Laxman Raghunath Ingale, Ahmednagar V. Income tax Officer,

ITA 2915/PUN/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7093 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-11-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 21-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ABHAY SHASHTRI
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 2915/PUN/2016 / ASSESSMENT YEAR : 2008-09 MR. LAXMAN RAGHUNATH INGALE, C/O. RAGHUJAN GAS, NEWASA, DIST.- AHMEDNAGAR PAN : AAIPI3128B ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD-2, AHMEDNAGAR. / RESPONDENT ASSESSEE BY : SHRI ABHAY SHASHTRI REVENUE BY : SHRI PANKAJ GARG / DATE OF HEARING : 29.04.2019 / DATE OF PRONOUNCEMENT : 29.04.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE LD. CIT(APPEALS)-2, PUNE DATED 18.07.2016 FOR THE ASSESSME NT YEAR 2008-09 AS PER THE GROUNDS OF APPEAL ON RECORD. 2. AT THE OUTSET, WE NOTICE THAT THE PRESENT APPEAL IS TIME BARRED BY 89 DAYS. THE ASSESSEE HAS FILED AN AFFIDAVIT ALONG WITH CONDONAT ION OF DELAY 2 ITA NO. 2915/PUN/2016 A.Y.2008-09 PETITION. WE HAVE GONE THROUGH THE CONDONATION PETITION A S WELL AS THE AFFIDAVIT AND HAVE FOUND THAT REASONS SPECIFIED THEREIN ARE JUSTIFIED AND THAT THE DELAY CANNOT BE ATTRIBUTED TO THE DELIBERATE CONDUC T OF THE ASSESSEE NEITHER THROUGH INTENTION NOR THROUGH ACTION. THE REASO NS FOR DELAY IN FILING THE APPEAL WERE BEYOND THE CONTROL OF THE ASSESSEE A ND EVEN THE LD. DR STATED THAT HE HAS NO OBJECTION, IF THE DELAY IS CONDONE D. IN VIEW OF THE MATTER, WE CONDONE THE DELAY AND PROCEED TO HEAR THE APPEAL ON ME RITS. 3. THE CRUX OF THE GRIEVANCE OF THE ASSESSEE IS THE LEVY OF PENALTY BY THE LD. ASSESSING OFFICER U/S.271(1)(C) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS THE ACT) WITHOUT SPECIFYING THE LIMB FOR W HICH PENALTY HAS BEEN IMPOSED IN THE NOTICE U/S.274 R.W.S.271(1)(C) OF THE ACT. 4. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE VE HEMENTLY ARGUED THAT THOUGH IN THE ASSESSMENT ORDER AND THE PENALTY O RDER, IT IS STATED THAT PENALTY HAS BEEN LEVIED U/S.271(1)(C) OF THE ACT FOR CONCEALME NT OF INCOME, HOWEVER, IN SO FAR AS THE NOTICE U/S.271(1)(C) R.W.S. 274 OF TH E ACT IS CONCERNED, IT IS AMBIGUOUS SO AS TO THE CORRECT CHARGE FOR WHICH PENALTY IS LEVIED THAT IS NOT SPECIFIC IN THE NOTICE. IT STATES THAT PE NALTY IS LEVIED FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. AR FURTHER SUBMITTED THE NOTICE ISSUED U/S.274 R.W.S. 2 71(1)(C) OF THE ACT DID NOT SPECIFY ON WHICH LIMB PENALTY U/S.271(1)(C) OF THE ACT IS LEVIED. THE LD. AR OF THE ASSESSEE RELIED ON THE LATEST JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY REPO RTED AS 392 ITR 4 (BOM.) WHEREIN THE HON'BLE BOMBAY HIGH COURT HAS FOLLOWED TH E VIEW OF KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATH C OTTON & GINNING FACTORY REPORTED IN 359 ITR 565(KAR.) WHEREIN IT WAS OBS ERVED THAT THE 3 ITA NO. 2915/PUN/2016 A.Y.2008-09 HON'BLE SUPREME COURT OF INDIA HAD HELD IN T. ASHOK PAI VS. CIT REPORTED AS 292 ITR 11 (SC) THAT ACT OF CONCEALMENT OF INCOME AND A CT OF FURNISHING INACCURATE PARTICULARS ARE TWO DIFFERENT THINGS. SINCE WHER E THE NOTICE DOES NOT SPECIFY FOR WHAT PENALTY IS BEING INITIATED, THE LEVY OF P ENALTY WAS HELD TO BE INVALID. THE LD. AR FURTHER SUBMITTED THAT AS OF NOW SO FAR AS THE HON'BLE JURISDICTIONAL HIGH COURT IS CONCERNED, THE NON-STRIKING OF I RRELEVANT PORTION OF THE LIMB IS NOT JUST A PROCEDURAL MISTAKE BUT IF SUCH EX ERCISE IS NOT DONE AND IF THE NOTICE DOES NOT SPECIFY THE LIMB IN WHICH THE PE NALTY IS BEING LEVIED U/S.271(1)(C) OF THE ACT, IN SUCH SCENARIO, THE IMPOSITION OF PEN ALTY SHALL BE VOID AB-INITIO. 5. ON THE OTHER HAND, THE LD. DR HAS PLACED RELIANCE ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS SMT. KAUSHALYA AND OTHERS REPORTED AS 216 ITR 660 . PLACING RELIANCE ON THIS DECISION, THE LD. DR CONTENDED THAT WHEN THE ASSESS MENT ORDER AND THE PENALTY ORDER CLEARLY STATES THAT PENALTY HAS BEEN LEVIE D FOR CONCEALMENT OF INCOME, THE NON-STRIKING OF IRRELEVANT PORTION OF THE LIMB IN T HE NOTICE U/S.271(1)(C) R.W.S.274 IS NOT FATAL, SINCE THE ASSESSEE KNOWS THE CHARGE FOR WHICH PENALTY U/S.271(1)(C) IS BEING LEVIED. 6. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE R IVAL CONTENTIONS AND HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE DOCUMENTS ON RECORDS. THAT IN THE PENALTY NOTICE, THE ASSESSING OFFICER IS NOT CLEAR AS TO WHIC H LIMB OF SECTION 271(1)(C) OF THE ACT PENALTY TO BE IMPOSED. THE LD. AR HAS P OINTED OUT BEFORE US THAT THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY (SUPRA.) HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME IN SECTION 271(1)(C) CARRY 4 ITA NO. 2915/PUN/2016 A.Y.2008-09 DIFFERENT MEANINGS/CONNOTATIONS AND THEREFORE, THE SATISFACT ION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BRE ACHES MENTIONED U/S.271(1)(C) FOR INITIATION OF PENALTY PROCEEDINGS WILL NOT WARRAN T/PERMIT PENALTY BEING IMPOSED FOR THE OTHER. THE ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON THE GROUND OF WHICH THE PENALTY PROCEEDING S HAS BEEN INITIATED, AND IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSE E HAS NO NOTICE. THEREFORE, WHERE THE ASSESSING OFFICER INITIATED PENALTY PRO CEEDINGS U/S.271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME, THE ORDER IMPOSING PENALTY FOR CONCEALMENT OF INCOME WAS NOT VALID. RE VERTING TO THE FACTS OF THE CASE THE PENALTY NOTICE IS AMBIGUOUS SO AS IT IS NOT SPECIFIED AS TO THE CHARGE FOR WHICH PENALTY U/S.271(1)(C) OF THE ACT IS LEVIED. MEANING THEREBY TO OUR HUMBLE UNDERSTANDING, THE ASSES SEE SHOULD BE READY WITH HIS DEFENSE FOR WHICH PENALTY HAS BEEN LEVIED BY THE REVENUE AUTHORITY. IT COULD NOT BE GENERALLY DONE THAT FOR CONC EALMENT OF INCOME AND ALSO FOR FURNISHING INACCURATE PARTICULARS OF INCOME, PENALT Y HAS BEEN LEVIED. THE LIMB FOR WHICH PENALTY IS LEVIED, SHOULD BE SPECIFIC IN THE P ENALTY NOTICE ALLOWING OPPORTUNITY TO THE ASSESSEE TO GET READY WITH H IS DEFENSE. FURTHER, THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY (SUPRA.) AS STATED BY THE LD. AR IS T HE PRESENT JUDGMENT ON THE ISSUE WHICH IS THEREFORE, RELEVANT. THE LD. DR HAS RELIED ON AN EARLIER DECISION OF THE HON'BLE BOMBAY HIGH. RESPECTFULLY, FOLLOWING THE DIRECTIONS AND RULING OF THE HON' BLE JURISDICTIONAL HIGH COURT, IN SAMSON PERINCHERY (SUPRA.), WE SE T ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY FROM THE HANDS OF THE ASSESSEE. 5 ITA NO. 2915/PUN/2016 A.Y.2008-09 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 29 TH DAY OF APRIL, 2019. SD/- SD/- R.S.SYAL PA RTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 29 TH APRIL, 2019. SB !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-2, PUNE. 4. THE PR. CIT-1, PUNE. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 6 ITA NO. 2915/PUN/2016 A.Y.2008-09 DATE 1 DRAFT DICTATED ON 29 .0 4 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 29 .04 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER