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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)-3, Pune dated 28.12.2018 for the assessment year 2006-07 as per grounds of appeal on record.
2 ITA No. 234/PUN/2019 A.Y.2006-07
The only grievance of the assessee is with regard to imposition of
penalty levied u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred
to as ‘the Act’) by the Assessing Officer and the same being confirmed by the
Ld. CIT(Appeals) relying on the decision of the Hon'ble Bombay High Court in
the case of Smt. Kaushalya reported as 216 ITR 660.
At the time of hearing, the Ld. AR of the assessee vehemently argued
that the notice issued u/s. 274 r.w.s. 271(1) of the Act did not specify the
exact limb/ charge for which penalty u/s.271(1)(c) is levied. The notice is
vague in nature since it mentions both the limbs of section 271(1)(c) of the
Act i.e. ‘concealment of income’ and ‘furnishing of inaccurate particulars of
income’. That further in the penalty order also, it is mentioned that penalty
u/s.271(1)(c) of the Act is levied for concealing and furnishing of inaccurate
particulars of income. 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 wherein it has been held that the
satisfaction of the Assessing Officer with regard to only one of the two
breaches u/s.271(1)(c) of the Act for initiation of penalty proceedings would
not permit penalty being imposed for the other breach. Thus, the order
imposing penalty was to be made only on the ground on which the penalty
proceedings were initiated and it could not be a fresh ground of which the
assessee had no notice.
3 ITA No. 234/PUN/2019 A.Y.2006-07
On the other hand, the Ld. DR vehemently argued that the Ld.
CIT(Appeals) has confirmed the penalty relied on the decision of the Hon'ble
Bombay High Court in the case of Smt. Kaushalya (supra.) and has placed
reliance on the order of the Sub-ordinate Authorities.
We have perused the case records and analysed the facts and
circumstances of the case and have given considerable thought to the judicial
pronouncements placed before us. We observe that the Ld. CIT(Appeals) relied
on the decision of Smt. Kaushalya (supra.) which is an earlier decision and
have confirmed the penalty levied u/s.271(1)(c) of the Act. However, the law of
the land as on date should definitely be the law laid down by the Hon'ble
Bombay High Court in the case of CIT Vs. Samson Perinchery (supra.) which
is at a later date than that laid down in Smt. Kaushalya’s case and therefore,
is a present judgment on the subject. The Hon'ble Bombay High Court therein
had applied the findings of the Hon'ble Karnataka High Court in the case of
CIT Vs. Manjunath Cotton and Ginning Factory (supra). The binding
proposition, therefore, is that 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. This is to provide an opportunity to the assessee 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.
In the totality of facts and circumstances, when notice of penalty is not
specific about the charge, when penalty order itself is not specific about the
exact limb/charge, both are vague in nature. In such circumstances, we set
4 ITA No. 234/PUN/2019 A.Y.2006-07
aside the order of the Ld. CIT(Appeals) and direct the Assessing Officer to delete penalty from the hands of the assessee.
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)-3, Pune. 4. The Pr. CIT-2, 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. 234/PUN/2019 A.Y.2006-07
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