SMT. ANJANABEN NARENDRAKUMAR PATEL,,AHMEDABAD vs. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(2),, AHMEDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri Mahavir Prasad, Judicial Member And Shri Amarjit Singh, Accountant Member ITA No. 1372/Ahd/2017 Assessment Year 2012-13

Anjanaben Narendrakumar The ACIT, Patel, C/203, Utsav Circle-2(2), Residency, New C.G. Vs Ahmedabad-380014 Road, Chandkheda, (Respondent) Ahmedabad PAN: AWFPP4964R (Appellant)

Revenue by: Shri Lalit P. Jain, Sr. D.R. Assessee by: Shri Pramod Popat, A.R. Date of hearing : 11-03-2019 Date of pronouncement : 13-03-2019 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-

The solitary ground of appeal of the assessee is against the decision of ld. CIT(A)-10 Ahmedabad vide order dated 28th March, 2017 in confirming the penalty levied u/s. 271(1)(c) of the act on account of cost of improvement of Rs. 20,23,196/-. The assessee has challenged the validity of the show cause notice issued u/s. 274 r.w.s. 271(1)(c) of the act on the

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ground that assessing officer has not mentioned the default of the assessee for which the penalty proceedings has been initiated.

The fact in brief is that the assessee has filed return of income on 27th 2. October, 2012 declaring total income at Rs. 33,87,060/-. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 2nd August, 2013. During the course of assessment, the assessing officer has noticed that assessee has sold land at Gandhinagar for Rs. 2.87 crores on 22 July, 2011 and this property was purchased on 25th July, 2008 for Rs. 18 lacs. The assessee has claimed various expenses like cost of improvement of Rs. 15 lacs and expenses of Rs. 5,02,578/- in connection with the transfer and also claimed exemption u/s. 54B and 54F. The assessing officer has denied the deduction of Rs. 1,08,70,056/- claimed u/s. 54B of the act as the assessee has failed to fulfill any condition as envisaged u/s. 54F of the act. The assessing officer has disallowed the claim of deduction u/s. 54F of Rs. 95 lacs on the ground that assessee has purchased one residential property and has also constructed one house property in violation of condition mentioned in sub-section (2) of section 54F of the act. The assessing officer has also disallowed claim of indexed cost of improvement of Rs. 20,23,196/- as the assessee has failed to substantiate with supporting document/evidences incurring of aforesaid expenses claimed under the head cost of improvement. The asssessee has not filed any appeal against the quantum addition made by the assessing officer before the ld. CIT(A). Thereafter, the assessing officer has levied penalty u/s. 271(1)(c) of the act an amount of Rs. 46,04,000/- on the total disallowance of Rs. 2,57,35,310/- as elaborated above in this order.

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furnishing of inaccurate particulars of income which attract the penalty proceedings u/s. 271(1)(c) of the act. After considering the detailed findings of the ld. CIT(A) of the ld. CIT(A) and the decision of hon’ble Gujarat High Court in the case of Sunita Transport, we do not find any merit in the appeal of the assssee. Since the assessing officer has clearly mentioned that impugned penalty was initiated for concealment of income and furnishing of inaccurate particulars of income and the assessee has not used the words or. Finally, while passing the penalty order u/s. 271(1)(c) of the act, the assessing officer has categorically stated that the penalty has been levied for furnishing of inaccurate particulars of income, therefore, we do not find any merit in the technical ground of default in issuing the notice u/s. 274 of the act raised by the asssessee. Regarding contention of the assessee that assessing officer has failed to specify charge whether penalty is being imposed for furnishing inaccurate particulars or concealment of income. We find that this aspect has been considered by the Hon'ble Gujarat High Court in the case of Snita Transport P. Ld. Vs. ACIT 42 taxmann.com 54 (Guj). In this case the Hon'ble High Court has observed that for the purpose of issuing show cause, the Id.AO can use expression "and/or" in between whether explanation of the assessee is being sought for concealment of income or furnishing of inaccurate particulars of income. However, while passing the final order, the AO has to specify his conclusion whether he visited the assessee with penalty for concealment of income or furnishing of inaccurate particulars. The discussion made by the Hon'ble High Court in para-9 in this regard is worth to note. It reads as under: "9. Regarding the contention that the Assessing Officer was ambivalent regarding under which head the penalty was being imposed namely for concealing the particulars of income or furnishing

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inaccurate particulars, we may record that though in the assessment order the Assessing Officer did order initiation of penalty on both counts, in the ultimate order of penalty that he passed, he clearly held that levy of penalty is sustained in view of the fact that the assessee had concealed the particulars of income. Thus insofar as final order of penalty was concerned, the Assessing Officer was clear and penalty was imposed for concealing particulars of income. In light of this, we may peruse the decision of this Court in case of Manu Engineering Works (supra). In the said decision, the Division Bench came to the conclusion that language of "and/or" may be proper in issuing a notice for penalty, but it was incumbent upon the Assessing Authority to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income had been furnished by them. If no such clear cut finding is reached by the authority, penalty cannot be levied. It was a case in which in final conclusion the authority had recorded that "I am of the opinion that it will have to be said that the assessee had concealed its income and/or that it had furnished inaccurate particulars of such income." It was in this respect the Bench observed that "Now the language of "and/or" may be proper in issuing a notice as to penalty order or framing of charge in a criminal case or a quasi-criminal case, but it was incumbent upon the IAC to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income had been furnished by the assessee. No such clear cut finding was reached by the IAC and, on that ground alone, the order of penalty passed by the IAC was liable to be struck down." In the present case, the ld.AO has conclusively held in the penalty order that penalty is being imposed for furnishing inaccurate particulars of income.

Order pronounced in the open court on 13-03-2019

Sd/- Sd/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 13/03/2019 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:-

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