DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 14,, PUNE vs. SUNIL SHIVAJIRAO BHOSALE,, PUNE

The above said appeal and cross objection by the Revenue and assessee, respectively filed against the common order dated 12-07-2019 passed by the Commissioner of Income Tax (Appeals)-3, Pune [‘CIT(A)’] for assessment year 2011-12.

Since, the issues raised in appeal and cross objection are similar based on same identical facts. Therefore, upon hearing and with the consent of both the parties, we proceed to dispose off above said appeal and cross objection together and to pass a consolidated order for the sake of convenience.

First, we shall take up the appeal by the Revenue in A.Y. 2011-12.

The Revenue raised four grounds of appeal amongst with the only issue emanates for our consideration is as to whether the CIT(A) is justified in cancelling the penalty imposed by the AO u/s. 271(1)(c) of the Act.

Heard both the parties and perused the material available on record. We note that the AO recorded its satisfaction by observing that the assessee concealed income vide Para No. 5.2.9 at Page No. 11 of the assessment order dated 18-03-2014 passed u/s. 143(3) r.w.s. 147 of the Act. In pursuance of the said satisfaction, the AO issued notice dated 18- 03-2014 u/s. 274 r.w.s. 271(1)(c) of the Act for both the charges i.e.

Having aggrieved, the assessee preferred an appeal before the CIT(A) challenging the action of AO for not striking out of the relevant charge in show cause notice issued u/s. 274 r.w.s. 271(1)(c) of the Act and also the penalty imposed under the charge of furnishing inaccurate particulars of income is contrary to the satisfaction recorded by the AO in the assessment order i.e. concealment of income. We note that the CIT(A) discussed the issue in detail and by placing reliance on the batch of orders of this Tribunal particularly in the case of Ambadas K Lavhale in vide order dated 14-08-2018 which held that the AO is under obligation to satisfy the correct limb at the time of initiation as well as at the time of levy of penalty and in the absence of which penalty order is unsustainable in law. The CIT(A) following the said decision held the penalty proceedings to be invalid. The ld. DR did not file any order contrary to the view taken by the Tribunal in the cases where penalty is not justified in the absence of non-striking of relevant charge in the notice issued u/s. 274 of the Act. Therefore, we find no infirmity in the order of CIT(A) and it is justified. Thus, the grounds raised by the Revenue are dismissed.

In the result, the appeal of Revenue is dismissed.

In view of our decision in Revenue’s appeal upholding the order of CIT(A), the issue raised in cross objection by the assessee becomes infructuous and are dismissed as such.

In the result, the appeal of Revenue as well as cross objection raised by the assessee is dismissed.