SIA LIFESTYLES P. LTD, MUMBAI V. DCIT CEN CIR 2(1), MUMBAI

ITA 365/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3094 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Appeal Filed On: 15-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHOUDHURY ARUN KUMAR SINGH
• Assessee Lawyers: MANSI CHHEDA
• Keywords: Bogus purchase; Revised return
• Section: 143(3); 274

Judgement Text

AAYAK AAYAK AAYAK AAYAKR APILAIYA AIQ R APILAIYA AIQ R APILAIYA AIQ R APILAIYA AIQAKRNA N AKRNA N AKRNA N AKRNA NYAAYAPIZ YAAYAPIZ YAAYAPIZ YAAYAPIZ MAMUBA[ MAMUBA[ MAMUBA[ MAMUBA[- -- - MAO MAOMAO MAO. .. . IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUM BAI BEFORE SRI MAHAVIR SINGH, JM AND SRI M BALAGENSH, AM AAYAKR APILA SA AAYAKR APILA SA AAYAKR APILA SA AAYAKR APILA SAM MM M . / ITA NO.365/MUM/2018 ( INAQA-ARNA BAYA- / ASSESSMENT YEAR 2012-13) SIA LIFESTYLES PVT LTD., 1 ST FLOOR, RANGMAHAL ARCADE, 1 ST GAUTHAN LANE, SANTACRUZ, MUMBAI. VS. DCIT, CENT. CIRCLE 2(1), MUMBAI, ( APILAAQA APILAAQA APILAAQA APILAAQAI II I - -- - / APPELLANT) .. ( P` P`P` P`%YAQAA %YAQAA %YAQAA %YAQAAI II I- -- - / RESPONDENT) PAN NO. AAFCS 0567G REVENUE BY : SHRI CHOUDHURY ARUN KUMAR SINGH ASS ESSEE BY : MANSI CHHEDA DATE OF HEARING: 5.3.2019 DATE OF PRONOUNCEMENT : 5-03- 2019 AADOSA AADOSA AADOSA AADOSA / O R D E R PER MAHAVIR SINGH, JM: THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS)-48, MUMBAI [IN SHORT CIT(A)], IN APPEAL NO.48/I.T.-234/DCCC-291)/2015-16 DATED 15.11 .2017. THE ASSESSMENT WAS FRAMED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, WARD 2(4), KALYAN (IN SHORT ITO, KALYAN) FOR THE A.Y. 2013-14 VIDE ORDER 2 ITA NO.365/MUM/2018 ASSESSMENT YEAR 2012-13 DATED 30.3.2016 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE ORDER OF THE CIT(A) CONFIRMING LEVY OF PENALTY UNDER SECTION.271 (1)(C) OF THE ACT BY THE ASSESSING OFFICER IN RESPECT TO ADDITION OF ALLEGED BOGUS PURCHASES BY ESTIMATING THE SAME AT 12.5%. FOR THI S, THE ASSESSEE HAS RAISED JURISDICTIONAL ISSUE AS WELL AS ISSUE ON MERITS. THE ASSESSEE HAS RAISED THE FIRST JURISDICTIONAL ISSUE VIDE GROUND NO.1 AS UNDER: 1. THE LD CIT(A) ERRED IN LEVYING PENALTY OF 1,72,870/- UNDER SECTION.271(1)(C). A. VALIDITY OF PENALTY PROCEEDINGS UNDER SECTION.27 4 R.W.S271(1)(C). A. THE NOTICE RECEIVED BY THE ASSESSEE UNDER SECTIO N 274 READ WITH S.271(1)(C) DOES NOT SPECIFY ON WHICH GRO UND THE PENALTY UNDER SECTION.271(1)(C) IS PROPOSED TO BE LEVIED. B. THE LD CIT(A) ERRED IN CONCLUDING THAT THE PENAL TY PROCEEDINGS AE VALID ALTHOUGH THE LD AO HAS NOT STR IKED OFF ANY OF THE OPTION & HENCE NOT CLARIFIED WHETHER PEN ALTY IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. C THE PENALTY PROCEEDINGS EVEN IF TENABLE SUFFER F ROM LEGAL INFIRMITY AT THE STAGE OF INITIATI8ON ITSELF AND TH EREFORE NO PENALTY CAN BE LEVIED. 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE FIRST OF ALL TOOK US TO THE ASSESSMENT ORDER AND STATED THAT THE INITIAT ION OF PENALTY PROCEEDINGS BY THE ASSESSING OFFICER VIDE PARA 3.8 WAS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND ALSO FOR CONCEALMENT OF PARTICULARS OF INCOME. LD COUNSEL R EFERRED TO THE 3 ITA NO.365/MUM/2018 ASSESSMENT YEAR 2012-13 FOLLOWINGS AS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER: PENALTY PROCEEDINGS UNDER SECTION.271(1)(C) OF THE I.T.ACT 1961 IS INITIATED SEPARATELY FOR FURNISHING INACCUR ATE PARTICULARS OF INCOME AND CONCEALMENT OF PARTICULAR S OF INCOME. 4. LD COUNSEL TOOK US THROUGH THE PENALTY ORDER DAT ED 9.9.2015 UNDER SECTION.271(1)(C) READ WITH SECTION. 274 OF T HE ACT, WHEREIN, THE ASSESSING OFFICER HAS LEVIED PENALTY FOR CONCEA LMENT OF INCOME VIDE PARA 5 AS UNDER: 5. ASSESSEES REPLY HAS BEEN CONSIDERED CAREFULLY AND THE SAME IS NOT ACCEPTABLE AS THE ADDITION MADE BY THE AO HAS REACHED ITS FINALITY AS THE ASSESSEE HAS NOT PREFER RED AN APPEAL BEFORE THE CIT(A) AT THE ASSESSING OFFICERS STAGE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE PUR CHASES OF 42,62,451/- OF 11 PARTIES AS MENTIONED IN PARA 2 AB OVE. THIS PROVES BEYOND DOUBT THAT ASSESSEE HAS CONCEALE D THE PARTICULARS OF INCOME TO THE EXTENT ADDITION MADE @ 12% OF 5,32,806/- AND MADE ITSELF LIABLE FOR PENALTY ON TH IS ACCOUNT. THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AGRE ED THE ADDITION ONLY WHEN THE AO BROUGHT TO THE NOTICE OF THE ASSESSEE REGARDS TO THE BOGUS PURCHASES. IT LEADS TO CONCEALMENT OF INCOME AS HELD IN THE DECISION IN TH E CASE OF INDUS ENGG. CO VS ACIT (INV) 17(1), MUMBAI BY THE H ONBLE H.C. IN W.P. 539/1993 (2009) 184 TAXMAN 869(BOM) IN WHICH CASE THE ASSESSEE OFFERED LOANS AS OTHER INCOME VOL UNTARILY UNDER SECTION.132(4) WHICH WAS NOT DISCLOSED IN ORI GINAL NOR IN REVISED RETURN OF INCOME, IS A CLEAR CASE OF CON CEALMENT OF INCOME. 5. LD COUNSEL FOR THE ASSESSEE ALSO REFERRED TO SHO W CAUSE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 2 71(1)(C)(1)(C) OF THE ACT DATED 12.3.2015 & 31.7.2015 I.E. STATUTORY NOTICES AND STATED THAT NONE OF THE CLAUSE WAS STRIKED OUT BY T HE ASSESSING OFFICER WHILE ISSUING THE NOTICES. IN VIEW OF THES E FACTS, LD COUNSEL STATED THAT THE ISSUE IS SQUARELY COVERED BY THE DE CISION OF HONBLE 4 ITA NO.365/MUM/2018 ASSESSMENT YEAR 2012-13 BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF IN COME TAX11 .. V/S. SHRI SAMSON PERINCHERY, (2017) 392 ITR 4 (BOM.), WHEREIN IT IS HELD AS UNDER : 3. THE IMPUGNED ORDER OF THE TRIBUNAL DELETED THE PENALTY IMPOSED UPON THE RESPONDENT ASSESSEE. THIS BY HOLDING THAT THE INITIATION OF PENALTY UNDER SECTION 271 (1)(C) OF THE ACT BY ASSE SSING OFFICER WAS FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHILE T HE ORDER IMPOSING PENALTY IS FOR CONCEALMENT OF INCOME. THE IMPUGNED ORDER HOLDS THAT THE CONCEALMENT OF INCOME AND FURNISHING INACCURATE PAR TICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THEREFORE, THE ASSESS ING OFFICER SHOULD BE CLEAR AS TO WHICH OF THE TWO LIMBS UNDER WHICH PENA LTY IS IMPOSABLE, HAS BEEN CONTRAVENED OR INDICATE THAT BOTH HAVE BEEN CO NTRAVENED WHILE INITIATING PENALTY PROCEEDINGS. IT CANNOT BE THAT T HE INITIATION WOULD BE ONLY ON ONE LIMB I.E., FOR FURNISHING INACCURATE PA RTICULARS OF INCOME WHILE IMPOSITION OF PENALTY ON THE OTHER LIMB I.E., CONCE ALMENT OF INCOME. FURTHER, THE TRIBUNAL ALSO NOTED THAT NOTICE ISSUED UNDER SECTION 274 OF THE ACT IS IN A STANDARD PROFORMA, WITHOUT HAVING S TRIKED OUT IRRELEVANT CLAUSES THEREIN. THIS INDICATES NON-APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER WHILE ISSUING THE PENALTY NOTICE. 6. WHEN THESE FACTS WERE POINTED OUT BY THIS BENCH TO LD SR DEPARTMENTAL REPRESENTATIVE, HE ONLY RELIED ON THE ASSESSMENT O RDER, PENALTY ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. ADMITTEDLY, AS NOTICED FROM THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION.274 READ WITH SECTI ON 271(1)(C)(1)(C) OF THE ACT DATED 12.3.2015 FOR INITIATING PENALTY PROCEEDINGS, THE ASSESSING OFFICER HAS NOT STRIKED OUT THE RELEVANT CLAUSES IN THIS SECTIO N. THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS FOR BOTH LIMBS I.E. F OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS WELL CONCEALMENT OF PARTIC ULARS OF INCOME AS IS EVIDENT FROM THE ASSESSMENT ORDER.. IT MEANS THAT THE ASS ESSING OFFICER IS NOT SURE ABOUT THE CHARGE ON WHICH PENALTY IS TO BE LEVIED. HENCE, RESPECTFULLY FOLLOWING 5 ITA NO.365/MUM/2018 ASSESSMENT YEAR 2012-13 THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF SHRI SAMSON PERINCHERY(SUPRA), WE DELETE THE PENALT Y OF RS.1,72,870/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION.271(1)(C) OF TH E ACT AND ALLOW THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 5-03- 2019. AADOSA KI AADOSA KI AADOSA KI AADOSA KI GAAO GAAOGAAO GAAOYANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK 15. 03.2019 KAO KI KAO KI KAO KI KAO KI GA GAGA GA SD/- SD/- (M BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 5- - 03- 2019 SUDIP SARKAR /SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//