SUNIL DAMODHAR BODKE,,NASHIK vs. INCOME-TAX OFFICER,,

Both the appeals relating to the same assessee on similar issue were heard together and are being disposed of by this consolidated order for the sake of convenience. However, in order to adjudicate the issues, reference is being made to the facts in ITA No.1368/PUN/2015, relating to assessment year 2005-06.

The assessee in ITA No.1368/PUN/2015, relating to assessment year 2005-06 has raised the following grounds of appeal:- The following grounds are taken without prejudice to each other – On facts and in law, 1] The learned CIT(A) has erred in confirming the levy of penalty u/s 271(1)(c) in respect of the additional income offered by the assessee in the return filed in response to the notice u/s 148. 2] The learned CIT(A) erred in holding that the levy of penalty was justified in respect of additional income of Rs.2,27,000/- offered on account of unaccounted cash payments for purchase of land and additional income of Rs.5,94,393/- declared on account of long term capital gains on sale of land without appreciating that no penalty was leviable on facts of the case. 3] The learned CIT(A) failed to appreciate that the long term capital gains of Rs.5,94,393/- were offered by the assessee by considering the sale consideration at Rs.50,98,500/- as per the provisions of section 50C as against the actual sale consideration of Rs.48,64,000/- received as per the registered sale deed and hence, no penalty u/s 271(1)(c) was leviable in respect of the additional capital gains of Rs.2,34,500/- offered merely on the basis of deeming provisions of section 50C. 4] The assessee submits that it was eligible to claim telescoping benefit in respect of the additional income offered on account of long term capital gains on undisclosed sale consideration of Rs.48,64,000/- and unaccounted cash payments of Rs.2,27,000/- and hence, there was no reason to levy penalty u/s 271(1)(c) in respect of the additional income to the extent of Rs.2,27,000/- merely because the assessee had offered the same in order to co-operate with the dept.

The issue raised in both the appeals is against levy of penalty for concealment under section 271(1)(c) of the Act. The plea of assessee before us was limited that the penalty levied under section 271(1)(c) of the Act is not sustainable as the Assessing Officer while recording satisfaction had held the assessee to have concealed income, also furnished inaccurate particulars of income and levied penalty for furnishing of inaccurate particulars of income. The learned Authorized Representative for the assessee pointed out that the said penalty order passed by the Assessing Officer is not sustainable since proper satisfaction was not recorded by the Assessing Officer. Even in the

The learned Departmental Representative for the Revenue on the other hand, placed reliance on the orders of authorities below.

We have heard the rival contentions and perused the record. The issue arising in the present appeal is against levy of penalty under section 271(1)(c) of the Act. In the facts of the case, the assessee had furnished return of income declaring total income of ₹ 1,28,991/-. During the year under consideration, the assessee along with seven members of his family acquired development rights in respect at Survey No.441/3 from Shri Gopinath P. Kukade and family and also from tenants of Kothule family. The assessee had not offered the income earned out of the said development activity in the original return of income. The case of assessee was selected for scrutiny. In response to notice under section 148 of the Act, the assessee had filed return of income on 27.02.2009 and offered ₹ 2,27,000/- as additional income on account of undisclosed sources of cash payments to Kothule family and ₹ 5,94,393/- as income from long term capital gains. The Assessing Officer was of the view that the assessee had disclosed income only after enquiries by the Department, which was concealed by him, therefore, I am satisfied that the assessee has concealed income also furnished inaccurate particulars of income within the meaning of section 271(1)(c) for which penalty proceedings u/s. 271(1)(c) of the Act are initiated separately. The Assessing Officer issued notice under section 274 of the Act show causing the assessee to explain its

The assessee is aggrieved by the levy of penalty under section 271(1)(c) of the Act, which was upheld by the CIT(A). The case of assessee before us is that in the absence of recording proper satisfaction by the Assessing Officer while initiating penalty proceedings, initiation and penalty levied levying penalty suffers from infirmity, in view of the proposition laid down by the Hon’ble Bombay High Court in CIT Vs. Shri Samson Perinchery in Income Tax Appeal No.1154 of 2014 with other Income Tax Appeals Nos.953 of 2014, 1097 of 2014 and 1226 of 2014, judgment dated 05.01.2017.

The case of Revenue on the other hand is that where the penalty proceedings have been initiated on both the counts and even show cause notice has been issued on both the counts, the Assessing Officer had given proper show cause notice to the assessee and levied penalty on one count i.e. concealment of income, then the said penalty order passed under section 271(1)(c) of the Act merits to be upheld.

We find that the Hon’ble Bombay High Court in CIT Vs. Shri Samson Perinchery (supra) vide its judgment dated 05.01.2017 after referring to the decision of the Hon'ble Supreme Court in Ashok Pai Vs. CIT (2007) 292 ITR 11

The facts and issues in ITA No.1369/PUN/2015 are identical to the facts and issues in ITA No.1368/PUN/2015 and our decision in ITA No.1368/PUN/2015 shall apply mutatis mutandis to ITA No.1369/PUN/2015.

In the result, the appeal of assessee is allowed.