ROBIN BIPIN MEHTA, MUMBAI V. ACIT CC 20, MUMBAI

ITA 4270/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1249 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 21-06-2016
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Assessee Lawyers: B V JHAVERI
• Keywords: Search and seizure; Principle of natural justice; Initiation of penalty proceedings; Wrong claim; Revised return
• Section: 143(3); 153A; 234B; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 4270 / MUM/20 1 6 ( ASSESSMENT YEAR : 2011 - 12 ) MR. ROBIN BIPIN MEHTA 3, DEEPAK, 1 ST FLOOR, 401, S.V.ROAD, VILE PARLE (WEST) MUMBAI 400 056 VS. ACIT - CC - 20, MUMBA I 400 021 PAN/GIR NO. AABPM8343D APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI B.V.JHAVERI REVENUE BY MS. BEENA SANTOSH DATE OF HEARING 18 / 0 4 /201 7 DATE OF PRONOUNCEME NT 21 / 04 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 21, MUMBAI DATED 28/03/2016 FOR THE A.Y.2011 - 12 IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE IT ACT. 2. IN THIS APPEAL, ASSESSEE I S AGGRIEVED FOR PENALTY OF RS.7,20,130/ - IMPOSED U/S.271(1)(C) OF THE IT ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT ORIGINAL RETURN OF INCOME WAS FILED ON 27/07/2011 U/S.139(1) DECLARING INCOME OF RS.11,51,000/ - , THEREAFTER SEARCH OF SEIZURE ACTION U/S.132(1) WAS CARRIED OUT ON 13/09/2011. AFTER SEARCH, AO ISSUED NOTICE U/S.153A ON 30/11/2012. IN REPLY TO THE SAME, ASSESSEE FILED RETURN OF INCOME ON 31/10/2013 WHEREIN INCOME DECLARED DURING COURSE OF SEARCH ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 2 WAS OF FERED. THE AO ACCEPTED RETURN OF INCOME FILED U/S.153A WHILE PASSING ORDER U/S.143(3) R.W.S.153A WITHOUT MAKING ANY FURTHER ADDITION. THUS, RETURN OF INCOME WAS ACCEPTED BY THE AO. THEREAFTER, AO PASSED PENALTY ORDER U/S. 271(1)(C). THE PENALTY SO IMPOSED WAS CONFIRMED BY THE CIT(A) VIDE ITS ORDER DATED 31/10/2014 BY RELYING ON THE DECISION OF AHMEDABAD TRIBUNAL IN KIRIT DAHYABHAI PATEL 121 ITD 159. AGAINST THIS ORDER OF CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. IT WAS ARGUED BY LEARNED AR MR. B. V.JHAVERI THAT NO ADDITION WAS MADE TO THE INCOME DECLARED U/S.153A. ASSESSEE HAS NOT CONCEALED ANY INCOME VIS - - VIS THE RETURN OF INCOME FILED U/S.153A. RELIANCE WAS PLACED ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF B.G.SHIRKE CONSTRUCTION DATED 06/03/2017. IT WAS SUBMITTED THAT IN THE CASE DECIDED BY BOMBAY HIGH COURT, SEARCH ACTION WAS CARRIED OUT ON 18/12/2008, THEREAFTER, NOTICE U/S.153A WAS ISSUED FOR A.Y.2007 - 08 AND 2008 - 09. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED RETURN OF INCOME U/S. 153A . IN AN APPEAL FILED BY THE REVENUE BEFORE THE HIGH COURT, HIGH COURT HAS HELD AS UNDER: - '11. IN THE PRESENT FACTS FOR THE SUBJECT ASSESSMENT EARS IT IS AN UNDISPUTED P OSITION THAT THE PENDING ASSESSMENT BEFORE THE ASSESSING OFFICER CONSEQUENT TO RET URN FILED UNDER SECTION 139(1) OF THE ACT FOR THE SUBJECT ASSESSMENT YEARS HAD ABATED. THIS IS ON ACCOUNT OF THE SEARCH AND AS PROVIDED IN SECOND PROVISO TO SECTION 153A(1) OF THE ACT. THE CONSEQUENCE OF NOTICE UNDER SECTION 153A(1) OF THE ACT IS THAT ASSE SSEE IS REQUIRED TO FURNISH FRESH RETURN OF INCOME FOR EACH OF THE SIX ASSESSMENT YEARS IN REGARD TO WHICH A NOTICE HAS BEEN ISSUED. IT IS THIS RETURN WHICH IS FILED CONSEQUENT TO THE NOTICE WHICH WOULD BE SUBJECT OF ASSESSMENT BY THE REVENUE FOR THE FIRST TIME IN THE CASE OF ABATED ASSESSMENT PROCEEDINGS. CONSEQUENT TO NOTICE UNDER SECTION 153A OF THE ACT THE EARLIER RETURN FILED FOR THE PURPOSE OF ASSESSMENT WHICH IS PENDING WOULD BE TREATED AS NON EST IN LAW . ... .' ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 3 5. RELIANCE WAS ALSO PLACED BY LEARNE D AR ON THE DECISION OF DELHI HIGH COURT IN CASE OF NEERAJ JINDAL 79 TAXMANN.COM 96. I N THIS CASE, RETURN U/S 139(1) WAS FILED ON 30.12.2005 DECLARING INCOME OF RS.1,72,799/ - . A SEARCH AND SEIZURE OPERATION U /S 132(1 ) WAS CARRIED OUT ON 11/ 01 / 2007 WHEREIN CASH OF RS. 5,26,5301 - AN D JEWELLERY WORTH RS. 17,85,785/ - WERE FOUND FROM THE PREMISES AND LO CKERS OF THE ASSESSEE. NOTICE U/ S 153A WAS ISSUED ON 26.02.2008. RETURN U/ S 153A WAS FILED ON 23 /10/2008 DECLARING RS. 23,38,731/ - WHEREIN THE ASSESSEE OFFERED RS . 21,65,932/ - AS ADDITIONAL INCOME CONSISTING OF RS. 5,26,530 / - BEING CASH FOUND AND RS. 17,85,785/ - BEING THE UNDISCLOSED JEWELLERY. THE A.O COMPLETED THE ASSESSMENT U / S 143(3) R.W.S 153A WITHOUT MAKING ANY ADDITION OVER AND ABOVE THE ADDITIONA L INCOME DE CLARED IN THE RETURN . THEREAFTER THE A.O INITIATED AND PENALTY U/S 271(1)(C) OF RS. 7,29,100 / - ON THE CONCEALED INCOME OF RS. 21,65,932/ - WHICH WAS OFFERED FOR TAXATION IN THE RETURN OF INCOME FI LED U/ S 153A OF THE ACT. THE CIT (A) AS WELL AS THE ITAT DELE TED THE PENALTY LEVIED BY THE A.O BY RELYING ON THE DECISION OF THE HON'BLE TRIBUNAL IN THE CASE OF IN PREM ARORA V. DCIT [(2012) 149 TTJ 590 (DEL)]. IN AN APPEAL FILED BY THE DEPARTMENT, THE HIGH COURT HELD AS UNDER: - '21. THUS, IT IS CLEAR THAT WHEN THE A.O HAS ACCEPTED THE REVISED RETURN FILED BY THE ASSESSEE UNDER SECTION 153A, NO OCCASION ARISES TO REFER TO PREVIOUS RETURN FILED UNDER SECTION 139 OF THE ACT. FOR ALL THE PURPOSES, INCLUDING FOR THE PURPOSE OF LEVYING PENALTY UNDER SECTION 271(1)(C) OF T HE ACT, THE RETURN THAT HAS TO BE LOOKED AT IS THE ONE FILED UNDER SECTION 153A. .. ... WHAT IS CLEAR FROM THIS IS THAT SECTION 153A IS IN THE NATURE OF A SECOND CHANCE GIVEN TO THE ASSESSEE, WHICH INCIDENTALLY GIVES HIM AN OPPORTUNITY TO MAKE GOOD OMISSI ON, IF ANY, IN THE ORIGINAL RETURN. ONCE THE A.O ACCEPTS THE ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 4 REVISED RETURN FILED UNDER SECTION 153A, THE ORIGINAL RETURN UNDER SECTION 139 ABATES AND BECOMES NON - EST. N OW, IT IS TRITE TO SAY THAT THE 'CONCEALMENT' HAS TO BE SEEN W ITH REFERENCE TO THE RE TURN THAT IT IS FILED BY THE ASSESSEE. THUS, FOR THE PURPOSE OF LE VY ING PENAL UNDER SECTION 271 (1 )( C), WHAT HAS TO BE SEEN IS WHETHER THERE IS ANY CONCEALME NT IN TH E RETURN FILED B THE ASSESSEE UNDER SECTION 1 53A, AND NOT VIS A VIS THE ORIGINAL RETURN U /S. 139.' 6. RELIANCE WAS ALSO PLACED ON THE DECISION OF GUJARAT HIGH COURT IN CASE OF KIRIT DAHYABHAI PATEL 280 CTR 216. IN THIS CASE, RETURN OF INCOME U/S. L39(1) WAS FILED ON 07/06/2002 DECLARING TOTAL INCOME OF RS. 1,30,900 / - . A SEARCH AND SEIZURE OPE RATION U/S 132(1 ) WAS CARRIED OUT ON 04/09/2003 WHEREIN CERTAIN INCRI MINATING DOCUMENTS WERE FOUND. NOTICE U / S 153A WAS ISSUED ON 17112/2003. RETURN U / S 153A WAS FILED ON 31 /05/2004 DECLARING RS. 9,00,940 INCLUDING ADDITIONAL INC OME OF RS. 5,50,000/ - . THE A .O ACCEPTED THE SAID RETURNS WITH NO FURTHER ADDITION. PENALTY WAS LEVIED U/S 271(1)(C) ON THE GROUND THAT NEITHER TRANSACTIONS RELATING TO CONCEALED INCOME WERE RECORDED IN BOOKS OF ACCOUNT NOR DISCLOSURE WAS VOLUNTARY. TH E COMMISSIO NER (APPEALS) DELETED THE PENALTY IMPOSED U/S.271(1)(C) . TH E ITAT CONCLUDED THAT PENALTY UNDER SECTION 271 (1)(C) COULD BE LEVIED WITH REFERENCE TO ASSESSMENTS MADE UNDER SECTION 153A. 13 CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE DECISIONS RE LIED BY LEARNED SENIOR ADVOCATE FOR THE APPELLANT, WE ARE OF THE CONSIDERED OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL IS ERRONEOUS. THE CIT RIGHTLY HELD THAT IT IS NOT RELEVANT WHETHER ANY RETURN OF INCOME WAS FILED BY THE ASSESSEE PRIOR TO THE DATE OF S EARCH AND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETURN OF INCOME. IN VIEW OF THE SPECIFIC PRO VISION OF S. 153A OF THE IT ACT THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER S. 153A OF THE IT ACT IS TO BE CONSIDERED AS RETURN FILED UNDER S. 139 OF THE ACT, AS THE AO HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, THE RETURN IS TO BE CONSIDERED FOR TH E PURPOSE OF PENALTY ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 5 UNDER S. 271(1)(C) OF THE IT ACT AND THE PENALTY IS TO BE LE V IED ON THE INCOME ASSESSED OVER A ND ABOVE UNDER S. 153A, IF A NY. 7. MY ATTENTION WAS ALSO INVITED BY THE LEARNED AR TO THE OBSERVATION MADE BY NAGPUR TRIBUNAL IN CASE OF PURTI SAKHAR KARKHANA LTD., 153 TTJ 12. THE HONBLE TRIBUNAL HELD AS UNDER: - '25 IT FOLLOWS THAT THE CONCEALMENT OF INCOME HAS TO BE SEEN WITH REF ERENCE TO ADDITIONAL INCOME BROUGHT TO TAX OVER AND ABOVE THE RETURNED BY THE ASSESSEE IN RESPONSE TO NOTICE ISSUED UNDER S. 153A OF THE ACT. ACCORDINGLY, IN OUR CONSIDERED OPINION FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER S. 271(1)(C) RESULTING AS A RESULT OF SEARCH ASSESSMENTS MADE UNDER S. 153A, THE ORIGINAL RETURN OF INCOME FILED UNDER S.139 CANNOT BE CONSIDERED. .. .... IN VIEW OF THIS, THE AO HAS TO FRAME AN ASSESSMENT ON THE BASIS OF THE RETURN FILED U/S 153A. AS HAS BEEN HELD ABO V E THE PENAL UN DER S. 271(1)(C) IS IMPOSABLE W HEN THERE IS V ARIATION IN AS SESSE D AND RETURNED IN C OM E . I F THERE IS NO VARIATION , TH E R E WILL B E NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. WHEN THERE IS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTI CULARS OF INCOME, QUESTION OF LEVY OF PENALTY UNDER S.271(1)(C) OF THE ACT WILL NOT ARISE. 8. IT WAS SUBMITTED BY LEARNED AR THAT THE DECISION OF TRIBUNAL IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA) AS RELIED BY CIT(A) WHILE UPHOLDING THE PENALTY HAS BE EN REVERSED BY HONBLE GUJARAT HIGH COURT, ACCORDINGLY THIS ISSUE NOW STANDS IN FAVOUR OF THE ASSESSEE. 9. LEARNED AR ALSO RAISED LEGAL ISSUE TO THE EFFECT THAT SINCE PENALTY PROCEEDINGS ARE INITIATED ON CHARGE OF FURNISHING INACCURATE PARTICULARS OF INCOM E, THEN PENALTY CANNOT BE LEVIED ON THE CHARGES OF CONCEALMENT OF INCOME AND VICE VERSA. OUR ATTENTION WAS ALSO DRAWN TO THE ASSESSMENT ORDER DATED 12/03/2014, WHEREIN AO INITIATED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME AS UNDER: - '3.1 ... PENALTY PROCEEDINGS U/S 271 (1 )( C) OF THE IT ACT ARE INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME IN THE RETURN ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 6 OF INCOME U/S 139(1) OF THE ACT, LEADING TO THE CONCEALMENT OF THE INCOME.' 6. THE A.O ISSUED NOTICE U/S 274 R. W. 271 ON 12/0312014 WHEREIN, THE A.O HAS TICKED BOTH LIMBS ENSHRINED U/S 271(1)(C) AS UNDER: 'HAVE CONCEALED THE PARTICULARS OF YOUR INCOME' OR _ 'FURNISHED INACCURATE PARTICULARS OF INCOME'. 10. LEARNED AR ALSO DRAWN OUR ATTENTION TO THE PENALTY O RDER DATED 30/09/2014 WHEREIN AO HAS LEVIED THE PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME AFTER OBSERVING AT PAGE 9 OF HIS ORDER, WHICH READS AS UNDER: - 'I AM THEREFORE OF THE OPINION THAT THE ASSESSEE HAS KNOWINGLY AND DELIBERATELY MADE FALSE CLAIMS AND CONCEALED/FURNISHED INACCURATE PARTICULARS OF HIS INCOME AS DISCUSSED ABOVE. I AM FURTHER OF THE OPINION THAT THE ASSSESSEE'S CASE SQUARELY FALLS WITHIN AMBIT OF EXPLANATION 1 TO SECTION 271(1)(C) AND THE ASSESSEE'S CASE IS A FIT CASE, WHERE THE ASSESSEE HAS KNOWINGLY AND DELIBERATELY TRIED TO MISLEAD THE DEPARTMENT AND HAS ATTEMPTED TO CONCEAL INCOME BY FURNISHING INACCURATE PARTICULARS. ' 'IN VIEW OF THE ABOVE MENTIONED FACTS AND CIRCUMSTANCES OF THE CASE AND RELYING UPON THE ABOVE MENTIONED SUPREME CO URT AND HIGH COURT JUDGMENT, I AM SATISFIED THAT THIS IS A FIT CASE FOR LEVY OF PENALTY ULS 271(1)(C) OF THE INCOME TAX ACT, 1961.' 11. IT WAS FURTHER SUBMITTED BY LEARNED AR THAT THERE IS NO QUESTION OF FURNISHING INACCURATE PARTICULARS OF THE INCOME BY THE ASSESSEE IN SO FAR AS ASSESSEE HAS DISCLOSED THE ADDITIONAL INC OME IN HIS RETURN OF IN C OM E FIL ED U/S.153A OF THE ACT AND THE SAID INCOME WAS ACCEPTED ON COMPLETION OF THE ASSESSMENT. HENCE, THERE WAS NO QUESTION OF FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE VIS - - VIS THE RETURN OF INCOME WHICH WAS SCRUTINIZED BY THE AO. 12. LEARNED AR FURTHER CONTENDED THAT AO INITIATED PENALTY PROCEEDINGS ON THE GROUND THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 7 INCOME. HOWEVER, IN THE N OTICE U/S.274 R.W.S. 271 OF THE ACT, THE AO HAD INVOKED BOTH THE LIMBS OF SECTION 271 (1)(C) OF THE ACT NAMELY CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE NOTICE ISSUED 271 R.W.S. 274 OF THE ACT IS IN A STANDARD PROFORMA A ND THE AO HAS NOT STRIKED OUT NON - APPLICABLE CLAUSES THEREIN. T HUS, AO HAS INVOKED BOTH THE LIMBS I .E. CONCEALMENT OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS AND HE HAS NOT IDENTIFIED AS TO IN WHICH ONE OF THE TWO LIMB S OF 271(1)(C), THE PEN ALTY WAS IMPOSED. 1 3 . LEARNED AR FURTHER SUBMITTED THAT IT IS NOT OPEN TO THE AO TO INITIATE THE PENALTY FOR ONE OF THE TWO LIMBS AND LEVY THE PENALTY ON THE OTHER LIMB. THIS CLEARLY INDICATES NON - APPLICATION OF MIND ON THE PART OF THE AO WHILE ISSUING THE NOTICE AND AS WELL AS PASSING ORDER U/S. 271(1)(C). RELIANCE WAS PLACED ON THE DECISION OF SAMSON PERINCHERY (ITA NO.4625 TO 4630/MUM/2013) ORDER DATED 11/10/2013. IN THIS CASE, RETURN OF INCOME U / S 1 39(1) FOR THE AY 2003 - 04 DECLARING TOTAL INCOME OF RS. 97,669 / - . A SEARCH AND SEIZURE ACTION WAS CARRIED U/S 132 ON 18/12/ 2008. ASSESSEE FILED RETURN I N RESPONSE TO NOTICE U /S 153A ON 30 / 03/2009 DECLARING TOTAL INCOME OF RS. 30,26,460 / - INCLUDING ADDITIONAL INCOME OF RS. 29,28,791/ - . A.O ACCEPTED THE RETURN OF INCOME U / S 153A OF THE ACT. THEREAFTER PENALTY U/S. 271(L)(C) WAS INITIATED FOR ' F URNISHING OF INACCURATE PARTICULARS'. HOWEVER, THE PENALTY WAS LEVIED FOR 'CONCEALMENT OF INCOME'. THE CIT(A) DISMISSED ASSESSEES APPEAL. THE TRIBUNAL ALLOWED THE APPEAL AN D HELD AS UNDER: - ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 8 '10. ON THE FACTS RELATING TO THE RECORDING OF THE SATISFACTION FOR LEVY OF PENALTY U/ S 271(L)(C) OF THE ACT, WE HAVE PERUSED THE RELEVANT ORDERS OF THE REVENUE AND EXAMINED THE LAST PARA OF THE ASSESSMENT ORDER WHICH READS AS UNDER: 'ASSESSED U/ S 143(3) OF THE INCOME TAX ACT, 1961 AT A TOTAL INCOME OF RS. 31,98,4601 - . CHARGE INTEREST ILLS 234B & 234C AS APPLICABLE. GIVE CREDIT FOR TAXES PAID AFTER DUE VERIFICATION. ISSUE DEMAND NOTICED AND CHALLAN ACCORDINGLY ISSUE SHOW CAUSE NOTICE F OR INITIATING PENALTY U/ S 271 (L )( C) OF THE IT ACT, 1961 FOR FURNISHING INACCURATE PARTICULARS OF THE INCOME. THIS ORDER IS PASSED AFTER GETTING APPROVAL FROM ADDL. CIT, RANGE - 4, CENTRAL CIRCLE - IL, MUMBAI VIDE HIS LETTER NO. ADDL CIT C.R.4/APPROVAL - 153D /2010 - 11, DATED 29.12.2010.' '11. FROM THE ABOVE, THE PENALTIES WERE TO BE INITIATED EITHER FOR 'FURNISHING INACCURATE PARTICULARS OF INCOME' AND NOT FOR 'CONCEALMENT OF INCOME'. HOWEVER, THE AO IS UNDER OBLIGATION TO SPECIFY THE SAME AND SHOULD NOT LEAV E THE SCOPE FOR IMAGINATIONS AND SURMISES. AT THE END, WE FIND THAT THE PENALTY WAS ACTUALLY LEVIED 'FOR CONCEALMENT OF (PARTICULARS) OF INCOME WHICH IS EVIDENT FROM PARA 4 OF THE ASSESSMENT ORDER WHICH READS AS UNDER: '4. FROM THE ABOVE, I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME SO AS TO EVADE TAX AND AS SUCH PENALTY U/ S 271 (L)( C) OF THE ACT IS LEVIABLE. THE TAX ON THE UNDISCLOSED INCOME OF RS. 31,0 0,790/ - (INCLUDING FOREIGN TRAVEL) WORKS OUT TO RS. 9,30,2001 - . ACCORDING LY, I HEREBY LEVY A MINIMUM PENALTY AT 100% OF TAX I.E., RS. 9,30,200 / - .' '13. FROM THE ABOVE, IT IS CLEAR THAT THE PENALTY SHOULD BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR HERE THE PENALTY IS NOT SUSTAINABLE. THEREFOR E, CONSIDERING THE SAME, WE ARE OF THE OPINION THAT THE GROUND RAISED BY THE ASSESSEE SHOULD BE ALLOWED ON TECHNICAL GROUNDS. ACCORDINGLY, ADJUDICATION OF THE PENALTIES ON MERITS BECOMES AN ACADEMIC EXERCISE. THEREFORE, THE GROUNDS RAISED IN ALL THE SIX AS SESSMENT YEARS ARE A LLOWED. 14 . HE HAS FURTHER DRAWN OUR ATTENTION TO THE DECISION OF THE BOMBAY HIGH COURT DATED 05/01/2017, WHEREIN BOMBAY HIGH COURT HAS CONFIRMED THE ABOVE ORDER OF THE TRIBUNAL IN THE CASE OF SAMSON PERINCHERY AFTER OBSERVING AS UNDE R: - ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 9 6. THEREFORE, THE SATISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BREACHES MENTIONED U/S.271(1)(C) OF THE ACT, FOR INITIATION OF PENALTY PROCEEDINGS WILL NOT WARRANT / PERMIT BEING IMPOSED FOR THE OTHER BREACH. THIS IS MORE SO AS AN ASSESSEE WOULD RESPOND TO THE GROUND ON WHICH THE PENALTY HAS BEEN INITIATED / NOTICE ISSUED. IT MUST, THEREFORE, FOLLOW THAT PENALTY PROCEEDINGS HAS BEEN INITIATED AND IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSEE HAS NO NOTICE. 15 . FURTH ER RELIANCE WAS PLACED ON THE DECISION OF BOMBAY TRIBUNAL IN CASE OF WADHA ESTATE & DEVELOPERS ORDER DATED 24/02/2017 AND DHARNI DEVELOPERS 61 TAXMANN.COM 208. LEARNED AR ALSO PLACED DECISION OF GUJARAT HIGH COURT IN CASE OF NEW SORATHIA ENGINEERING CO. 28 2 ITR 642, WHEREIN IT WAS HELD THAT IF THE PROCEEDINGS ARE INITIATED ON CHARGE OF CONCEALMENT, THEN PENALTY CANNOT BE LEVIED ON THE CHARGE OF FURNISHING INACCURATE PARTICULARS OF INCOME AND VICE VERSA. 1 6 . ON THE OTHER HAND, IT WAS CONTENDED BY LEARNED DR THAT PENALTY WAS INITIATED BY AO FOR FURNISHING INACCURATE PARTICULARS OF INCOME. SHE FURTHER CONTENDED AT PAGE 10, THE AO HAS CLEARLY OBSERVED THAT INCOME WAS OFFERED IN RESPECT OF INCRIMINATING MATERIAL FOUND DURING COURSE OF SEARCH AS WELL AS JEWELLERY SO FOUND. OUR ATTENTION WAS ALSO INVITED TO THE DECISION RELIED BY ASSESSEE BEFORE THE CIT(A) IN THE CASE OF MUNINAGA REDDY 37 TAXMANN.COM 440 , AND WHICH WAS DISTINGUISHED BY CIT(A) ON THE PLEA THAT DECISION IS NOT APPLICABLE TO THE FACTS OF THE PRESENT C ASE AS THERE WAS SURVEY U/S.133A IN THAT CASE, WHEREAS IN THE INSTANT CASE THERE WAS SEARCH U/S.132(1). 17 . I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. I HAD ALSO DELIBERATED ON THE JUDICIAL PRONOUNCE MENTS REFERRED BY LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 10 WELL AS CITED BY LEARNED AR AND DR DURING THE COURSE OF HEARING BEFORE US IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE. FROM THE RECORD, I FOUND THAT INCOME OFFERED BY ASSESSEE IN THE RETURN FILED IN RESPECT TO NOTICE U/S.153A WAS ACCEPTED BY THE AO WITHOUT MAKING ANY FURTHER ADDITION. UNDER THESE CIRCUMSTANCES, ISSUE IS COVERED BY THE DECISION OF DELHI HIGH COURT IN CASE OF NEERAJ JINDAL (SUPRA) WHEREIN IT WAS HELD THAT WHEN AO HAS ACCEPTED THE REVISED RETURN FILED BY THE ASSESSEE U/S.153A, NO OCCASION ARISES TO REFER TO PREVIOUS RETURNS FILED U/S.139 OF THE ACT. IT WAS CATEGORICALLY OBSERVED BY THE HONBLE HIGH COURT THAT FOR ALL THE PURPOSES, INCLUDING FOR THE PURPOSE OF LEVY OF PENALTY U/S .271(1)(C) OF THE ACT, THE RETURN THAT HAS TO BE LOOKED AT IS THE ONE FILE U/S. 153A. THUS, THE RETURN FILED U/S.153A IS IN THE NATURE OF SECOND CHANCE GIVEN TO THE ASSESSEE, WHICH INCIDENTALLY GIVES HIM AN OPPORTUNITY TO MAKE GOOD OMISSION IF ANY IN THE O RIGINAL RETURN. HONBLE HIGH COURT FURTHER OBSERVED THAT ONCE THE AO ACCEPTS THE REVISED RETURN FILED U/S.153A, THE ORIGINAL RETURN U/S.139 ABATES AND BECOMES THE NON - EST. AT THIS STAGE, CONCEALMENT IS TO BE SEEN WITH REFERENCE TO THE RETURN FILED BY THE A SSESSEE IN RESPONSE TO NOTICE U/S.153A AND NOT WITH RESPECT TO THE ORIGINAL RETURN FILED U/S.139. GUJARAT HIGH COURT HAS ALSO TAKEN SIMILAR VIEW IN CASE OF KIRIT DAHYABHAI PATEL BY REVERSING THE ORDER OF THE TRIBUNAL. BOMBAY HIGH COURT IN THE CASE OF B.G.S HIRKE CONSTRUCTION (SUPRA) HAS ALSO OBSERVED THAT THAT CONSEQUENT NOTICE U/S.153(1), ASSESSEE IS REQUIRED TO FURNISH FRESH RETURN OF INCOME FOR EACH OF THE SIX ASSESSMENT YEARS IN REGARD TO WHICH NOTICE HAS BEEN ISSUED. THIS RETURN WHICH IS FILED CONSEQUEN T TO THE NOTICE WHICH WOULD BE SUBJECT OF ASSESSMENT BY THE REVENUE FOR THE FIRST TIME IN ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 11 THE CASE OF ABATED ASSESSMENT PROCEEDINGS. CONSEQUENT TO THE NOTICE U/S.153A OF THE ACT, THE EARLIER RETURN FILED FOR THE PURPOSE OF ASSESSMENT WHICH IS PENDING WOULD BE TREATED AS THE NON - EST IN LAW . 18 . IN THE INSTANT CASE, CIT(A) HAS CONFIRMED THE PENALTY BY RELYING ON THE ORDER OF THE TRIBUNAL IN CASE OF KIRTI DAHYABHAI PATEL . SINCE THE ORDER OF THE TRIBUNAL HA S BEEN REVERSED BY THE HON BLE HIGH COURT REPORTED AT 280 CTR 216, THE ORDER OF CIT(A) NO MORE SURVIVES. 19 . WITH REGARD TO THE LEGAL CONTENTION TAKEN BY THE ASSESSEE, I FOUND THAT WHILE ISSUING NOTICE U/S.274 R.W.S. 271(1)(C) ON 12/03/2014, THE AO HAS TICKED BOTH THE LIMBS OF PENALTY U/S.271(1) (C) I.E., CON CEALMENT OF PARTICULARS OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. HOWEVER, IN THE PENALTY ORDER DATED 30/09/2014, AO HAS LEVIED PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME, HOWEVER IN THE QUANTUM ORDER, THE AO HAS INITIATED PENAL TY PROCEEDINGS ON THE GROUND THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME, WHEREAS PENALTY ORDER IS FIXED REGARDING CONFIRMING PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME. AS PER JUDICIAL PRONOUNCEMENTS IN THE CASE OF MANJUNATHA COTTON & G INNING FACTORY 359 ITR 562 NOTICE ISSUED U/S.274 R.W.S. 271(1)(C) IS BAD IN LAW, AS IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) PENALTY PROCEEDINGS HAS BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INAC CURATE PARTICULARS OF INCOME. I FIND THAT SIMILAR VIEW HAS BEEN TAKEN BY THE KARNATAKA HIGH COURT IN CASE OF SSA'S EMERALD MEADOWS IN 73 ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 12 TAXMANN.COM 241 AND SLP FILED BY REVENUE BEFORE THE SUPREME COURT WAS REJECTED BY OBSERVING THAT THERE IS NO MERIT IN T HE PETITION SO FILED. IN THIS REGARD, I HAVE PERUSED THE SAID PRARAS 59 TO 61 OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) AND THE SAME READ AS UNDER : 'NOTICE UNDER SECTION 274 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDINGS CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PASSED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGARDING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUED UNDER SECTION 274 , THEY COULD CONVENIENTLY REFER TO THE SAID ORDER WHICH CONTAINS THE SATISFACTION OF THE AUTHORITY WHICH HAS PASSED THE ORDER. HOWEVER, IF THE EXISTENCE OF THE CONDITIONS COULD NOT BE DISCERNED FROM THE SAID ORDER AND IF IT IS A CASE OF RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION - 1 OR IN EXPLANATION - 1(B), THEN THOUGH PENALTY PROCEEDINGS ARE IN THE NATURE OF CIVIL LIABILITY, IN FACT, IT IS PENAL IN NATURE. IN EITHER EVENT, THE PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTION 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSING PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPORTUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE CONDITIONS STIPULATED IN SECTION 271(1)(C) DO NOT EXI ST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FORM HERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NATURE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE TO BE HELD TO BE STRICTLY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMP OSED ON THE ASSESSEE. 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, THAT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. NO DOUBT, THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE MAY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES THE INITIATION OF THE PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE OFFENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR FINDING HIM GUIL TY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 13 SATISFACTION OF THE EXISTENCE OF THE GROUNDS MENTIONED IN SECTION 271(L)(C) WHEN IT IS A SINE QUA NON FOR INITIA TION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONFINED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECIFICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUNITY TO MEET THOSE GROUNDS. AFTER, HE PLACES HIS VERSION AND TRIES TO SUBST ANTIATE HIS CLAIM, IF AT ALL, PENALTY IS TO BE IMPOSED, IT SHOULD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE IS CALLED UPON TO ANSWER. IT IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSING PENALTY TO IMPOSE PENALTY ON THE GROUNDS OTHER THAN WHAT ASSESSE E WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PROCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PENALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GR OUND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IMPOSITION OF PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PE NALTY MUST BE DETERMINED WITH REFERENCE TO THE INFORMATION, FACTS ARID MATERIALS IN THE HANDS OF THE AUTHORITY IMPOSING THE PENALTY AT THE TIME THE ORDER WAS PASSED AND FURTHER DISCOVERY OF FACTS SUBSEQUENT TO THE IMPOSITION OF PENALTY CANNOT VALIDATE THE ORDER OF PENALTY WHICH, WHEN PASSED, WAS NOT SUSTAINABLE. 61 THE ASSESSING OFFICER IS EMPOWERED UNDER THE ACT TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCUR ATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT A CASE OF FURNISHING OF INACCURATE PARTICULARS. THE APEX COURT IN THE CASE OF ASHOK PAL REPORTED IN 292 FLR 11 AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJRAT HIGH COURT IN THE CASE OF MANU ENGINEERING REPORTED IN 122 ITR 306 AND THE DELHI HIGH COURT IN THE CASE O VIRGO MARKETING REPORTED IN 171 TAXMN 156, HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLE AR PENALTY IS NOT SUSTAINABLE. THEREFORE, WHEN THE ASSESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILAR IS THE CASE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE STANDARD PROF ORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NON - APPLICATION OF MIND.' ITA NO. 4270/MUM/2016 MR. ROBIN BIPIN MEHTA 14 20 . FROM THE ABOVE, IT IS CLEAR THAT THE PENALTY NOTICE SHOULD BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR HERE THE P ENALTY IS NOT SUSTAINABLE. 2 1. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 21 / 04 /2017 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 21 / 04 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. 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//