE AS FOLLOWS :- 05. IN VIEW OF THE FACTS ENUMERATED ABOVE, IT IS QUITE CLEAR THAT, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS CONCEALED THE INCOME TO EVADE THE TAX ON INCOME OF RS.84,24,770/-. THE CASE OF THE ASSESSEE FALL IN EXPLANATION-1 OF THE SECTION 271(1)(C) OF THE I.T. ACT, 1961. 5. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSING OFFICER INVOKED BOTH THE LIMBS OF CLAUSE (C) OF SECTION 271(1) OF THE ACT BY USING THE CONJUNCTION AND WHILE RECORDING THE SATISFACTION IN THE ASSESSMENT ORDER. THIS MANNER OF GIVING SATISFACTION CERTAINLY FALLS SOUGHT OF THE LEGAL REQUIREMENT. SUCH RECORDING HAPPENS ONLY WHEN THERE IS AN AMBIGUITY IN THE MIND OF THE ASSESSING OFFICER QUA THE NATURE OF DEFAULT. SIMILAR IS THE MANNER ADOPTED BY THE ASSESSING OFFICER FOR LEVYING THE PENALTY AS SEEN FROM THE EXTRACT GIVEN ABOVE. CONSIDERING THE SAME, WE ARE OF THE OPINION SUCH RECORDING OF SATISFACTION DOES NOT MAKE THE PENALTY ORDER SUSTAINABLE. THEREFORE, CONSIDERING THE BINDING JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE CIT VS. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM.) AS WELL AS THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND 3 ITA NO.2786/PUN/2016 GINNING FACTORY 359 ITR 565, WE ARE OF THE OPINION THAT SUCH PENALTY ORDER IS UNSUSTAINABLE IN LAW LEGALLY. IT IS A SETTLED LEGAL PROPOSITION FROM THE SAID JUDGEMENTS, THE ASSESSING OFFICER IS UNDER OBLIGATION TO SPECIFY THE APPROPRIATE LIMB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT AT THE TIME OF INITIATION AS WELL AS AT THE TIME OF LEVY OF PENALTY. 6. IN VIEW OF THE ABOVE DELIBERATION ON THIS ISSUE, WITHOUT GOING INTO THE MERITS OF THE PENALTY, WE ARE OF THE OPINION THAT THE PENALTY ORDER IS LIABLE TO BE QUASHED ON THIS LEGAL ISSUE. THUS, WE SET-ASIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY ON LEGAL GROUND. THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 31 ST DAY OF DECEMBER, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 31 ST DECEMBER, 2018. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-1, NASHIK. 4. THE CCIT, NASHIK. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.