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Income Tax Appellate Tribunal, “A” Bench, Mumbai
THE INCOME TAX APPELLATE TRIBUNAL “A” Bench, Mumbai Shri Shamim Yahya (AM) & Shri Amarjit Singh (JM)
I.T.A. No. 8030/Mum/2019 (Assessment Year 2013-14) Vs. ITO-24(1)(2) Late Ananda Rajgopalan A/26, Maharaja surajmal 6th Floor Housing Society, Four Piramal Bunglow, Andheri-West Chamber Mumbai-400 053. Lalbaug, Parel Mumbai-12. PAN : AAEPR0294B (Appellant) (Respondent)
Assessee by None Department by Shri Brajendra Kumar Date of Hearing 03.08.2021 Date of Pronouncement 05.10.2021
O R D E R Per Shamim Yahya (AM) :- This appeal by the assessee is directed against the order of learned CIT(A) dated 22.11.2019 pertaining to assessment year (A.Y.) 2013-14.
Grounds of appeal read as under : On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming the penalty u/s.271(l)(c) of Rs.10,46,500/- ignoring the fact, that the penalty notice was defective and the proceedings was null and void. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the penalty u/s. 271(1)(c), ignoring the fact that the Appellant had a genuine and bonafide reason for the mistakes made while filing the return.
Brief facts leads to the levy of penalty. In this case the assessee has filed return of income for AY 2013-14 on 26.07.2013 declaring total income of Rs.6,65,810/-. The case was selected for scrutiny under CASS and statutory notice u/s. 143(2) was issued on 12.09.2014. The assessment was completed u/s. 143(3) on 10.03.2016 determining the total income of Rs.38,80,330/-. While passing the assessee order the AO has made addition of Rs.31,39,069/-
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on account of capital gains. Further as per AIR details the assessee has received Rs. 31,876/- & Rs.109/- but not offered the same for taxation, hence, the same was added to the income of the assessee. The penalty proceedings u/s. 271(1)(c) were initiated for furnishing inaccurate particulars of income. A show cause notice was issued on 18.07.2016 by fixing the hearing on 17.08.2016 and asking the assessee to show cause as to why the penalty u/s. 271(1)(c) should not be levied. The assesses has filed reply in response to this notice vide letter dated 17.08.2016. The assessee submitted that the assessee claimed exemption u/s. 54 by purchasing a new property at Dombivali for Rs.56,44,493/- as the colony could not be constructed the exemption was claimed u/s.54F which was claimed and submitted in the revised computation during the assessment proceedings. As regards the addition of Rs. 31,876/- the assessee submitted that he had kept fixed deposit with Unitech on 05.10.2010. Though the interest of Rs.31,876/- and TDS of Rs,3,188/- reflected on traces site, the assessee neither received the principal nor received interest. The assessee had neither concealed particulars nor furnished any inaccurate particulars. In view of this penalty may be dropped. Another show cause was issued on 27.09.2016 fixing the date of hearing on 28.09.2016. In response to this notice the assessee submitted his reply which was same was the earlier reply. The assessee had sold a plot for consideration of Rs.88,00,000/- and claimed exemption of Rs.50,00,000/- u/s. 54 and exemption of Rs.37,23,320/- on account of investment in capital gain account scheme. Vide the revised computation dated 03.02.2016 the assessee had shown capital gain of Rs.31,39,069/-. The Assessing Officer opined in penalty proceedings that clearly the assessee had offered the same as his case was in scrutiny if the same was not the case this income have escaped the assessment. Further, as per the AIR the assessee had received Rs.31,876/- & Rs.109/- but not offered the same for taxation. Hence the intention of the assessee was not bonafide. In view of the above the Assessing Officer in penalty order held that the assessee concealed particulars of income as envisaged by section 271(1)(c) of the Income Tax Act-1961 on account of
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disallowance of Rs.31,71,054/-. That the assessee has to pay by way of penalty a sum not less than the amount 100% of tax sought to be evaded by reason of the concealment of particulars of his income amounting to Rs.10,46,500/- u/s. 271(1)(c) of the IT Act, 1961.
Upon assessee’s appeal as regards the issue of different charges specified in assessment order and penalty order learned CIT(A) held as under :-
“4.1.5 The appellant during the course of appellate proceedings has lastly stated that the AO is not sure about whether it is a case of furnishing inaccurate particulars or concealment of income and has relied upon certain decisions. The assessment order and the penalty order do not have any ambiguity and it is very clear that the charge for penalty u/s. 271(1)(c) is on account of furnishing inaccurate particulars of income. Therefore, where there exists no vagueness or ambiguity as to the charge. The validity of the penalty order cannot be objected. The recent decision in the case of Skylight Hospitality LLP vs. ACIT 92 taxmann.com 93 (2018)(SC). the Hon'ble Supreme Court has affirmed the decision of the Hon'ble Delhi High Court wherein it was held as under :- Nevertheless human errors and mistakes cannot and should not nullify proceedings which are otherwise valid and no prejudice had been caused. This is the effect and mandate of section 292B of the Act.”
Against the above the order assessee is in appeal before us.
We have heard learned Departmental Representative and perused the record. We note that it is clear that while the Assessing Officer in assessment order mentioned the charges against the assessee as that of furnishing of inaccurate particulars of income on the other hand the Assessing Officer in the penalty order held that the assessee is guilty of concealment of income. Penalty levied u/s. 271(1)(c) of the Act in such circumstances is not sustainable on the touchstone of the Hon'ble Bombay High Court decision in the case of CIT Vs. Samson Perinchery (Income Tax Appeal No. 1154 of 2014 dated 5.1.2017). We may gainfully refer to the said discussion as under :- “(i) The grievance of the Revenue before us is that there is no difference between furnishing of inaccurate particulars of income and concealment of income. Thus, distinction drawn by the impugned order is between Tweedledum and Tweedledee. In the above view, the deletion of the penalty, is unjustified.
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(ii) The above submission on the part of the Revenue is in the face of the decision of the Supreme Court in Ashok Pat v/s. CIT 292 ITR 11 [relied upon in Manjunath Cotton & Ginning Factory (supra)] - wherein it is observed that concealment of income and furnishing of inaccurate particulars of income in Section 271(1)(c) of the Act, carry different meanings/ connotations. Therefore, the satisfaction of the Assessing Officer with regard to only one of the two breaches mentioned under Section 271 (1 )(c) of the Act, for initiation of penalty proceedings will not warrant/permit penalty being imposed for the other breach. This is more so, as an Assessee would respond to the ground on which the penalty has been initiated/notice issued. It must, therefore, follow that the order imposing penalty has to be made only on the ground of which the penalty proceedings has been initiated, and it cannot be on a fresh ground of which the Assessee has no notice.”
Hence, respectfully following the precedent, we set aside the order of authorities below. As regards the reference by learned CIT(A) to Hon'ble Supreme Court decision Skylight Hospitality LLP (supra)the same was with reference to Writ before Hon'ble Apex Court. It was not the case of assessment order initiating the charge for furnishing of inaccurate particulars of income and penalty being levied for concealment. Hence, the same does not help the case of Revenue.
In the result, assessee’s appeal is allowed. Pronounced in the open court on 5.10.2021.
Sd/- Sd/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai; Dated : 05/10/2021 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai