DIGNITY REALTORS PRIVATE LIMITED , MUMBAI V. INCOME TAX OFFICER 1(1)(2), MUMBAI

ITA 5905/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2438 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 18-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G PANSARI
• Keywords: Initiation of penalty proceedings; Fair market value
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI BEFORE SRI MAHAVIR SINGH, JM AND SRI MANOJ KUMAR A GGARWAL, AM ITA NO.5905/MUM/2017 ( ASSESSMENT YEAR 2012-13) DIGNITY RELATORS PVT LTD., 8, SULEMAN CHAMBER, 4, BATTERY STREET, COLABA, MUMBAI., VS. ITO 1(1)(2), MUMBAI ( A PPELLANT ) .. / RESPONDENT ) PAN NO. AAACD 3763 C REVENUE BY : SHRI ,D.G.PANSARI, SR. D.R. ASSESSEE BY : NONE DATE OF HEARING: 12.3.2019 DATE OF PRONOUNCEMENT : 12- - 03-2019 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)-2, MUMBAI [IN SHORT CIT(A)] , IN APPEAL NO. CIT(A)- 2/IT/171/2015-16 DATED 3.7..2017 CONFIRMING THE PEN ALTY OF 55,644/- LEVIED BY THE ASSESSING OFFICER FOR THE A.Y. 2012-13 VIDE O RDER DATED 12.8.2015 UNDER SECTION 271(1)(C) OF THE ACT, 1961 (HEREINAFTER TH E ACT). 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF THE AS SESSEE IS THAT THE CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENAL TY OF 55,644/- 2 ITA NO.5905/MUM/2017 ASSESSMENT YEAR 2012-13 LEVIED BY THE ASSESSING OFFICER UNDER SECTION.271(1 )(C) OF THE ACT. FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS: 1. WHETHER, ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE & IN LAW, COMMISSIONER OF INCOME TAX (APPEALS ) WAS JUSTIFIED IN RETAINING PENALTY OF RS. 55,644/- U/S 271 (1) (C) OF INCOME TAX ACT , 1961 IN VIEW OF THE FACT THAT THE APPELLANT HAS NOT CONCEALED THE ' PAR TICULARS OF ITS INCOME NOR FURNISHED INACCURATE PARTICULARS IN RESPECT OF RENT RECEIVED. THE ASSESSING OFFICER HAS, ASSESSED RENT AT FAIR MARKET VALUE EVEN THOUGH THE APPELLANT HAS NOT RECEIVED ANY RENT MORE THAN W HAT IS DECLARED IN ITS RETURN. 2. WHETHER, ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE & IN LAW, COMMISSIONER OF INCOME TAX (APPEALS} WAS JUSTIFIED IN REJECTING THE SUBMISSION OF THE APPELLANT THAT IN THE ASSESSMENT ORDER PENALTY PROCEEDINGS ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS ONLY WHERE AS IN THE NOTICE U/S 271(1) (C) BOTH THE LIMBS OF T HE SECTION ARE RETAINED. 3. NONE IS PRESENT ON BEHALF OF THE ASSESSEE WHEN T HE CASE WAS CALLED FOR HEARING. SINCE, THIS ISSUE CAN BE D ECIDED IN THE ABSENCE OF THE ASSESSEE, WE HAVE TAKEN UP THIS APPE AL FOR ADJUDICATION AFTER HEARING LD SR,. D,.R, 4. LD SR. D.R. STATED THE FACTS. WHEN THE BENCH DR EW ATTENTION OF LD SR. D.R, IN REGARD TO INITIATION OF PENALTY P ROCEEDINGS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND WHETHER IN THE NOTICE UNDER SECTION.274, BOTH THE LIMBS OF SECTION ARE RETAINED OR ON ANY SPECIFIC CHARGE, LD D.R. COULD NOT ANSWER. 5. WE HAVE GONE THROUGH THE FACTS AND CIRCUMSTANC ES OF THE CASE AND ALSO THE ASSESSMENT AND NOTED THAT THIS IS A CASE O F DEEMED RENT ASSESSED BY THE ASSESSING OFFICER IN STEAD OF ACTUAL RENT RECEI VED FROM THE TENANTS. THE ASSESSING OFFICER HAS TAKEN 10% INCREASE IN RENT AN D ADDED PER YEAR OF 1,29,920/- FROM FINANCIAL YEARS 2002-03 TO 2011-12 AND ARRIVED AT RENT OF 3,36,970/- PER MONTH FROM THE PROPERTY OF OFFICE N O.SF 1, SECOND FLOOR, MALAK 3 ITA NO.5905/MUM/2017 ASSESSMENT YEAR 2012-13 COMPLEX, MOUJE SHEKHPUR, KHARPUR TALUKA, CITY AHMED ABAD. ACCORDINGLY, HE ADDED THE DIFFERENTIAL AMOUNT AS DEEMED RENT OF 2,35,879/- TO THE RETURN INCOME OF THE ASSESSEE AND INITIATED PENALTY PROCEE DINGS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME VIDE PARA 8 AS UND ER: ACCORDINGLY, THE ABOVE INCOME OF 2,35,879/- IS ADDED IN THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROP ERTY. PENALTY PROCEEDINGS UNDER SECTION.271(1)(C) OF THE ACT ARE SEPARATELY INITIATED FOR FURNISHING OF INACCURATE PARTICULARS. 6. THE ASSESSEE HAS FILED COPY OF NOTICE UNDER SECT ION.274 READ WITH SECTION. 271(1)(C)(1)(C) OF THE ACT FOR INITIATION OF PENALTY PROCEEDINGS, WHEREIN, THE ASSESSING OFFICER HAS NOT DELETED THE INAPPROPR IATE WORDS I.E. HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNIS HED INACCURATE PARTICULARS OF SUCH INCOME. WE FIND THIS ISSUE IS SQUARELY COVERE D BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIO NER OF INCOME TAX 11 .. 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. 7. ADMITTEDLY, AS NOTICED FROM THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION.274 READ WITH SECTION 271(1)(C) OF TH E ACT FOR INITIATING PENALTY 4 ITA NO.5905/MUM/2017 ASSESSMENT YEAR 2012-13 PROCEEDINGS, THE ASSESSING OFFICER HAS NOT STRIKED OUT THE RELEVANT CLAUSES IN THIS SECTION. THE ASSESSING OFFICER HAS INITIATED P ENALTY PROCEEDINGS FOR BOTH LIMBS I.E. FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS WELL CONCEALMENT OF PARTICULARS OF INCOME AS IS EVIDENT FROM THE ASS ESSMENT ORDER.. IT MEANS THAT THE ASSESSING OFFICER IS NOT SURE ABOUT THE CHARGE ON WHICH PENALTY IS TO BE LEVIED. HENCE, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SHRI SAMSON PERINCHERY(SUPRA), WE DELETE THE PENALT Y OF 55,644/- LEVIED BY THE ASSESSING OFFICER UNDER SECT ION.271(1)(C) OF THE ACT AND ALLOW THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12-03-201 9. (MANOJ KUMAR AGGARWAL) (MAHAVIR S INGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 12- - 03-2019 BKP/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//