ADITI ATUL KIRLOSKAR,,PUNE vs INCOME-TAX OFFICER, WARD - 3(3),, PUNE

Income Tax Appellate Tribunal, “A”

Before: SHRI PARTHA SARATHI CHAUDHURY & DR. DIPAK P. RIPOTE

For Appellant: Shri C H Naniwadekar – AR

For Respondent: Shri S.P.Walilmbe – DR

Hearing: 28/07/2022Pronounced: 08/08/2022

ORDER

PER DR. DIPAK P. RIPOTE, AM:

This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeals)-3, Pune dated 31.05.2018 for the A.Y. 2014-15, emanating from the order under section 271(1)(c) of the Income Tax Act, 1961 dated 22.06.2017. The assessee has raised the following grounds of appeal: “1. The learned Assessing Officer erred on facts and in law in levying the penalty of Rs.42,650/- u/s 271(1)(c) read with section 274(2)(a) of the Act. He failed to appreciate the contents and arguments advanced in this behalf.

2. The appellant craves, leave to add, alter, delete, or substitute all or any of the above grounds of appeal.”

2. The ld.Authorised Representative(ld.AR) of the assessee at the beginning pointed out that notice under section 271(1)(c) of the Act A.Y. 2014-15 Aditi Atul Kirloskar Vs. ITO, Ward-3(3), Pune [A] dated 21.12.2016 is defective as the Assessing Officer(AO) has not struck-off the relevant part of the notice. This shows, non- application of mind. The ld.AR also invited our attention to the assessment order, where Assessing Officer vaguely mentioned penalty initiated separately for concealment of the particulars of income or furnished inaccurate particulars of income. Therefore, ld.AR submitted that even in the assessment order, the AO was not clear whether there is concealment of income or furnished inaccurate particulars.

The ld.Departmental Representative(ld.DR) for the Revenue relied on the orders of the Lower Authorities.

We have heard both the parties, studied the records. The only issue involved is penalty order under section 271(1)(c) of the Act dated 22.06.2017 passed by the Income Tax Officer, Ward-3(3), Pune. We have perused the copy of the notice dated 21.12.2016 filed by the ld.AR. It is observed that none of the non-applicable words have been struck-off by the AO in the notice. It is a printed notice, the First para is about failure to comply notice under section 22(1) of the Indian Income Tax Act, 1922 or section 142(1) of the Income Tax, third para is about “have concealed the particulars of income or furnished inaccurate particulars of such income”. In this printed format, the AO has not mentioned which of the paragraph is A.Y. 2014-15 Aditi Atul Kirloskar Vs. ITO, Ward-3(3), Pune [A] applicable to the assessee. Neither the AO has struck-off the appropriate words, therefore, we are of the opinion that the penalty notice is defective. It is also observed that in the assessment order, the AO has not categorically mentioned whether the AO is initiating penalty for concealment of particulars of income or for furnishing inaccurate particulars of income. Thus, there is no application of mind even at the stage of assessment by the AO. We find support from the order of Hon’ble Bombay High Court in Ganga Iron & Steel Trading Co. v/s Commissioner of Income Tax[2022] 135 taxmann.com 244 (Bombay)order dated December 22, 2021 held as under: “10. We find that the law as laid down by the Full Bench applies on all fours to the facts of the present case as in the show cause notice dated 12-2-2008, the Assistant Commissioner of Income-tax is not clear as to whether there was concealment of particulars of income or that the Assessee had furnished inaccurate particulars of income. We therefore find that issuance of such show cause notice without specifying as to whether the Assessee had concealed particulars of his income or had furnished inaccurate particulars of the same has resulted in vitiating the show cause notice. Heavy reliance was placed by the learned counsel for the Revenue on the decision in Mak Data (P.) Ltd. (supra) to urge that the penalty contemplated by section 271 (1) (c) of the said Act was in the nature of civil liability and mens rea was not essential therein. The decision in Dilip N. Shroff (supra) having been held as not laying down good law in Dharmendra Textile Processors Ltd. (supra), it was submitted that the show cause notice issued in the present proceedings was liable to be upheld. It may be noted that all the decisions relied upon by the learned counsel for the Revenue were considered by the Full Bench while answering the issues referred to it on reference. The Full Bench having considered these decisions and having answered the question as regards defect in the notice under section 271(1)(c) of the said Act resulting in vitiating the penalty proceedings, we find ourselves bound by the answers given by the Full Bench. It would not be A.Y. 2014-15 Aditi Atul Kirloskar Vs. ITO, Ward-3(3), Pune [A] permissible for us to disregard this aspect and take a different view of the matter. Accordingly substantial question of law no. III is answered by holding that since the show cause notice dated 12-2-2008 does not indicate whether there was concealment of particulars of income or furnishing of incorrect particulars of such income, the same would vitiate the penalty proceedings.” 4.1. In the case under consideration also the AO has not struck the appropriate words in the penalty notice. Also as mentioned in earlier para, in the assessment order the AO has not mentioned whether the penalty is initiated for concealment or filling inaccurate particulars. Therefore, respectfully following the Hon’ble jurisdictional High Court, it is held that the penalty u/s.271(1)(c) is not maintainable. Hence, the Assessing Officer is directed to delete the penalty u/s 271(1)(c).

ADITI ATUL KIRLOSKAR,,PUNE vs. INCOME-TAX OFFICER, WARD - 3(3),, PUNE