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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SHRI PRADIP KUMAR KEDIA
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.
In the captioned appeal, the Revenue has agitated the action of
the CIT(A) in deleting the penalty of Rs.14,60,034/- levied by the AO
under s. 271(1)(c) of the Act.
When the matter was called for hearing, the learned DR for the
Revenue relied upon the penalty order passed by the AO.
The learned AR, on the other hand, relied upon the order of
CIT(A) granting relief from the action of the AO.
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.
ITA No. 3206/Ahd/15 [ITO vs. Shri Rameshwar R. Maniyar] A.Y. 2011-12 - 3 -
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.
Consequently, the penalty order of the AO dated 25/11/2013 is set aside and penalty imposed thereby is cancelled.”
ITA No. 3206/Ahd/15 [ITO vs. Shri Rameshwar R. Maniyar] A.Y. 2011-12 - 4 -
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.
In the result, the appeal of the Revenue is dismissed.
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 ।