Kalate Tushar, Pune V. Income-tax Officer,

ITA 759/PUN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7663 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 20-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , ! , ' # BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO. 759/PUN/2016 '% & '& / ASSESSMENT YEAR : 2011-12 SHRI TUSHAR ATMARAM KALATE S. NO. 165, WAKAD, MULSHI, PUNE-411 057 PAN : AKDPK9441Q ....... / APPELLANT (% / V/S. THE INCOME TAX OFFICER, WARD 4(6), PUNE. / RESPONDENT ASSESSEE BY : SHRI SHARAD SHAH REVENUE BY : SHRI ACHAL SHARMA / DATE OF HEARING : 12.04.2018 / DATE OF PRONOUNCEMENT : 18.04.2018 ) / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS)-3, PUNE DATED 01.01.2016 FOR THE ASS ESSMENT YEAR 2011-12 CONFIRMING LEVY OF PENALTY U/S. 271(1)(C) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2 ITA NO.759 /PUN/2016 A.Y.2011-12 2. SHRI SHARAD SHAH APPEARING ON BEHALF OF ASSESSEE SUBM ITTED THAT THERE IS ELEMENT OF VAGUENESS IN RECORDING OF SATISFACTION FOR LEVYING PENALTY U/S. 271(1)(C) OF THE ACT. DURING THE COURSE OF SCRUTINY ASSESSMENT, TWO ADDITIONS WERE MADE I.E. ADDITION OF RS 91,00,000/-ON ACCOUNT OF UNEXPLAINED CREDIT S U/S. 68 OF THE ACT AND ADDITION OF RS.2,50,000/- AS ASSESSING OFFICER WAS NO T CONVINCED WITH THE GENUINENESS OF TRANSACTION IN RESPECT OF AGRICULTURA L LAND. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT IN RESPECT OF BOTH THE ADDITIONS. THE ASSESSING OFFICER WHILE RECORDING SATISFAC TION MENTIONED BOTH THE LIMBS OF SECTION 271(1)(C) OF THE ACT I.E. CONCEALMENT OF INC OME/ FURNISHING INACCURATE PARTICULARS OF INCOME. THEREAFTER, AT THE TIME OF LEVYING PENALTY, THE ASSESSING OFFICER LEVIED PENALTY ON THE CHARGE OF FURNISHING INACCURAT E PARTICULARS OF INCOME ALONE. THUS, THE ASSESSING OFFICER WAS NOT CLEAR IN HIS MIND AT THE TIME OF RECORDING SATISFACTION AS TO UNDER WHICH LIMB OF SECTION 2 71(1)(C) OF THE ACT, PENALTY IS TO BE LEVIED. THE MANNER IN WHICH SATISFACTION HAS BEEN RECORDED CLEARLY REFLECTS AMBIGUITY IN THE MIND OF ASSESSING OFFICER. EV EN, AT THE TIME OF ISSUING NOTICE U/S.274 R.W.S. 271(1) (C) OF THE ACT, IRRELEVANT LIM B IN THE PERFORMA NOTICE WAS NOT STRUCK OFF BY THE ASSESSING OFFICER. IN THE NOTICE DATED 24.03.2014, AGAIN BOTH THE LIMBS OF SECTION 271(1)(C) OF THE ACT I.E. CONCEALMENT OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE MENTIONED. 2.1 THE LD. AR FURTHER SUBMITTED THAT IN THE DECISIONS REN DERED IN THE CASE OF CIT VS. SAMSON PERINCHERY REPORTED AS 392 ITR 4 (BOM.) AND CIT VS. MANJUNATHA COTTON & GINNING FACTORY REPORTED AS 359 I TR 565 (KAR.), THE HON'BLE HIGH COURT HAVE HELD THAT WHERE SATISFACTION HAS NOT BEEN PROPERLY RECORDED AND THE EXACT CHARGE UNDER WHICH PENALTY IS T O BE LEVIED, IS NOT COMMUNICATED TO THE ASSESSEE, PENALTY PROCEEDINGS ARE LIABLE TO BE S ET ASIDE. 3. ON THE OTHER HAND, SHRI ACHAL SHARMA REPRESENTING TH E DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND THE PENALTY ORDER. THE LD. DR 3 ITA NO.759 /PUN/2016 A.Y.2011-12 SUBMITTED THAT ASSESSING OFFICER AT THE TIME OF PASSING ORD ER LEVYING PENALTY U/S. 271(1)(C) OF THE ACT HAS MENTIONED ONLY ONE CHARGE I.E. FUR NISHING INACCURATE PARTICULARS OF INCOME. THUS, THERE WAS NO AMBIGUITY IN THE M IND OF ASSESSING OFFICER. THE LD. DR PRAYED FOR REJECTING THIS TECHNICAL GROU ND RAISED BY THE ASSESSEE. 4. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERU SED. THE ASSESSEE HAS CHALLENGED THE PENALTY ORDER ON THE LEGAL ISSUE OF AM BIGUITY IN RECORDING OF SATISFACTION. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THA T PENALTY PROCEEDINGS HAVE BEEN INITIATED FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME IN RESPECT OF BOTH THE ADDITIONS. THE ASSESSING OFFICER HAS RECORDED SATISFACTION FOR INITIATING PENALTY PROCEEDINGS IN RE SPECT OF THE ADDITIONS SEPARATELY IN AN IDENTICAL MANNER. THE RELEVANT EXTRACT O F THE ASSESSMENT ORDER WHEREBY THE ASSESSING OFFICER RECORDED SATISFACTION READS AS UNDER : RECORDING OF SATISFACTION QUA ADDITION OF RS.91,00,000/-. 5. PENALTY PROCEEDINGS ARE INITIATED FOR CONCEALME NT OF INCOME/FURNISHING IN ACCURATE PARTICULARS OF INCOME. RECORDING OF SATISFACTION QUA ADDITION OF RS.2,50,000/-. 7. PENALTY PROCEEDINGS ARE INITIATED FOR CONCEALMEN T OF INCOME/FURNISHING IN ACCURATE PARTICULARS OF INCOME. WE OBSERVE THAT WHILE PASSING ORDER LEVYING PENALTY U/S. 271(1)(C) OF THE ACT, PENALTY HAS BEEN LEVIED IN RESPECT OF BOTH THE ADDITIO NS FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE RELEVANT EXTRACT OF T HE PENALTY ORDER READS AS UNDER: 4 I AM SATISFIED THAT THE ASSESSEE HAS FURNISHE D INACCURATE PARTICULARS OF HIS INCOME TO THE EXTENT OF RS.91,00 ,000/-. 5. XXXXXXXXXXXXXXX 6.. I AM SATISFIED THAT THE ASSESSEE HAS FURNISH ED INACCURATE PARTICULARS OF HIS INCOME TO THE EXTENT OF RS.2,50, 000/-. 4 ITA NO.759 /PUN/2016 A.Y.2011-12 5. AN EXAMINATION OF THE ASSESSMENT ORDER AND PENALTY O RDER REVEAL THAT THERE WAS AMBIGUITY IN THE MIND OF ASSESSING OFFICER AT THE TIME OF RECORDING SATISFACTION FOR INITIATING PENALTY PROCEEDINGS. THE ASSESSING OFFICER WHILE RECORDING SATISFACTION WAS REQUIRED TO SPECIFY EXACT CHARGE UND ER SECTION 271(1)(C) OF THE ACT FOR WHICH PENALTY PROCEEDINGS WERE TO BE INITIAT ED. VAGUENESS IN THE MIND OF ASSESSING OFFICER IN RECORDING SATISFACTION FOR INITIATING PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT IS APPARENT WRIT LARGE . HENCE, PENALTY PROCEEDINGS ARE LIABLE TO BE SET ASIDE. WE ORDER AND DIRECT ACCORDING LY. 6. IN THE RESULT, THE IMPUGNED ORDER IS SET ASIDE AND AP PEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 18 TH DAY OF APRIL, 2018 SD/- SD/- ( . / D. KARUNAKARA RAO ) ( ! /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 18 TH APRIL, 2018 SB ) * +',- . ', / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-3, PUNE. 4. THE PR. CIT-2, PUNE. 5. %&' () , * () , +,- , / DR, ITAT, A BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY // *2 / BY ORDER, 3 (- / PRIVATE SECRETARY * () , / ITAT, PUNE.