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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.S.SYAL, VP & SHRI PARTHA SARATHI CHAUDHURY, JM
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM :
This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals)-2, Pune dated 18.07.2016 for the assessment year 2008-09 as per the grounds of appeal on record.
At the outset, we notice that the present appeal is time barred by 89 days. The assessee has filed an affidavit along with condonation of delay
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petition. We have gone through the condonation petition as well as the
affidavit and have found that reasons specified therein are justified and that
the delay cannot be attributed to the deliberate conduct of the assessee
neither through intention nor through action. The reasons for delay in filing
the appeal were beyond the control of the assessee and even the Ld. DR
stated that he has no objection, if the delay is condoned. In view of the
matter, we condone the delay and proceed to hear the appeal on merits.
The crux of the grievance of the assessee is the levy of penalty by the
Ld. Assessing Officer u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter
referred to as ‘the Act’) without specifying the limb for which penalty has been
imposed in the notice u/s.274 r.w.s.271(1)(c) of the Act.
At the time of hearing, the Ld. AR of the assessee vehemently argued
that though in the assessment order and the penalty order, it is stated that
penalty has been levied u/s.271(1)(c) of the Act for concealment of income,
however, in so far as the notice u/s.271(1)(c) r.w.s. 274 of the Act is
concerned, it is ambiguous so as to the correct charge for which penalty is
levied that is not specific in the notice. It states that penalty is levied for
concealment of income and furnishing inaccurate particulars of income. The
Ld. AR further submitted the notice issued u/s.274 r.w.s. 271(1)(c) of the Act
did not specify on which limb penalty u/s.271(1)(c) of the Act is levied. The ld.
AR of the assessee relied on the latest judgment of the Hon'ble Jurisdictional
High Court in the case of CIT Vs. Samson Perinchery reported as 392 ITR 4
(Bom.) wherein the Hon'ble Bombay High Court has followed the view of
Karnataka High Court in the case of CIT Vs. Manjunath Cotton & Ginning
Factory reported in 359 ITR 565(Kar.) wherein it was observed that the
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Hon'ble Supreme Court of India had held in T. Ashok Pai Vs. CIT reported as
292 ITR 11 (SC) that act of ‘concealment of income’ and act of ‘furnishing
inaccurate particulars’ are two different things. Since where the notice does
not specify for what penalty is being initiated, the levy of penalty was held to
be invalid. The Ld. AR further submitted that as of now so far as the Hon'ble
Jurisdictional High Court is concerned, the non-striking of irrelevant portion
of the limb is not just a procedural mistake but if such exercise is not done
and if the notice does not specify the limb in which the penalty is being levied
u/s.271(1)(c) of the Act, in such scenario, the imposition of penalty shall be
void ab-initio.
On the other hand, the Ld. DR has placed reliance on the decision of
the Hon'ble Bombay High Court in the case of Commissioner Of Income-Tax
vs Smt. Kaushalya And Others reported as 216 ITR 660. Placing reliance on
this decision, the Ld. DR contended that when the assessment order and the
penalty order clearly states that penalty has been levied for concealment of
income, the non-striking of irrelevant portion of the limb in the notice
u/s.271(1)(c) r.w.s.274 is not fatal, since the assessee knows the charge for
which penalty u/s.271(1)(c) is being levied.
We have perused the case records and heard the rival contentions and
have given thoughtful consideration to the documents on records. That in the
penalty notice, the Assessing Officer is not clear as to which limb of section
271(1)(c) of the Act penalty to be imposed. The Ld. AR has pointed out before
us that the decision of Hon'ble Jurisdictional High Court in the case of CIT
Vs. Samson Perinchery (supra.) has held that ‘concealment of income’ and
‘furnishing of inaccurate particulars of income’ in section 271(1)(c) carry
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different meanings/connotations and therefore, the satisfaction of the
Assessing Officer with regard to only one of the two breaches mentioned
u/s.271(1)(c) for initiation of penalty proceedings will not warrant/permit
penalty being imposed for the other. The order imposing penalty has to be
made only on the ground of which the penalty proceedings has been initiated,
and it cannot be on a fresh ground of which the assessee has no notice.
Therefore, where the Assessing Officer initiated penalty proceedings
u/s.271(1)(c) for furnishing inaccurate particulars of income, the order
imposing penalty for concealment of income was not valid. Reverting to the
facts of the case the penalty notice is ambiguous so as it is not specified as to
the charge for which penalty u/s.271(1)(c) of the Act is levied.
Meaning thereby to our humble understanding, the assessee should be
ready with his defense for which penalty has been levied by the Revenue
Authority. It could not be generally done that for ‘concealment of income’ and
also for ‘furnishing inaccurate particulars of income’, penalty has been levied.
The limb for which penalty is levied, should be specific in the penalty notice
allowing opportunity to the assessee to get ready with his defense. Further,
the decision of the Hon'ble Jurisdictional High Court in the case of CIT Vs.
Samson Perinchery (supra.) as stated by the Ld. AR is the present judgment
on the issue which is therefore, relevant. The Ld. DR has relied on an earlier
decision of the Hon'ble Bombay High.
Respectfully, following the directions and ruling of the Hon'ble
Jurisdictional High Court, in Samson Perinchery (supra.), we set aside the
order of the Ld. CIT(A) and direct the Assessing Officer to delete the penalty
from the hands of the assessee.
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In the result, appeal of the assessee is allowed. 7.
Order pronounced on 29th day of April, 2019.
Sd/- Sd/- R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 29th April, 2019. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-2, Pune. 4. The Pr. CIT-1, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.
6 ITA No. 2915/PUN/2016 A.Y.2008-09
Date 1 Draft dictated on 29.04.2019 Sr.PS/PS 2 Draft placed before author 29.04.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order