ITO 17(3)(3), MUMBAI V. MANGAL ASSOCIATES, MUMBAI

ITA 4960/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5493 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 03-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Wrong claim; Condonation of delay; Revised return
• Section: 80IB; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , HONBLE JUDICIAL MEMBER & SHRI DR. A.L. SAINI , HONBLE ACCOUNTANT MEMBER ITA NO. 4960 / MUM /201 6 (ASST. YEAR: 20 11 - 12 ) ITO - 17(3)(3), AAYAKAR BHAVAN, ROOM NO. 123, 1 ST FLOOR, M.K. ROAD, MUMBAI 400 020 V S . SHREE MANGAL ASSOCIATES, 802B, 8 TH FLOOR, GRANDE PALLADIUM, NEAR MERCEDES SHOWROOM, 175, CST ROAD, KALINA, SANTACRUZ (E), MUMBAI 400 098 PAN NO. ABIFS 0355 B (APPELLANT) (RESPONDENT) C.O.NO. 292/MUM/2017 (ARISING OUT OF ITA NO. 4960/MUM/2016) (ASST. YEAR : 2011 - 12) SHREE MANGAL ASSOCIATES, 802B, 8 TH FLOOR, GRANDE PALLADIUM, NEAR MERCEDES SHOWROOM, 175, CST ROAD, KALINA, SANTACRUZ (E), MUMBAI 400 098 VS. ITO - 17(3)(3), AAYAKAR BHAVAN, ROOM NO. 123, 1 ST FLOOR, M.K. ROAD, MUMBAI 400 020. PAN NO. ABIFS 0355 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MADHUR AGARWAL , ADV. DEPARTMENT BY : SHRI SAURABH KUMAR RAI , DR DATE OF HEARING : 27 / 0 6 /201 8 . DATE OF PRONOUNCEMENT : 20 / 0 7 /201 8 . 2 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) O R D E R PER DR. A.L. SAINI , ACCOUNTANT MEMBER THE CAPTIONED APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE , PERTAINING TO ASSESSMENT YEAR 2011 - 12, ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) - 2 8 , MUMBAI IN APPEAL NO. CIT(A)/ - 2 8 /IT - 242/ITO - 12(3)(2)/ 201 4 - 15 , DATED 16/05 /2016, WHICH IN TURN ARISES OUT OF A PENALTY ORDER PASSED BY THE ASSESSING OFFICER UNDER SEC TION 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT'). 2. SINCE THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE RELATE TO THE SAME ASSESSEE, SAME ASSESSMENT YEAR AND IDENTICAL ISSUES ARE INVOLVED, THEREFORE, THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCES AND BREVITY. 3 . AT THE OUTSET , WE FIND THAT THE CROSS OBJECTION FILED BY THE ASSESSEE IS DELAYED BY 05 DAYS AND THE ASSESSEE HAS FILED CONDONATION PETITION PRAYING FOR CONDONATION OF DELAY . WE HEARD THE PARTIES ON THIS PRELIMINARY IS S UE, AND HAVING REGARD THE 3 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) REASONS GIVEN IN THE PETITIO N ,W E CONDONE THE DELAY AND ADMIT THE CROSS OBJECTIONS FOR HEARING. 4 . HOWEVER, IN THIS APPEAL , THE REVENUE HAS RAISED A MULTIPLE GROUNDS OF APPEAL, BUT AT THE TIME OF HEARING, THE MAIN GRIEVANCE OF THE REVENUE HAS BEEN CONFINED TO THE ISSUE THAT THE LD. CIT(A) HAS ERRED IN DELETING PENALTY UNDER SEC. 271(1)(C) OF THE ACT PARTLY AND IN DIRECTING TO AO TO DELETE THE PENALTY LEV I ED UNDER SEC. 271(1)(C) OF THE ACT IN RESPECT OF RS. 50,28,374/ - BEING OTHER INTEREST INCOME AND RS. 6,53,537/ - AS FDR INTEREST AGGREGATING TO RS. 56,81,911/ - 5. ON THE OTHER HAND , THE MAIN GRIEVANCE OF THE ASSESSEE IN HIS ORIGINAL CROSS OBJECTION AND ADDITIONAL GROUND S OF CROSS OBJECTIONS ARE THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SEC TION 271(1)(C) OF THE ACT IN RESPECT OF ADDITION ON ACCOUNT OF INTEREST OF RS. 37,71 ,024/ - , AS THE ASSESSEE HAS OFFERED THE SAID INTEREST INCOME IN ASSESSMENT YEAR 2012 - 13, AND MOREOVER, THERE IS NO SPECIFIC CHARGE MENTIONED IN THE PENALTY ORDER, THEREFORE, PENALTY SHOULD NOT BE LEVIED. 4 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) 6 . THE FACTS OF THE CASE WHICH CAN BE STATED QUITE SHORTLY ARE AS FOLLOWS: DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER , ON VERIFICATION OF PROFIT & LOSS ACCOUNT FOUND THAT THE ASSESSEE HAS RECEIVED INTEREST INCOME OF RS. 50,28,374/ - AND INTEREST ON FDRS OF RS. 6,53,537/ - . THE ASSESSEE WAS REQUEST ED TO SUBMIT COPY OF 26AS (TRACES). ON VERIFICATION THE AO NOTED THAT THE ASSESSEE HAS RECEIVED INTEREST OF RS. 87,08,521/ - . THE TDS DEDUCTED ON THIS AMOUN T WAS TO THE TUNE RS. 8,70,851/ - . HOWEVER, THE INTEREST INCOME OF RS. 37,71,024/ - RECEIVED FROM M/S. BAU DEVELOPER P. LTD. HAS NOT BEEN OFFERED FOR TAXATION DURING THIS YEAR. THE ASSESSEE WAS ISSUED SHOW CAUSE NOTICE IN RESPECT OF THE INTEREST AMOUNT OF RS. 37,71 ,024/ - AS TO WHY THIS AMOUNT SHOULD NOT BE ADDED AS HIS UNDISCLOSED INCOM E. THE ASSESSEE VIDE LETTER DATED 19/03/2014 HAS EXPLAINED THAT THE INTEREST INCOME OF RS. 37,71 ,024/ - REFLECTED IN 26AS STATEMENT RECEIVED FROM M/S. BAU DEVELOPER P. LTD , IS OFFERED FOR TAXATION IN THE FINANCIAL YEAR 2011 - 12 I.E. ASSESSMENT YEAR 2012 - 13. HOWEVER, THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE AND MADE ADDITION OF RS. 37,71 ,024/ - IN THE TOTAL INCOME OF THE ASSESSEE AS HIS UNDISCLOSED INCOME UNDER SEC. 68 OF THE ACT AND PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) WERE 5 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) INITIATED SEPARATELY FOR CONCEALMENT OF TOTAL INCOME AND/OR FILING INACCURATE PARTICULARS OF INCOME. 7. ON VERIFICATION OF COMPUTATION OF INCOME FILED BY THE ASSESSEE, IT WA S NOTED BY THE LD . AO TH A T THE ASSESSEE HAS CONSIDERED FDR INTEREST INCOME OF RS. 6 ,53,537/ - AS WELL AS INCOME OF RS. 50,28,374/ - FOR COMPUTATION OF DEDUCTION UNDER SEC TION 80IB OF THE ACT. HOWEVER, AS PER AO, SINCE THESE INCOMESWERE NOT PERTAINING TO THE BUSINESS OF THE ASSESSEE , HENCE THE ASSESSEE WA S NOT ELIGIBLE FOR CLAIMING DE D U C TION UNDER SEC TION 80IB OF THE ACT . ACCORDINGLY, THE FDR INTEREST INCOME OF RS. 6,53,537/ - AND INTEREST INCOME OF RS.50,28,374/ - WERE DISALLOWED IN SECTION 80IB COMPUTATION AND WA S ADDED BACK TO THE TAXABLE INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS UND ER SEC. 271(1)(C) WERE INITIATED FOR FILING INACCURATE PARTICULARS OF INCOME . THE LD . ASSESSING OFFICER FURTHER NOTED THATH AD THIS CASE NOT BEEN SELECTED FOR SCRUTINY, THE INTEREST INCOME SHOWN IN THE PROFIT & LOSS ACCOUNT WOULD HAVE BEEN ACCEPTED AS BUSIN ESS INCOME INSTEAD OF INCOME FROM OTHER SOURCES UNDER SEC. 143(1) OF THE ACT, THEREBY THE ASSESSEE WOULD HAVE EVADED PAYMENT OF TAX. BASED ON THE REASONS MENTIONED ABOVE, THE ASSESSING OFFICER LEVIED PENALTY TO THE TUNE OF RS. 29,20,956/ - . 6 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) 8 . AGGRIEVED BY THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A), WHO HAS DEL E TED THE PENALTY PARTLY . THE LD. CIT(A) NOTED THAT IN RESPECT OF OTHER INTEREST INCOME DULY DISCLOSED IN THE FINANCIAL STATEM ENT TO THE TUNE O F RS. 56,81,911/ - . THE ASSESSEE CLAIMED THIS INTEREST AS ELIGIBLE FOR DEDUCTION UNDER SEC. 80IB AND THE FACT THAT EARNING OF INTEREST HAS BEEN DISCLOSED BY THE ASSESSEE. THEREFORE LD. CIT(A) RELYING ON THE DECISION OF THE HON`BLE ITAT, MUMBAI IN ROBORANT INVESTMENTS PVT. LTD. (7 SOT 181) (MUMBAI) HELD THAT THE ASSESSEE HAVING DISCLOSED THE PARTICULARS OF HIS INTEREST INCOME IN THE FINANCIAL STATEMENTS HAD MADE A FULL DISCLOSURE. THE CLAIM OF THE ASSESSEE TH A T THE INTEREST ALSO QUA LIFIES FOR A DEDUCTION UNDER SEC. 80IB DID NOT STAND THE SCRUTINY OF THE ASSESSING OFFICER, HOWEVER, MERE MAKING OF THIS CLAIM CANNOT LEAD TO PENALTY AUTOMATICALLY. THEREFORE LD. CIT(A) DELETED THE PENALTY U/S 271(1)(C ) IN RESPECT OF THE ADDITION OF RS. 5 6,81,911/ - MADE BY THE ASSESSING OFFICER TOWARDS INTEREST INCOME NOT ELIGIBLE FOR DEDUCTION UNDER SEC. 80IB OF THE ACT. 7 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) 9. AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A), THE REVENUE IS IN APPEAL AND THE ASSESSEE IS IN CROSS OBJECTION BEFORE THIS TRIBUNA L. 10. LEARNED COUNSEL FOR THE ASSESSEE BEGINS BY POINTING OUT THAT THE ASSESSING OFFICER HAS NOT RECORDED ANY SATISFACTION WHILE IMPOSING PENALTY. NOTICE UNDER SEC. 271(1)(C) IS A DEFECTIVE NOTICE AND IT IS NOT CERTAIN WHETHER THE PENALTY IS INITIATED ON ACCOUNT OF CONCEALMENT OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS OF INCOME. THE LD. COUNSEL FURTHER POINTED OUT THAT NON - STRIKING OF IRRELEVANT PORTION OF THE PENALTY ORDER REFLECTS NON - APPLICATION OF MIND O N THE PART OF THE ASSESSING OFFICER AND THE ASSESSING OFFICER HIMSELF WAS NOT SURE ABOUT THE LIMB/EXACT CHARGE FOR WHICH THE ASSESSEE WAS BEING PENALISED WHICH IS EVIDENT FROM THE FACT THAT THE RELEVANT LIMB OF THE PENALTY HAS NOT BEEN TICKED AND THE IRRELEVANT LIMB HAS NOT BEEN STRIKE OFF. SINCE, THE RELEVANT LIMB OF THE CHARGE HAS NOT BEEN TICKE D AND THE IRRELEVANT PORTION HAS NOT BEEN STRIKE OFF , THEREFORE, T HE ASSESSEE DOES NOT KNOW ABOUT THE CHARGE, HENCE , INITIATION OF PENALTY AGA INST THE ASSESSEE IS BAD IN LAW. FOR THAT, ASSESSEE HAS RELIED ON THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF 8 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) THE CIT VS. SAMSON PERINCHERY [(2017) 392 ITR 4 (BOM.) ] , WHEREIN IT WAS HELD AS UNDER: - 6. 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 (L)(C) OF THE ACT BY ASSESSING OFFICER WAS FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHILE THE ORDER IMPOSING PENA LTY IS FOR CONCEALMENT OF INCOME. THE IMPUGNED ORDER HOLDS THAT THE CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THEREFORE, THE ASSESSING OFFICER SHOULD BE CLEAR AS TO WHICH OF THE TWO LIMBS UNDER WHICH PENALTY IS IMPOSABLE, HAS BEEN CONTRAVENED OR INDICATE THAT BOTH HAVE BEEN ABOUT BLANK CONTRAVENED WHILE INITIATING PENALTY PR OCEEDINGS. IT CANNOT BE THAT THE INITIATION WOULD BE ONLY ON ONE LIMB I.E. FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHILE IMPOSITION OF PENALTY ON THE OTHER LIMB I.E. CONCEALMENT OF INCOME. FURTHER, THE TRIBUNAL ALSO NOTED THAT NOTICE ISSUED UNDER S ECTION 274 OF THE ACT IS IN A STANDARD PROFORMA, WITHOUT HAVING STRIKED OUT IRRELEVANT CLAUSES THEREIN. THIS INDICATES NON - APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER WHILE ISSUING THE PENALTY NOTICE. 11. THE COUNSEL FURTHER STATED THAT THE ASSESSEE, VIDE LETTER DATED 19/03/2014 HAD EXPLAINED TO AO THAT THE INTEREST INCOME OF RS. 37,71,024/ - REFLECTED IN 26AS STATEMENT RECEIVED FROM M/S. BAU DEVELOPER P. LTD, IS OFFERED FOR TAXATION IN THE FINANCIAL YEAR 2011 - 12 I.E. ASSESSMENT YEAR 2012 - 13. THE DATE OF BOOKING OF THE TRANSACTION IN RESPECT OF M/S. BAU DEVELOPER P. LTD IS ON 01.08.2011 (VIDE PB 11), WHICH FALLS IN ASSESSMENT YEAR 2012 - 13, 9 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) THEREFORE, THE ASSESSEE HAS RIGHTLY OFFERED INTEREST INCOME OF RS. 37,71,024/ - FOR TAXATION IN THE AS SESSMENT YEAR 2012 - 13 . 1 2 . THE LD COUNSEL ALSO SUBMITTED THAT THE INTEREST AMOUNTING TO RS. 56,81,911 / - WA S ELIGIBLE FOR DEDUCTION UNDER SEC TION 80IB OF THE ACT AND THE ASSESSEE HA D DISCLOSED THE FACT OF EARNING SAID INTEREST IN THE FINANCIAL STATEMENTS . SINCE THE ASSESSEE HA D MADE FULL DISCLOSURE IN RESPECT OF INTEREST TO THE TUNE OF RS. 56,81,911 / - , AND THEREFORE, LD CIT(A) HAS RIGHTLY DELETED THE PENALTY U/S 271(1)(C ) OF THE ACT . THE LD . COUNSEL PRAYED THE BENCH THAT PENALTY UNDER SECTION 271(1) (C ) OF THE ACT IN RESPECT OF INTEREST INCOME OF RS. 37,71,024/ - SHOULD ALSO BE DELETED, AS THE ASSESSEE HAS OFFERED THE SAID AMOUNT FOR TAXATION IN A.Y. 2012 - 13. 1 3 . ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS SUBMITTED THAT THERE IS A CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. THE ASSESSEE HAS NOT DISCLOSED THE INTEREST ON FDR AND INTEREST INCOME RECEIVED FROM M/S. BAU DEVELOPER P. LTD. TO THE TUNE OF RS. 37,71 ,024/ - , WHICH IS REFLECTED 10 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) IN 26AS . HAD TH E ASSESSEE S CASE N OT BEEN SELECTED FOR SCRUTINY, THE INTEREST SHOWN IN THE PROFIT & LOSS ACCOUNT WOULD HAVE ESCAPED FROM ASSESSMENT. THE LD DR STATED THAT T HE REQUIREMENT OF SECTION 274 , READ WITH SECTION 271 (1) (C ) OF THE INCOME TAX ACT FOR GRANTING REASONABLE OPPORTUNIT Y OF BEING HEARD IN THE MATTER CANNOT BE STRETCHED TO THE EXTENT OF FRAMING A SPECIFIC CHARGE OR ASKING THE ASSESSEE AN EXPLANATION IN RESPECT OF THE QUANTUM OF PENALTY PROPOSED TO BE IMPOSED . THE ASSESSEE WAS SUPPLIED WITH THE FINDINGS RECORDED IN THE OR DER OF ASSESSMENT . THE ASSESSEE HAD SUFFICIENT NOTICE OF THE ACTION OF IMPOSING PENALTY.THE AO HAS TO SATISFY WHETHER THE PENALTY PROCEEDINGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE AO IS NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTI CULAR MANNER OR REDUCE IT INTO WRITING. IN ADDITION TO THIS THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , TO SUPPORT HIS P L EA , RELIED ON THE FOLLOWING JUDGMENT: - 1 ) CIT VS.L. VISHNUDAS [(2014) 50 TAXMANN.COM 314 (KERALA) , WHEREIN IT HAS BEEN HELD AS UNDER: - 10. THOUGH WE ARE NOT REQUIRED TO ENQUIRE INTO MENS REA OR WI L LF U L INTENTION ON THE PART OF THE ASSESSEE, WE CANNOT CLOSE OUR EYES TO THE CATEGORICAL DECLARATIONS MADE BY THE ASSESSEE AT THE TIME OF FILING THE RETURN. IN THE LIGHT OF THE CATEGORICAL STATEMENT THAT THE ENTIRE INCOME FROM THE HUF WAS INCLUDED IN 11 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) THE INDIV IDUAL INCOME OF THE ASSESSEE WHICH APPARENTLY WAS FAR FROM TRUTH, WE ONLY HAVE TO OPINE THAT THERE WAS NO HONEST AND BONA FIDE DISCLOSURE MADE BY THE RESPONDENT AT THE TIME OF FILING THE RETURN OF INCOME. ON THE OTHER HAND, BUT FOR THE SCRUTINY TAKEN UP BY THE DEPARTMENT, THE ADDITIONAL INCOME FROM THE HUF WOULD HAVE GONE UNNOTICED AND IT WOULD HAVE ESCAPED FROM COMPUTATION OF TAX. 11. IN THE LIGHT OF ABOVE OBSERVATIONS, IT IS CLEAR THAT WHAT HAPPENED SUBSEQUENT TO FEBRUARY 6, 1998, THOUGH NOT CRUCIAL, THE APPELLATE AUTHORITIES HAVE PLACED MUCH RELIANCE ON SUBSEQUENT EVENTS THAN THE CATEGORICAL DECLARATION IN RETURN OF INCOME ON FEBRUARY 6, 1998. THE CRITERION IS NOT THE CONTENTS OF THE LETTER DATED FEBRUARY 23, 1998, NOR THE REVISED RETURN FILED IN RESPON SE TO THE SCRUTINY NOTICE. THE CRITERION IN THIS CASE ISCATEGORICAL DECLARATION MADE BY THE ASSESSEE AT THE TIME OF SUBMISSION OF RETURNS. THE CATEGORICAL STATEMENTWITH REFERENCE TO THE ABOVE REASONING CLEARLY INDICATES THERE IS CONCEALMENT OF INCOME FROM THE HUF, I.E., KNOWINGLY THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME FOR COMPUTATION OF TAX . IN ADDITION TO THIS, LD . DR FOR THE REVENUE ALSO SUBMITTED THAT LD CIT(A) DELETED THE PENALTY U/S 271(1) (C) OF THE ACT, IN RESPECT OF OTHER INTEREST INCOME OF RS. 56,81,911/ - WITHOUT CONSIDERING THE FACTS IN RIGHT PERSPECTIVE. THE ASSESSEE HAD MADE WRONG CLAIM, THEREFORE, THE PENALTY SHOULD BE LEVIED. 1 4 . WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD . WE NOTE THAT THE PENALTY IMPOSED UNDER SECTION 271 (1) (C ) OF THE ACT, IN RESPECT OF OTHER INTEREST INCOME OF RS. 56,81,911/ - , WHICH HAS BEEN DELETED BY THE LD CIT(A) , AS THE SAID AMOUNT WAS DULY 12 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) DISCLOSED IN THE FINANCIAL STATEMENT BY THE ASSESSEE. THERE WAS A CLAIM BY THE ASSESSEE THAT SAID INTEREST INCOME OF RS. 56,81,911/ - WA S ELIGIBLE FOR DEDUCTION UNDER SEC TION 80IB OF THE ACT , AND THE ASSESSEE H AD DISCLOSED THE FACT OF EARNING SAID INTEREST IN THE FINANCIAL STATEMENTS. WE NOTE THAT THE ASSESSEE HAS DISCLOSED THE PARTICULARS OF HIS INCOME IN THE FINANCIAL STATEMENTS AND HAS MADE FULL DISCLOSURE , IN RESPECT OF OTHER INTEREST INCOME OF RS. 56,81,911/ - HENCE, THERE IS NEITHER CONCEALMENT OF INCOM E NOR FURNISHING INACCURATE PARTICULARS OF INCOME. WE NOTE THAT MERE MAKING OF THIS CLAIM CANNOT LEAD TO PENALTY AUTOMATICALLY. THEREFORE, LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY U/S271 (1) (C) OF THE ACT, IN RESPECT OF ADDITION OF RS. 56,81,911/ - . 1 5 . WE NOTE THAT THE ASSESSEE, VIDE LETTER DATED 19/03/2014 , HAD EXPLAINED TO AO THAT THE INTEREST INCOME OF RS. 37,71,024/ - REFLECTED IN 26AS STATEMENT , WAS RECEIVED FROM M/S. BAU DEVELOPER P. LTD, AND HAD BEEN OFFERED FOR TAXATION BY THE ASSESSEE, IN THE ASSESSMENT YEAR 2012 - 13. WE NOTE THAT T HE DATE OF BO OKING OF THE TRANSACTION IN RESPECT OF M/S. BAU DEVELOPER P. LTD IS ON 01.08.2011 (VIDE PB 11), WHICH FALLS IN ASSESSMENT YEAR 2012 - 13, THEREFORE, THE ASSESSEE HAS OFFERED INTEREST INCOME OF 13 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) RS. 37,71,024/ - FOR TAXATION IN THE ASSESSMENT YEAR 2012 - 13 . SINCE THE ASSESSEE HAS OFFERED THE SAID INCOME FOR TAXATION IN THE A.Y.2012 - 13, HENCE THERE IS NO CONCEALMENT . BASED ON THESE FACTS WE NOTE THAT THERE IS NEITHER CONCEALMENT OF INCOME NOR INACCURATE PARTICULARS OF INCOME AND HENCE WE ARE OF THE VIEW THAT THERE IS NO ANY SCOPE TO IMPOSE THE PENALTY ON THE ASSESSEE UNDER CONSIDERATION , AS THE ASSESSEE HAS DISCLOSED THE RIGHT INCOME IN THE RIGHT ASSESSMENT YEA R. 1 6 . WE HAVE ALSO PERUSED THE NOTICE ISSU ED U/S 274 , READ WITH 271 (1) (C ) OF THE ACT AND THE RELEVANT PARA READS AS UNDER: ' H AVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME' A T THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE NOTICES U/S. 274 OF THE ACT R.W.S. 271 (1) (C ) OF THE ACT DATED 20.04.2013, AND SERVED ON THE ASSESSEE , WHEREIN WE NOTE THAT THE AO HAS NOT TICKED THE LIMB OF CHARGE/DEFAULT FOR WHICH THE PENALTY IS BEING INITIATED AGAINST THE ASSESSEE. WE FIND THAT THE NOTICE HAS BEEN ISSUED FOR HAVING CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME . BUT NO ANY PARTICULAR LIMB HAS BEEN STRUCK OFF OR TICKED BY ASSESSING OFFICER. WE NOTE THAT IN A SIMILAR CASE THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY REPORTED IN (2013) 359 ITR 565 (KAR) HAS 14 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) CANCELLED THE PENALTY TAKING NOTE OF THE FACT THAT THE PENALTY NOTICE DID NOT SPELL OUT CLEARLY AS TO WHETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME. WE ALSO FIND THAT HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS, REPORTED IN (2016) 73 TAXMANN.COM 241 (KAR) ENDORSED THE SAME VIEW IN M ANJUNATHA COTTON AND GINNING FACTORY (SUPRA) AND HELD AS UNDER: 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FO R SHORT THE ACT), TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY (2013) 359 ITR 565/218 TAXMAN 423/35 TAXMANN.COM 250(KAR). 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE APPEAL IS ACCORDINGLY DISMISSED. 15 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) WE ALSO FIND THAT THE AFORESAID ORDER OF THE HONBLE HIGH COURT WAS CHALLENGED BY THE DEPARTMENT BEFORE THE HONBLE SUPREME COURT BY PREFERRING AN SLP WHICH HAS BEEN DISMISSED WHICH FACT HAS BEEN REPORTED IN CIT VS. SSAS EMERALD MEADOWS (2016) 73 TAXMANN. COM 248 (SC). 1 7 . WE NOTE THAT CASE LAW RELIED ON BY THE LD DR FOR THE REVENUE IS DISTINGUISHABLE ON FACTS , IN THE CASE LAW RELIED ON BY THE LD . DR THERE WAS NO HONEST AND BONA FIDE DISCLOSURE MADE BY THE RESPONDENT AT THE TIME OF FILING THE RETURN OF INCOME , WHEREAS IN THE ASSESSEE`S CASE UNDER CONSIDERATION THE ASSESSEE HAS OFFERED THE INTEREST INCOME RECEIVED FROM M/S BAU DEVELOPERS PRIVATE LIMITED IN ASSESSMENT YEAR 2012 - 13 AND HENCE THERE IS NO CONCEALMENT OF INCOME. HENCE, NONE OF THE CASE LAW REL IED ON BY THE LD DR IS APPLICABLE TO THE ASSESSEE UNDER CONSIDERATION. 1 8 . WE NOTE THAT SINCE THE PENALTY NOTICE ISSUED TO THE ASSESSEE DATED 20.04.2013 DID NOT SPELL OUT AS TO WHICH DEFAULT THE ASSESSEE HAS COMMITTED FOR WHICH PENALTY U/S. 271(1)(C) OF T HE ACT HAS BEEN INITIATED, THEREFORE, RESPECTFULLY FOLLOWING THE HONBLE KARNATAKA HIGH COURTS ORDER IN MANJUNATHA COTTON & GINNING FACTORY (SUPRA) AND SSAS EMERALD MEADOWS AND JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF THE CIT VS. SAMSON PERINCHERY [(2017) 392 ITR 4 (BOM.) (SUPRA), WE CANCEL THE PENALTY IMPOSED BY THE AO WHICH HAS BEEN ERRONEOUSLY CONFIRMED 16 ITA NO. 4960 / MUM/2016 C.O.NO. 292/MUM/2017 ( SHREE MANGAL ASSOCIATES ) BY THE LD. CIT(A) , PARTLY .THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED AND CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE ALLOWED. 1 9 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON TH IS DAY OF 20 TH JULY , 201 8 . ( SAKTIJIT DEY ) ( A.L. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH JULY , 201 8 . VR/ - COPY TO: 1 . THE ASSESSEE SHREE MANGAL ASSOCIATES, 802B, 8TH FLOOR, GRANDE PALLADIUM, NEAR MERCEDES SHOWROOM, 175, CST ROAD, KALINA, SANTACRUZ (E), MUMBAI 400 098 2 . THE REVENUE - ITO - 17(3)(3), AAYAKAR BHAVAN, ROOM NO. 123, 1ST FLOOR, M.K. ROAD, MUMBAI 20 3 . THE PR. CIT - 17, MUMBAI. 4 . THE CIT(A) - 28, MUMBAI. 5 . THE D.R . , MUMBAI. 6 . GUARD FILE. BY ORDER DY./ASST. REGISTRAR, ITAT, MUMBAI.