Mrs. Mandakini Dattatray Ranpise, Pune V. Assistant Commissioner of Income-tax,

ITA 76/PUN/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7292 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 18-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Assessee Lawyers: VIPIN GUJARATHI

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.76/PUN/2016 / ASSESSMENT YEAR : 2010-11 MRS. MANDAKINI DATTATRAY RANPISE, AKSHYA PRIYA, 34, KRANTIVEERY TATYA TOPE SOCIETY, WANAWORIE, PUNE 411 040 PAN : ACUPR5272P . /APPELLANT VS. ACIT, CENTRAL CIRCLE-2(2), PUNE . / RESPONDENT / APPELLANT BY : SHRI VIPIN GUJARATHI / RESPONDENT BY : SHRI MUKESH JHA / DATE OF HEARING : 02.11.2017 / DATE OF PRONOUNCEMENT: 03.11.2017 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A)-12, PUNE DATED 14-10-2015 FOR THE A.Y. 2010-11. 2 ASSESSEE RAISED 5 GROUNDS AND THEY REVOLVE AROUND THE SUSTAINABILITY OF THE PENALTY PROCEEDINGS IN THE LIGHT OF THE PROVISI ONS OF SECTION 271AAA OF THE ACT. 3. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND IS ENGAGED IN THE TRADING OF LIQUOR. THERE WAS SEARCH ACTION ON THE ASSESSEE U/S.132 OF THE ACT ON 18-11-2009. ASSESSEE FILED T HE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.69,53,850/-. AT THE E ND OF THE ASSESSMENT, THE ITA NO. 76/PUN/2016 MRS. MANDAKINI DATTATRAY RANPISE 2 RETURNED INCOME OF THE ASSESSEE HAS BEEN ACCEPTED B Y THE AO WITH INSIGNIFICANT ADDITION OF RS.16,016/- U/S.14A OF THE ACT. AO INI TIATED THE PENALTY PROCEEDINGS BY STATING THE FOLLOWING (PARA 5 OF THE ASSESSMENT ORDER) : 5. . . . . . . . . . HOWEVER, PENALTY PROCEEDINGS U/S.271AAA ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND CON CEALING INCOME. 4. PENALTY WAS LEVIED BY THE AO VIDE PENALTY ORDER DATED 22-06-2011 AS PER THE REASONS GIVEN HERE AS UNDER (PARA 6.3 OF THE PE NALTY ORDER) : 6.3. . . . . . . . . . . . . . . . . ON GOING THROUGH THE STATEMENT ABOVE, IT IS CLEAR THAT THE ASSESSEE IN THE STATEMENT RECORDED U/S.132(4) HAS NOT SUBSTANTIATED THE MANNER IN WHICH THE INCOME HAS BEEN DERIVED. THEREFORE THE ASSESSEE IS NOT SATISFYING THE EXCEPTION CLAUSE AS MENTIONED IN S. 271AAA (2) OF T HE IT ACT AND HENCE NOT ELIGIBLE FOR IMMUNITY. 5. FINALLY, THE AO LEVIED THE PENALTY OF RS.4,60,00 0/- FOR THE REASONS GIVEN IN HIS ORDER. THE SAME WAS CONFIRMED BY THE CIT(A) WITHOUT GETTING INTO THE LEGAL SUBMISSIONS RELATING TO IMPROPER SATISFACTIO N OF THE AO WHILE INITIATING THE PENALTY PROCEEDINGS DURING THE ASSESSMENT PROCEEDIN GS. 6. AGGRIEVED WITH THE ORDER OF CIT(A) THE ASSESSEE IN APPEAL BEFORE US. 7. DEVIATING FROM THE GROUNDS RAISED BY THE ASSESSE E IN THE APPEAL RELATING TO SPECIFYING AND SUBSTANTIATING THE MANNER IN WHIC H THE UNDISCLOSED INCOME WAS DERIVED FOR CLAIM OF IMMUNITY OR EXCEPTIONS FRO M THE RIGOURS OF THE PENALTY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS IS SUE OF INITIATING THE PENALTY FOR ONE REASON AND LEVY OF THE PENALTY FOR ANOTHER REASON REVEALS THE AMBIGUITY OR CONFUSION OR LACK OF UNDERSTANDIN G ABOUT THE PENAL PROVISIONS OF THE ACT BY THE AO. IN SUCH CASE, THE PENALTY PR OCEEDINGS ARE REQUIRED TO BE QUASHED. IN THIS REGARD, LD. COUNSEL FOR THE ASSES SEE BROUGHT OUR ATTENTION TO THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNA L IN THE CASE OF ACIT VS. SHRI VIKAS BAPURAO TAKAWANE IN ITA NO.2245/PUN/2014 ORDER DATED 26-07- ITA NO. 76/PUN/2016 MRS. MANDAKINI DATTATRAY RANPISE 3 2017 AND SUBMITTED THAT ON IDENTICAL GROUND THE PEN ALTY PROCEEDINGS WERE HELD UNSUSTAINABLE. HE ALSO SUBMITTED THAT THE NOTICE I SSUED U/S.274 R.W.S. 271AAA OF THE ACT (PAGE 1 OF THE PAPER BOOK) REFERS TO BOT H THE LIMBS OF CLAUSE (C) OF SECTION 271(1) IGNORING THE FACT THAT THE SAME ARE IRRELEVANT WHEN THE PENALTY PROCEEDINGS WERE TO BE FINALIZED U/S.271AAA OF THE ACT. HE ALSO RELIED ON THE FOLLOWING DECISIONS/JUDGMENTS : 1. PRL. CIT VS. MUKESHBHAI RAMANLAL PRAJAPATI TAX APPEAL NO.434/2017 ORDER DATED 24-07-2017 (GUJARAT HIGH COURT) 2. PRL. CIT VS. M/S. EMIRATES TECHNOLOGIES PVT. LTD . ITA 400/2017 ORDER DATED 18-07-2017 (DELHI HIGH COURT) 3. ACIT VS. EMIRATES TECHNOLOGIES PVT. LTD. ITA N O.476/DEL/2014 ORDER DATED 28-10-2016 (DELHI TRIBUNAL) 4. CIT VS. MAHENDRA C. SHAH 299 ITR 0305 5. CIT VS. RADHA KISHAN GOEL 278 ITR 0454 8. LD. DR FOR THE REVENUE ON THE OTHER HAND RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 9. ON HEARING BOTH THE PARTIES, WE ARE OF THE OPINI ON THAT THIS ISSUE RAISED BY THE ASSESSEE STANDS COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF ACIT VS. SHRI VIKAS BAPURAO TAKAWANE (SUPRA). FOR THE S AKE OF COMPLETENESS, THE RELEVANT OPERATIONAL PARAGRAPHS ARE REPRODUCED BELO W : 6. A BARE PERUSAL OF SECTION 271AAA SHOWS THAT THE PENALTY IS LEVIED IN RESPECT OF UNDISCLOSED INCOME. THE EXPRESSION UND ISCLOSED INCOME HAS BEEN DEFINED IN EXPLANATION TO SECTION 271AAA OF THE ACT . PENALTY U/S. 271AAA IS NOT LEVIED FOR CONCEALMENT OF INCOME AND/OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. A PERUSAL OF ASSESSMENT ORDER SHOWS THAT T HE ASSESSING OFFICER WHILE RECORDING SATISFACTION FOR LEVYING PENALTY U/S. 271 AAA HAS CATEGORICALLY STATED THAT THE PENALTY PROCEEDINGS ARE INITIATED FOR CONC EALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH US, IT IS EVIDENT THAT THE ASSESSING OFFICER WAS NOT CLEAR IN HIS MIND WHILE R ECORDING SATISFACTION WHETHER THE PENALTY IS TO BE LEVIED UNDER THE PROVISIONS OF SECTION 271(1)(C) OR THE PROVISIONS OF SECTION 271AAA OF THE ACT. SIMILARLY , IN THE ORDER LEVYING PENALTY U/S. 271AAA, THE ASSESSING OFFICER LEVIED PENALTY F OR CONCEALMENT OF INCOME. THERE IS NO REFERENCE OF UNDISCLOSED INCOME EITHE R IN THE ASSESSMENT ORDER OR THE ORDER LEVYING PENALTY U/S. 271AAA OF THE ACT. THE UNDISCLOSED INCOME AS DEFINED IN EXPLANATION TO SECTION 271AAA MEANS ANY INCOME REPRESENTED EITHER WHOLLY OR PARTLY BY ANY MONEY, BULLION, JEWELRY OR OTHER VALUABLE ARTICLE OR THINGS OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHE R DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF SEARCH WHICH HAS NOT BEEN RE CORDED IN THE BOOKS OF ACCOUNT OR DISCLOSED TO THE DESIGNATED INCOME TAX A UTHORITY BEFORE THE DATE OF SEARCH. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS FAILED TO SPECIFY THE ITA NO. 76/PUN/2016 MRS. MANDAKINI DATTATRAY RANPISE 4 UNDISCLOSED INCOME UNEARTHED DURING THE SEARCH AS ENVISAGED UNDER THE PROVISIONS OF SECTION 271AAA OF THE ACT. 7. THE MANNER IN WHICH THE ENTIRE PENALTY PROCEEDIN GS ARE CONDUCTED RIGHT FROM INITIATION TO THE ORDER LEVYING PENALTY, INCLU DING ISSUANCE OF NOTICE SHOWS THAT THERE WAS AMBIGUITY AND VAGUENESS IN THE MIND OF ASSESSING OFFICER WITH REGARD TO THE CHARGE AND THE PROVISIONS UNDER WHICH PENALTY IS TO BE LEVIED. AS A RESULT, THE NOTICE LEVYING PENALTY IS ALSO AMBIGU OUS AND HENCE BAD IN LAW. WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER DELETING PENALTY U/S. 271AAA OF THE ACT. WE CONCUR WITH THE REASONS GIVE N BY COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE PENALTY. THE IMPUGNED ORDER IS UPHELD AND THE APPEAL OF THE REVENUE IS DISMISSED. 10. FROM THE ABOVE EXTRACTED PORTION OF THE ORDER O F THE TRIBUNAL, WE FIND THE ABOVE ORDER IS UNAMBIGUOUS IN CONCLUDING THAT T HE PENALTY PROCEEDINGS ARE UNSUSTAINABLE WHEN THE INITIATION OF THE PENALTY PR OCEEDINGS DO NOT REFER TO THE LIMBS MENTIONED IN CLAUSE (C) OF SECTION 271(1) OF THE ACT AND THE PENALTY WAS FINALLY LEVIED FOR FAILURE OF THE AO TO SPECIFY THE UNDISCLOSED INCOME OF THE ASSESSEE U/S.271AAA OF THE ACT. 11. COMING TO THE GROUNDS RAISED BY THE ASSESSEE RE LATING TO NON-FULFILMENT OF THE CONDITIONS SPECIFIED IN SECTION 271AAA(2) OF THE ACT, WE ARE OF THE OPINION THAT ADJUDICATION OF THIS ISSUE BECOMES AN ACADEMIC EXERCISE IN VIEW OF THE RELIEF GRANTED ON THE ISSUE OF SATISFACTION W HILE INITIATING THE PENALTY PROCEEDINGS AND AMBIGUITY IN THE MIND OF THE AO. ACCORDINGLY, RELEVANT GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE DI SMISSED AS ACADEMIC. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 03 RD DAY OF NOVEMBER, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 03 RD NOVEMBER, 2017. ITA NO. 76/PUN/2016 MRS. MANDAKINI DATTATRAY RANPISE 5 / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE THE APPELLANT THE RESPONDENT THE CIT(A) - 1 2, PUNE CIT - 1 2, PUNE , , B BENCH PUNE; / GUARD FILE.