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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: AND SHRI PRASHANT MAHARISHI, AM
This appeal is filed by the assessee against the appellate order passed by the Commissioner of income tax, (appeal) – Pune – 11 (the learned CIT – A) for assessment year 2015 – 16 dated 25/5/2023 wherein appeal filed by the assessee against the penalty order passed under section 271 (1) (C) of the act dated 27/6/2018 passed by The Deputy Commissioner Of Income Tax, Circle – 1, Thane levying penalty of ₹ 615,887 was confirmed.
Briefly stated the facts of the case show that assessee is an individual. He filed his return of income on 23/9/2015 declaring a total loss of ₹ 1,521,339/–. The case was selected for complete scrutiny for verification of the lower profit before interest and tax shown and large business losses set-off against other heads of income. Accordingly the notices under section 143 (2) of the act was issued and it culminated into the assessment order under section 143 (3) of the act on 25/12/2017 wherein the total income of the assessee was assessed at ₹ 913,100. The learner assessing officer has made an addition under section 68 of the income tax act of RFs 2 lakhs, disallowed the agricultural income of ₹ 22,940/– and also disallowed the depreciation out of the seven different vehicles amounting to ₹ 2,376,499. Learned assessing officer while making addition under section 68 of the act of Rs 2 lakhs has recorded a satisfaction for furnishing of inaccurate particulars of income. While disallowing the depreciation he has also recorded the satisfaction of furnishing of inaccurate particulars of income.
The learned assessing officer on issue of the show cause notice received the reply of the assessee on 13/6/2018 stating that assessee has not received the assessment order and therefore is not aware about the decision. The learned assessing officer has given an acknowledgement
Assessee aggrieved with that, order has preferred an appeal before the CIT – A, he also dismissed the appeal of the assessee. Therefore, assessee is in appeal before us.
Before us the assessee has submitted that show cause notice dated 25/12/2017 issued by the learned assessing officer did not strike any of the twin charges of either concealment of income or furnishing inaccurate particulars of such income and therefore the levy of the penalty deserves to be quashed on this point itself.
The learned departmental representative vehemently supported the order of the lower authorities.
We have carefully considered the rival contention and perused the orders of the lower authorities. In the present case though the penalty has been initiated for furnishing of inaccurate particulars of income but the learned assessing officer has issued a show cause notice under section 274 of the income tax act dated 25/12/2017 wherein none of the twin charges have been cancelled/strike of. In view of this, the penalty is not sustainable. This is also the mandate of the honourable jurisdictional High Court in case of Mohd. Farhan A. Shaikh v. Dy. CIT [2021] 125
Appeal filed by the assessee is allowed.
Order pronounced in the open court on 30.10.2023.