Gautam Kisan Wadave, Pune V. Deputy Commissioner of Income-tax,

ITA 982/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7383 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 27-09-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 29-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , ! # . $ , % , & BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO, AM ' / ITA NO. 982/PUN/2015 ( ) ) / ASSESSMENT YEAR : 2010-11 SHRI GAUTAM KISAN WADAVE, WADAVE COMPLEX, NANEKARWADI, PUNE- NASHIK ROAD, CHAKAN, TAL : KHED, PUNE-410501. PAN :AAJPW6073G ....... / APPELLANT ( / V/S. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(2), PUNE. / RESPONDENT ASSESSEE BY : SHRI S. N PURANIK REVENUE BY : SHRI AJAY MODI / DATE OF HEARING : 27.09.2017 / DATE OF PRONOUNCEMENT : 29.09.2017 * / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-11, PUNE DATED 27.02 .2015 FOR ASSESSMENT YEAR 2010-11. 2 ITA NO.982/PUN/2015 A.Y. 2010-11 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. HONOURABLE COMMISSIONER (APPEALS) HAS ERRED IN C ONFIRMING THE PENALTY LEVIED U/S. 271 (1) (C), SAME MAY PLEASED B E CANCELLED. 2. PROVISIONS OF SECTION 271(1) (C) UNDER WHICH TH E PENALTY IS LEVIED BY ASSESSING OFFICER IS NOT APPLICABLE. APPELLANT T HEREFORE PRAYED TO CANCEL. 3. APPELLANT PRAYS FOR JUST AND EQUITABLE RELIEF. 4. APPELLANT PRAYS TO ADD, ALTER, AMEND, MODIFY AND /OR WITHDRAW THE GROUND/ GROUNDS AS THE OCCASION MAY DEMAND. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT TH E ASSESSEE IS A REAL ESTATE AGENT AND FILED RETURN OF INCOME DECLARING TOT AL INCOME AT RS.9,97,690/-. IN THE SCRUTINY ASSESSMENT PROCEEDINGS U/ S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT), THE ASSESSING OFFICER DETERMINED THE ASSESSED INCOME AT RS.48 ,11,889/-. THE ASSESSING OFFICER MADE VARIOUS ADDITIONS AMOUNTING TO RS.38,14,199/-. THE ASSESSING OFFICER ALSO INITIATED PENALTY PR OCEEDINGS U/S. 271(1) (C) OF THE ACT BY GIVING FOLLOWING SATISFACTION IN HIS ORDER: ..SINCE THE ASSESSEE HAS CONCEALED HIS INCOM E AND THEREBY HAD FURNISHED INACCURATE PARTICULARS OF INCOME. TH EREFORE, PENALTY PROCEEDINGS U/S. 271(1) (C ) R.W.S 274 IS INITIATED SEPARATELY ON THIS GROUND. ( PARA-4(C). 4. SUBSEQUENTLY, THE ASSESSING OFFICER LEVIED PENALTY AFTER DUE PROCESS OF THE RULES IN PENALTY MATTER. THE AMOUNT OF RS .11,47,690/- WAS QUANTIFIED VIDE HIS ORDER DATED 28.03.2013. THE REASONS GIVEN BY THE ASSESSING OFFICER FOR LEVYING THE SAID PENALTY READS AS UNDER : FROM THE ABOVE FACTS AND CIRCUMSTANCES IT IS PROVED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME TO EVADE THE TA X AND THE CASE OF THE ASSESSEE CLEARLY FALLS WITHIN THE AMBIT OF SECTION 271(1) (C) R.W. EXPLANATION 5A OF THE I.T ACT, 1961. I AM THEREFORE, SATISFIED THAT THE ASSESSEE HAS COM MITTED DEFAULT WITHIN THE MEANING OF SECTION. 271(1) (C) OF THE ACT AND H AS RENDERED ITSELF LIABLE FOR PENALTY UNDER SECTION 271(1) (C) R.W. EXPLANATI ON 5A OF THE I.T. ACT, 1961. 3 ITA NO.982/PUN/2015 A.Y. 2010-11 I THEREFORE, LEVY PENALTY OF RS. 11,47,690/- U/S. 2 71 (1) (C) OF THE INCOME TAX ACT, 1961 FOR CONCEALING PARTICULARS OF INCOME .( CONTENTS OF PARA-7/V OF THE PENALTY ORDER). 5. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSING OFFICER INVOKED PROVISIONS OF EXPLANATION 5A TO SECTION 271(1) (C) OF THE ACT WHICH IS ACTUALLY MEANT FOR THE CASES OF SEARCH INITIATED ON OR AFT ER 01.06.2007. THE ASSESSING OFFICER IGNORED THE FACT THAT THE PRESENT C ASE UNDER CONSIDERATION WAS DONE U/S. 143(3) OF THE ACT ON 28.03.201 3. LD. COUNSEL ALSO BROUGHT OUR ATTENTION ON THE ABOVE EXTRAC T AND MENTIONED THAT THE SAID PENALTY WAS LEVIED FOR CONCEALING PARTICULARS OF INCOME. 6. THEREFORE, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSE E DEMONSTRATED THAT THE ASSESSING OFFICER INITIATED PENALTY P ROCEEDINGS FOR CONCEALED HIS INCOME AND THEREBY HAD FURNISHED THE INACCU RATE PARTICULARS OF INCOME. HOWEVER, HE LEVIED PENALTY FOR CONCEA LING PARTICULARS OF INCOME. THESE REASONS IN SUCH FORM AND LANGU AGE DO NOT EMANATE FROM THE LANGUAGE OF CLAUSE (C) OF SECTION 271 (1) O F THE ACT. THE AMBIGUITY IN THE MIND OF ASSESSING OFFICER IS APPARENT. FURTHE R, IN REFERRING TO THE PROVISION OF EXPLANATION 5A OF THE SAID SEC TION, WHICH IS ABSOLUTELY UNCALLED FOR IN THE PRESENT CASE, ASSESSING OFFICE R DISPLAYED HIS IGNORANCE IN LAW. LD. AR RELIED ON THE BINDING JUDGMENTS IN THE CASE OF CIT VS. MANJUNATA COTTON AND GINNING FACTORY REPOR TED IN 359 ITA 565 (KAR.) , CIT VS. SAMSON PERINCHERY REPORTED IN 292 ITR 11(BOM.) TOO. THE LD. COUNSEL PRAYED FOR CANCELLING THE PRESENT PENALTY ORDER . 7. THE LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDE R OF ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS). 4 ITA NO.982/PUN/2015 A.Y. 2010-11 8. WE HAVE HEARD BOTH PARTIES ON THIS LIMITED ISSUE WHICH IS LEGAL IN NATURE WHICH REFERS TO THE JURISDICTION OF THE ASSESSING O FFICER IN INITIATING AND LEVYING THE PENALTY. THE FACTS ARE CLEAR AND R ELEVANT PORTIONS FROM THE ORDERS OF ASSESSMENT OF THE ASSESSING OFFICER AS WELL AS HIS PENALTY ORDER ARE EXTRACTED IN THE PRECEDING PARAGR APHS OF THIS ORDER. WE FIND THAT THERE IS NO HARMONY IN THE REASONS GIVEN BY THE ASSESSING OFFICER FOR INITIATING AND REASONS FOR LEVYING PENALTY. IT REFLECT S THE LACK OF CLARITY IN THE MIND OF THE ASSESSING OFFICER WITH REGARD TO T HE LIMB OF THE CLAUSE (C) OF SECTION 271 (1) OF THE ACT. FURTHER, THE ERROR IS AMPLIFIED IN THE ORDER WHEN A REFERENCE IS MADE TO THE EXPLANATION 5A TO SECTION 271 (1) (C) OF THE ACT. THE SAME IS ABSOLUTELY UNCALLED FOR AS T HE PRESENT ASSESSMENT IS NOT A SEARCH RELATED ASSESSMENT. THEREFOR E, IN OUR VIEW, THE ASSESSING OFFICER IS ILL-INFORMED ON THE LEGAL PROVISIONS RE LATING TO THE PENALTY PROCEEDINGS U/S 271(1) (C) OF THE ACT. RELYING ABO VE REFERRED BINDING JUDGMENTS OF THE HONBLE APEX COURT, WE ARE OF TH E CONSIDERED OPINION THAT THE PENALTY ORDER IS REQUIRED TO BE CANCELLE D. ACCORDINGLY, THE LEGAL ISSUE IS ALLOWED IN FAVOUR OF THE ASSESSEE AND ALL T HE OTHER GROUNDS OF APPEAL RELATING TO MERITS RAISED BY THE ASSES SEE ARE DISMISSED AS ACADEMIC IN VIEW OF THE RELIEF GRANTED TO THE ASSESSEE ON LEGAL ISSUE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 29 TH DAY OF SEPTEMBER, 2017. SD/- SD/- ( / SUSHMA CHOWLA ) ( . / D. KARUNAKARA RAO ) ! '# / JUDICIAL MEMBER $ '# / ACCOUNTANT MEMBER $ / PUNE; %'& / DATED : 29 TH SEPTEMBER, 2017 SB 5 ITA NO.982/PUN/2015 A.Y. 2010-11 *+,-./0/- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-11, PUNE. 4. THE CIT-11, PUNE . 5. '() !!*+ , , *+ , - -. , $ / DR, ITAT, B BENCH, PUNE. 6. )/ 01 / GUARD FILE. // TRUE COPY // ,'$2 / BY ORDER !3 * / PRIVATE SECRETARY , *+ , $ / ITAT, PUNE.