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Income Tax Appellate Tribunal, “J” BENCH, MUMBAI
Before: SHRI JOGINDER SINGH, JM & SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year [AY] 2008-09 contest the order of Ld. Commissioner of Income-Tax (Appeals)-38 [CIT(A)], Mumbai, Appeal No.CIT(A)-38/IT.304/26(3)(1)/2014-15 dated 31/08/2016 qua confirmation of penalty u/s 271(1)(C) for Rs.12.36 Lacs as imposed by Ld. AO vide order dated 22/08/2014. The assessee has ITA.No.1327/Mum/2017 Sameera Shaikh Assessment Year-2008-09 been assessed u/s 143(3) at Rs.45.27 Lacs after certain additions of Rs.37.79 Lacs, against which impugned penalty has been levied.
The registry has noted that the appeal has been filed with a delay of 74 days, the condonation of which has been sought by the assessee on the strength of condonation petition & affidavit dated 03/03/2017 executed by the assessee. It has been submitted that the appellate order was received by the new tenant since the assessee shifted her residence which led to delay in filing of appeal. Finding the same plausible one, we condone the delay and proceed to dispose-off the appeal on merits.
The Ld. Auhtorized Representative for Assessee [AR], Shri Vallabhdas D.Parmar agitated the penalty proceedings on legal grounds by submitting that the Ld. AO did not record proper satisfaction as envisaged by law while initiating the penalty and further, the show-cause notice issued u/s 274 did not specify the appropriate charge for which the penalty was being levied and therefore, the proceedings stood vitiated in terms of certain judicial pronouncements. Our attention is drawn to the order of this Tribunal in assessee’s own case for AY 2009- 10 dated 271/2/2017 wherein the penalty has been deleted on legal grounds on identical factual matrix. The copy of the same has been placed on record. Per Contra, Ld. DR, Shri V.K.Chaturvedi supported the penalty as confirmed by Ld. first appellate authority.
We have carefully perused the rival contentions and perused relevant material on record including cited order of the Tribunal in assessee’s own case for AY 2009-10. A perusal of the quantum order ITA.No.1327/Mum/2017 Sameera Shaikh Assessment Year-2008-09 reveals that the penalty has been initiated by making following observations:- Penalty proceedings u/s 271(1)(c of the I.T.Act, 1961 is initiated as the assessee has concealed / furnished inaccurate particulars of income.
A perusal of show-cause notice issued u/s 274 read with Section 271 reveal that the appropriate charge for which the penalty was proposed was not marked. Finally, the penalty has been imposed for concealment of income. We find that this Tribunal, on identical factual matrix, has deleted the penalty in assessee’s own case for AY 2009-10 by observing as under:- 6. We have heard the rival submissions and perused the relevant materials on record. We find that in the assessment order dated 10.02.2014, the AO has initiated the penalty stating “the assessee has concealed/furnished inaccurate particulars of income”. In the notice u/s 274 r.w.s 271(1)(c), the AO has not mentioned whether the assessee has concealed the particulars of her income or furnished inaccurate particulars of such income. In the penalty order dated 22.08.2014, the AO has imposed the penalty of Rs.2,40,402/- by mentioning that the assessee had concealed the particulars of her income. Before a penalty is imposed, the assessee must be apprised of the precise charge brought against her. She must be told distinctly whether she is held guilty of having concealed the particulars of her income or of having furnished inaccurate particulars thereof. Section 274(1) provides for a reasonable opportunity to be given to the assessee so that she can understand the charge. The basis of the issuance of notice should remain the same while imposing penalty. If the notice is issued in the context of concealment of income, then the penalty cannot be levied by shifting the basis to inaccuracy of particulars. This is to ensure that the assessee gets an adequate opportunity in respect of the default which is detected and alleged against her and which forms the basis of the issuance of the notice u/s 271(1)(c) and also to ensure that she is not put to peril of answering against something which never was specifically determined as her default. We may refer here to the judgment of the Hon’ble Gujarat High Court in A.M. Shah & Co. v. CIT (1999) 238 ITR 415, 433 (Guj). The same issue also arose in CIT vs. Shri Samson Perinchery in 1097, 1154 & 1226/2014, before the Hon’ble Bombay High Court. We extract below the decision dated 05.01.2017 of the Hon’ble High Court: “5. 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.
ITA.No.1327/Mum/2017 Sameera Shaikh Assessment Year-2008-09 6. The above submission on the part of the Revenue is in the face of the decision of the Supreme Court in Ashok Pai vs. 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 meaning/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.
Therefore, the issue herein stands concluded in favour of the Respondent- Assessee by the decision of the Karnataka High Court in the case of Manjunath Cotton and Ginning Factory (supra). Nothing has been shown to us in the present facts which would warrant our taking a view different from the Karnataka High Court in the case of Manjunath Cotton and Ginning Factory (supra).” 6.1 Facts being similar, we follow the decision mentioned at para 6 hereinbefore and delete the penalty of Rs.2,40,402/- imposed by the AO.
Respectfully following the view of the co-ordinate bench of the Tribunal as above, we delete the impugned penalty and allow this ground of assessee’s appeal. Accordingly, delving into the other aspects become merely academic in nature and we see no fruitful reason to consider the same. 5. Resultantly, the appeal stand allowed in terms of our above order.