MR. MADAN MOHAN MISHRA ,MUMBAI vs. INCOME TAX OFFICER 10(3)(3), MUMBAI

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ITA 4175/MUM/2024Status: DisposedITAT Mumbai19 November 2024AY 2009-105 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961, had no legs to stand and was therefore deleted. The reasoning was based on the fact that the primary addition leading to the penalty, specifically the agricultural income treated as income from undisclosed sources, had been set aside by a co-ordinate bench of the ITAT for reconsideration afresh by the Assessing Officer. The Tribunal observed that neither the Assessing Officer nor the CIT(A) had taken due note of this vital fact before levying and upholding the penalty. Since the addition itself was under review, the penalty order could not survive. The appeal of the assessee was allowed, and the penalty was deleted. The issue regarding the specific limb of section 271(1)(c) under which the penalty was levied was not expressly decided as the penalty was deleted on other grounds.

What were the facts?

The assessee, Madan Mohan Mishra, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the penalty of Rs. 6,08,625/- levied under section 271(1)(c) of the Income Tax Act, 1961, for Assessment Year 2009-10. The penalty was upheld by the Commissioner of Income-tax (Appeals) and originally imposed by the Income Tax Officer. The original assessment order, passed under section 143(3), had made additions including agricultural income, house property income, and disallowance of expenses. The assessee's return declared a total income of Rs. 9,86,721/- and a business loss. The ITAT noted that a co-ordinate bench had previously set aside the addition in respect of agricultural income for reconsideration by the Assessing Officer, and other disallowances were substantially reduced.

What were the issues?

1. Whether the penalty levied under section 271(1)(c) of the Income Tax Act, 1961, for alleged furnishing of inaccurate particulars of income is justified, considering the facts and circumstances and the prevailing legal position? 2. Whether the penalty proceedings initiated and levied under section 271(1)(c) of the Act are valid, without the assessing officer clearly specifying the limb of the section under which the penalty was imposed? Assessee's Contentions: The assessee argued that the penalty was unjustified as the assessing officer was not justified in imposing it without considering the facts, circumstances, and legal position. Furthermore, the assessee contended that the penalty was bad in law because the assessing officer failed to specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. The assessee also pointed out that the addition in respect of agricultural income, which formed the basis for the penalty, had been set aside by a co-ordinate bench of the ITAT for de novo consideration by the Assessing Officer. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Before: SMT. BEENA PILLAI

Hearing: 13.11.2024Pronounced: 19.11.2024

PER PRABHASH SHANKAR [A.M.] :-

The present appeal arising from the appellate order dated 29.12.2017 is filed by the assessee against the order

passed by the Learned Commissioner of Income-tax

(Appeals)-17, Mumbai [hereinafter referred to as “CIT(A)”]

pertaining to assessment order passed u/s. 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 23.04.2015 as passed by the Income Tax Officer-10(3)(3), Mumbai for the Assessment Year [A.Y.] 2009-10. 2. The grounds of appeal are as under:- Madan Mohan Mishra

1) That the order dated 29.12.2017 leving penalty under section 271(1)(c) of the Income Tax Act, 1961, passed by the assessing officer is against the law and facts on the file in, as much as, he was not Justified to impose a penalty of Rs. 6,08,625/- for alleged finishing in accurate particulars of income, without considered the fact and circumstances of the case and the prevailing legal position on the issue.

2) That the order dated 29.12.2017 levying penalty under section 271(1)(c) of the Income Tax Act, 1961, passed by the Ld. assessing officer is against the law and facts on the file in, as much as, he was not justified to impose a penalty of Rs. 6,08,625/- for alleged concealment of income / furnishing inaccurate particulars of income without clearing specifying the limb of section 271(c) of the Act, under which the penalty proceedings has been initiated and penalty levied.

3) That the appellant craves to add, amend, alter, modify or delete any of the grounds of the appeal or at the time of hearing.

3.

In this case, assessee had furnished his return of income

declaring total income of Rs. 9,86,721/-which comprised of following

Salary income from 10,99,108/- prama instruments

Income from House Property 1,55,400/- Income from other sources 30,146/- Assessee suffered a net loss of Rs. 16,93,105/-

under the head of Business Income Exempted Income and_ deduction 15,90,600/- under Chapter VIA

The Assessing officer made additions as below: Madan Mohan Mishra

Agricultural Income under section 15,90,600/-

68 House Property Income 55,230/- Disallowance of Expenses 4,74,345/-

3.

1 The assessment in the case of the assessee was completed vide order dated 25/11/2011 of the passed under section 143(3) of the Income Tax Act, 1961 by Ld. assessing officer at an income Rs. 15,99,337/- against the return income of Rs. 9,86,721/- after making an addition of Rs. 15,99,340/- under section 68 of the act 1961 etc. The appellant filed an appeal before the Hon. Commissioner of Income Tax (Appeals) vide order dated 16/11/2013 granted partial relief of Rs. 2,00,000/- (Two lakh) out of expenses claimed.The appellant filed an appeal before the Hon. Income Tax Appellate Tribunal and granted partial real if of Rs. 1,00,000/- one lakh out of expenses. Subsequently, the learned assessing officer, has imposed a penalty under section 271(1)(c) of the act of Rs. 6,08,625/-, being 100% of the allegedly should to be evaded, for alleged furnishing inaccurate particulars of income. The learned CIT(A) upheld the penalty.

4.

In the course of hearing of the case before us, it was pointed out by the Ld. Authorised representative of the assessee that co-ordinate Bench of ITAT, Mumbai while dealing with the quantum appeal in its order in ITA No.871/M/2014 dated 19.08.2019 vide para 6 to 8 of the order has set aside the addition in respect of the agricultural income of Rs 15,90,600/- Madan Mohan Mishra

for reconsideration afresh to the Assessing officer allowing the appeal for statistical purposes. The Bench has followed the coordinate bench of Tribunal in assesses own case for AY 2010- 11 in ITA No.4180/Mum/2015 dated 16.06.2016 on the issue of agriculture income. Rest of the disallowances made on estimate basis have been reduced substantially.

5.

Since the penalty imposed is basically w.r.t. the agriculture income treated as income from Undisclosed sources and the addition made is already restored to the AO for de novo consideration and decision, the present penalty order evidently does not survive. It appears that neither of the lower authorities have taken due note of this vital fact before resorting to levying

penalty and upholding it.

6.

On due consideration of all the relevant facts as stated above, we hold that the penalty imposed has no legs to stand

which is therefore, deleted.

6.

1 Appeal of the assessee is, therefore, allowed.

Order pronounced in the open court on 19/11/2024. BEENA PILLAI PRABHASH SHANKAR (ate ae /JUDICIAL MEMBER) (Grcicord age /ACCOUNTANT MEMBER) Madan Mohan Mishra Place: ¥as/Mumbai feats /Date 19.11.2024 Lubhna Shaikh / Steno

arg ot fae 3mftaCcopy of the Order forwarded to: attanlf / The Appellant

weal / The Respondent. HIG STAT / CIT faurta oferta, sre sricie effect DR, ITAT,

Mumbai

5.

mS WSa/ Guard file.

RBWNE

went wld //// STERMTAR/ BY ORDER,

SU/ASTIS TSHR (dy. /Asstt. Registrar) STH BUT stfTeRX1 rat, Bench,

Mumbai.

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