SHRI RAJESH MOOLCHAND DAYARAMANI, Nagpur V. ACIT-CIRCLE-8, Nagpur

ITA 293/NAG/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9675 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 02-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Cost of acquisition; Bonafide mistake
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P.K. BANSAL, VICE PRESIDENT AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO. 293/NAG./2014 ( ASSESSMENT YEAR : 200910 ) SHRI RAJESH MOOLCHAND DAYARAMANI HITESH PLACE, RING ROAD JARIPATKA, NAGPUR 440 014 PAN ABOPD3501A APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE8, NAGPUR .... RESPONDENT ASSESSEE BY : SHRI K.P. DEWANI REVENUE BY : SHRI A.R. NINAWE DATE OF HEARING 21.06.2017 DATE OF ORDER 28.06 .2017 O R D E R PER AMARJIT SINGH, J.M. THE INSTANT APPEAL BY THE ASSESSEE IS DIRECTED AGAI NST THE IMPUGNED ORDER DATED 3 RD FEBRUARY 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS)II, NAGPUR, CONFIRMING PENAL TY IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) FOR THE ASSESSMENT YEAR 200910. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED B ELOW: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENA LTY OF ` 18,00,000 UNDER SECTION 271(1)(C). 2 SHRI RAJESH MOOLCHAND DAYARAMANI 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E PROVISIONS OF SECTION 271(1)(C) DO NOT APPLY. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENAL TY WHEN THERE WAS NEITHER CONCEALMENT OF PARTICULARS OF INCOME NO R ANY FURNISHING OF INACCURATE PARTICULARS OF INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING INCOME OF ` 67,76,981 ON 30 TH SEPTEMBER 2009. THE ASSESSEE IS A CONTRACTOR AND EXECUTES CONSTRUCTION OF ROADS FOR VARIOUS STATE GOVERNMENT AUTHORITIES AS WELL AS PWD ETC. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE ASSESSI NG OFFICER THAT THE ASSESSEE HAD SOLD ONE PROPERTY FOR CONSIDERATION OF ` 1,19,00,000 AND HAD MADE A CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT AMOUNTING TO ` 42,44,846 AND AFTER DEDUCTING INDEXED COST OF ACQUISITION, HAD OFFERED ` 38,48,320 AS TAXABLE LONG TERM CAPITAL GAIN. THE ASSESSING OFFICER ALSO EXAMINED THE VARIOUS PUR CHASE AND SALE DOCUMENTS FOR THE ORIGINAL AND NEWLY ACQUIRED PROPE RTIES AND CAME TO THE CONCLUSION THAT THE ASSESSEE WOULD NOT BE ENTIT LED TO CLAIM THE SAID DEDUCTION UNDER SECTION 54F. THE WITHDRAWAL OF EXEMPTION UNDER SECTION 54F OF THE ACT WAS MADE BY THE ASSESSING OF FICER FOR THE FOLLOWING REASONS: (I) IT WAS NOTED BY THE ASSESSING OFFICER THAT FOR MAKING A CLAIM OF EXEMPTION U/S 54F THE APPELLANT SHOULD HAVE PURCHAS ED A RESIDENTIAL HOUSE WITHIN ONE YEAR BEFORE OR TWO YEA RS AFTER THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PL ACE. ALTERNATIVELY HE SHOULD HAVE CONSTRUCTED A RESIDENTIAL HOUSE WITH IN A PERIOD OF THREE YEARS AFTER THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSETS TOOK PLACE. IN THE CASE OF THE ASSESSEE, HOW EVER, TRANSFER OF 3 SHRI RAJESH MOOLCHAND DAYARAMANI THE SAID PROPERTY TOOK PLACE ON 09-06-2008 WHILE TH E NEW RESIDENTIAL HOUSE WAS BROUGHT BY THE APPELLANT ON 2 9-05-2006 THAT IS MORE THAN TWO YEARS PRIOR TO THE DATE OF TRANSFE R. SINCE THE BASIC CONDITION FOR MAKING THE CLAIM U/S 54F WAS NOT MET, THE LD. AO CAME TO THE CONCLUSION THAT THE SAID EXEMPTION CANN OT BE GIVEN TO THE APPELLANT. (II) IT WAS FURTHER NOTED BY THE LD. AO THAT AS PER THE PROVISO A(II) TO SECTION 54F(1), EXEMPTION CANNOT BE GIVEN TO THE APPELLANT IF HE PURCHASES A RESIDENTIAL HOUSE, OTHER THAN THE NEW A SSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF TH E ORIGINAL ASSET. IN THE CASE OF THE APPELLANT IT WAS SEEN BY THE LD. AO THAT THE APPELLANT HAD ACQUIRED ONE PROPERTY ON 12-09-2008 A ND ON PERUSAL OF THE SCHEDULE OF PROPERTY AS STATED IN THE PURCHA SE DOCUMENT IT WAS A HOUSE BEING A RESIDENTIAL HOUSE BEARING CITY OF NAGPUR CORPORATION NO. 706, CITY SURVEY NO. 451, PLOT NO. 29, JARIPATKA COLONY. THE LD. AO DEPUTED AN INSPECTOR TO ENQUIRE ABOUT THE NATURE OF THE PROPERTY WHEREIN IT WAS ASCERTAINED T HAT THE SAID PROPERTIES WAS A RESIDENTIAL PROPERTY. THIS FACT WA S BROUGHT TO THE KNOWLEDGE OF THE APPELLANT VIDE ORDER SHEET DATED 0 3-11-2011. IT WAS STATED BY THE APPELLANT THAT THE SAID PROPERTY IS A GODOWN. THE LD. AO HOWEVER CAME TO THE CONCLUSION THAT IN VIEW OF THE ABOVE FACTS ALSO THE APPELLANT WAS NOT ENTITLED TO THE CL AIM OF EXEMPTION U/S 54F AND THE SAME WAS REQUIRED TO BE WITHDRAWN. (III) IT WAS ALSO NOTED BY THE LD. AO THAT THE APPE LLANT HAD PURCHASED A RESIDENTIAL PROPERTY AND HAD CARRIED OU T EXTENSIVE CONSTRUCTION THEREON WHICH WAS NOT RESIDENTIAL CONS TRUCTION BUT WAS MORE IN THE NATURE OF FURNISHING AND RENOVATION . THE LD. AO WAS OF THE OPINION THAT EXEMPTION U/S 54F IS ALLOWA BLE ONLY WHEN THE SALE CONSIDERATION IS INVESTED EITHER IN PURCHA SE OF RESIDENTIAL HOUSE OR FOR CONSTRUCTION OF A RESIDENTIAL HOUSE AN D SINCE THE APPELLANT'S CLAIM TO HAVE DONE BOTH THE CLAIM U/S 5 4F WOULD HAVE TO BE REJECTED ON THIS GROUND ALSO. (IV) IT WAS ALSO NOTED BY THE LD. AO THAT THE APPEL LANT HAD BORROWED MONEY FROM HDFC BANK AND PNB WHICH CLEARLY SHOWED THAT THE APPELLANT HAD NOT INVESTED SALE PROCEEDS F ROM THE SALE OF THE ORIGINAL ASSETS INDIVIDUALLY ACQUIRED PROPERTY AND SINCE THIS WAS THE PRIMARY REQUIREMENT OF SECTION 54F THE APPELLAN T WOULD NOT BE ENTITLED TO EXEMPTION UNDER SECTION 54F. 4. THE ASSESSEE FILED DETAILED REPLY, HOWEVER, THE ASS ESSING OFFICER REJECTING THE CONTENTIONS OF THE ASSESSEE HELD THAT THE ASSESSEE HAD DELIBERATELY SOUGHT TO CONCEAL HIS TAXABLE (REAL) I NCOME THROUGH 4 SHRI RAJESH MOOLCHAND DAYARAMANI INACCURATE PARTICULARS AND ACCORDINGLY, PENALTY PRO CEEDINGS FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND CO NCEALMENT OF INCOME UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED O N TWO GROUNDS: I) ASSESSEE HAD CLAIMED EXEMPTION UNDER SECTION 54 OF THE ACT, WHEN HE WAS NOT ELIGIBLE TO DO SO; II) ASSESSEE HAD FURNISHED INACCURATE DETAILS OF SALE C ONSIDERATION RECEIVED FOR ONE OF THE PROPERTIES FOR THE PURPOSE OF CALCULATION OF CAPITAL GAIN. 5. BEING AGGRIEVED BY THE IMPOSITION OF PENALTY UNDER S ECTION 271(1)(C) OF THE ACT, THE ASSESSEE FILED APPEAL BEF ORE THE FIRST APPELLATE AUTHORITY, WHEREIN, THE LEARNED COMMISSIO NER (APPEALS) HAS CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFI CER. THE ASSESSEE FEELING AGGRIEVED FILED APPEAL BEFORE US. 6. BEFORE US, THE LEARNED COUNSEL FOR ASSESSEE SUBMITTE D BY WAY OF WRITTEN SUBMISSION, WHICH IS REPRODUCED HEREIN BELO W: A) ON MERITS ADDITIONS MADE BY A.O. ITSELF IS UNSU STAINABLE IN LAW NO PENALTY CAN BE LEVIED IN RESPECT TO SUCH ADDITIO N. RELIANCE ON: I) GIST OF SUBMISSION MADE IN ITA NO.449/NAG./2013 IN THE CASE OF ASSESSEE. B) GENUINE AND BONAFIDE CLAIM OF EXEMPTION U/S 54F OF IT. ACT 1961 BY ASSESSEE. A.O. HAS NOT DISPUTED THE GENUINE NESS OF EXPENDITURE INCURRED ON CONSTRUCTION OF RESIDENTIAL HOUSE. ENTIRE EXPENDITURE INCURRED ON CONSTRUCTION OF RESIDENTIAL HOUSE HAS BEEN REFLECTED IN BALANCE SHEET AND DETAILS THEREOF HAVE BEEN SUBMITTED BY ASSESSEE. NOTHING IS HIDDEN BY ASSESSE E. PARTICULARS FURNISHED ARE NOT FOUND TO BE INACCURATE. NO CONCEA LMENT OF INCOME. PENALTY U/S 271 (1 )(C) IS UNSUSTAINABLE. 5 SHRI RAJESH MOOLCHAND DAYARAMANI C) IT IS SETTLED POSITION OF LAW THAT NO PENALTY CAN BE LEVIED IN RESPECT TO DEBATABLE ISSUES. FROM THE DECISIONS REL IED BY ASSESSEE IN GIST OF SUBMISSION IN ITA NO.449/NAG/2013 IT IS CLEAR THAT ISSUE UNDER CONSIDERATION IS DEBATABLE ISSUE AND SAME CAN NOT BE VISITED WITH PENALTY U/S 271 (1 )(C). RELIANCE ON: I) 231 TAXMAN 0665 (BOM.) CIT VS. NAYAN BUILDERS AND DEVELOPERS D) MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF I NCOME. RELIANCE ON: I) 322 ITR 158(SC) CIT VS. RELIANCE PETRO PRODUCTS E) MERE DISALLOWANCE OF BONAFIDE DISPUTED CLAI M CANNOT BE VISITED WITH PENALTY U/S 271(1)(C) OF ACT 1961. RELIANCE ON: I) 288 ITR 670 (DEL.) CIT VS. NATH BROS. EXIM INTERNATIONAL II) 288 ITR 570 (DEL.) CIT VS. INTERNATIONAL AUDIO VISUAL F) IMPOSITION OF PENALTY IS NOT MANDATORY. REL IANCE ON: I) 83 ITR 26 (SC) HINDUSTAN STEEL LTD. VS. STATE OF ORISSA G) ASSESSEE DURING ASSESSMENT PROCEEDINGS HAS SUBM ITTED COPY OF REGISTERED SALE DEED IN RESPECT TO SALE OF PROPERTY . ASSESSEE INVITES ATTENTION AT PAGE 4 OF PENALTY ORDER WHEREIN A.O. O BSERVED FROM REGISTERED SALE DEED SUBMITTED BY ASSESSEE THAT SAL E CONSIDERATION OF PROPERTY SOLD IS RS.129 LACS. ACCOUNTANT OF ASSESSE E HAD COMMITTED AN INADVERTENT AND BONAFIDE ERROR BY CONSIDERING SALE CONSIDERATION AT RS.119 LACS. CORRECT AMOUNT OF SALE CONSIDERATION W AS APPARENT FROM PERUSAL OF REGISTERED SALE DEED AND IT DID NOT REQU IRE TO MAKE ANY INQUIRY OR INVESTIGATION. IT CLEARLY DEPICT BONAFID E MISTAKE. NO PENALTY OUGHT TO BE LEVIED U/S 271(1)(C) OF IT. ACT 1961. RELIANCE ON: I) 348 ITR 306 (SC) PRICE WATER COOPERS PVT. LTD. VS. CIT 6 SHRI RAJESH MOOLCHAND DAYARAMANI H) REGISTERED SALE DEED IS A DISCLOSED TRANSACTION . INADVERTENT BONAFIDE MISTAKE IN TAKING THE SALE CONSIDERATION C ANNOT BE TAKEN AS ON ACT OF CONCEALMENT. I) SHOW CAUSE NOTICE SPEAKS OF CONCEALMENT OF INCOME A ND FURNISHING PARTICULARS OF INCOME. NOTICE VAGUE AND CONSEQUENT LEVY OF PENALTY UNDER SECTION 271(1)(C) BAD IN LAW. RELIANCE ON: I) HON'BLE BOMBAY HIGH COURT IN ITA NO. 1154 OF 2 14 IN THE CASE OF SHRI SAMSON PERINCHERY VIDE ORDER DATED 05/01/2017. II) SUPREME COURT ORDER IN PETITION(S) FOR SLP (C) 72016 (CC NO.11485/2016) IN THE CASE OF M/S. SSA'S EMERALD ME ADOWS. III) HON'BLE KARNATAKA HIGH COURT IN ITA NO.380 OF 2015 IN THE CASE OF M/S. SSA'S EMERALD MEADOWS VIDE ORDER DATED 23/11/2 015. J) PERUSAL OF PENALTY ORDER WOULD INDICATE THAT NO DISCUSSION HAS BEEN MADE IN RESPECT TO LEVY OF PENALTY ON ADDITION MADE ON ACCOUNT OF ALV OF PROPERTY. INFACT, NO PENALTY HAS BEEN LEVIED IN RESPECT TO SAME. HON'BLE CIT(A) ERRED IN OBSERVING THAT PENALTY IS C ONFIRMED FOR ALV WHICH HAS NOT BEEN LEVIED BY A.O. K) DECISIONS RELIED UPON BY A.O. AND HONBLE CIT(A) ARE DISTINGUISHABLE ON FACTS AND HENCE ARE NOT APPLICAB LE IN THE CASE OF ASSESSEE. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PENALTY HAS BEEN LEVIED AT THE HANDS OF ASSESSEE IN RESPECT TO DISALLOWANCE OF CLAIM UNDER SECTION 54F OF THE ACT AS WELL AS ALV ASSESSED IN RESPECT TO PROPERTY SHOWN IN THE FINANCIAL STATEMENT AS GODOWN. THE ADDITION MADE BY THE ASSESSEE ON ACCOUNT OF DISALLOWANCE UNDER SECTION 54F OF THE AC T AND ADDITION 7 SHRI RAJESH MOOLCHAND DAYARAMANI MADE IS RESPECT TO ALV WERE CHALLENGED IN THE APPEA L AND HAS BEEN CONSIDERED IN THE APPEAL FILED BY THE ASSESSEE BEFO RE US IN ITA NO. 449/NAG./2013. IN THE ORDER PASSED IN THE APPEAL IN ITA NO 449/ NAG./2013 THE ADDITION MADE BY THE ASSESSING OFFICE R ON ACCOUNT OF DISALLOWANCE OF EXEMPTION UNDER SECTION 54F AS WELL AS ADDITION ON ACCOUNT OF ALV HAS BEEN DELETED. IT IS THUS OBVIOUS THAT NO PENALTY WOULD SURVIVE IN RESPECT TO ADDITION MADE ON ACCOUN T OF DISALLOWANCE OF CLAIM UNDER SECTION 54F AND FOR ALV OF PROPERTY SHOWN AS GODOWN IN RESPECT TO SALE CONSIDERATION OF PROPERTY SHOWN LESS BY ` 10 LAKH IT HAS BEEN EXPLAINED TO BE BONAFIDE MISTAKE OF ACCOUN TANT. THE PROPERTY SOLD BY ASSESSEE HAVING BEEN DECLARED IN T HE RETURN OF ASSESSEE EXPLANATION AS TO BONAFIDE MISTAKE OF ACCO UNTANT OF ASSESSEE CANNOT BE DISCARDED. THE EXPLANATION GIVEN BY ASSES SEE IS REASONABLE AND DESERVE ACCEPTANCE FOR THE PURPOSE OF PENALTY T O BE LEVIED BY UNDER SECTION 271(1)(C) OF THE ACT. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES CASE OF ASSESSEE IT IS HELD THAT PENALTY LEVIED TO BE UNJUSTIFIED AND IS DIRECTED TO BE CANCELLED. IT IS FURTHER SEEN THAT IN CASE OF ASSESSEE NOTICE ISSUED FOR IMPOSITION OF PE NALTY UNDER SECTION 271(1)(C) OF THE ACT, IS IN CYCLOSTYLE PROFORMA NOT ICE WHERE NO SPECIFIC CHARGE TO SHOW AS TO WHETHER THE PENALTY IS EXIGIBL E FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF I NCOME IS TO BE LEVIED AT THE HANDS OF ASSESSEE. THE AFORESAID LEGAL ISSUE HAS BEEN CONSIDERED BY THE COORDINATE BENCH OF THE TRIBUNAL , MUMBAI BENCH, 8 SHRI RAJESH MOOLCHAND DAYARAMANI MUMBAI IN CASE OF SIDDHI HOME MAKERS, ORDER DATED 2 8 TH APRIL 2017 IN ITA NO. 4168/MUM./2013 AND IT HAS BEEN HELD AS UNDE R: 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS WITH REGARD TO THE PRELIMINARY PLEA OF THE ASSESSEE IN T ERMS OF WHICH THE VALIDITY OF THE PROCEEDINGS INITIATED UNDER SEC TION 271(1)(C) OF THE ACT HAS BEEN SOUGHT TO BE CHALLENGED. THE SUM-A ND- SUBSTANCE OF THE POINT RAISED BY THE ASSESSEE IS TH AT THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 R .W.S. 271(1)(C) OF THE ACT DATED 30/12/2010 DOES NOT REFLECT AN APP ROPRIATE APPLICATION OF MIND, INASMUCH AS, THE NOTICE HAS BE EN ISSUED IN A STANDARD PROFORMA WHERE THE IRRELEVANT PORTION HAS NOT BEEN STRUCK OFF. AT THE TIME OF HEARING, LD. REPRESENTAT IVE FOR THE ASSESSEE HAS REFERRED TO THE NOTICE ISSUED UNDER SE CTION 274 R.W.S. 271(1)(C) OF THE ACT DATED 30/12/2010 IN THI S REGARD. FACTUALLY SPEAKING, IT IS CLEARLY EMERGING THAT THE NOTICE HAS BEEN ISSUED IN A STANDARD PROFORMA AND THE IRRELEVANT LI MB OF SECTION 271(1)(C) OF THE ACT HAS NOT BEEN STRUCK OFF. NOTAB LY, THE PENALTY PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE ATTR ACTED WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS ALSO A WELL ACCEPTED PROPOSITION THAT THE AFORESAID TWO LIMBS OF SECTION 271(1)(C) OF THE ACT CARRY DIFFERENT MEANINGS. THEREFORE, IT WAS IMPERATIVE FOR THE ASSESSING OFFICER TO STRIKE- OFF THE IRRELEVANT LIMB SO AS TO MAKE THE ASSESSEE AWARE AS TO WHAT IS THE CHARGE MA DE AGAINST HIM SO THAT HE CAN RESPOND ACCORDINGLY. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNI NG FACTORY (SUPRA) OBSERVED THAT THE LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEING LEVIED. AS PER HON'BLE HIGH COURT, WHERE THE ASSESSING OFFICER PROPOSED TO INVOKE FIRS T LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATEL Y MARKED. THE HON'BLE HIGH COURT HELD THAT THE STANDARD PROFORMA OF NOTICE UNDER SECTION 274 OF THE ACT WITHOUT STRIKING OF TH E IRRELEVANT CLAUSES WOULD LEAD TO AN INFERENCE OF NON-APPLICATI ON OF MIND BY THE ASSESSING OFFICER. THE HONBLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF VS. JCIT, 291 ITR 519(SC) HAS ALSO NOTICED THAT WHERE THE ASSESSING OFFICER ISSUES NOTICE UNDER SEC TION 274 OF THE ACT IN THE STANDARD PROFORMA AND THE INAPPROPRIATE WORDS ARE NOT DELETED, THE SAME WOULD POSTULATE THAT THE ASSESSIN G OFFICER WAS NOT SURE AS TO WHETHER HE WAS TO PROCEED ON THE BAS IS THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOM E OR FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDING TO THE HONBLE SUPREME COURT, IN SUCH A SITUATION, LEVY OF PENALTY SUFFERS FROM NON-APPLICATION OF MIND. IN THE BACKGROUND OF THE A FORESAID LEGAL POSITION AND, HAVING REGARD TO THE MANNER IN WHICH THE ASSESSING OFFICER HAS ISSUED NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT DATED 30/12/2010 WITHOUT STRIKING OFF THE IRREL EVANT WORDS, 9 SHRI RAJESH MOOLCHAND DAYARAMANI THE PENALTY PROCEEDINGS SHOW A NON-APPLICATION OF M IND BY THE ASSESSING OFFICER AND IS, THUS, UNSUSTAINABLE. WE H OLD SO. 9. THE RATIO LAID DOWN BY THE HONBLEITAT MUMBAI REPRO DUCED HEREINABOVE SQUARELY APPLIES TO FACTS IN CASE OF AS SESSEE AND RESPECTFULLY FOLLOWING THE SAME PENALTY LEVIED U/S 271(1)(C) OF INCOME TAX ACT 1961 IS NOT SUSTAINABLE ON THE AFORESAID LE GAL GROUND ALSO. THE HONBLE BOMBAY HIGH COURT IN CASE OF SHRI SAMSUN G PERICHERYREPORTED AT 392 ITR 4 (BOM) HAS TAKEN A S IMILAR VIEW AND RATIO LAID DOWN THEREIN FULLY SUPPORT THE SUBMISSI ON OF ASSESSEE. THE RATIO LAID DOWN BY HONBLE JURISDICTIONAL HIGH COUR T APPLIES WITH FULL FORCE TO THE FACTS IN CASE OF ASSESSEE AND CONSIDER ING THE SAME PENALTY LEVIED IS UNSUSTAINABLE. CONSIDERING THE TOTALITY O F FACTS AND CIRCUMSTANCES IN CASE OF ASSESSEE WE ARE OF CONSIDE RED OPINION THAT THE PENALTY LEVIED IS UNJUSTIFIED AND IS DIRECTED T O BE CANCELLED. THE GROUND OF APPEAL IS ALLOWED. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.06.2017 SD/ - P.K. BANSAL VICE PRESIDENT SD/ - AMARJIT SINGH JUDICIAL MEMBER NAGPUR, DATED: 28.06.2017 10 SHRI RAJESH MOOLCHAND DAYARAMANI COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, NAGPUR