Sun Infrastructure Pvt. Ltd., Nashik V. Income-tax Officer,

ITA 844/PUN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7740 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-06-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 28-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Assessee Lawyers: SATISH MALANI MANAGER
• Keywords: Search and seizure; Initiation of penalty proceedings; Reasonable cause
• Section: 132; 139

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. 844 /PUN/ 201 6 / ASSESSMENT YEAR : 20 08 - 09 SUN INFRASTRUCTURE PVT. LTD., F 1/2, SUYOJIT HEIGHTS, SHARANPUR ROAD, OPP. RAJIV GANDHI BHAVAN, NASHIK 422002 PAN: AAHCS5734P . / APPELLANT VS. ITO, CENTRAL - 1 , NASHIK . / RESPONDENT ASSESSEE BY : SHRI SATISH MALANI (MANAGER) REVENUE BY : SHRI MUKESH JHA / DATE OF HEARING : 20 .0 6 . 2018 / DATE OF PRONOUNCEMENT: 27 . 0 6 .2018 / ORDER PER D. KARUNAKARA RAO , AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 2 , PUNE , DATED 29 .0 2 .2016 FOR THE ASSESSMENT YEAR 20 08 - 09 . 2. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSESSEE IS LAND DEVE LOPER AND CIVIL CONTRACTOR. THE ASSESSEE FILED ORIGINAL RETURN OF INCOME UNDER SECTION 139 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 22.06.2009 DECLARING TOTAL INCOME OF RS.NIL. SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCT ED IN THE SUYOJIT GROUP OF CASES ON 17.09.2010. CERTAIN DOCUMENTS WERE SEIZED INCLUDING COPY ITA NO. 844 /PUN/201 6 M/S. SUN INFRASTRUCTURE PVT. LTD. 2 OF PROMISSORY NOTE AND COPY OF CHEQUE. ON VERIFICATION OF BOOKS OF ACCOUNT AND ON PERUSAL OF THE REPLY SUBMITTED BY THE ASSESSEE, THE ASSESSING OFFICER FOUND THA T THE ASSESSEE DID NOT CLAIM ANY INTEREST INCOME IN FINANCIAL YEAR 2007 - 08 TO WHICH THE SAID PROMISSORY NOTE RELATES . THE ASSESSING OFFICER MADE ADDITION OF INTEREST INCOME AND HE WAS OF THE VIEW THAT THE INCOME OF RS.90,000/ - W AS DETECTED AS A RESULT OF SEARCH ACTION AND THERE WAS NOTHING VOLUNTARY ABOUT THE ADMISSION BY THE ASSESSEE. THUS, ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE TRIED TO EVADE TAX ON THIS INTEREST INCOME AND THEREFORE, THE PENALTY PROCEEDINGS U/S 271(1)(C) WE RE INITIATED FOR CONCEALMENT AND FILING OF INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, THE ASSESSING OFFICER ORDERED FOR ISSUE OF SHOW CAUSE NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) AND 271B OF THE ACT. THEREAFTER, THE ASSESSING OFFICER VIDE PARA 6 OF PENALTY ORDER HELD THAT I AM SATISFIED THAT THE ASSESSEE HAS WITHOUT ANY REASONABLE CAUSE, FURNISHED AN INACCURATE PARTICULARS OF INCOME AND THEREBY CONCEALED HIS INCOME TO THE EXTENT OF RS.90,000/ - AND ACCORDINGLY, LEVIED PENALTY. 3. DURING THE FIRST APPELLATE PROCEED INGS, THE ASSESSEE CONTENDED THAT THE ASSESSING OFFICER HAS NOT STRUCK DOWN THE INAPPROPRIATE PORTION OF THE NOTICE ISSUED UNDER SECTION 274 OF THE ACT AND HENCE, THE NOTICE ISSUED WAS INVALID AND CONSEQUENTIAL PENALTY IMPOSED NEEDS TO BE DELETED. HOWEVER , THE CIT(A) DISMISSING THE GROUNDS OF ASSESSEE UPHELD THE LEVY OF PENALTY. 4. AGGRIEVED WITH THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 844 /PUN/201 6 M/S. SUN INFRASTRUCTURE PVT. LTD. 3 5. BEFORE US, THE LEARNED COUNSEL SUBMITTED THAT SINCE THE ASSESSING OFFICER HAS NOT STRUCK DOWN APPROP RIATE PORTION OF NOTICE ISSUED UNDER SECTION 274 OF THE ACT LEVYING PENALTY, THE SAME IS INVALID. FURTHER, THE PUNE BENCH OF TRIBUNAL IN VARIOUS SUCH CASES, HAS DELETED THE PENALTY IMPOSED IN SUCH CASES. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE RELIED ON THE ORDERS OF ASSESSING OFFICER AND CIT(A). 7. WE FIND THAT THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY IN INCOME TAX APPEAL NO.1154 OF 2014 WITH OTHER INCOME TAX APPEALS NOS.953 OF 2014, 1097 OF 2014 AND 1226 OF 201 4, JUDGMENT DATED 05.01.2017 AFTER REFERRING TO THE DECISION OF THE HON'BLE SUPREME COURT IN ASHOK PAI VS. CIT (2007) 292 ITR 11 (SC) AND THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN CIT & ANR. VS. M/S. MANJUNATHA COTTON AND GINNING FACTORY (2013 ) 359 ITR 565 (KAR) HAS HELD THAT SATISFACTION OF THE ASSESSING OFFICER HAS TO BE WITH REGARD TO ONE OF TWO BREACHES MENTIONED UNDER SECTION 271(1)(C) OF THE ACT, FOR INITIATION OF PENALTY PROCEEDINGS, WOULD NOT WARRANT / PERMIT PENALTY BEING IMPOSED FOR O THER BREACHES. THE REVENUE IN THIS REGARD HAS STRONGLY EMPHASIZED THAT WHERE THE ASSESSING OFFICER HAS RECORDED SATISFACTION IN RESPECT OF BOTH THE LIMBS AND ALSO HAS GIVEN NOTICE IN RESPECT OF BOTH THE LIMBS AND WHERE PENALTY HAS BEEN LEVIED THOUGH ON BO TH THE LIMBS, THEN THE SAME MERITS TO BE UPHELD AS IT DOES NOT VIOLATE THE PROVISIONS OF THE ACT. HOWEVER, WE FIND NO MERIT IN THE SAID STAND OF LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE LEVIED ONLY IN RESPECT OF EITHER OF TWO ITA NO. 844 /PUN/201 6 M/S. SUN INFRASTRUCTURE PVT. LTD. 4 LIMBS I.E. EITHER FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER AFTER MAKING ADDITIONS IN THE HANDS OF ASSESSEE HAS TO RECORD SATISFACTION IN THIS REGARD AS TO WHICH LIMB OF SECTION 271(1)(C) OF THE ACT HAS NOT BEEN SATISFIED BY THE ASSESSEE AND ACCORDINGLY, GIVE HIM SHOW CAUSE NOTICE BY RECORDING SATISFACTION OF VIOLATING BOTH THE LIMBS AND ALSO ISSUING SIMILAR NOTICE IS OUTSIDE THE PURVIEW OF PROVISIONS OF SAID SECTION AN D HENCE, IS NOT SUSTAINABLE. THE ASSESSING OFFICER HAVING FAILED TO RECORD SATISFACTION WITH REGARD TO NON - FULFILLMENT OF ONE OF THE LIMBS AND SIMILARLY, NON - STRIKING OF IN - APPROPRIATE PORTION OF NOTICE ISSUED UNDER SECTION 274 OF THE ACT AND EVEN PENALTY HAS BEEN LEVIED FOR NON - SATISFACTION OF BOTH THE LIMBS, SUCH AN ORDER LEVYING PENALTY FOR CONCEALMENT CANNOT BE UPHELD. ACCORDINGLY, WE HOLD SO. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN KANHAIYALAL D. JAIN VS. ACIT IN IT A NOS.1201 TO 1205/PN/2014, RELATING TO ASSESSMENT YEARS 2003 - 04 TO 2007 - 08, DATED 30.11.2016. CONSEQUENTLY, WE ALLOW THE ISSUE IN FAVOUR OF ASSESSEE. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS, ALLOWED. 8 . IN THE RESULT, APPEAL OF THE ASSES SEE IS ALLOWED. ORDER PRONOUNCED ON THIS 27 TH D AY OF JUNE , 2018. SD/ - SD/ - ( VIKAS AWASTHY ) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE ; DATED : 27 TH JUNE , 2018 GCVSR ITA NO. 844 /PUN/201 6 M/S. SUN INFRASTRUCTURE PVT. LTD. 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// S ENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A ) - 1 2 , PUNE 4. THE PR CIT (C ENTRAL), NASHIK 5. , , BENCH B PUNE; 6. / GUARD FILE .