Deputy Commissioner of Income tax, V. Nandu A Rajput, Pune

ITA 4/PUN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4996 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 02-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT HALDER
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO S . 04, 06 TO 08 /P U N/201 7 / ASSESSMENT YEAR S : 2006 - 07, 2008 - 09 TO 20 1 0 - 1 1 THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3), PUNE . / APPELLANT VS. NANDU A RAJPUT S.NO.125, ARJUN HEIGHTS, NEAR WARJE JA KAT NAKA, WARJE, PUNE 411052 . / RESPONDENT PAN: AAPPR5684Q / APPELLANT BY : SHRI ABHIJIT HALDER / RESPONDENT BY : NONE / DATE OF HEARING : 17 . 1 0 .201 8 / DATE OF PRONOUNCEMENT: 24 . 1 0 .201 8 / ORDER PER SUSHMA CHOWLA, J M : THIS BUNCH OF FOUR APPEAL S FILED BY REVENUE ARE AGAINST CONSOLIDATED ORDER OF CIT (A) - 12 , PUNE DATED 06 . 1 0.2016 RELATING TO ASSESSMENT YEAR S 2006 - 07, 2008 - 09 TO 2010 - 11 AGAINS T PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO S . 04, 06 TO 08 /P U N/20 1 7 NANDU A RAJPUT 2 2. THIS BUNCH OF FOUR APPEAL S FILED BY REVENUE RELATING TO SAME ASSESSEE ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. HOWEVER, IN ORDER TO ADJUDICATE THE ISSUES, REFERENCE IS BEING MADE TO THE FACTS AND ISSUES IN ITA NO. 04 /PUN/201 7, RELATING TO ASSESSMENT YEAR 2006 - 07 . 3. THE REVENUE IN ITA NO. 04 /PUN/201 7 , RELATING TO ASSESSMENT YEAR 2006 - 07 HAS RAISED THE FOLLOWING GROUND S OF APPEAL: - 1) ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE ISSUE OF PENALTY ON UNDISCLOSED INVESTMENT IN BUNGLOW, BY WAY OF SETTING OFF OF UNDISCLOS ED INCOME DETECTED AND OFFERED AS ADDITIONAL INCOME DURING THE SEARCH ACTION WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NO EVIDENCE OF UTILIZING THE INCOME DETECTED DURING SEARCH ACTION TO THE CONSTRUCTION OF THE BUNGLOW ?. 2) ON THE FACTS AND TH E CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE ISSUE OF PENALTY ON UNDISCLOSED INVESTMENT IN BUNGLOW, BY WAY OF ALLOWING EXPENSES MADE AFTER THE PERIOD OF SEARCH ASSUMING DVO HAS CONSIDERED THE WORK DONE AFTER COMMENCEMENT OF SEARCH ACTION AND ADDED TO THE VALUE OF THE BUNGLOW PRIOR TO THE PERIOD OF SEARCH ?. 3) ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE ISSUE OF PENALTY ON UNDIS CLOSED INVESTMENT IN BUNGLOW, BY WAY OF ALLOWING RELIEF ON ACCOUNT OF SELF SUPERVISION CHARGES @ OF 12.5 % WHEREAS IN THE EARLIER ORDER, THE LD. CIT(A) HAS ALLOWED THE SAME AT THE RATE OF 6 % ?. 4) ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT( A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE ISSUE OF PENALTY ON UNDISCLOSED INVESTMENT IN BUNGLOW, BY WAY OF MISTAKE IN DVO'S REPORT, WITHOUT APPRECIATING THE FACT, THAT THE BUILDING CONSTRUCTED WAS OF VERY COMPLEX STRUCTURE AND DVO IS AN EX PERT WITH KNOWLEDGE OF CIVIL ENGINEERING? 5) ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE ISSUE OF PENALTY ON UNDISCLOSED INVESTMENT IN BUNGLOW, BY WAY OF ALLOWING SET OFF OF PRIOR PERIOD EXPENSES FROM THE UNDISCLOSED INCOME OF A.Y. 2006 - 07?. 6) THE ORDER OF THE LD. CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHALF OF ASSESSEE NOR ANY APPLICATION WAS MOVED FOR ADJOURNMENT. HOWEVER, IT TRANSPIRES THAT ASSESSEES APPEALS ON SIMILAR ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ITA NO S . 04, 06 TO 08 /P U N/20 1 7 NANDU A RAJPUT 3 HAVE BEEN DISPOSED OF ON JURISDICTIONAL ISSUE THAT SATISFACTION RECORDED FOR INITIATING PENALTY PROCEEDINGS AND THE ORDER L EVYING PENALTY SUFFERS FROM INFIRMITIES, WHEREIN RECORDING OF SATISFACTION FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS ON ONE CHARGE AND LEVY OF PENALTY WAS ON ANOTHER CHARGE AND HENCE, PENALTY ORDER WAS HELD TO BE UNSUSTAINABLE IN THE EYES OF LAW. 5. THE PRESENT APPEALS ARE FILED BY REVENUE AGAINST PART RELIEF GIVEN BY CIT(A) ON SIMILAR ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 6. ON PERUSAL OF RECORD AND AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE, WE FIND THAT THE ONLY ISSUE RAISED IN PRESENT APPEALS IS AGAINST PARTIAL RELIEF GIVEN BY CIT(A) WHILE DECIDING THE ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN THE HANDS OF ASSESSEE FOR THE CAPTIONED ASSESSMENT YEARS. THE CIT(A) HAD PARTIALLY UPHELD LEVY OF PENALTY FOR CONCEALMENT UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSEE FILED APPEALS BEFORE THE TRIBUNAL AND THE BUNCH OF APPEALS WERE TAKEN UP VIDE ITA NOS. 2832 TO 2836 /PUN/201 6 , RELATING TO ASSESSMENT YEARS 2006 - 07 TO 2010 - 11 AND THE TRIBUNAL VIDE ORDER DATED 28.09.2018 NOTED THAT THERE WAS AMBIGUITY IN THE MIND OF ASSESSING OFFICER FOR EXACT CHARGE FOR LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT , WHILE RECORDING SATISFACTION DURING CLOSE OF ASSESSMENT ORDER. THE TRIBU NAL FURTHER NOTES THAT THE SAID AMBIGUITY CONTINUES EVEN AT THE TIME OF LEVY OF PENALTY , WHEREIN THE ASSESSING OFFICER HAD OBSERVED THAT PENALTY LEVIED FOR CONCEALING INCOME BY FURNISHING INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL THUS, HELD THAT RECO RDING OF SATISFACTION CITING BOTH CHARGES AND LEVY OF PENALTY WOULD ALSO VITIATE THE PENALTY PROCEEDINGS. THE TRIBUNAL HELD THAT ORDER LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS NOT LEGALLY SUSTAINABLE ONCE THE ORDER LEVYING PENALTY HAS BEEN H ELD TO BE NOT LEGALLY ITA NO S . 04, 06 TO 08 /P U N/20 1 7 NANDU A RAJPUT 4 SUSTAINABLE, THEN CONSEQUENT TO THAT , RELIEF GIVEN BY CIT(A) DOES NOT STAND SINCE THE BASIS OF ORDER OF CIT(A) HAS BEEN KNOCKED OFF BY THE TRIBUNAL WHILE DECIDING APPEALS OF ASSESSEE FOR THE CAPTIONED ASSESSMENT YEARS. ACCORDINGLY, W E HOLD THAT THERE IS NO MERIT IN GROUNDS OF APPEAL RAISED BY REVENUE AND THE SAME BECOME ACADEMIC IN NATURE. 7. BEFORE PARTING, IT MAY BE POINTED OUT THAT ONE APPEAL FOR ASSESSMENT YEAR 2007 - 08 WAS DISMISSED BECAUSE OF LOW TAX EFFECT AND THE OTHER APPEALS FOR ASSESSMENT YEARS 2006 - 07, 2008 - 09 TO 2010 - 11 ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. 8 . IN THE RESULT, ALL THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 24 TH DAY OF OCTO BER , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 24 TH OCTO BER , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APP ELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 12 , PUNE ; 4. THE PR.CIT CENTRAL, PUNE ; 5. 6. , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE