SAVITA SOMCHAND SHAH, THANE V. ASST CIT CIR 1, KALYAN

ITA 4197/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1288 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 20-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR ANUPAMA SINGLA LD
• Assessee Lawyers: DR P DANIEL LD AR
• Keywords: Revised return
• Section: 143(3)

Judgement Text

ITA NO.4197/M/2016 SAVITA SOMCHAND SHAH ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO. 4197/MUM/2016 ( / ASSESSMENT YEAR: 2009-10) SAVITA SOMCHAND SHAH 501, SITA VIHAR BUILDING A WING NEAR DAMANI ESTATE AGRA ROAD THANE (W) DISTT. THANE / VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1 KALYAN % ./ ./PAN/GIR NO. ACMPS-3675-B ( %' /APPELLANT ) : ( () %' / RESPONDENT ) %' * / APPELLANT BY : DR. P.DANIEL, LD. AR () %' * / RESPONDENT BY : DR. ANUPAMA SINGLA, LD. DR , * - / DATE OF HEARING : 12/04/2017 ./0 * - / DATE OF PRONOUNCEMENT : 17 /04/2017 ITA NO.4197/M/2016 SAVITA SOMCHAND SHAH ASSESSMENT YEAR 2009-10 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT Y EAR [AY] 2009-10 ASSAILS THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2 [CIT(A)], THANE DATED 31/03/2016 QUA CONFIRMATION OF PENALTY U/S 271(1)(C) FOR RS.2,94,6 17/-. 2. BRIEFLY STATED, THE ASSESSEE, BEING RESIDENT IND IVIDUAL, WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) VIDE ASSESSING OFFICER [AO] O RDER DATED 25/11/2011 WHEREIN THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT RS.1 2,71,520/- AFTER CERTAIN ADJUSTMENTS / DISALLOWANCES AS AGAINST RETURNED INCOME OF RS.3,68 ,830/- FILED BY ASSESSEE ON 10/02/2010 WHICH WAS LATER REVISED TO RS.11,46,280/ - ON 31/03/2010. SINCE, THE ORIGINAL RETURN WAS FILED BELATEDLY, THE REVISED RETURN WAS TREATED AS NON-EST BY THE LD. AO. THE ASSESSEE SUFFERED ADDITION OF RS.9,02,693/- ON ACCO UNT OF SALE OF CERTAIN SHARES AGAINST WHICH SHE WAS SADDLED WITH A PENALTY OF RS.2,94,617 /- U/S 271(1)(C) VIDE AO PENALTY ORDER DATED 16/05/2012. THE ASSESSEE CONTENDED THAT IT ALREADY OFFERED THE INCOME IN THE REVISED RETURN AND PAID DUE TAXES THEREUPON AND HEN CE NOT LIABLE FOR PENALTY. HOWEVER NOT CONVINCED, AO LEVIED THE IMPUGNED PENALTY, WHIC H UPON APPEAL, WAS CONFIRMED BY THE LD. CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD. COUNSEL FOR ASSESSEE [AR] HAS ASSAILED THE PENALTY ON LEGAL GROUNDS AS WELL AS ON MERITS. IT WAS CONTENDED THAT THE ASSESS EE VOLUNTARILY OFFERED THE INCOME IN THE REVISED RETURN OF INCOME AND PAID DUE TAXES THE REUPON AND THEREFORE, THE PENALTY WAS UNJUSTIFIED. IT WAS ONLY BECAUSE THE RETURN WAS TRE ATED AS NON-EST IN VIEW OF THE STATUTORY PROVISIONS, THE ASSESSEE IS SADDLED WITH THE IMPUGN ED PENALTY. FURTHER LD. AR WHILE DRAWING OUR ATTENTION TO THE QUANTUM ASSESSMENT ORD ER, SHOW CAUSE NOTICE ISSUED U/S 274 READ WITH SECTION 271(1)(C) AND AOS PENALTY ORDER AND CONTENDED THAT THE PENALTY ORDER STOOD VITIATED ON TECHNICAL GROUNDS AS THE PE NALTY WAS INITIATED / LEVIED BY AO WITHOUT DUE APPLICATION OF MIND. FIRST OF ALL, NO S PECIFIC CHARGE WAS MENTIONED BY AO IN ITA NO.4197/M/2016 SAVITA SOMCHAND SHAH ASSESSMENT YEAR 2009-10 3 THE QUANTUM ORDER FOR WHICH THE PENALTY WAS BEING I NITIATED. FURTHER, THE SHOW-CAUSE NOTICE ISSUED U/S 274 R.W.S. DID NOT SPECIFY THE EX ACT GROUND / LIMB FOR WHICH THE ASSESSEE WAS BEING PENALIZED WHICH IMPINGED UPON A VALUABLE RIGHT OF THE ASSESSEE TO EFFECTIVELY CONTEST THE PENALTY PROCEEDINGS. FINALLY THE PENALT Y WAS LEVIED FOR CONCEALMENT OR FILING OF INACCURATE PARTICULARS. THUS, THE AO WAS NEVER CLEAR IN HIS MIND AS TO LIMB AGAINST WHICH HE INITIATED THE PENALTY IN THE QUANTUM ORDER AND THEREFORE, THE PENALTY ORDER WAS BAD IN LAW IN THE LIGHT OF VARIOUS JUDICIAL PRONOUN CEMENTS. RELIANCE HAS BEEN PLACED ON THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF CIT VS SSAS EMERALD MEADOWS [72 TAXMANN.COM 248] AND HONBLE BOMBAY HIGH COURT IN CIT VS. SAMSON PERINCHERY [98 CCH 0039 MUM HC]. PER CONTRA, LD. DR CONTENDED THAT THE PENALTY WAS INITIATED WIT H DUE APPLICATION OF MIND. THE NOTICE U/S 274 WAS IN T HE STANDARD FORMAT AND THE LIMB FOR WHICH THE PENALTY WAS INITIATED WAS DULY TICKED BY THE AO AND THE ASSESSEE VERY WELL KNEW AT ALL TIMES FOR WHICH THE PENALTY WAS INITIAT ED AND LEVIED. THE ASSESSEE ACTIVELY CONTESTED THE PENALTY AND THEREFORE, NOT ENTITLED T O RAISE THIS ISSUE NOW. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. SINCE, THE LEGAL ISSUE RAISED GOES TO THE ROOT OF T HE MATTER, WE TAKE UP THE SAME FIRST. A PERUSAL OF THE QUANTUM ASSESSMENT ORDER REVEALS THA T THE LD. AO HAS USED THE EXPRESSION PENALTY PROCEEDINGS U/S 271(1)(C) IS BEING INITIATE D . FURTHER, A PERUSAL OF NOTICE DATED 25/11/2011 ISSUED UNDER SECTION 274 READ WITH SECTI ON 271 OF THE INCOME TAX ACT, 1961 REVEALS THAT THE AO HAS TICKED THE EXPRESSION HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. FINALLY, THE PENALTY HAS BEEN LEVIED VIDE ORDER DATED 16/05/2012 BY USING THE EXP RESSION CONCEALED OR FILED INACCURATE PARTICULARS OF INCOME. THEREFORE, IN OUR OPINION, THE AO HAS NOT INITIATED THE PENALTY WITH DUE APPLICATION OF MIND AS AT THE TIME OF INIT IATION OF PENALTY THE AO WAS NOT CLEAR ABOUT THE LIMB FOR WHICH THE PENALTY WAS BEING INIT IATED. IT IS WELL SETTLED THAT THE EXPRESSION CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS CARRIES DIFFERENT MEANINGS / CONNOTATIONS AND THE THEREFORE , THE ASSESSEE HAS EVERY RIGHT TO KNOW THE LIMB FOR WHICH HE IS BEING PENALIZED AND FAILUR E TO DO SO VITIATES THE PENALTY. OUR ITA NO.4197/M/2016 SAVITA SOMCHAND SHAH ASSESSMENT YEAR 2009-10 4 VIEW IS FORTIFIED BY THE RATIO OF CITED CASE LAWS. HENCE, FINDING THE PENALTY BAD IN LAW, WE QUASH THE SAME AND ALLOW ASSESSEES APPEAL. 5. IN NUTSHELL, THE ASSESSEES APPEAL SUCCEEDS. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH APRIL, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER , MUMBAI; 2 DATED : 17.04.2017 SR.PS:- THIRUMALESH '#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. %' / THE APPELLANT 2. () %' / THE RESPONDENT 3. 3- ( ) / THE CIT(A) 4. 3- / CIT CONCERNED 5. 67 (-89 , 890 , , / DR, ITAT, MUMBAI 6. : ;, / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , , / ITAT, MUMBAI