The ITO, Ward-4(4), Ahmedabad V. Shri Rameshwar Ramnivas Maniyar, Ahmedabad

ITA 3206/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7849 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 21-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 09-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH
• Keywords: Initiation of penalty proceedings

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 3206/AHD/2015 ( ASSESSMENT YEAR : 2011-12) THE INCOME-TAX OFFICER,, WARD 2(1)(4), 1 ST FLOOR, NAVJIVAN TRUST BUILDING, AHMEDABAD - 380009 / VS. SHRI RAMESHWAR RAMNIVAS MANIYAR, 51/2, KABUTARKHANA, CHOWKHA BAZAR, AHMEDABAD - 380002 ./ ./ PAN/GIR NO. : AAYPM2347J ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SAURABH SINGH, SR. D.R. / RESPONDENT BY : SHRI SUNIL TALATI, A.R. DATE OF HEARING 18/06/2018 !'# / DATE OF PRONOUNCEMENT 17/07/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE CIT(A)-4, AHMEDABA D (CIT(A) IN SHORT), DATED 8 TH SEPTEMBER, 2015 ARISING IN THE PENALTY ORDER DATED 13.06.2014 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 271(1)(C) OF ITA NO. 3206/AHD/15 [ITO VS. SHRI RAMESHWAR R. MANIYAR] A.Y. 2011-12 - 2 - THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSES SMENT YEAR 2011- 12. 2. IN THE CAPTIONED APPEAL, THE REVENUE HAS AGITATE D THE ACTION OF THE CIT(A) IN DELETING THE PENALTY OF RS.14,60,034/ - LEVIED BY THE AO UNDER S. 271(1)(C) OF THE ACT. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED DR FOR THE REVENUE RELIED UPON THE PENALTY ORDER PASSED BY THE AO. 4. THE LEARNED AR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF CIT(A) GRANTING RELIEF FROM THE ACTION OF THE AO. 5. WE HAVE CAREFULLY PERUSED THE QUANTUM ORDER PASS ED BY THE AO AS WELL AS PENALTY ORDER AND THE ORDER OF THE CIT(A ) APPEALED AGAINST. A BARE PERUSAL OF THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE ACT DATED 05.12.2013 SHOWS THAT A SATISFACTION AS C ONTEMPLATED UNDER S. 271(1)(C) OF THE ACT R.W.S. 271(1B) HAS FORMED T OWARDS CONCEALMENT OF PARTICULARS OF INCOME IN RESPECT OF LONG TERM CA PITAL GAINS ARISING ON SALE OF CERTAIN IMMOVABLE PROPERTY. HOWEVER, A PERUSAL OF THE PENALTY ORDER DATED 13.06.2014 PASSED UNDER S. 271( 1)(C) OF THE ACT SHOWS THAT THE AO HAS SHIFTED FROM ITS ORIGINAL SAT ISFACTION AND IMPOSED PENALTY FOR DEFAULT COMMITTED ON ACCOUNT OF FILING INACCURATE PARTICULARS OF INCOME WITH REFERENCE TO LONG TERM CAPITAL GAINS. ITA NO. 3206/AHD/15 [ITO VS. SHRI RAMESHWAR R. MANIYAR] A.Y. 2011-12 - 3 - THEREFORE, THERE IS A DEFINITE CHANGE IN THE BASIS OF INITIATION OF PENALTY PROCEEDINGS AND IMPOSITION THEREOF WHICH IS NOT PERMISSIBLE IN LAW. THE ISSUE IS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE BY THE DECISION OF THE CO-ORDINATE BENCH IN IN SHRI KANTI BHAI NARANBHAI PRAJAPATI VS. ITO ITA NO. 2880/AHD/2014 ORDER DATED 15.02.2018. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CO- ORDINATE BENCH IS REPRODUCED HEREUNDER: 8. WE STRAIGHT AWAY FIND THAT THE AO VIDE PENALTY ORDER DATED 25/11/2013 UNDER S.271(1)(C) OF THE ACT IMPOSED P ENALTY ON ADDITIONS MADE ALLEGING CONCEALMENT OF PARTICUL ARS OF INCOME. HOWEVER, THE CIT(A), ON THE OTHER HAND, HAS CONFIRM ED THE PENALTY ON THE GROUND OF FURNISHING INACCURATE PARTICULARS OF INCOME. APPARENTLY, THE BASIS AND FOUNDATION FOR IMPOSITION OF PENALTY HAS BEEN ALTERED BY THE CIT(A). IT IS THUS OSTENSIBLE T HAT FINDINGS RECORDED BY THE CIT(A) SHOW THAT PENALTY HAS BEEN C ONFIRMED ON A DIFFERENT PREMISE AND THE ORIGINAL SATISFACTION FOR IMPOSITION OF PENALTY HAS BEEN ALTERED OR MODIFIED BY THE APPELLA TE AUTHORITY. IN SUCH CIRCUMSTANCES, WHERE THE ORIGINAL BASIS OF IMP OSITION OF PENALTY HAS BEEN ALTERED IN A SIGNIFICANT WAY BY THE FIRST APPELLATE AUTHORITY, THE VERY BASIS FOR SUSTAINING THE PENALTY IS RENDER ED NON-EXISTENT. NEEDLESS TO SAY, THE IMPOSITION OF PENALTY IS SOLEL Y DEPENDENT UPON THE SATISFACTION OF THE AO [UNLESS INITIATED BY C IT(A)] AND NON- ELSE. THE GROUND FOR ACTION BY AO WAS ALLEGATION O F CONCEALMENT. THIS GROUND HAS BEEN SUBSTITUTED BY CIT(A) TO FURN ISHING INACCURATE PARTICULARS OF INCOME WHILE CONFIRMING THE PENALTY QUANTIFIED BY THE AO. THUS, IN THE ABSENCE OF CONTINUITY IN THE FIND INGS OF THE AO AND THE CIT(A), THE ORDER OF THE PENALTY PASSED BY THE AO IS LIABLE TO BE STRUCK DOWN ON THIS GROUND ALONE. FOR SUCH A VIEW, WE USEFULLY REFER TO THE DECISION OF THE HONBLE GUJARAT HIGH COURT I N THE CASE OF NEW SORATHIA ENGINEERING COMPANY VS. CIT (2006) 282 ITR 642 (GUJ.) AND CIT VS. MANU ENGINEERING WORKS (1980) 122 ITR 3 06 (GUJ.). SIMILAR VIEW HAS BEEN TAKEN BY THE COORDINATE BENCH OF THE TRIBUNAL IN GIAN CHAND BATIA VS. DCIT 61 ITD 24(ALL.). THER EFORE, WHERE CONCURRENT I.T.AUTHORITIES ARE NOT SURE ABOUT NATUR E OF DEFAULT, THE PENAL ACTION UNDER S.271(1)(C) OF THE ACT IS NOT SU STAINABLE IN LAW. 9. CONSEQUENTLY, THE PENALTY ORDER OF THE AO DATED 25/11/2013 IS SET ASIDE AND PENALTY IMPOSED THEREBY IS CANCELLED. ITA NO. 3206/AHD/15 [ITO VS. SHRI RAMESHWAR R. MANIYAR] A.Y. 2011-12 - 4 - 6. SINCE THE IMPOSITION OF PENALTY STANDS DELETED O N THE AFORESAID LEGAL GROUND, WE ARE NOT INCLINED TO DEAL WITH OTHE R ASPECTS OF THE ARGUMENTS RAISED ON BEHALF OF THE ASSESSEE FOR DELE TION OF PENALTY. THUS, WE FIND NO ERROR IN THE CONCLUSION DRAWN BY T HE CIT(A) FOR DELETION OF PENALTY. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (MADHUMITA ROY) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 17/07/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 17/07/20 18