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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
order u/s 271(1)(c) of the Income Tax Act 1961(In short the ‘Act’) dated 10.03.2016 framed by ITO-2(3), Indore.
Assessee has raised following grounds of appeal; 1
1. That, the learned CIT(A) erred, both on facts and in law, in confirming the Order of Penalty passed u/s. 271(1)(c) of the Income-Tax Act, 1961 by the ITO-2(3), Indore, imposing penalty of Rs.2,OO,OOO/-.
2. That, the learned CIT(A) grossly erred in not considering the material fact that in the instant case, the AO imposed the penalty without first issuing a proper and valid show-cause notice to the appellant.
3 (a) That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the order of penalty passed u/s. 271(1)(c) of the Act, without considering the material fact that the appellant had neither concealed nor furnished inaccurate particulars of her income for the year under consideration and therefore she was not liable for any penalty u/s. 271(1)(c) of the Act.
That, without prejudice to the above, the learned CIT(A) erred in confirming the penalty without considering the material fact that the addition qua which the penalty has been imposed, itself was not sustainable in view of the decision of the Hon'ble ITAT, Special Bench, Mumbai, in the case of Al! Cargo Global Logistics Ltd & Ors. vs. DCIT, as reported in (2012) 74 DTR (Mumbai) (SB) (Trib) 89 and also as per the ratio laid down by many judicial authorities including by the Hon'ble ITAT Indore Bench.
That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.
3. Briefly stated facts as culled out from the records are that the assessee is an individual and derives income from the business of manufacturing and trading of corrugated boxes. Return of income Jyotsana Ajmera 139(4) filed on 29.3.2007 declaring income of Rs.2,15,000/-. A search action u/s 132(1) of the Act was carried out at the residential premises of the appellant followed by issuance of notice u/s 153A of the Act duly served upon the assessee for furnishing her return of total income. In response to the notice, the appellant furnished her return of income on 01.2.2010 declaring the same income of Rs.2,15,000/- which was declared in the original return of income. The case was selected for scrutiny. Notices u/s 143(2) & 142(1) were issued and the assessee complied with. The assessment u/s 153A r.w.s. 143(3) of the Act was completed determining the total income at Rs.7,50,000/- making addition of Rs.5,35,000/-. The Ld. A.O also initiated penalty proceedings u/s 271(1)(c) of the Act in respect of additions of Rs.4,95,000/-.
1. Aggrieved assessee preferred appeal against the levy of penalty before Ld. CIT(A) but could not succeed.
2. Now the assessee is in appeal before the Tribunal against the penalty of Rs.2,00,000/- imposed u/s 271(1)(c) of the Act. 3. Ld. Counsel for the assessee raising legal issue relying on the Jyotsana Ajmera Hon'ble Apex Court in the case of National Thermal Power Company Limited 229 ITR 383(SC) submitted that as per provisions of Section 271(1)(c) of the Act the penalty can be initiated either for concealing the particulars of income or for furnishing inaccurate particulars of income, whereas the Ld.A.O has not recorded any charge on the assessee, as to whether penalty is to be levied for ‘furnishing inaccurate particulars of income or concealing the particulars of income’. Placing reliance on the judgments mentioned in the written submission which mainly includes judgment of Hon'ble Jurisdictional High Court in the case of PCIT Vs Kulwant Singh Bhatia of 2018 dated 9.5.2018, the Ld. Counsel for the assessee contended that the Ld.A.O has failed in comply the provisions of section 271(1)(c) of the Act by initiating the penalty proceedings with no specific charge. Reliance was also placed on Indore Tribunal decision in the case of Varad Mehta ITA No.693/Ind/16 dated 06.12.2018.
Per contra Departmental Representative vehemently argued supporting the orders of lower authorities.
We have heard rival contentions and perused the records 4 Jyotsana Ajmera placed before us. The issues raised by the assessee on both legal and merits revolves around the levy of penalty at Rs.2,00,000/- levied by the Ld. A.O and confirmed by Ld.CIT(A). Ld. Counsel for the assessee pleaded that Ld. A.O has wrongly initiated the penalty proceedings by not specifying the charge for levy of penalty i.e. whether the penalty proceedings has been initiated for concealing particulars of income or for furnishing the inaccurate particulars of income. It was also pleaded by the Ld. Counsel for the assessee that though the Ld. Assessing Officer has made proper satisfaction on record in the assessment order for initiating penalty proceedings but in the notice issue u/s 274 r.w.s. 271(1)(c) of the Act, Ld. A.O remained silent by not specifying as for which charge the penalty proceedings have been initiated.
To examine this fact we have gone through the impugned notice issued on 29.02.2016 for initiating the penalty proceedings u/s 271(1)(c) of the Act for Assessment Year 2006-07. For reference we reproduce below the notice u/s 271(1)(c) of the Act for Assessment Year 2006-07; Jyotsana Ajmera F.No.ITO-2(3)/Ind/Penalty/2015-16 Date: 29.02.2016
PAN ACMPA2979A To Smt. Jytisna Ajmera, E-14 Saket Nagar, Indore Sir/Madam,
NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961.
Whereas in the course of proceedings before oe for the A.Y. 2006- 07 it appears to me that you:- have concealed the particulars of your income or furnished inaccurate particulars of such income.
You are hereby requested to appear before me at 11.30 AM on 04.03.16 and show cause why an order imposing a penalty on you should not be made under section 271 of the Income Tax Act, 1961. If you do not with to avail yourself of this opportunity of being heard in person or through authorized representative, you may sow cause in writing on or before the said date which will be considered before any such order is made under section 271.
Yours sincerely,