SAMIR SHAH, MUMBAI V. ACIT CENT. CIR. - 47, MUMBAI

ITA 6189/MUM/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0899 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 20-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Initiation of penalty proceedings
• Section: 271(1)(c); 143(3); 142(1); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 6189/MUM/2016 ASSESSMENT YEAR: 2008 - 09 & ITA NO. 6188/MUM/2016 ASSESSMENT YEAR: 2009 - 10 & ITA NO. 6190/MUM/2016 ASSESSMENT YEAR: 2010 - 11 SHRI SAMIR SHAH, 1404, SHIV TAPI APARTMENT, H.G. ROAD, GAMDEVI, MUMBAI - 400007 VS. ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 47, AAYAKARBHAVAN, NEW MARINE LINES, MUMBAI - 400020. PAN NO. ALFPS3256F APPELLANT RESPONDENT ASSESSEE BY : MR. PRAKASH JHUNJHUNWALA , AR REVENUE BY : MR. MANOJ KUMAR SINGH , DR DATE OF HEARING : 29 /0 8 /2018 DATE OF PRONOUNCEMENT : 19/11/2018 ORDER PER N.K. PRADHAN, AM THE CAPTIONED APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 50 , MUMBAI [IN SHORT CIT(A) ] AND ARISE OUT OF THE PENALTY LEVIED U/S 271(1)(C) THE INCOME TAX ACT 1961 (THE ACT). AS COMMON ISSUES ARE INVOLVED, WE ARE SAMIR SHAH ITA NO. 6189, 6188 & 6190/MUM/2016 2 PROCEEDING TO DISPOSE THEM OFF THROUGH A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. WE BEGIN WITH THE ASSESSMENT YEAR (AY) 2008 - 09. 2. THE GROUND OF APPEAL FILED BY THE ASSESSEE READ S AS UNDER: THE LD. CIT(A) HAS ERRED IN CONFIRMING PENALTY U/S 271(1)(C) OF RS.3,57,660/ - WITHOUT PROPERLY CONSIDERING THE FACTS AVAILABLE ON THE RECORDS. THE APPELLANT SUBMITS THAT DURING THE COURSE OF APPEAL PROCEEDINGS DETAILED SUBMISSIONS WERE MADE ALONG WITH VARIOUS JU DICIAL DECISIONS. HOWEVER, LD. CIT(A) DID NOT CONSIDER THE DETAILED SUBMISSION MADE BY THE APPELLANT AND FACTS AVAILABLE ON THE RECORD. 2.1 THE ASSESSEE HAS FILED ADDITIONAL GROUNDS OF APPEAL AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PENALTY LEVIED U/S 271(1)(C) IS ERRONEOUS SINCE HAD BEEN LEVIED, IN PENALTY ORDER, UNDER DUAL CHARGE OF ALLEGED CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. 2. ON THE FACTS A ND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEVY OF PENALTY U/S 271(1)(C) IS BAD IN LAW SINCE THE NOTICE U/S 274 HAD BEEN ISSUED IN MECHANICAL MANNER WITHOUT SPECIFYING THE CHARGE OF ALLEGED CONCEALMENT OF INCOME OR FURNISHING THE INACCURATE PARTICULARS O F INCOME; 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEVY OF PENALTY U/S 271(1)(C) IS INVALID SINCE LD. AO HAD NOT INITIATED THE PENALTY QUA - ADDITIONS MADE IN ASSESSMENT. 2.2 WE FIND THAT THE ABOVE ADDITIONAL GROUNDS OF APPEAL ARE PURE QUESTION OF LAW AND CLOSELY LINKED WITH THE GROUNDS OF APPEAL MENTIONED AT PARA 2 HEREINBEFORE. THEREFORE, WE ADMIT THE ADDITIONAL GROUNDS OF APPEAL FOR ADJUDICATION. SAMIR SHAH ITA NO. 6189, 6188 & 6190/MUM/2016 3 3. BRIEFLY STATED, THE FACT S OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY 2008 - 09 ON 27.07.2009 DECLARING TOTAL INCOME OF RS.8,33,064/ - . SUBSEQUENTLY, IN RESPONSE TO NOTICE U/S 153A DATED 11.01.2013, THE ASSESSEE FILED RETURN OF INCOME ON 06.03.2014 DECLAR ING TOTAL INCOME OF RS.7,59,550/ - . THEREAFTER, THE AO ISSUED NOTICE U/S 143(2) AND 142(1) DATED 06.03.2014 ALONG WITH QUESTIONNAIRE AND SERVED IT ON THE ASSESSEE. CONSEQUENTLY, THE ASSESSEE REVISED THE RETURN OF INCOME ON 07.03.2014 DECLARING TOTAL INCOME AT RS.16,38,505/ - AND OFFERED ADDITIONAL INCOME OF RS.8,78,960/ - . THE ASSESSING OFFICER (AO) COMPLETED THE ASSESSMENT U/S 153A R.W.S. 143(3) VIDE ORDER DATED 31.03.2014 DETERMINING THE TOTAL INCOME AT RS.16,38,510/ - . THEREAFTER, THE AO INITIATED PENALTY P ROCEEDINGS AND HELD THAT THE ASSESSEE OFFERED ADDITIONAL INCOME IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A ON 21.01.2014, WHICH WAS NOT DECLARED IN THE ORIGINAL RETURN FILED U/S 153A ON 29.03.2007. HOLDING THAT THIS ACT OF THE ASSESSEE IS NOT VOLUNTEER AND RELYING ON THE DECISION IN MAK DATA PVT. LTD. 358 ITR 593 (SC), THE AO LEVIED A MINIMUM PENALTY OF RS.3,57,660/ - U/S 271(1)(C) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HELD THAT: 6.5 IN THE PENALTY ORDER, THE ASSESSING OFFICER HELD THAT THE APPELLANT HAD CONCEALED HIS INCOME TO THE EXTENT OF RS.10,55,194/ - . BUT, IN THE ASSESSMENT ORDER PASSED U/S 153A R.W.S. 143(3) OF THE ACT, THE AO MADE ADDITION OF RS.8,78,96 0/ - ONLY TO THE TOTAL INCOME DECLARED IN THE NEW RETURN FILED. THEREFORE, I FIND THAT THE AO ERRED IN HOLDING THAT SAMIR SHAH ITA NO. 6189, 6188 & 6190/MUM/2016 4 THE APPELLANT HAD CONCEALED PARTICULARS OF HIS INCOME TO THE EXTENT OF RS.10,55,194/ - . THE AO IS DIRECTED TO RECOMPUTE THE PENALTY IMPOSABL E IN THIS CASE BY TAKING THE CONCEALED INCOME AS RS.8,78,960/ - ONLY AND IMPOSE PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED AS WAS DONE IN THE PENALTY ORDER AGAINST THIS APPEAL. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE BEGINS WITH THE ADDITIONAL GRO UND RAISED BY HIM. IT IS STATED THAT THE AO SHOULD EXPLICITLY SPELL AND SET OUT IN ASSESSMENT ORDER ITSELF HIS SATISFACTION ABOUT EXISTENCE OF INGREDIENT OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND IN ABSENCE OF SUCH A MA NDATORY PROVISION, INITIATION OF PENALTY PROCEEDING CANNOT BE REGARDED IN ACCORDANCE WITH LAW AND HENCE SUSCEPTIBLE AND VULNERABLE TO BE QUASHED AS AB - INITIO OR OTHERWISE ILLEGAL, INVALID AND BAD IN LAW AND HENCE NULL AND VOID. IN THIS REGARD, THE LD. COUNSEL REFERRED TO THE ASSESSMENT ORDER DATED 31.03.2014 AND PENALTY ORDER DATED 17.09.2017 PASSED BY THE AO. 6. ON THE OTHER HAND, THE LD. DR RELIES ON THE OR DER PASSED BY THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE ASSESSMENT ORDER DATED 31.03.2014, THE AO HAS INITIATED THE PENALTY ON THE BASIS THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. WE REFER HERE TO PARA 9 OF THE SAID ORDER. IN THE PENALTY ORDER DATED 17.09.2017, IT IS MENTIONED AT PARA 6 BY THE AO THAT THE ASSESSEE HAS DELIBERATELY CONCEALED THE INCOME AND FURNISHED INACCURATE PARTICULARS OF HIS INCOME. T HE AO HAS LEVIED SAMIR SHAH ITA NO. 6189, 6188 & 6190/MUM/2016 5 MINIMUM PENALTY OF RS.3,57,660/ - U/S 271(1)(C) ON THE REASON THAT THE ASSESSEE CONCEALED INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME. IN CIT VS. SAMSON PERINCHERRY (ITA NO. 953, 1097, 1154 & 1226 OF 2014), THE HONBLE BOMBAY HIGH COURT HELD: THEREFORE, THE SATISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BREACHES MENTIONED UNDER SECTION 271(1)(C) OF THE ACT, FOR INITIATION OF PENALTY PROCEEDINGS WILL NOT WARRANT/PERMIT PENALTY BEING IMPOSED FOR THE ORDER 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 THE ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON THE GROUND OF WHICH THE PENALTY PROCEEDINGS HAS BEEN INITIATED, AND IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSEE HAS NO NOTICE. RESPECTFULLY FOLLOWING THE ABOVE DECISION, WE HOLD THE PENALTY PROCEEDINGS AS INVALID AND SET ASIDE THE ORDER OF THE LD. CIT(A). 8. FACTS BEING IDENTICAL , OUR DECISION FOR THE A Y 2008 - 09 APPLIES MUTATIS MUTANDIS TO AYS 2009 - 10 AND 2010 - 11. 9. IN THE RESULT, THE APPEAL S ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/11/2018. SD/ - SD/ - ( SANDEEP GOSAIN ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 19/11/2018 RAHUL SHARMA, SR. P.S. SAMIR SHAH ITA NO. 6189, 6188 & 6190/MUM/2016 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI