ZAHEER ABDULHAMID MULANI,PUNE vs. INCOME-TAX OFFICER, PUNE

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ITA 1185/PUN/2017Status: DisposedITAT Pune26 March 2019AY 2011-125 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty notice was vague as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. The Tribunal also noted that the revised return was filed before the assessment was completed.

What were the facts?

The assessee failed to disclose certain salary income and cash deposits in the original return. A penalty was initiated under Section 271(1)(c) for concealment of income and furnishing inaccurate particulars. The assessee later filed a revised return disclosing these amounts.

What were the issues?

Whether a penalty under Section 271(1)(c) can be levied when the notice is vague and does not specify the limb of the charge. Whether filing a revised return before completion of assessment negates the charge of concealment or inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274,Section 139(5)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI R.S.SYAL, VP & SHRI PARTHA SARATHI CHAUDHURY, JM

For Appellant: Shri K. Srinivasan
For Respondent: Shri Sudhendu Das
Hearing: 25.03.2019Pronounced: 26.03.2019

आदेश / ORDER

PER PARTHA SARATHI CHAUDHURY, JM :

This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals), Pune dated 23.12.2016 for the assessment year 2011-12 as per grounds of appeal on record.

2 ITA No.1185 /PUN/2017 A.Y.2011-12

2.

The crux of the grievance of the assessee is with regard to confirmation

of penalty levied u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter

referred to as ‘the Act’).

3.

The brief facts in this case are that the assessee is a salaried individual who derives salary from (i) Eaton Technologies Pvt. Ltd (ii) Hutchison 3 Global Services Pvt. Ltd (iii) Axa Technologies Shares Services Pvt. Ltd. The Assessment u/s. 143(3) was completed on 29.03.2014 assessing total taxable income of Rs.39,89,650/-. The case was selected for scrutiny as per the Scrutiny

Selection Norms under CASS and the required notices duly issued and served on the Assessee. Penalty was initiated in the assessment Order for furnishing

inaccurate particulars and concealment of income for the failure of the Assessee to offer Rs.4,54,653/- and Rs.1,71,721/- salary received from two concerns, failure to disclose interest amount of Rs.8,121/- and to explain the source of cash deposits amounting to Rs.32,50,000/-.

4.

At the time of hearing the Ld. AR of the assessee at the very outset

submitted that the notice issued u/s.274 r.w.s.271(1)(c) of the Act along with

penalty order is vague as to the limb on which penalty u/s. 271(1)(c) of the

Act is initiated. The Ld. AR contended that it is settled principle of law if the

charge is not specific then the penalty u/s.271(1)(c) of the Act cannot be

levied. That in support of his contentions, the Ld. AR of the assessee relied on

the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs.

Samson Perinchery in ITA No.1154 of 2014 and the decision of Hon'ble

Karnataka High Court in the case of CIT Vs. Manjunath Cotton and Ginning

Factory reported as 359 ITR 565. The Ld. AR further submitted that the

assessee has filed revised return on 18.12.2013 in compliance to section

139(5) of the Act. Since revised return was filed before assessment was

3 ITA No.1185 /PUN/2017 A.Y.2011-12

completed i.e. on 29.03.2014 and in that revised return, the assessee has

reflected the salary and the interest component which was not included in the

original return and thereby in compliance to section 139(5) of the Act, there is

neither ‘concealment of income’ nor ‘furnishing of inaccurate particulars of

income’ so far as the assessee is concerned.

5.

Per contra, the Ld. DR has relied on the orders of Sub-ordinate

Authorities.

6.

We have perused the case records and considered the judicial

pronouncement placed before us. The facts reveal that in the notice issued

u/s.274 r.w.s. 271(1)(c) of the Act as well as penalty order, the charge for

which penalty u/s.271(1) (c) of the Act has been levied, is not specific and

both the limbs of charge are mentioned there i.e. ‘concealment of income’ and

‘furnishing of inaccurate particulars of income’.

That taking guidance from the decision of the Hon'ble Bombay High

Court in the case of CIT Vs. Samson Perinchery (supra.) wherein the Hon'ble

Bombay High Court has considered the decision of Hon'ble Karnataka High

Court in the case of CIT Vs. Manjunath Cotton and Ginning Factory (supra.),

the legal proposition that comes out and which is binding in nature is that

the Assessing Officer should be clear as to which of the two limbs under

which penalty is imposable, has been contravened or indicate that both have

been contravened while initiating penalty proceedings. It cannot be that the

initiation would be only on one limb i.e. for furnishing inaccurate particulars

of income while imposition of penalty on the other limb i.e. concealment of

income.

7.

The sanctity in terms of natural justice with regard to this proposition

is that the assessee under the scheme of welfare legislation which is

4 ITA No.1185 /PUN/2017 A.Y.2011-12

embedded in the Income Tax Act, 1961 should get an opportunity to prepare himself for the defense as regards to the exact charge on which penalty is imposed upon him u/s. 271(1)(c) of the Act. In the instant case, the charge is vague and therefore, levy of penalty is not warranted. Furthermore, the revised return filed by the assessee is in conformity with section 139(5) of the Act wherein all the particulars of income have been disclosed.

Taking totality of facts and legal scenario into consideration, we set aside the order of the Ld. CIT(Appeals) and direct the Assessing Officer to delete the penalty from the hands of the assessee.

8.

In the result, appeal of the assessee is allowed.

Order pronounced on 26th day of March, 2019.

Sd/- Sd/- R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER

पुणे / Pune; �दनांक / Dated : 26th March, 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), Pune-5. 4. The Pr. CIT, Pune-4, 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.

5 ITA No.1185 /PUN/2017 A.Y.2011-12

Date 1 Draft dictated on 25.03.2019 Sr.PS/PS 2 Draft placed before author 26.03.2019 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

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