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Facts
The assessee appealed against penalty orders for Assessment Years 2010-2011, 2011-2012, and 2012-2013. The penalties were levied under Section 271(1)(c) for concealment of income related to notional rental income from three flats. The assessee contended that the flats constituted a single residential unit, a position accepted in later assessment years.
Held
The Tribunal held that the issue of whether the three flats constitute a single unit had been decided in favour of the assessee on merits in a previous case. Therefore, the penalty levied based on the finding that one of the flats was a separate unit could not be sustained. The appeals against the penalty orders were allowed.
Key Issues
Whether penalty under Section 271(1)(c) can be levied when the underlying addition was based on a finding contrary to a previous decision on merits concerning the same property and assessee.
Sections Cited
271(1)(c), 250, 143(3), 254, 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, E BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER (Assessment Year: 2011-2012) & Kamini Krishna Kotak 18, Kalpana, 96-B, Netaji Subhash Road, Marine Drive, Mumbai – 400002, Maharashtra. [PAN: AADPK9389K] …………. Appellant Vs Income Tax Officer Ward 8(2)(1) Aayakar Bhavan, M. K. Road, Mumbai – 400020. Maharashtra …………. Respondent Appearance For the Appellant/Assessee : Shri Y. P. Trivedi, Senior Advocate Shri Nishit Gandhi, Ms. Usha Dalal For the Respondent/Department : Shri Hemanshu Joshi Date Conclusion of hearing : 18.02.2025 Pronouncement of order : 13.05.2025 O R D E R Per Bench: 1. These are three appeals preferred by the Assessee pertaining to Assessment Year 2010-2011, 2011-2012 and 2012-2013 arising from three separates orders passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’], under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], whereby the appeal preferred by the Assessee challenging penalty ITA No.6602, 6610 & 6640/Mum/2024 Assessment Year 2010-2011, 2011-2012 & 2012-2013 levied by the Assessing Officer under Section 271(1)(c) of the Act was dismissed by the CIT(A). Since the appeals arose in common factual matrix and involved identical issues, the same were heard together and are being disposed off by way of a common order. [Assessment Year 2010-2011] 2. We would first take up appeal preferred by the Assessee for the Assessment Year 2010-2011 which is directed against the order, dated 25/10/2024, passed by the CIT(A) whereby appeal preferred by the Assessee against the Penalty Order, dated 02/03/2022, passed under Section 271(1)(c) of the Act levying penalty of INR.38,232/- was dismissed by the CIT(A).
3. The Assessee has raised following ground of appeal:
“1. The appellant submits that the learned Commissioner of Income- tax (Appeals) [“CIT(A)”] erred in confirming levy of penalty of a sum of Rs. 38,232/- under section 271(1)(c) of the Income tax Act, 1961 (hereinafter referred as “the Act”) by the Assessing Officer vide his order dated 02.03.2022 passed under section 271(1)(c) of the Act.
2. The appellant submits that the Ld. CIT (A) ought to have deleted the said penalty on a confirmation of notional deemed rent in respect of one property i.e. Flat No. 17B situated at Kalpana, Netaji Subhash Road, Marine Drive, Mumbai 400 002 by the Assessing Officer considering the order of the ITAT in appellant’s own case for Assessment Year 2013-14 wherein such notional rent addition was deleted by the ITAT.
3. The Ld. CIT (A) erred in the facts and circumstances of the case in confirming a penalty by relying on the fact that the appellant has not challenged the assessment in quantum appeal. The Ld. CIT (A) ought to have appreciated that assessment proceedings and penalty proceedings are entirely distinct from each other and the mere fact that the quantum addition was not agitated in appeal cannot ipso facto conclude that penalty ought to be levied. Further in the peculiar facts of the case, it would not have been cost effective to prefer an appeal against the said assessment order under section 143(3) r.w.s. 254 of the Act. Assessment Year 2010-2011, 2011-2012 & 2012-2013
4. The Ld. CIT (A) has not considered the fact that Hon’ble ITAT has vide its order dated 17.02.2021 accepted all 3 units as a single unit in the appellant’s own case for Assessment Year 2013-14 where there were no changes in facts. The appellant submits that while the said order has not been followed in the set aside quantum assessment order under section 143(3) r.w.s. 254 of the Act, yet certainly there can be no ground for levy of penalty under section 271(1) (c) of the Act for the assessment under appeal where the facts are identical.
5. The Ld. CIT (A) has erred in facts and circumstances of the case in not considering the settled judicial position that a mere addition does not mean that there is a concealment of income or furnishing any inaccurate particulars."
The relevant facts in brief are that as under:
4.1. For the Assessment Year 2010-2011 assessment was framed on the Assessee vide Assessment Order, dated 18/02/2014, passed under Section 143(3) read with Section 153A of the Act. By way of the aforesaid Assessment Order, Notional Rental Income of INR.9,06,146/- (computed as under) was brought to tax in the hands of the Assessee:
Flat. Description of the Property with share Sq. mt. Sq. ft. Notional pertained to pertained to Rental the assessee the assessee Income 17B Flat No.17B at Kalpana, 96, Netaji SOP SOP - Subhash Road, Mumbai [for short ‘Flat 17B’] 16 ½ undivded share in Flat No.16 at 147.55 1587.64 2,39,737/- Kalpana, 96, Netaji Subhash Road, Mumbai [for short ‘Flat 16’] 1/3rd undivded share in Flat No.18 at 18 52.96 569.85 6,66,809/- Kalpana, 96, Netaji Subhash Road [for short ‘Flat 18’] 4.2. In appeal, the Commissioner of Income Tax (Appeals) – 54, Mumbai upheld the aforesaid addition vide order, dated 12/09/2016. Assessment Year 2010-2011, 2011-2012 & 2012-2013 4.3. However, in appeal preferred against above order passed by the CIT(A), the Tribunal, vide Common Order dated 01/07/2019 [passed in for the Assessment Year 2010-2011, ITA No.7215/Mum/2016 for the Assessment Year 2011-2012 and ITA No.7217/Mum/2016 for the Assessment Year 2012-2013] granted relief to the Assessee holding as under:
“8. We have heard both the counsel and perused the records. Learned counsel referred to the additional ground and also submitted that a decision of ITAT in the case of co-owner Smt. Vidyaben Bhagwan Kotak in respect of the same flats in which she had half shareholding in Flat No. 16 & 18 at Kalpana, in which the ITAT at paragraph 10 of the said order has accepted that these flats are duplex flats used by the assessee having common staircase and hence it was held that they can be considered as one house which is adjacent to each other. This was so held by the ITAT vide order dated 20.9.2017 in to 7186/Mum/2016.
9. Now we note that this is an additional evidence which was not placed before the authorities below. Though the Revenue has challenged the additional ground and raised ground that how flat No. 16 & 18 be considered as combined single unit. Further the Revenue has also challenged that earlier assessee had claimed Flat No. 17B as self occupied property.
Upon careful consideration, we find that since there is an ITAT order in the case of co-owner, which has not been set aside by Hon'ble Jurisdictional High Court, we deem it appropriate to remit this issue to the file of the Assessing Officer. The Assessing Officer shall consider this additional evidence and decide accordingly. We further hold that there is no estoppel against the assessee in now offering self occupied property and deemed let out property in a different manner than that offered initially. Assessee is very much entitled to plan its taxation so as to minimize the burden so long as the method is not colourable. Here the approach of the assessee can by no stretch of imagination be said to be a colourable device.” 4.4. Pursuant to the above directions issued by the Tribunal, the Assessing Officer passed Assessment Order, dated 27/09/2021, under Section 143(3) read with Section 254 of the Act making addition of Notional Assessment Year 2010-2011, 2011-2012 & 2012-2013 Rental Income of INR.4,15,598/- (computed as under):
Flat. Sq. Mt. pertained Sq. Ft. pertained to Lettable Value Annual Lettable to the assessee the assessee per month Value Flat 17B 91.93 989.52 49,476 5,93,712 Flat 16 SOP SOP SOP SOP Flat 18 SOP SOP SOP SOP Total 5,93,712 Less Standard 1,78,114 Deduction @30% Notional Rental Income 4,15,598 It is admitted position that the Assessee did not challenge the above addition made by the Assessing Officer in appeal before the CIT(A).
4.5. While passing the above Assessment Order, dated 27/09/2021, the Assessing Officer also initiated penalty proceedings under Section 271(1)(c) of the Act which culminated into passing of the Penalty Order, dated 02/03/2022, whereby penalty of INR.38,232/- was levied on the Assessee under Section 271(1)(c) of the Act.
4.6. In appeal preferred by the Assessee challenging the levy of above penalty, the CIT(A) decline to grant any relief and dismissed the appeal.
4.7. Therefore, the Assessee has preferred the present appeal before the Tribunal on the grounds reproduced in paragraph 3 above.
We have considered the rival submission from both the sides and have perused the material on record.
The addition on the basis of which penalty has been levied pertains to addition of Notional Rental Income made by the Assessing Officer vide Assessment Order, dated 27/09/2021. On perusal of the same it is evident that the during the relevant previous year Assessee claimed to be co-owner of Flat 16 and Flat 18 and complete owner of Flat 17B. Before the Assessing Officer the Assessee had claimed that the three flats constituted a single residential house property which was self- Assessment Year 2010-2011, 2011-2012 & 2012-2013 occupied. The aforesaid submission of Assessee was rejected by the Assessing Officer. Flat 16 and Flat 18 were accepted by the Assessing Officer to be constituting a single residential house property which was self occupied by following the decision of the Tribunal in the case of other Co-owner of Flat 16 and Flat 18 (i.e., Smt. Vidyaben Bhagwan Kotak) passed in to for the Assessment Year 2006-2007 to 2010- 2011, dated 20/03/2017. However, the Assessing Officer concluded that the third flat (i.e. Flat 17B) was a separate house property. Therefore, the Notional Rental Income of INR.4,15,598/- was brought to tax in the hands of the Assessee.
In appeal preferred by the Assessee before CIT(A) challenging the levy of penalty, it was contended on behalf of the Assessee that while adjudicating appeal for the Assessee pertaining to Assessment Year 2013-2014, the Tribunal had accepted the contention of the Assessee that all the three flats constituted a single unit and had deleted the Notional Rental Income added in the hands of the Assessee vide order dated 17/02/2021 passed in ITA No.5245/Mum/2019. Therefore, even though the Assessee had not challenged the addition of Notional Rental Income made by the Assessing Officer for the Assessment Year 2010-2011, the issue stood decided in the favour of the Assessee on merits and therefore, the Assessing Officer had erred in levying penalty under Section 271(1)(c) of the Act. However, the CIT(A) noted that for the Assessment Year 2010-2011, the Tribunal had, vide common order dated 01/07/2019 [passed in for the Assessment Year 2010-2011, for the Assessment Year 2011-2012 and for the Assessment Year 2012-2013], set aside the issue back to the file of Assessing Officer with the directions to decide the same afresh and had not given any directions to the Assessing Officer to treat all the three flats as single residential unit. Thus, Learned CIT(A) rejected Assessment Year 2010-2011, 2011-2012 & 2012-2013 the aforesaid contention of the Assessee and confirmed the penalty levied under Section 271(1)(c) of the Act.
We note that the CIT(A) had placed reliance upon the directions issued by the Tribunal vide common order dated 01/07/2019 passed in the first round of litigation. In this regard we find that while passing the aforesaid order the Co-ordinate Bench of the Tribunal had noted that the Assessee had placed additional evidence and raised additional grounds contending that Flat No.16 and Flat No.18 should be consider as combined single unit. This was opposed by the Revenue on the ground that Assessee had claimed that Flat No.17B was self-occupied property. Keeping in view of the aforesaid facts, the issue was remitted to the file of Assessing Officer to consider the additional evidence and for adjudicating the issue accordingly. The Tribunal had specifically observed that the Assessee was entitled to plan its taxation so as to minimize the burden so long as the method is not colourable. During the assessment proceedings conducted under Section 143(3) read with Section 254 of the Act, , vide letter dated 21/09/2021, the Assessee had made following submissions (reproduced in paragraph 6 of the Assessment Order, dated 27/09/2021, before the Assessing Officer:
“6. In response to this notice, the assessee vide letter dated 21.09.2021 has submitted as under- “I am in receipt of a notice under section 142(1) of the Income tax Act, 1961 for Assessment Year 2010-11 as the Hon'ble ITAT had set aside the matter to the file of Assessing Officer vide its order dated 01.07.2019. In response to above notice, I have to submit as under:
I am the owner of the following immovable properties for the year under consideration
(a) 100% share in flat No. 178 situated at Assessment Year 2010-2011, 2011-2012 & 2012-2013 Kalpana, 96/B, N. Subhash Road, Marine Drive, Mumbai 400 002. (b) 50% share in Flat No. 16 situated at Kalpana, 96/B, N. Subhash Road, Marine Drive, Mumbai 400002. (c) 1/3rd share in Flat No. 18 situated at Kalpana, 96/B, N. Subhash Road, Marine Drive, Mumbai 400 002. 2 During the year under consideration, the ITAT in the to 7217/Mum/2016 under a consolidated order had accepted the fact that the 3 flats are to be considered as one single unit and treated as SOP. However, since there was some additional evidence filed during the course of the hearing, the case has been restored to the Assessing Officer for verification which is the case before you.
For the subsequent year 2013-14 in my own case where there was no additional evidence filed, the ITAT has decided the same on similar issue in my favour and held that all the aforesaid units are to be considered as one single unit and to be treated as SOP on the ground that the Kalpak Co-op housing Society Ltd.-Kalpana has issued a certificate dated 25/05/2018 and 06/07/2018 confirming the following:
(a) Flat no. 16 and 18 are duplex flats on the 5th and 6th floor respectively having a common staircase inside the flat. (b) Flat No. 17B is adjacent to flat no 16 on the 5th floor and is a single unit. Accordingly, all the three flats are a single unit and to be treated as SOP. Assessment Year 2010-2011, 2011-2012 & 2012-2013 Similar view has been upheld by the ITAT in the case of Smt. Vidyaben Bhagwan Kotak in to 7156/Mum/2016, co-owner of the flats 16 and 18 that these flats have a common staircase inside the premises and to be considered as one house.
It is therefore submitted that based on the decision of the ITAT for the subsequent years in my own case and in the case of the co-owner, all the aforesaid flats be treated as one single unit and to be considered as a SOP and not compute any notional rental income in my hands.
In light of the above please find enclosed the following documents:
1. 1. ITAT Order dated 01.07.2019 where in para 10 of the Order, ITAT had set aside the matter to the Assessing Officer as per Annexure 1.
2. ITAT Order dated 17.02.2021 in assessee's own case for Assessment Year 2013-14 where the Hon'ble ITAT has decided similar ground in assessee's favour and directed the Assessing Officer to delete disallowance as per Annexure 2.
3. ITAT Order dated 20.09.2017 in the case of Smt. Vidyaben Bhagwan Kotak -Co-owner of both properties where in para 10 of the Order, ITAT had directed the Assessing Officer to delete the addition made in respect of one of the Flat No. 18 for the Assessment Years from 2006-07 to 2009-10 as per Annexure 3.
4. Certificate dated 25.05.2018 issued by the Kalpak Co-operative housing Society Ltd., Kalpana certifying that Flat No. 16& Flat No. 178 are one single unit and the same have been recorded in the Assessment Year 2010-2011, 2011-2012 & 2012-2013 society as flat no. 16 as per Annexure 4.
5. Certificate dated 06.07.2018 issued by the Kalpak Co-operative housing Society Ltd., Kalpana certifying That Flat No. 16& 18 situated at 5th and 6th floors respectively and are used as duplex flats having a common staircase attached to both floors inside the said premises and therefore adjacent to each other as per Annexure 5."
We have perused the decision of the Tribunal, in the case of the Assessee for the Assessment Year 2013-2014 [in dated 17/02/2021], and we find that the Tribunal had accepted the contention of the Assessee that Flat 16, Flat 18 and Flat 17B constituted as a single unit. The relevant extract of the decision of the Paragraph read as under:
“2 The only issue to be decided in this appeal is with regard to determination of rental income for flat Nos. 16,18 and 17B held by the assessee. The interconnected issue involved therein is whether the flat Nos. 16 & 17B situated in 5th floor, flat No.18 situated in 6th Floor could be considered as a single unit or separate unit.
We have heard rival submissions and perused the materials available on record. We find that assessee is an individual earning income from dividend and interest on fixed deposits with banks. The assessee filed her original return of income for the A.Y.2013-14 on 25/07/2013 declaring total income at Rs.75,06,520/-. The assessee is in possession of the following properties: a) Flat No.17B at Kalpana, 96, Netaji Subhash Road, Mumbai. b) 1/3 undivided share in Flat No.16 at Kalpana, 96, Netaji Subhash Road, Mumbai. Assessment Year 2010-2011, 2011-2012 & 2012-2013 c) 1/3 undivided share in Flat No.18 at Kalpana, 96, Netaji Subhash Road, Mumbai. 3.1. The assessee submitted vide her letter dated 16/12/2015 before the ld. AO that flat Nos. 17B, 16 & 18 are to be considered as one single residential unit and not to be considered separately. The assessee also submitted that property is extremely old and not easily accessible from the main road and accordingly, it would be difficult to provide annual lettable value for this property. The assessee also pleaded that all the three properties should be considered as one single unit and accordingly, to be treated as self-occupied and hence, no rental income on notional basis could be assessed in respect of the same.
3.2. The ld. AO however, did not consider the contentions of the assessee and proceeded to make notional addition of rental income under the head income from house property as under:-
50% share in flat No. 16 Kalpana - Rs.11,43,096/- 33.37% in flat No.18 Kalpana - Rs.4,10,292/- 3.3. The ld. AO did not give relief to the assessee in respect of maintenance charges and municipal taxes paid by the assessee while determining the said income from house property. 3.4. The ld. CIT(A) observed that assessee owns 50% undivided share at flat No.16 at Kaplana and 33.33% undivided share in flat No.18 at Kalpana and that they are two separate units even though assessee is claiming them to be a single unit. Apart from this, the assessee also owns another flat i.e. flat No.17B which has been claimed as self-occupied property. The ld. CIT(A) also observed that assessee had furnished copies of letters from Kalpak Co-operative Housing society Ltd., which states that flat Nos. 16 & 17 are one single unit and that flat Nos. 16 & 18 are used as duplex flats and are connected from inside. The ld. CIT(A) observed that however, the fact remains that all three are bought and registered as three separate units. The ld. Assessment Year 2010-2011, 2011-2012 & 2012-2013 CIT(A) also observed that the assessee herself has given the prevailing market rate of the property at Rs.60/- per sq.ft and offered the notional income at Rs.9,96,760/- in A.Y.2014-15. The ld. CIT(A) observed that flat No.16 and flat No. 18 are two separate units in which the assessee has half undivided share and 1/3rd share respectively and that flat No.17B alone could be treated as self-occupied property. With these observations, he upheld the action of the ld. AO. However, the ld. CIT(A) gave directions to the ld. AO to verify the records and if proof of municipal payment is produced by the assessee, the assessee be given deduction thereon in accordance with the provisions of the Act from the notional rental income.
3. At the outset, we find that there is no dispute that assessee is having three properties namely 1/3 share in flat No.18, half share in flat No.16 and full share in flat No.17B. It is not in dispute that flat Nos. 16 & 18 are situated at 5th and 6th floor respectively at Kalpana 96, Netaji Subhash Road, Marine Drive, Mumbai 400 002. It is not in dispute that these flats are duplex flats having a common staircase attached to both the floors inside the said premises and therefore, adjusted adjacent to each other. This is also evidenced from a certificate dated 06/11/2018 issued by Kalpak Co operative Housing Society Ltd., It is not in dispute that flat No.17B is adjacent to flat No. 16 on 5th floor and the society has considered flat No.16 & 17B as one single unit. This fact is evidenced by certificate dated 25/05/2016 Issued by Kalpak Co-operative Housing Society. From the above, it could be seen that all the three flats Le. Flat No.16, 17B and 18. are to be considered as one single unit and treated as self-occupied. We find that in the case of assessee's mother-in-law Smt. Vidyaben Bhagwan Kotak who is a co-owner in the flats alongwith assessee, this Tribunal in to 7186/Mum/2016 for A.Y.2006-07, 2007- 08,2008-09,2009-10,2010-11 respectively dated 20/09/2017 had accepted the fact that flat No. 16 and flat No.18 are situated Assessment Year 2010-2011, 2011-2012 & 2012-2013 on 5th and 6th floor respectively having common staircase attached to both the floors inside the said premises and hence, to be considered as one house adjacent to each other. We also find that this Tribunal in assessee's own case in ITA No.7215 to 7217/Mum/2016 for A.Yrs. 2010-11,2011-12 & 2012-13 respectively dated 01/07/2019 had accepted the fact that properties of the three flats are to be considered as one single unit and treated as self-occupied property but since there was some additional evidence filed in that case, the same was restored to the file of the ld. AO for verification and decided in accordance with law. This Tribunal had also considered the fact that merely because certain income had been offered voluntarily by the assessee in the returns filed for subsequent years, that would not bind assessee for the year under consideration as there is no estoppel against the statute and the said change in stand in the peculiar facts and circumstance of the instant case cannot be termed as 'colourable device'. For the year under consideration, we find that there is no additional evidence filed by the assessee requiring any verification of the lower authorities. Respectfully following the decision of this Tribunal in assessee's own case and also in the case of assessee's mother- in-law referred to supra, we direct the ld. AO to delete the addition on account of notional rental income in the hands of the assessee. Accordingly, the ground Nos. 1-4 raised by the assessee are allowed.” (Emphasis supplied)
10. During the course of hearing the Learned Departmental Representative had questioned the bonafide of claim made by the Assessee on the ground that Certificate, dated 25/05/2018 and 06/07/2018, were issued by the Kalpak Co-operative Housing Society Ltd. after the date of passing the assessment order for the relevant assessment year. We find that while adjudicating appeal for the year 2013-2014 (where Assessment Order under Section 143(3) of the Act was passed on 29/01/2016 - a date prior to the issuance of the Assessment Year 2010-2011, 2011-2012 & 2012-2013 aforesaid certificates), the Tribunal had taken into consideration the aforesaid certificates issued by the Kalpak Co-operative Housing Society Ltd. and had arrived at conclusion that all the three flats i.e. Flat 16, Flat 17B and Flat 18 constituted a single unit. The aforesaid finding of fact returned by the Co-ordinate Bench of Tribunal continues to hold good. There is nothing on record to show that the aforesaid decision was overturned in appellate proceedings. In the aforesaid decision, the Tribunal had also taken note of the fact that while adjudicating appeal for the Assessment Years 2010-2011 to 2012-2013 (supra), the Tribunal had remitted the issue to the file of the Assessing Officer since the additional evidence was filed by the Assessee requiring verification. However, since for the Assessment Years 2013-2014, there was no additional evidence, the Co-ordinate Bench of the Tribunal had proceed to adjudicate the issue in favour of the Assessee after taking into consideration the material on record. In view of the aforesaid, we find merit on behalf of the contention advanced on behalf of the Assessee that the issue on merits stands decided in favour of the Assessee vide Order dated 17/02/2021 passed in passed in appeal for the Assessment Year 2013-2014. The fact that the Assessee had not preferred appeal challenging quantum additions made for the assessment year under consideration (i.e. Assessment Year 2010- 2011) before the CIT(A) would not come in the way of the Assessee raising the aforesaid contentions in the penalty proceedings. Therefore, in our considered view, the findings returned by the Assessing Officer that Flat 17B constituted a separate unit is contrary to the decision of the Tribunal in the case of the Assessee for the Assessment Year 2013-2014 and penalty levied on the basis of the addition made by placing reliance on such finding of the Assessing Officer cannot be sustained.
Further, we find that in the present case while passing Assessment Assessment Year 2010-2011, 2011-2012 & 2012-2013 Order, dated 27/09/2021, under Section 143(3) read with Section 254 of the Act, the penalty proceedings were initiated for furnishing inaccurate particulars of income. The relevant extract of the aforesaid assessment order reads as under:
9. As the assessee had not disclosed income correctly in the return of income, as discussed above, penalty proceedings under Section 271(1)(c) of the I.T.Act, 1961 is initiated separately for furnishing inaccurate particulars of income leading to concealment of income.
Whereas on perusal of the Penalty Order, we find that the Assessing Officer had levied penalty for concealment of particulars of income. The relevant extract of the aforesaid penalty order reads as under:
2.1. In the light……………….. xx xx If the assessee really was of the view that all the three flats are one single unit (as held by the ITAT in his own case for the AY 2013-14), he ought to have contested the assessment in appellate forum. By not contesting the assessment, he has deemed to have accepted the finding that Flat No. 17B is a separate independent unit. When on identical issue he has contested for other assessment years, he should have followed the same for the assessment year under consideration too However, by not doing so, he has indirectly accepted/consented with the findings arrived by the AO in his reassessment order that Flat No.17B is a separate independent unit. Therefore the addition made by the AO in treating the Flat No.17B as a separate unit is justified and the addition made by the AO clearly satisfies the fact that the assessee has concealed his particulars of income by not disclosing the rental income/deemed rental income in respect of Flat No.17B. Accordingly it is found that this is a fit case for levy of penalty. 4.0 Accordingly, I am of the opinion that it is a fit case for levy of Assessment Year 2010-2011, 2011-2012 & 2012-2013 penalty U/s 271(1)(c) of the IT. Act ………………...
In our view, for this reason also penalty levied under Section 271(1)(c) of the Act cannot be sustained.
Thus, in view of the above penalty of INR.38,232/- levied by the Assessing Officer under Section 271(1)(c) of the Act are deleted. In terms of the aforesaid, Ground No. 1 to 4 raised by the Assessee ARE allowed while Ground No.5 raised by the Assessee is dismissed as having rendered infructuous.
ITA No. 6610/MUM/2024 [Assessment Year 2011-2012] & [Assessment Year 2012-2013]
Now we would take up the appeal preferred by the Assessee for the Assessment Year 2011-2012 & 2012-2013 which is directed against the orders, dated 25/10/2024 each passed by the CIT(A), respectively.
Since in the identical set of facts penalty of INR.26,325/- and INR.47,086/- was levied under Section 271(1)(c) of the Act for Assessment Year 2011-2012 and 2012-2013, respectively. Both the sides had agreed that our findings/adjudication in relation to appeal for the Assessment Year 2010-2011 shall apply mutatis mutandis to the appeal for the Assessment Year 2011-2012 and 2012-2013. Accordingly, keeping in view identical facts and circumstances, and adopting the reasoning given while adjudicating the appeal preferred by the Assessee for the Assessment Year 2010-2011. We delete the penalty of INR.26,325/- and INR.47,086/- was levied under Section 271(1)(c) of the Act for Assessment Year 2011-2012 and 2012-2013, respectively. In terms of the aforesaid, Ground No. 1 to 4 raised by the Assessee in each of the appeals are allowed while Ground No.5 raised by the Assessee in each of the appeals is dismissed as having Assessment Year 2010-2011, 2011-2012 & 2012-2013 been rendered infructuous.
In result, in terms of paragraph 14 above, all the three appeals preferred by the Assessee are allowed.