LATE ANANDA RAJGOPALAN, MUMBAI V. ITO 24 (1)(2), MUMBA

ITA 8030/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3905 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 30-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Keywords: Initiation of penalty proceedings; TDS; Set aside; Capital Gains
• Section: 271(1)(c); 143(3); 143(2); 54

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 8030/MUM/2019 (ASSESSMENT YEAR 2013-14) LATE ANANDA RAJGOPALAN A/26, MAHARAJA SURAJMAL HOUSING SOCIETY, FOUR BUNGLOW, ANDHERI-WEST MUMBAI-400 053. PAN : AAEPR0294B VS. ITO-24(1)(2) 6 TH FLOOR PIRAMAL CHAMBER LALBAUG, PAREL MUMBAI-12. (APPELLANT) (RESPONDENT) ASSESSEE BY NONE DEPARTMENT BY SHRI BRAJENDRA KUMAR DATE OF HEARING 03 .0 8 .2021 DATE OF PRONOUNCEMENT 05.10.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A) DATED 22.11.2019 PERTAINING TO ASSESSMENT YE AR (A.Y.) 2013-14. 2. GROUNDS OF APPEAL READ AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY U/S.271(L)(C) OF RS.10,46,500/- IGNORING THE FACT, THAT THE PENALTY NOTICE WAS DEFECTIV E AND THE PROCEEDINGS WAS NULL AND VOID. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY U/S. 271(1)(C), IGNO RING THE FACT THAT THE APPELLANT HAD A GENUINE AND BONAFIDE REASON FOR THE M ISTAKES MADE WHILE FILING THE RETURN. 3. BRIEF FACTS LEADS TO THE LEVY OF PENALTY. IN THI S CASE THE ASSESSEE HAS FILED RETURN OF INCOME FOR AY 2013-14 ON 26.07.2013 DECLA RING TOTAL INCOME OF RS.6,65,810/-. THE CASE WAS SELECTED FOR SCRUTINY U NDER CASS AND STATUTORY NOTICE U/S. 143(2) WAS ISSUED ON 12.09.2014. THE AS SESSMENT WAS COMPLETED U/S. 143(3) ON 10.03.2016 DETERMINING THE TOTAL INC OME OF RS.38,80,330/-. WHILE PASSING THE ASSESSEE ORDER THE AO HAS MADE AD DITION OF RS.31,39,069/- LATE ANANDA RAJGOPALAN 2 ON ACCOUNT OF CAPITAL GAINS. FURTHER AS PER AIR DET AILS THE ASSESSEE HAS RECEIVED RS. 31,876/- & RS.109/- BUT NOT OFFERED TH E SAME FOR TAXATION, HENCE, THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. T HE PENALTY PROCEEDINGS U/S. 271(1)(C) WERE INITIATED FOR FURNISHING INACCU RATE PARTICULARS OF INCOME. A SHOW CAUSE NOTICE WAS ISSUED ON 18.07.2016 BY FIXIN G THE HEARING ON 17.08.2016 AND ASKING THE ASSESSEE TO SHOW CAUSE AS TO WHY THE PENALTY U/S. 271(1)(C) SHOULD NOT BE LEVIED. THE ASSESSES HAS FI LED REPLY IN RESPONSE TO THIS NOTICE VIDE LETTER DATED 17.08.2016. THE ASSESSEE S UBMITTED THAT THE ASSESSEE CLAIMED EXEMPTION U/S. 54 BY PURCHASING A NEW PROPE RTY AT DOMBIVALI FOR RS.56,44,493/- AS THE COLONY COULD NOT BE CONSTRUCT ED THE EXEMPTION WAS CLAIMED U/S.54F WHICH WAS CLAIMED AND SUBMITTED IN THE REVISED COMPUTATION DURING THE ASSESSMENT PROCEEDINGS. AS REGARDS THE A DDITION OF RS. 31,876/- THE ASSESSEE SUBMITTED THAT HE HAD KEPT FIXED DEPOS IT WITH UNITECH ON 05.10.2010. THOUGH THE INTEREST OF RS.31,876/- AND TDS OF RS,3,188/- REFLECTED ON TRACES SITE, THE ASSESSEE NEITHER RECE IVED THE PRINCIPAL NOR RECEIVED INTEREST. THE ASSESSEE HAD NEITHER CONCEALED PARTIC ULARS NOR FURNISHED ANY INACCURATE PARTICULARS. IN VIEW OF THIS PENALTY MAY BE DROPPED. ANOTHER SHOW CAUSE WAS ISSUED ON 27.09.2016 FIXING THE DATE OF H EARING ON 28.09.2016. IN RESPONSE TO THIS NOTICE THE ASSESSEE SUBMITTED HIS REPLY WHICH WAS SAME WAS THE EARLIER REPLY. THE ASSESSEE HAD SOLD A PLOT FOR CONSIDERATION OF RS.88,00,000/- AND CLAIMED EXEMPTION OF RS.50,00,00 0/- U/S. 54 AND EXEMPTION OF RS.37,23,320/- ON ACCOUNT OF INVESTMEN T IN CAPITAL GAIN ACCOUNT SCHEME. VIDE THE REVISED COMPUTATION DATED 03.02.20 16 THE ASSESSEE HAD SHOWN CAPITAL GAIN OF RS.31,39,069/-. THE ASSESSING OFFICER OPINED IN PENALTY PROCEEDINGS THAT CLEARLY THE ASSESSEE HAD OFFERED T HE SAME AS HIS CASE WAS IN SCRUTINY IF THE SAME WAS NOT THE CASE THIS INCOME H AVE ESCAPED THE ASSESSMENT. FURTHER, AS PER THE AIR THE ASSESSEE HA D RECEIVED RS.31,876/- & RS.109/- BUT NOT OFFERED THE SAME FOR TAXATION. HEN CE THE INTENTION OF THE ASSESSEE WAS NOT BONAFIDE. IN VIEW OF THE ABOVE THE ASSESSING OFFICER IN PENALTY ORDER HELD THAT THE ASSESSEE CONCEALED PART ICULARS OF INCOME AS ENVISAGED BY SECTION 271(1)(C) OF THE INCOME TAX AC T-1961 ON ACCOUNT OF LATE ANANDA RAJGOPALAN 3 DISALLOWANCE OF RS.31,71,054/-. THAT THE ASSESSEE H AS TO PAY BY WAY OF PENALTY A SUM NOT LESS THAN THE AMOUNT 100% OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INC OME AMOUNTING TO RS.10,46,500/- U/S. 271(1)(C) OF THE IT ACT, 1961. 4. UPON ASSESSEES APPEAL AS REGARDS THE ISSUE OF D IFFERENT CHARGES SPECIFIED IN ASSESSMENT ORDER AND PENALTY ORDER LEA RNED CIT(A) HELD AS UNDER :- 4.1.5 THE APPELLANT DURING THE COURSE OF APPELLATE P ROCEEDINGS HAS LASTLY STATED THAT THE AO IS NOT SURE ABOUT WHETHER IT IS A CASE OF FURNISHING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME AND H AS RELIED UPON CERTAIN DECISIONS. THE ASSESSMENT ORDER AND THE PENALTY ORDE R DO NOT HAVE ANY AMBIGUITY AND IT IS VERY CLEAR THAT THE CHARGE FOR PEN ALTY U/S. 271(1)(C) IS ON ACCOUNT OF FURNISHING INACCURATE PARTICULARS OF INCO ME. THEREFORE, WHERE THERE EXISTS NO VAGUENESS OR AMBIGUITY AS TO THE CHARGE . THE VALIDITY OF THE PENALTY ORDER CANNOT BE OBJECTED. THE RECENT DECISION IN THE CASE OF SKYLIGHT HOSPITALITY LLP VS. ACIT 92 TAXMANN.COM 93 (2018)(SC) . THE HON'BLE SUPREME COURT HAS AFFIRMED THE DECISION OF THE HON'BLE DELHI HIGH COURT WHEREIN IT WAS HELD AS UNDER :- NEVERTHELESS HUMAN ERRORS AND MISTAKES CANNOT AND SHO ULD NOT NULLIFY PROCEEDINGS WHICH ARE OTHERWISE VALID AND NO PREJUDICE HAD BEEN CAUSED. THIS IS THE EFFECT AND MANDATE OF SECTION 292B OF THE ACT. 5. AGAINST THE ABOVE THE ORDER ASSESSEE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E AND PERUSED THE RECORD. WE NOTE THAT IT IS CLEAR THAT WHILE THE ASS ESSING OFFICER IN ASSESSMENT ORDER MENTIONED THE CHARGES AGAINST THE ASSESSEE AS THAT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME ON THE OTHER HAND THE ASSESSING OFFICER IN THE PENALTY ORDER HELD THAT THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME. PENALTY LEVIED U/S. 271(1)(C) OF THE ACT IN SUCH CI RCUMSTANCES IS NOT SUSTAINABLE ON THE TOUCHSTONE OF THE HON'BLE BOMBAY HIGH COURT DECISION IN THE CASE OF CIT VS. SAMSON PERINCHERY (INCOME TAX A PPEAL NO. 1154 OF 2014 DATED 5.1.2017). WE MAY GAINFULLY REFER TO THE SAID DISCUSSION AS UNDER :- (I) THE GRIEVANCE OF THE REVENUE BEFORE US IS THAT THERE IS NO DIFFERENCE BETWEEN FURNISHING OF INACCURATE PARTICULARS OF INCO ME AND CONCEALMENT OF INCOME. THUS, DISTINCTION DRAWN BY THE IMPUGNED ORDER IS BETWEEN TWEEDLEDUM AND TWEEDLEDEE. IN THE ABOVE VIEW, THE DEL ETION OF THE PENALTY, IS UNJUSTIFIED. LATE ANANDA RAJGOPALAN 4 (II) THE ABOVE SUBMISSION ON THE PART OF THE REVENUE I S IN THE FACE OF THE DECISION OF THE SUPREME COURT IN ASHOK PAT V/S. CIT 2 92 ITR 11 [RELIED UPON IN MANJUNATH COTTON & GINNING FACTORY (SUPRA)] - WHERE IN IT IS OBSERVED THAT CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE P ARTICULARS OF INCOME IN SECTION 271(1)(C) OF THE ACT, CARRY DIFFERENT MEANING S/ 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 PENALT Y 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 ISSU ED. 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, AN D IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSEE HAS NO NOTICE. 7. HENCE, RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE ORDER OF AUTHORITIES BELOW. AS REGARDS THE REFERENCE BY LEA RNED CIT(A) TO HON'BLE SUPREME COURT DECISION SKYLIGHT HOSPITALITY LLP (SU PRA)THE SAME WAS WITH REFERENCE TO WRIT BEFORE HON'BLE APEX COURT. IT WA S NOT THE CASE OF ASSESSMENT ORDER INITIATING THE CHARGE FOR FURNISHING OF INACC URATE PARTICULARS OF INCOME AND PENALTY BEING LEVIED FOR CONCEALMENT. HENCE, TH E SAME DOES NOT HELP THE CASE OF REVENUE. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 5.10.2021. SD/- SD/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI; DATED : 05/10/2021 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// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI