Savita Mukeshkumr Mehta L/H of deceased Mukeshkumar Pukhraj Mehta, Pune V. Income-tax Officer, Ward - 8 (3), Pune

ITA 691/PUN/2019

AI Insights

The case involves Savita Mumeshkumar Mehta, the legal heir of deceased Mukeshkumar Pukhraj Mehta, who appealed against the order of the Commissioner of Income Tax (Appeals)-13, Pune, confirming the penalty imposed by the AO for concealment of income. The AO had initially recorded satisfaction for both concealment of income and furnishing of inaccurate particulars of income but imposed the penalty only for concealment of income. The CIT(A) later changed the charge to furnishing of inaccurate particulars of income. The Tribunal noted that the Sales Tax Department had unearthed bogus purchases and hawala transactions independently, and there was no information provided by the assessee during the assessment proceedings. The Tribunal referenced the decision of the Hon'ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. Samson Perinchery, which held that a penalty order cannot be made on a fresh ground of which the assessee has no notice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132839 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-01-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 29-04-2019
• Other Referred Cases: Commissioner of Income Tax Vs. Samson Perinchery
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 143(3)

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.691/PUN/2019 धििाारण वर्ा / Assessment Year : 2010-11 Savita Mumeshkumar Mehta, Legal heir of deceased Mukeshkumar Pukhraj Mehta, Gala No. 10B/11B, Goyal Industrial Co. Society, J-514, MIDC, Bhosari, Pune – 411026 PAN : AJQPM1241C .......अपीलार्थी / Appellant बिाम / V/s. The Income Tax Officer, Ward – 8(3), Pune ......प्रत्यर्थी / Respondent Assessee by : N O N E Revenue by : Shri Ramnath P. Murkunde सुनवाई की तारीख / Date of Hearing : 11-01-2023 घोषणा की तारीख / Date of Pronouncement : 12-01-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 23-07-2018 passed by the Commissioner of Income Tax (Appeals)-13, Pune [‘CIT(A)’] for assessment year 2010-11. 2. We find no representation on behalf of the assessee nor any application filed seeking adjournment. Thus, the assessee called absent 2 ITA No.691/PUN/2019, A.Y. 2010-11 and set ex-parte. Therefore, we proceed to dispose of the appeal by hearing the ld. DR and perusing the material available on record. 3. We find that this appeal was filed with a delay of 200 days. To condone the said delay, the assessee filed notarized affidavit dated 17-11- 2022 explaining the reasons for delay. On perusal of the same upon hearing ld. DR, the delay of 200 days is condoned. 4. The assessee raised four grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(A) justified in confirming the penalty imposed by the AO u/s. 271(1)(c) of the Act. 5. We note that the AO recorded its satisfaction that the assessee has furnished inaccurate particulars of income and concealment of income vide assessment order dated 15-03-2013 u/s. 143(3) of the Act. In pursuance of the said satisfaction the AO initiated penalty proceedings u/s. 271(1)(c) of the Act and imposed penalty for concealment of income. The CIT(A) confirmed the order of AO in imposing penalty only on the charge furnishing of inaccurate particulars of income. Therefore, it is clear that the AO initiated penalty proceedings for both the charges, but however, imposed penalty only for concealment of income. The CIT(A) changed the charge to furnishing of inaccurate particulars of income against the concealment of income. We note that the ld. DR vehemently submitted that the AO made addition on account of bogus purchases which was confirmed by the CIT(A) and Tribunal also in quantum proceedings. Admittedly, we note that this bogus purchases were unearthed by the Sales Tax Department, Government of Maharashtra regarding bogus purchases and hawala dealers and there was no information as such furnished by the assessee regarding this alleged hawala transactions during the course of assessment proceedings. The fact remains admitted 3 ITA No.691/PUN/2019, A.Y. 2010-11 that the assessee did not file any information in this regard before the authorities below during the course of assessment proceedings. It is only the Sales Tax Department unearthed the hawala transactions in their independent investigation. When there is no furnishing of information furnishing of inaccurate particulars of income by the assessee does not arise and the penalty as confirmed by the CIT(A) under the charge of inaccurate particulars of income is not justified as against the penalty imposed by the AO for the charge of concealment of income. 6. A bare perusal of satisfaction recorded by the Assessing Officer during assessment proceedings shows that the Assessing Officer was not clear; Whether the penalty proceedings u/s. 271(1)(c) are to be initiated on the charge of concealment of income or furnishing of inaccurate particulars of income. In para 4 of the assessment order the Assessing Officer has mentioned both the charges. 7. The Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. Samson Perinchery reported in 392 ITR 4 (Bom.) has held that where satisfaction has been recorded on one ground and penalty is levied on another, such penalty order bad in law. The relevant extract of the order of Hon’ble High Court reads as under : “6. The above submission on the part of the Revenue is in the face of the decision of the Supreme Court in Ashok Pai v/s. CIT 292 ITR 11 [relied upon in Manjunath Cotton & Ginning Factory (supra)] – wherein it is observed that concealment of income and furnishing of inaccurate particulars of income in Section 271(1)(c) of the Act, carry different meanings/ connotations. 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 other 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.” 4 ITA No.691/PUN/2019, A.Y. 2010-11 8. In the light of the above, we note that non-mentioning of specific charge would lead to ambiguity in recording of satisfaction for initiating penalty proceedings. In the present case, as discussed above, the AO recorded satisfaction about both the charges, i.e. furnishing of inaccurate particulars of income and concealment of income, but levied penalty on concealment of income and the CIT(A) altogether changed it to furnishing of inaccurate particulars of income. As it appears, findings of both the authorities below contrary to each other. Therefore, in our opinion, the findings of both the authorities below would render penalty order bad in law and as such the same is liable to be quashed. Thus, we hold the order of CIT(A) is not justified and the penalty imposed by the AO is quashed. Thus, grounds raised by the assessee are allowed. 9. In the result, appeal of assessee is allowed. Order pronounced in the open court on 12 th January, 2023. Sd/- Sd/- (Inturi Rama Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिनाांक / Dated : 12 th January, 2023. रदव आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A)-13, Pune 4. The Pr. CIT-5, Pune 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आिेशानुसार / BY ORDER, वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune