Deepali Abhijit Jagtap, Pune V. Income-tax Officer,

ITA 756/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9446 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 20-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Keywords: Salary income
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.756/PUN/2016 / ASSESSMENT YEAR : 2009-10 DEEPALI ABHIJIT JAGTAP, 19, INDU BUILDING, CHITTAVIHARI SOCIETY, DHANKAWADI, PUNE 43. PAN : ADIPJ7070L. . / APPELLANT V/S INCOME TAX OFFICER, WARD 7(2), PUNE. . / RESPONDENT ASSESSEE BY : NONE. REVENUE BY : SHRI VIVEK AGGARWAL. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A)-4, PUNE DT.25.01.2016 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 AN INDIVIDUAL STATED TO BE HAVING INCOME FR OM SALARY AND OTHER SOURCES. ASSESSEE FILED HER RETURN OF IN COME FOR A.Y. 2009-10 ON 31.07.2009 DECLARING TOTAL INCOME OF RS.10,74,90 0/-. / DATE OF HEARING : 25.01.2018 / DATE OF PRONOUNCEMENT: 25.01.2018 2 THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSES SMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.15.11.2011 AND T HE TOTAL INCOME WAS DETERMINED AT RS.13,02,830/-, INTER-ALIA BY MAKIN G ADDITION TO SALARY FROM BLADELOGIC SOFTWARE SERVICES PVT. LT D AND DIFFERENCE OF RS.11,013/- ON ACCOUNT OF RECONCILIATION AS PER 26AS AND FORM-16. ON THE AFORESAID DISALLOWANCES / ADDITIONS, A O VIDE ORDER DT.10.05.2012 LEVIED PENALTY OF RS.71,249/- U/S 271(1) (C) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED T HE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.25.01.2016 (IN APPEAL NO.PN/CIT(A )- 4/ITO WARD 7(2), PUNE/47/2012-13/357) CONFIRMED THE ACTIO N OF AO OF LEVY OF PENALTY. AGGRIEVED BY THE ORDER OF LD.CIT(A), AS SESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) PUNE ER RED IN CONFORMING THE PENALTY LEVIED BY THE ASSESSING OFFI CER OF RS . 71,249/ - U/S 271(1)(C) IN COMPLETE DISREGARD TO THE WORKING FILED BY THE APPELLANT SHOWING THAT THERE WAS NO TAX WHICH WAS S OUGHT TO BE EVADED AS NOT ONLY SALARY INCOME RS.2,09 , 617/- BUT ALSO TDS OF RS.62965/- @ 30% ON THAT INCOME WAS NOT CONSIDERED IN THE RETURN OF INCOME, AND WHICH CLEARLY ESTABLISHES CONDUCT AND E XPLANATIONS OF THE APPELLANT TO BE BONAFIDE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) PUNE ER RED IN CONFORMING THE PENALTY LEVIED BY THE ASSESSING OFFI CER OF RS.71,249/- U/S 271(1)(C) IN COMPLETE . DISREGARD OF THE DECISION OF HON'BLE ITAT PUNE IN CASE OF KANBAY SOFTWARE INDIA PVT. LTD. VS. DCIT [2009-(122)- TTJ -0721 -TPUN . WHERE IT HELD THAT PENALTY IS NOT LEVIABLE WHEN IT IS ESTABLISHED THAT THE TAXPAYER'S CONDUCT AND EXPLANA TION IS BONA FIDE IN THE PENALTY PROCEEDINGS BEFORE THE ASSESSING OFF ICER OR CIT(A). THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) PUNE ER RED , IN HOLDING THAT EXPLANATION OFFERED BY THE APPELLANT IS NOT BO NAFIDE WITHOUT ' DISPUTING . ANY . OF THE EXPLANATIONS OFFERED BY THE APPELLANT AND HOLDING ', THAT THE ACT OF OMISSION, COMMISSION OR CONTUMACIOU S CONDUCT OF THE ASSESSEE HAS TO BE VIEWED FROM THE R ETURN OF INCOME AND HENCE THE APPELLANT IS HIT BY THE MISCHIEF OF DEEMING PROVISION UNDER EXPLANATION-1 TO SEC 271(1)(C), WHICH IS INC OMPLETE CONTRADICTION TO THE DECISION OF HONBLE ITAT, PUNE . 3 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E - AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED I N INDIRECTLY HOLDING THAT THERE IS NO PLACE EVEN FOR GENUINE ERR ORS AND OMISSION IN FILING OF RETURN OF INCOME AND HENCE LEVY OF PENALT Y IS A MUST U/S 271(1)(C) IN ALL SUCH CASES WHERE ADDITIONS ARE MAD E IN ASSESSMENT ORDERS ON ACCOUNT OF SUCH ERRORS AND OMISSIONS, WHICH IS CONTRARY TO THE PROVISIONS OF SEC 271(1)(C) AND ALSO CONTRARY T O , THE INTENDMENT OF THE LEGISLATURE AND TO THE RATIO OF RULING THAT QUA NTUM AND PENALTY PROCEEDINGS ARE DIFFERENT AS HELD BY HON'BLE MUMBAI ITAT IN THE CASE OF ACIT VS. VIP INDUSTRIES LTD. [2009-(122)-TTJ -02 89 - TBOM] 3. ON THE DATE OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED. WE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIAL ON RECORD AND AFTER HEARING THE LD.D.R. 4. BEFORE US LD.D.R. SUPPORTED THE ORDER OF AO. 5. WE HAVE HEARD LD.D.R. AND PERUSED THE MATERIAL ON RECO RD. IN THE PRESENT CASE WE FIND THAT IN THE ASSESSMENT ORDER AO HAD LEVIED PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME A ND CONCEALING THE INCOME. IN THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT, IT IS SEEN THAT THERE IS NO MENTION AS TO ON WH ICH LIMB THE PENALTY U/S 271(1)(C) OF THE ACT HAS BEEN LEVIED I.E., WHETHER FOR CONCEALING THE INCOME OR FOR FILING INACCURATE PARTICULARS OF INCOME. 6. IN THE PRESENT CASE, PENALTY HAS BEEN LEVIED FOR CONCE ALING THE PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE PERUSAL OF ASSESSMENT ORDER PASSED U/S 143 (3) OF THE ACT REVEALS THAT AO HAD INITIATED PENALTY PROCEEDING BUT NO SATISFACTION WAS RECORDED. THEREAFTER IN THE PENALTY ORDE R PASSED U/S 271(1)(C) OF THE ACT, AO HAS LEVIED PENALTY BUT HAS NOT INDIC ATED HIS 4 SATISFACTION THAT WHETHER THE LEVY OF PENALTY IS FOR CONCEA LING THE INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS A SETTLED LAW THAT WHILE LEVYING PENALTY FOR CONCEALMENT, THE AO HAS TO RECORD SATISFACTION AND THEREAFTER COME TO A FINDING IN RES PECT OF ONE OF THE LIMBS, WHICH IS SPECIFIED UNDER SECTION 271(1)(C) OF THE AC T. THE FIRST STEP IS TO RECORD SATISFACTION WHILE COMPLETING THE ASSESSMENT AS TO WHETHER THE ASSESSEE HAD CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THEREAFTER, NOTIC E U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT IS TO BE ISSUED T O THE ASSESSEE. THE ASSESSING OFFICER THEREAFTER HAS TO LEVY PE NALTY UNDER SECTION 271(1)(C) OF THE ACT FOR NON-SATISFACTION OF EITHER OF THE LIMBS. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HAS T O COME TO A FINDING AS TO WHETHER THE ASSESSEE HAS CONCEALED IT S INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE HONBLE BOMB AY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY IN ITA NO.115 4 OF 2014 WITH OTHER ITA NOS.953 OF 2014, 1097 OF 2014 AND 1 226 OF 2014, VIDE JUDGMENT DATED 05.01.2017 HELD THAT WHERE INITIA TION 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 ASSESS EE, THERE IS NO MERIT IN LEVY OF PENALTY. 7. IN THE PRESENT CASE, AS NOTED HEREINABOVE, IT IS SEEN THAT THE AO HAS NOT RECORDED ANY SATISFACTION AND FURTHER LEVIED P ENALTY WITHOUT INDICATING THAT WHETHER THE PENALTY IS FOR CONCEA LMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. CONSIDERING THE AFORESAID FACTS IN THE LIGHT OF THE DECISION O F HONBLE BOMBAY HIGH COURT IN THE CASE OF SAMSON PERINCHERY (SUPR A), WE ARE 5 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 OF JURISDICTION POWER OF AO AND THEREFORE PENALTY ORD ER CANNOT BE UPHELD. WE ACCORDINGLY SET ASIDE THE PENALTY ORDER PASSE D BY AO. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 25 TH DAY OF JANUARY, 2018. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 25 TH JANUARY, 2018. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-4, PUNE. PR.CIT-3, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $+,-/ GUARD FILE. / BY ORDER // TRUE COPY // ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.