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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI B. R. BASKARAN, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 16.11.2015 passed by the Commissioner of Income Tax (Appeals)-3, Thane [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2009-10 wherein the penalty levied by the AO has been ordered to be confirmed.
2. The assessee has raised the following grounds: - “
1. The learned Commissioner of Income-tax [Appeals]
3. ClT(A) in so far as the levy of penalty under section 271{1)(c) of the Act against the appellant, is opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
ITA. No.1558/M/2016 A.Y. 2009-10
The order levying penalty u/s, 271{1)(c) of the Act, is bad in law in as much as the learned assessing officer has neither any proper satisfaction nor has such satisfaction been recorded in the order of assessment and consequently the very initiation of proceedings u/s. 271(1)(c) of the Act, is not in accordance with requirements of section 271(1)(c) of the Act and consequently, the order of penalty founded on the invalid penalty proceedings is liable to be cancelled.
The learned assessing officer failed to appreciate that the penalty proceedings are independent with that of the assessment proceedings and ought to have verified the facts of the case independently under the facts and circumstances of the case. 4. Without prejudice to the above the learned assessing officer is not justified in levying penalty of Rs.6,28,816/- under section 271(1)(c) of the Act without considering the facts the survey was conducted on the Appellant's father and the amount was confronted by Appellant father, which was not the income of the Appellant. 5. The Ld AO failed to appreciate the fact that the Notice for initiation of penalty as to whether it is concealment of income OR furnishing of inaccurate particulars of income is not discernable from the notice issued, which renders the Notice being defective and consequently the order of penalty should be held void under the facts and circumstances of the case. 6. The appellant craves leave, to add, amend, alter, modify and/or withdraw any of the above grounds of appeal as the situation may warrant, on or before the date of hearing of appeal.” The brief facts of the case are that the assessee filed his return 3. of income for the A.Y. 2009-10 on 24.09.2009 declaring income to the tune of Rs.10,36,500/-. The survey action u/s 133A of the Act was conducted on 04.02.2010 on the Pereira Builder and Group. During survey at the head office Pereira Builder, a paper indicating cash was ITA. No.1558/M/2016 A.Y. 2009-10 found. At the time of survey proceeding, Shri Anthony Pereira was confronted who explained that an amount of Rs.18,50,000/- was belonging to his son Shri Amol Anthony Pereira his son for the A.Y. 2009-10. The said additional income was confirmed by the assessee. Thereafter, on the basis of additional income, the assessee filed the revised income on 25.03.2010 declaring total income to the tune of Rs.28,86,500/-. Since no survey action could be conducted then the said income could not be disclosed. Thereafter, the penalty u/s 271(1)(c) of the I.T. Act, was initiated. Notice u/s 274 r.w.s. 271(1)(c) of the Act was issued and served upon the assessee. After the reply of the assessee, the penalty to the tune of Rs.6,28,816/- was levied. The assessee filed an appeal before the CIT(A) who confirmed the penalty order, therefore, the assessee has filed the present appeal before us.
We have heard the argument advanced by the Ld. Representative of the parties and perused the record. Under all the issues, the assessee has challenged confirmation to levy the penalty to the tune of Rs.6,28,816/-. The Ld. Representative of the assessee has argued that after the survey, the assessee has filed the revised return of income on 25.03.2010 which has been accepted, therefore, in the said circumstances, there is no concealment of income and no furnishing of inaccurate particulars of income hence the penalty is not liable to tenable in view of the law settled in the case of CIT Vs. V. Narashima Prasad 250 ITR 852 Karnataka High Court. It is also ITA. No.1558/M/2016 A.Y. 2009-10 argued that the penalty notice dated 27.06.2012 has been issued without any tick off particular limb to levy the penalty which is not justifiable , therefore, the penalty is not liable to be sustainable in view of the law settled in CIT Vs. Samson Perinchery (ITA. No.1154 of 2014 05.01.2017) Bom High Court, CIT Vs. Manjunatha Cotton & Gining Factory Ltd. 359 ITR 565 (Kar), Suresh Seth Vs. ITO & 6915/M/2012 dated 20.12.2017. On the other hand, the Ld. Representative of the Department has refuted the said contention and argued that self- disclosure of the income has no excuse to levy the penalty in view of the law settled in case of Principal CIT Vs. Dr. Vandana Gupta dated 20.02.2018. Therefore, the appeal of the assessee is liable to be dismissed. Keeping in view of argument advanced by Ld. Representative of the parties and perusing the record, we noticed that the survey action was initiated against the father of the assessee on 04.02.2010 where a piece of paper was found and was confronted to the father of the assessee Shri Anthony Pereira who told that an amount of Rs.18,50,000/- was belonging to his son Shri Amol Anthony Pereira(assessee). When this fact was confronted to the assessee, the Assessee agreed to add this amount into his income. Thereafter the assessee filed the revised return of income on 25.03.2010 declaring total income to the tune of Rs.28,86,500/-. The assessment was completed on 22.12.2011 u/s 143(3) of the I.T. Act, 1961. In the said return of income, there is no concealment of income
ITA. No.1558/M/2016 A.Y. 2009-10 of furnishing the inaccurate particulars of income and concealment of income. Therefore, in the said circumstances, no penalty is leviable in view of the law settled in CIT Vs. V. Narashima Prasad 250 ITR 852 Karnataka High Court (supra). So far as the issuance of notice u/s 271(1)(c) r.w.s. 274 of the I.T. Act is concerned, the same is on the file which speaks that the Assessing Officer nowhere striking off any limb to levy the penalty. It is on record that in the assessment order the AO initiated the penalty for the concealment of income whereas in pursuance of penalty order, the penalty has been levied under both the limbs. The Notices is defective which nowhere speaks any limb to levy the penalty and could not be said to provide an opportunity being afforded to the assessee in the interest of justice and in this regard we find support of the law settled in CIT Vs. Vs. Samson Perinchery (supra). In the said circumstances, we are of the view that the penalty is not liable to be sustainable in accordance with law.. So far as the law relied by the Ld. Representative of the Department is concerned, we noticed that the said law belongs in connection with the offering of income at the time of assessment by the assessee whereas in the instant case the material was received from the father of the Assessee who explained that same was belonging to his son and his son did not deny the said material, therefore, an amount to the tune of Rs.18,50,000/- was added to the income of the assessee. The fact of the present case is quite different from the facts of the case relied by the Ld. Representative of the assessee. Moreover, on the point of ITA. No.1558/M/2016 A.Y. 2009-10 notice as well as on the point of filing the revised return which has been discussed above, The penalty is not liable to be sustainable in the eyes of law. Therefore, in the said circumstances, we set aside the finding of the CIT(A) on this issue and delete the penalty. Accordingly, these issues are being decided in favour of the assessee against the revenue.