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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI RAJESH KUMAR
Per Rajesh Kumar, Accountant Member:
The above titled three appeals have been preferred by the assessee against the order dated 25.01.2016 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2005-06, 2006-07 & 2007-08.
The only issue raised by the assessee is against the confirmation of penalty by Ld. CIT(A) as imposed by the AO under section 271(1)(c) of the Act of Rs.1,46,370/- in respect of additional income of Rs.4,00,000/- declared by the assessee during the assessment proceedings after filing the return of income under section 153A of the Act.
2 1508 & 1509/M/2016 M/s. Man Equipment Co. P. Ltd 3. The facts in brief are that a search was conducted on assessee on 13.02.2009 on Rangara group of cases of which the assessee was a group entity. During the year the assessee filed the nil return of income on 29.10.2005 declaring loss Rs.29,138/-. Thereafter, in response to notice issued under section 153A dated 13.08.2009, the assessee filed its return of income on 26.11.2009 declaring a same income which was declared in the original return filed by the assessee. Thereafter, the assessee filed a revised computation of income during the assessment proceedings declaring an additional income by stating that during the course of search, some list of entries recorded on backside of the page No.3 there appeared an entry of Rs.3,60,000/- which could not be explained and therefore same is being offered as an additional income amounting to Rs.4,00,000/-. The assessee submitted that in the return of income filed in response to notice under section 153A of the Act such additional income was not declared by mistake and now being rectified by filing revised computation of income. Thereafter, the assessment was framed under section 143(3) read with section 153A of the Act dated 31.12.2010 assessing the total income of Rs.4,00,000/- and the AO initiated penalty proceedings for concealment of particulars of income and furnishing of inaccurate particulars of income in the assessment order and also issued notice under section 274 read with section 271(1)(c) of the Act. Thereafter, the penalty was levied vide order dated 07.03.2014 passed under section 271(1)(c) on the ground that the assessee has concealed the particulars of income or furnished inaccurate particulars of income thereby
In the appellate proceedings also Ld. CIT(A) affirmed the order of AO by holding that the AO has correctly invoked the provisions of Explanation 5A to section 271(1)(c) in respect of additional income of Rs.4,00,000/- shown by the assessee in the revised computation of income during the course of assessment proceedings much after the date of search and thus justified the imposition of penalty.
After hearing both the parties and perusing the material on record, we observe that in this case the penalty has been initiated by the AO in the assessment order for both the charges i.e. concealment of income or for furnishing of inaccurate particulars of income. Thus the AO has initiated penalty under both the charges. Similarly, the penalty was imposed under both the charges in the penalty order dated 07.03.2014 passed under section 271(1)(c) of the Act. Though the notice issued under section 274 read with section 271(1)(c) is not before us so we are not able to comment on whether the assessee has mentioned both the charges or specific limb was pointed out but after perusal of the order of assessment passed under section 143(3) read with section 153A of the Act dated 31.12.2010 and the penalty order under section 271(1)(c) dated 07.03.2014, we observe that the penalty was initiated for both the charges as well as imposed on both the charges which is not permissible under the Act as both these limbs are mutually exclusive. Under these circumstances, we are not in a position to sustain the order of Ld. CIT(A) confirming the penalty imposed under 4 1508 & 1509/M/2016 M/s. Man Equipment Co. P. Ltd section 271(1)(c) of the Act as the same is in violation of the ratio laid down by the Hon’ble Bombay High Court in the case of Mrs. Piedade Perinchery (BomHC) ITA No.1310 of 2014 dated 10.01.2017 & Shri Samson Perinchery vs. CIT (Bom HC ) 392 ITR 4 dated 05.01.2017. Similarly, the issue has been affirmed by the Hon’ble Supreme Court in the case of CIT vs. SSA's Emerald Meadows (Kar HC) 73 taxmann.com 241 dated 23. 11. 2015. We therefore respectfully following the decision of Hon’ble Bombay High Court and also the Apex Court as stated hereinabove, set aside the order of Ld. CIT(A) and direct the AO to delete the penalty.
& 159/M/2016 6. The issue raised by the assessee in both these appeals is common and is against the confirmation of penalty of Rs.1,83,600/- in A.Y. 2006-07 and Rs.7,34,400/- in A.Y. 2007- 08.
We have already decided the similar issue in A.Y. 2005-06 (supra), therefore, our decision in ITA No.1507/M/2016 would ,mutatis mutandis, apply to these appeals as well. Accordingly, the appeals of the assessee are allowed.
In the result, all the three appeals of the assessee are allowed. Order pronounced in the open court on 21.05.2019.