KALPANA SUNIL RAIKWAR, NAVI MUMBAI V. ITO 22(3)(4), NAVI MUMBAI

ITA 672/MUM/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0526 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 29-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO. 672/MUM/2014 (ASSESSMENT YEAR 2008-09) KALPANA SUNIL RAIKWAR, FLAT NO.302, SIMRAN PLAZA, PLOT NO.144, SECTOR-44, NERUL, NAVI MUMBAI 400 706 PAN:AKKPRO0957K ...... APPELLANT VS. THE ITO-22(3)(4), ROOM NO.310, 3 RD FLOOR, TOWER NO.6, VASHI STATION COMPLEX, VASHI, NAVI MUMBAI. .... RESPONDENT APPELLANT BY : SHRI K.GOPAL & MS NEHA PARAN JPE RESPONDENT BY : SHRI RAJESH KUMAR YADAV DATE OF HEARING : 01/11/2017 DATE OF PRONOUNCEMENT : 30/01/2018 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAI NING TO ASSESSMENT YEAR 2008-09 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-7, MUMBAI DATED 28/11/2013, WHICH IN TURN ARISES OUT OF AN ORDER P ASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 18/05/2011. 2 ITA NO. 672/MUM/2014 (ASSESSMENT YEAR 2008-09) 2. IN THIS APPEAL, THE SOLITARY GRIEVANCE OF THE AS SESSEE IS AGAINST THE ORDER OF THE CIT(A) IN SUSTAINING PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS.7,50,4 00/-. 3. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE APP ELLANT IS AN INDIVIDUAL WHO FILED A RETURN OF INCOME FOR ASSESSMENT YEAR 2008- 09 DECLARING AN INCOME OF RS.1,44,145/-, WHICH WAS PICKED UP FOR SCRUTINY ASS ESSMENT, WHICH WAS FINALIZED ON 12/11/2010 UNDER SECTION 143(3) OF THE ACT WHEREBY THE TOTAL INCOME WAS ASSESSED AT RS.23,89,150/-. THE DIFFERE NCE BETWEEN THE ASSESSED AND THE RETURNED INCOME COMPRISED OF AN ELEMENT OF RS.22,45,000/-, WHICH REPRESENTED AN ADDITION MADE BY THE ASSESSING OFFIC ER BY TREATING VARIOUS LOANS RECEIVED BY THE ASSESSEE TOTALLING TO RS.22,4 5,000/- AS BEING UNEXPLAINED WITHIN THE MEANING OF SECTION 68 OF THE ACT . NOTA BLY, ASSESSEE WAS FOUND TO HAVE INVESTED RS.30,10,000/- IN THE IMMOVABLE PROPE RTY, RS.2,50,000/- IN MUTUAL FUNDS, AND RS.2,00,000/- IN BANK ACCOUNT. ON BEING ASKED TO EXPLAIN THE SOURCE OF SUCH INVESTMENT ASSESSEE, INTER-ALIA STATED THAT LOANS AMOUNTING TO RS.22,45,000/- WERE RAISED FROM FRIENDS AND REL ATIVES. THE ASSESSING OFFICER RECORDS THAT HAVING REGARD TO THE DETAILS FURNISHED , ASSESSEE COULD NOT PRODUCE THE CREDITORS AND, THEREFORE, HE TREATED THE LOAN A MOUNT OF RS.22,45,000/- AS UNEXPLAINED UNDER SECTION 68 OF THE ACT. SUBSEQUEN TLY, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT BEING 100% OF THE TAX SOUGHT TO BE EVADED QUA THE AFORESAID ADDITION. THUS, A P ENALTY OF RS.7,50,400/- WAS LEVIED, WHICH HAS BEEN AFFIRMED BY THE CIT(A) ALSO. AGAINST SUCH A LEVY, ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, THE ASSESSEE THE ASSESSEE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT AT THE TIME OF HEARING A SHORT POINT WA S ADVERTED TO, WHICH WAS BASED ON THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF 3 ITA NO. 672/MUM/2014 (ASSESSMENT YEAR 2008-09) CIT VS. SAMSON PERINCHERY IN INCOME TAX APPEAL NOS. 1154 OF 2014,953 OF 2014,1097 OF 2014 AND 1226 OF 2014 DATED 5 TH JANUARY, 2017. FIRSTLY, THE LD.REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE FOLLOWING DISCUSSION IN THE ASSESSMENT ORDER TO POINT OUT THAT THE PENALTY PROC EEDINGS WERE INITIATED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF TH E ACT ON ACCOUNT OF ASSESSEE HAVING FURNISHED INACCURATE PARTICULARS OF INCOME BY CLAIMING LOANS WHICH COULD NOT BE PROVED, THE A SSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME MAKING THE ASSESSEE LIABLE TO PENALTY UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T.ACT 1961. THEREFORE, PENALTY PROCEEDINGS ARE INITIATED FOR DEFAULT U/S.271(1)(C) OF THE ACT. 4.1 SECONDLY, OUR ATTENTION HAS BEEN INVITED TO THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 274 R.W.S. 271 OF THE ACT DATED 12/ 11/2010, WHERE THE INAPPLICABLE LIMB OF SECTION 271(1)(C) OF THE ACT H AS NOT BEEN STUCK OFF. IT IS NOT CLEAR THAT THE NOTICE IS ISSUED FOR CONCEALMENT OF THE PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME UND ER SECTION 271(1)(C) OF THE ACT. THIRDLY, OUR ATTENTION HAS BEEN DRAWN TO THE IMPUGNED PENALTY ORDER PASSED BY THE ASSESSING OFFICER WHEREBY THE PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF THE PARTICULARS OF INCOME. IN THIS CONTEXT, FOLLOWING CONCLUSION OF THE ASSESSING OFFICER IN THE PENALTY ORDER HAS B EEN REFERRED TO: I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED TH E PARTICULARS OF INCOME OF HIS INCOME IN THE RETURN OF INCOME FILED. I, THEREFORE , HOLD THAT THE ASSESSEE HAS COMMITTED A DEFAULT WITHIN THE MEANING OF SECTION 2 71(1)(C) OF THE INCOME-TAX ACT,1961 MAKING HIM LIABLE TO PRESCRIBED PENALTY. 4.2 ON THE BASIS OF THE AFORESAID FACTUAL MATRIX, I T IS POINTED OUT THAT THE SHOW CAUSE NOTICE ISSUED IS AMBIGUOUS AND, THEREFOR E, IT IS NOT SUSTAINABLE AND FOR THAT MATTER RELIANCE HAS BEEN PLACED ON THE DEC ISION OF THE MUMBAI TRIBUNAL IN THE CASE OF M/S.ORBIT ENTERPRISES VS. I TO, IN ITA NOS.1596 & 1597/MUM/2014 DATED 01/09/2017. FURTHER, IT IS PO INTED OUT THAT WHEREAS 4 ITA NO. 672/MUM/2014 (ASSESSMENT YEAR 2008-09) PENALTY PROCEEDINGS HAVE BEEN INITIATED ON THE GROU ND OF FURNISHING OF INACCURATE PARTICULARS OF INCOME , WHEREAS IT HAS B EEN LEVIED IN THE PENALTY ORDER ON THE GROUND OF CONCEALMENT OF PARTICULARS O F INCOME. JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SAMSON PE RINCHERY (SUPRA) HAS BEEN RELIED UPON TO SAY THAT THE PENALTY COULD HAVE BE EN LEVIED ONLY ON THE GROUND ON WHICH IT HAS BEEN INITIATED. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE HAS NOT CONTESTED THE FACTUAL MATRIX, BUT POINTED OUT THAT THE PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE DULY INITIATED I N THE ASSESSMENT ORDER AND THE MISTAKE SOUGHT TO BE POINTED OUT BY THE ASSESSI NG OFFICER IS NOT FATAL FOR THE LEVY OF PENALTY. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN THE PRESENT CASE, IT IS QUITE CLEAR THAT WHILE ON ONE HAND, IN THE AS SESSMENT ORDER, THE INITIATION OF PENALTY IS ONLY ONE LIMB I.E. FOR FURNISHING O F INACCURATE PARTICULARS OF INCOME, WHEREAS WHILE IMPOSING PENALTY, THE SAME HA S BEEN IMPOSED ON THE OTHER LIMB I.E. FOR CONCEALMENT OF INCOME. THE SAI D INFIRMITY CLEARLY RENDERS THE PENALTY ORDER AS UNTENABLE, HAVING REGARD TO TH E RATIO OF THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF SAMSON PE RINCHERY(SUPRA). IN FACT, HON'BLE BOMBAY HIGH COURT HAS TAKEN NOTE OF THE ARG UMENTS OF THE REVENUE THAT THERE IS NO DIFFERENCE BETWEEN INACCURATE PART ICULARS OF INCOME AND CONCEALMENT OF INCOME. THE SAID ARGUMENT HAS BEEN REPELLED BY THE HON'BLE BOMBAY HIGH COURT BY REFERRING TO THE JUDGMENT OF T HE HON'BLE SUPREME COURT IN THE CASE OF ASHOK PAI VS. CIT 292 ITR 11(SC), WHEREIN IT IS OBSERVED THAT CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME UNDER SECTION 271(1)(C) OF THE ACT, CARRY DIFFERENT CONNOTATIONS. THUS, IN THE FACE OF SUCH LEGAL POSITION, THE PENALTY ORDER PASS ED BY THE ASSESSING OFFICER IS 5 ITA NO. 672/MUM/2014 (ASSESSMENT YEAR 2008-09) CLEARLY UNTENABLE SINCE IT COULD HAVE BEEN MADE ONL Y ON THE GROUND ON WHICH THE PENALTY PROCEEDINGS WERE INITIATED IN THE ASSES SMENT ORDER AND NOT ON THE OTHER LIMB OF SECTION 271(1)(C) OF THE ACT . THUS, BY ADVERTING TO THE AFORESAID SHORT POINT , WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY OF RS. 7,50,400/-IMPO SED UNDER SECTION 271(1)(C) OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED , AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 30/01/2018 . SD/- SD/- (RAM LAL NEGI) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 03/01/2018 VM , SR. PS 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// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI