M/s. Dream Construction, Nandurbar V. Assistant Commissioner of Income tax, Nashik

ITA 661/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0965 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Wrong claim; Set aside
• Section: 271(1)(c); 143(3); 274

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.661/PUN/2017 / ASSESSMENT YEAR : 2009-10 M/S. DREAM CONSTRUCTION, SURVEY NO.598/1, BEHIND TELEPHONE EXCHANGE OFFICE, RAGHUWANSI NAGAR, NEAR KHODAI MATA MANDIR, NANDURBAR 425 412. PAN : AAEFD8999D. . / APPELLANT V/S THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE I, NASHIK. . / RESPONDENT ASSESSEE BY : SMT. DEEPA KHARE. REVENUE BY : SHRI SUDHENDU DAS. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A)-1, NASHIK, DT.17.01.2017 FO R THE ASSESSMENT YEAR 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF CONSTRUC TION ACTIVITY. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2009-10 ON 30.09.2009 DECLARING TOTAL INCOME OF / DATE OF HEARING : 16.08.2019 / DATE OF PRONOUNCEMENT: 03.09.2019 2 RS.1,78,25,695/-. THEREAFTER, ASSESSMENT WAS FRAMED U/S 1 43(3) OF THE ACT VIDE ORDER DT.27.12.2011 AND THE TOTAL INCOME W AS DETERMINED AT RS.2,30,24,480/- INTER-ALIA BY MAKING ADDITIONS ON ACCOUNT OF WRONG CLAIM OF DEPRECIATION ON TRUCK AND VIB RATORY COMPACTOR OF RS.40,48,605/- AND RS.1,50,183/-, RESPECTIVEL Y. ON THE AFORESAID ADDITIONS, AO VIDE ORDER DT.22.09.2015 LEVIED PENALTY OF RS.14,27,168/- U/S 271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.17.01.2017 (IN APPEAL NO.NSK/CIT(A)-1/458/2015-16) DISM ISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF L D.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE F OLLOWING GROUNDS : I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED HON'BLE CIT(A) ERRED IN HOLDING THAT PENALTY LEVIED ON 22/09/2015 BY ASSESSING OFFICER OF RS.14,27,168/- U/S 271(1)(C) F OR A.Y. 2009-10 WITHOUT CONSIDERING THE PROVISO TO SECTION 275(1)(A ). II. THE LEARNED ASSESSING OFFICER OUGHT TO HAVE LEV IED THE PENALTY VI] S 271(1)(C), ONE YEAR FROM THE END OF THE FINANCIAL Y EAR IN WHICH THE ORDER OF CIT(A) IS RECEIVED BY PRINCIPAL COMMISSIONE R ON 31/05/2013 AND THEREFORE THE PENALTY SHOULD BE LEVIED BY 31/03 /2015. PENALTY ORDER IS TIME BARRED. PENALTY LEVIED ON 22/09/2015 IS TIME BARRED. III. WITHOUT PREJUDICE TO THE ABOVE, THE HON'BLE CI T(A) HAS COMMITTED A MISTAKE OF CONFIRMING THE PENALTY LEVIED BY AO WITH OUT CONSIDERING THE FACT THAT DISALLOWANCE MADE BY AO FOR CLAIM OF DEPRECIATION ON COMMERCIAL VEHICLE OF RS. 1,50,183 PURCHASED ON 30/ 03/2009 AND PUT TO USE ON SAME DAY AND DISALLOWANCE CLAIM OF DE PRECIATION OF RS. 40,48,605/- (50%) OF RS. 8097204/- WERE DELETED BY THE HON'BLE CIT(A) BY HIS ORDER DATED 15/05/2013. THIS CAN NOT BE FURNISHING OF INACCURATE PARTICULARS FOR LEVYING THE PENALTY U/S 271(1){C). IV. THE ADDITIONS DELETED BY HON'BLE CIT(A) ORDER D ATED 15/05/2013 OF RS. 41,98,788/- AND RESTORED BY THE HON'BLE ITAT PUNE DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS WHEN TWO VIEWS HAVE TAKEN BY THE INCOME TAX DEPARTMENT. 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHER. 3 4 . BEFORE US, LD.A.R SUBMITTED THAT WHILE PASSING THE ASSESSMENT ORDER, AO WITH RESPECT TO ADDITIONS MADE ON ACCOUNT OF DEPRECIATION ON TRUCK AND VIBRATORY COMPACTOR OF RS.40,48,605/- AND RS.1,50,183/- RESPECTIVELY, HAS RECORDED THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME AND CONCEALED THE PARTICULARS OF INCOME BUT WHILE PASSING THE PENALTY ORDER U/S 271(1)(C) OF THE ACT ON22.09.2015 AO HAD LEVIED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME ONLY. HE THERE FORE RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN TH E CASE OF CIT VS. SAMSON PERINCHERY REPORTED IN (2017) 392 ITR 4 (BOM) SUBMITTED THAT IN THE ABSENCE OF PROPER SHOW CAUSE NOT ICE TO ASSESSEE, PENALTY U/S 271(1)(C) CANNOT BE LEVIED AND THEREFO RE URGED THAT PENALTY LEVIED BY AO BE DELETED. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPEC T TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN THE PRESENT CASE, PEN ALTY OF RS.14,27,168/- HAS BEEN LEVIED ON ADDITIONS MADE ON ACCO UNT OF DEPRECIATION ON TRUCK AND VIBRATORY COMPACTOR OF RS.40,4 8,605/- AND RS.1,50,183/- RESPECTIVELY. THE PERUSAL OF ASSESSMEN T ORDER PASSED U/S 143(3) OF THE ACT REVEALS THAT IN THE ASSESS MENT ORDER AO HAD RECORDED SATISFACTION FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND FOR CONCEALING PARTICULARS OF INCOME I.E., HE HAS RECORDED SATISFACTION FOR BOTH THE LIMBS OF SEC.271 (1)(C) OF THE ACT FOR LEVY OF PENALTY. THEREAFTER IN THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT, AO HELD THAT ASSESSEE HAD FURNISHED INA CCURATE 4 PARTICULARS OF INCOME AND ACCORDINGLY LEVIED THE PENALTY. E VEN IN THE NOTICE DT.27.12.2011 ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT, AO HAS NOT STATED THAT WHETHER THE PENALTY IS FOR CONC EALING THE PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULA RS OF INCOME. IT IS A SETTLED LAW THAT WHILE LEVYING PENALTY FOR CONCEALMENT, THE AO HAS TO RECORD SATISFACTION AND THER EAFTER COME TO A FINDING IN RESPECT OF ONE OF THE LIMBS WHICH IS SPECIFIE D UNDER SECTION 271(1)(C) OF THE ACT. THE FIRST STEP IS TO RECORD SA TISFACTION WHILE COMPLETING THE ASSESSMENT AS TO WHETHER THE ASSES SEE HAD CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THEREAFTER, NOTICE U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT IS TO BE ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER THEREA FTER HAS TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR NON-SATIS FACTION OF EITHER OF THE LIMBS. WHILE COMPLETING THE ASSESSMENT, THE AS SESSING OFFICER HAS TO COME TO A FINDING AS TO WHETHER THE ASSESS EE HAS CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SAM SON PERINCHERY REPORTED IN (2017) 392 ITR 4 (BOM) HAS HELD THA T WHERE INITIATION OF PENALTY IS ONE LIMB AND THE LEVY OF PENALTY IS ON OTHER LIMB, THEN IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO THE ASSESSEE, THERE IS NO MERIT IN LEVY OF PENALTY. 6. CONSIDERING THE FACTS OF THE PRESENT CASE IN THE LIGHT O F THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY (SUPRA), WE ARE OF THE VIEW THAT IN THE PRESENT CASE, THE BASIC CONDITION FOR LEVY OF PENALTY HAS NOT BEEN FULFILLED AND THAT THE PENALTY ORDER SUFFERS FROM NON-EXERCISING O F 5 JURISDICTION POWER OF AO AND THEREFORE PENALTY ORDER CANN OT BE UPHELD. WE ACCORDINGLY SET ASIDE THE PENALTY ORDER PAS SED BY AO. THUS, THE GROUNDS OF ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 3 RD DAY OF SEPTEMBER, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 3 RD SEPTEMBER, 2019. YAMINI !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-1, NASHIK. PR.CIT-1, NASHIK. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.