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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. SANJAY ARORA & SH. N.K.CHOUDHRY
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA No.368(Asr)/2014 Asst. Year:2007-08
Shri Jagjit Singh, Vs. Income Tax Officer, S/o Shri Amrik Singh, Ward-4(2), Amritsar Galli Gujjran, Jandiala Guru, Amritsar PAN:AWNPS 5528A (Appellant) (Respondent) Appellant by: Sh. P. N. Arora (Ld. Adv.) Respondent by: Sh. Gautam Deb (Ld. DR) Date of hearing: 08.08.2018 Date of pronouncement: 31.10.2018 ORDER PER N.K.CHOUDHRY, JM: The instant appeal has been preferred by the Assessee/Appellant, on feeling aggrieved against the order dated 02.04.2014 passed by the Ld. CIT(A)-, Amritsar u/s. 250(6) of the I.T. Act, 1961 (hereinafter called as ‘the Act’), whereby he confirmed the penalty of Rs.26,83,981/- as imposed by the Assessing Officer.
The assessee has raised the following grounds of appeal. That the Ld. CIT (Appeals) has grossly erred in confirming the order “1. of the AO thereby levying penalty of Rs.26,83,981/- under section 271(1)(c) of the Income-Tax Act, 1961, and the same may be cancelled. That the authorities below did not appreciate that there was no 2. default under section 271(1)( c) of the Income-Tax Act, 1961, and the case does not fall, within the mischief of section 271 (1)( c) of the Income-Tax Act, 1961. As such the order thereby confirming the penalty is bad in law and the same is liable to be cancelled.
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That the Ld. CIT (Appeals) has decided the case on legal ground and not decided the case on merits. The Ld. CIT (Appeals) should have decided the case on merits also.
That the order of the Ld. CIT (Appeals) thereby confirming the penalty of Rs.26,83,981/- is liable to be cancelled. The Ld. CIT (Appeals) did not appreciate that this case does not fall within the mischief of section 271(1)( c) of the Income-Tax act, 1961. As such the Ld. CIT (Appeals) was not justified in confirming the order of the AO, thereby levying penalty of Rs.26,83,981/-. As such the order of the Ld. CIT (Appeals) is bad in law and the same is liable to be cancelled. Alternatively, the penalty levied is very high & excessive.
That the Ld. CIT (Appeals) failed to appreciate that the penalty order under section 271 (1)( c) of the Income-Tax Act, 1961, is bad in law and the Ld. CIT (Appeals) miserably failed to appreciate that the penalty was initiated for furnishing inaccurate particulars of income and whereas the penalty was levied for concealing the particulars of income. Thus no reasonable opportunity of being heard was allowed before levying the penalty. As such the order levying penalty u/s 271(1)(c) of the I.T Act, 1961, is bad in law, inasmuch as, there was no application of mind as the levy of penalty is different from the basis of initiation of penalty proceedings. As such the order levying penalty u/s 271(1)(c) of the Income- Tax Act, 1961, is bad in law and is liable to be cancelled.
That the Ld. CIT (Appeals) has miserably failed to appreciate that the assessment proceedings and the penalty proceedings are quite different and as such there was no justification in confirming the penalty. The penalty order is bad in law and the same may be cancelled.” 3. The brief facts of the case are that the assessee had declared net income of Rs.93,800/- as well as Rs.90,000/- income from agriculture and the Assessing Officer vide order dated 30.12.2009 assessed the income u/s 143(3), to the tune of Rs.80,93,800/-+ Rs.90,000/- (Agriculture Income) after making an addition of Rs.80 lacs while considering the facts that the assessee by virtue of registered General Power of Attorney dated 24-07-2006 executed by Sh. Paramdeep Singh (owner of Amritsar Gas Service), had sold Gas Agency namely Amritsar Gas Service, situated at Dilawari Street, Putlighar, Amritsar, vide agreement dated 29.09.2009 to the respective buyers namely Sh. Sadha Singh ½ share, Sh. Nirmal Singh
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and Sh. Sawinder Singh ½ share , all residents of Village Mahal, Ram Tirth Road, Amritsar. The assessment order was challenged by the Assessee before the Ld CIT(A), who vide order dated 05-04-2011 set aside the Assessment order, thereafter the order of CIT(A) was challenged before the ITAT, Amritsar. The co-ordinate bench of ITAT Amritsar, vide order dated 11-09-2012, while restoring the assessment order , reversed the order passed by the Ld. CIT(A). Thereafter on restoration of assessment order by ITAT, the penalty proceeding have also been initiated separately and a notice for hearing for dated 22.01.2013 was duly served upon the assessee by the notice server on dated 16.01.2013, however neither no one attended on behalf of the assessee nor sought any adjournment, thereafter final opportunity was given, however, on dated 8.3.2013, the assessee’s counsel requested for adjournment, however the Assessee was directed to file reply by 15.03.2013 and thereafter up to 20th March, 2013, the same remained un-complied, therefore, the Assessing Officer came to the conclusion that the assessee has nothing to say in the matter and finally it was concluded by the Assessing Officer that from the above facts, one thing is clear that omission was there on the part of the assessee, since he failed to disclose his correct income and pay tax in full in return of the income filed by him. Finally the Assessing Officer imposed the penalty of Rs.26,83,981/- for concealing the particulars of income.
The assessee challenged the penalty order before the ld. CIT(A), who affirmed the same.
Now, the assessee is in appeal before us.
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Having heard the parties at length and considered the material on records. In the instant case, the assessee had challenged the penalty order before the ld. CIT(A) on various grounds inter alia that the penalty order is bad in law as the penalty was initiated for furnishing inaccurate particulars of income whereas the penalty was levied for concealing particulars of income and thus, no reasonable opportunity of being heard was offered while levying penalty. Further, there is non- application of mind while levying the penalty as the proceedings were initiated on different footings and the penalty was levied on separate footings. Further, it was submitted that the Assessing Officer has not applied his mind independently as the assessment and the penalty proceeding are separate proceedings and requires to be adjudicated independently on its own reasons, however, from the penalty order passed by the Assessing Officer, it does not reflect that he had applied his mind independently, simply he has observed that from the facts one thing is clear that the omission was there on the part of the assessee since he failed to disclose his correct income and pay tax in full in the return of income filed by him. Further it was submitted by the Ld. A R that the ld. CIT(A) wrongly interpreted the settled law and affirmed the penalty order without taking into account the peculiar facts and circumstances of the case because in the instant case, the satisfaction was recorded for furnishing inaccurate particulars of income, however, notice was issued on both of the limbs i.e. concealment of particulars of income or furnishing inaccurate particulars of such income, however, the penalty order was passed for the concealment of particulars of income, therefore, on this ground also the penalty order is liable to be set aside.
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In the instant case, the assessment order was passed and addition of Rs.80 lacs was made in the income of the assessee, which was challenged by the assessee before the Ld. CIT(A), who deleted the addition, thereafter, the Revenue Department preferred the appeal before the ITAT, Amritsar Bench and the Co-ordinate Bench at Amritsar reversed the order passed by the Ld. CIT(A) by restoring the order of the Assessing Officer, thereafter, the Assessing Officer passed the penalty order dated 22.03.2013, however, the Co-ordinate Bench at Amritsar vide its order dated 16.06.2016 passed in Misc. Application No.04(Asr)/2013 recalled its earlier order dated 11.09.2012 and finally vide order dated 31-10-2018, this Bench set aside the orders passed by the authorities below while observing the acts and omissions of the authorities below, which goes to show that the issue involved in the instant case is complex in nature and debatable and even otherwise the Assessing officer, while levying penalty without demonstrating independent and reasonable reasoning/material/grounds on the basis of which the penalty is justifiable, simply observed that from the facts one thing is clear that the omission was there on the part of the assessee since he failed to disclose his correct income and pay tax in full in the return of income filed by him. On the aforesaid considerations and observations, without going into the technical and legal issues raised by the Assessee, considering the peculiar facts and circumstances and specifically because the orders passed by the authorities below have already been set aside, we are of the view that the penalty in any sense cannot be leviable and hence does not survive, resultantly we do not have any hesitation to delete the penalty.
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In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on 31 .10.2018.
Sd/- Sd/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31.10.2018 /PK/ Ps. Copy of the order forwarded to: (1) Shri Jagjit Singh, S/o Shri Amrik Singh, Gali Gujjran, Jandiala Guru, Amritsar (2) Income Tax Officer, 4(2), Amritsar (3) The CIT(A)-Amritsar (4) The CIT concerned (5) The SR DR, I.T.A.T., Amritsar True copy By order