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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI D.T. GARASIA, JM & SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member) 1. The captioned appeal by revenue for Assessment Year [AY] 2009- 10 assails the order of the Ld. Commissioner of Income-Tax (Appeals)- 45 [CIT(A)], Mumbai, Appeal No. CIT(A)-45/AC 25(3)/ITA 309/2014-15 ITA.No.2048/Mum/2016 Krishna C.Tandon (HUF) Assessment Year-2009-10 dated 25/01/2016. The quantum assessment for impugned AY was framed by Ld. Assistant Commissioner of Income Tax-25(3), Mumbai [AO] on 29/11/2011 u/s 143(3) whereas penalty was levied u/s 271(1)(c) vide order dated 28/03/2014. None has appeared for assessee despite notice. Left with no option, we proceed to dispose-off the appeal on the basis of material available on record and after hearing Ld. Departmental Representative [DR].
The revenue is aggrieved by deletion of penalty u/s 271(1)(c) by Ld. CIT(A) and has raised the following Grounds of Appeal:-
1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty u/s.271(1)(c) amounting Rs.60,59,108/- being 100% of tax liability.
2. On the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in holding that no penalty is leviable where there is change in head of income without appreciating the fact that the real intention of the assesse was to evade taxes by furnishing inaccurate particulars.
3. On the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the appeal of the assesse has been dismissed by the Ld. CIT(A) himself for the same assessment year on the said issue of treatment of share trading income as business income by the A.O.
4. The appellant prays that the order of the Ld.CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. 3.1 Facts leading to the same are that the assessee being resident HUF earning Share Trading Income & Income from other sources was assessed for impugned AY u/s 143(3) on 29/11/2011. The assessee reflected Short Term Capital Loss & Long Term Capital Loss on Shares for Rs.261.31 Lacs & Rs.18.28 Lacs under the head Capital Gains. However, the said activity, in the opinion of Ld. AO, was assessable under the head Business Income. The stand of Ld. AO, upon appeal, was confirmed by Ld. first appellate authority in Appeal No.CIT(A)- 35/ACIT 25(3)/ITA184/11-12 order dated 29/04/2013.
ITA.No.2048/Mum/2016 Krishna C.Tandon (HUF) Assessment Year-2009-10 3.2 Consequently, penalty proceedings were initiated during quantum assessment for furnishing of inaccurate particulars. The assessee contested the same on the premises that full particulars were furnished in the return of income and there was no concealment of income and mere change of head of income do not justify imposition of penalty. However, not convinced, Ld. AO invoking Explanation-1 to Section 271(1)(c), levied penalty of Rs.60,59,108/- vide order dated 28/03/2014.
Aggrieved, the assessee contested the same with success before Ld. CIT(A) vide impugned order dated 25/01/2016 where the Ld. CIT(A) relying on the judgment of Bombay High Court rendered in Bennett Coleman & Co. Ltd. [ITA No. 2117/2012] & several other judgments concluded that penalty was not leviable for mere change of head of income. Aggrieved, the revenue is in further appeal before us. The Ld. DR has placed reliance on the stand of Ld. AO and contended that penalty was justified since the assessee was obliged to offer the income / loss under the correct head of income.
Heard and perused relevant material on record. We find that penalty has been imposed for merely change of head of income whereas there is no change in the loss figures offered by the assessee in the return of income. The assessee offered the loss under the head capital gains which, in the opinion of Ld. AO, was assessable under the head business income. However, the basic condition viz. furnishing of inaccurate particulars / concealment of particulars of income so as to attract the provisions of Section 271(1)(c) have remained unfulfilled in the present case. Therefore, penalty was not justified and the stand of ITA.No.2048/Mum/2016 Krishna C.Tandon (HUF) Assessment Year-2009-10 Ld. CIT(A) was quite fair & logical and hence, the same do not require any interference on our part.
Resultantly, revenue’s appeal stands dismissed. Order pronounced in the open court on 01st November, 2017.