THE ITO, WARD-4(4), AHMEDABAD vs. SHRI RAMESHWAR RAMNIVAS MANIYAR, AHMEDABAD

आदेश/O R D E R

PER PRADIP KUMAR KEDIA - AM:

The captioned appeal has been filed at the instance of the Revenue against the order of the CIT(A)-4, Ahmedabad (‘CIT(A)’ in short), dated 8th September, 2015 arising in the penalty order dated 13.06.2014 passed by the Assessing Officer (AO) under s. 271(1)(c) of

ITA No. 3206/Ahd/15 [ITO vs. Shri Rameshwar R. Maniyar] A.Y. 2011-12 - 2 -

the Income Tax Act, 1961 (the Act) concerning assessment year 2011-

12.

the CIT(A) in deleting the penalty of Rs.14,60,034/- levied by the AO

under s. 271(1)(c) of the Act.

Revenue relied upon the penalty order passed by the AO.

CIT(A) granting relief from the action of 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.

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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 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, where 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.

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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.

This Order pronounced in Open Court on 17/07/2018

Sd/- Sd/- (MADHUMITA ROY) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 17/07/2018 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।