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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: Shri Pramod Kumar]
SMC-ITA No. 3331/Ahd/2015 Kaushikaben A Patel Vs. ITO AY : 2009-10 Page 1 of 3
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD [ Before Shri Pramod Kumar, Accountant Member ] ITA No. 3331/Ahd/2015 Assessment Year : 2009-10 Kaushikaben A Patel ......…………......Appellant 8, Lavkush Society, Nr. Vyas Wadi, Nava Wadaj, Ahmedabad – 380 013 [PAN : AINPP 3805 B] Vs. Income Tax Officer .......................Respondent Ward 2 (2)(2), Ahmedabad
Appearances by: Aditi Sheth, for the appellant Sonia Kumar, for the respondent
Date of concluding the hearing : 12.10.2018 Date of pronouncing the order : 15.10.2018
O R D E R 1. By way of this appeal, the assessee appellant has challenged correctness of order dated 2nd November 2015 passed by the CIT(A) upholding the penalty imposed upon the assessee under section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 2009-10.
Grievance of the assessee, in substance, is against learned CIT(A)’s confirming the penalty of Rs.4,10,000/-.
To adjudicate on this appeal, only a few material facts need to be taken note of. In this case, an addition of Rs.13,09,800/- was made in the hands of the assessee, for cash deposits in his bank account which were treated as unexplained. The matter did not end at that. The Assessing Officer also imposed penalty under section 271(1)(c) in respect of the said addition which has been confirmed in appeal as well. The assessee is not satisfied and is in further appeal before the Tribunal.
I have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.
I find that the explanation of the assessee, about source of cash deposits, is that the deposits were made out of cash withdrawn from the bank in past, but then no supporting details are available. On merits, however, I do not have any reasons
SMC-ITA No. 3331/Ahd/2015 Kaushikaben A Patel Vs. ITO AY : 2009-10 Page 2 of 3
to interfere in the matter. However, I find that in this case penalty was initiated for “concealment of income” but penalty was imposed for “furnishing of inaccurate particulars of income”. Learned Departmental Representative also does not dispute that factual aspect. I find that, in the light of division bench decisions in the case of ITO vs. Rameshwar R. Maniyar (ITA No.3206/Ahd/2015; order dated 17.07.2018) and Kantibhai N. Prajapati vs. ITO (ITA No.2880/Ahd/2014; order dated 15.02.2018) – which bind this SMC, such a course of action is not permissible. “5. We have carefully perused the quantum order passed by the AO as well as penalty order and the order of the CIT(A) appealed against. A bare perusal of the assessment order passed under s.143(3) of the Act dated 05.12.2013 shows that a satisfaction as contemplated under s. 271(1)(c) of the Act r.w.s. 271(1B) has formed towards concealment of particulars of income in respect of long term capital gains arising on sale of certain immovable property. However, a perusal of the penalty order dated 13.06.2014 passed under s. 271(1)(c) of the Act shows that the AO has shifted from its original satisfaction and imposed penalty for default committed on account of filing 'inaccurate particulars of income' with reference to long term capital gains. Therefore, there is a definite change in the basis of initiation of penalty proceedings and imposition thereof which is not permissible in law. The issue is squarely covered in favour of the assessee by the decision of the co-ordinate bench in in Shri Kantibhai Naranbhai Prajapati vs. ITO ITA No. 2880/Ahd/2014 order dated 15.02.2018. The relevant operative para of the order of the co-ordinate bench is reproduced hereunder:
"8. We straight away find that the AO vide penalty order dated 25/11/2013 under s.271(1)(c) of the Act imposed penalty on additions made alleging 'concealment of particulars of income'. However, the CIT(A), on the other hand, has confirmed the penalty on the ground of 'furnishing inaccurate particulars of income'. Apparently, the basis and foundation for imposition of penalty has been altered by the CIT(A). It is thus ostensible that findings recorded by the CIT(A) show that penalty has been confirmed on a different premise and the original satisfaction for imposition of penalty has been altered or modified by the appellate authority. In such circumstances, where the original basis of imposition of penalty has been altered in a significant way by the first appellate authority, the very basis for sustaining the penalty is rendered non-existent. Needless to say, the imposition of penalty is solely dependent upon the 'satisfaction' of the AO [unless initiated by CIT(A)] and non- else. The ground for action by AO was allegation of 'concealment'. This ground has been substituted by CIT(A) to 'furnishing inaccurate particulars of income' while confirming the penalty quantified by the AO. Thus, in the absence of continuity in the findings of the AO and the CIT(A), the order of the penalty passed by the AO is liable to be struck down on this ground alone. For such a view, we usefully refer to the decision of the Hon'ble Gujarat High Court in the case of New
SMC-ITA No. 3331/Ahd/2015 Kaushikaben A Patel Vs. ITO AY : 2009-10 Page 3 of 3
Sorathia Engineering Company vs. CIT (2006) 282 ITR 642 (Guj.) and CIT vs. Manu Engineering Works (1980) 122 ITR 306 (Guj.). Similar view has been taken by the Coordinate Bench of the Tribunal in Gian Chand Batia vs. DCIT 61 ITD 24(All.). Therefore, wher e concurrent I.T.authorities are not sure about nature of default, the penal action under s.271(1)(c) of the Act is not sustainable in law. 9. Consequently, the penalty order of the AO dated 25/11/2013 is set aside and penalty imposed thereby is cancelled."
Since the imposition of penalty stands deleted on the aforesaid legal ground, we are not inclined to deal with other aspects of the arguments raised on behalf of the assessee for deletion of penalty. Thus, we find no error in the conclusion drawn by the CIT(A) for deletion of penalty.”
Respectfully following the esteemed view of the Division Benches, I delete the impugned penalty. The assessee gets the relief accordingly.
In the result, appeal is allowed. Order pronounced in the open Court on this 15th day of October, 2018.
Sd/-
Pramod Kumar (Accountant Member) Ahmedabad, the 15th day of October, 2018 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad 1. Date of dictation: ... order prepared as per 2 pages manuscripts of hon’ble AM, which are attached herewith-15.10.18 2. Date on which the typed draft is placed before the Dictating Member: 15.10.2018...... 3. Date on which the approved draft comes to the Sr. P.S./P.S.: ... 15.10.2018..... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement: .. 15.10.2018.. 5. Date on which the file goes to the Bench Clerk : . 15.10.2018. 6. Date on which the file goes to the Head Clerk : ……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order: … 8. Date of Despatch of the Order: ………………......