SHRI KARIM KAMRUDDIN MALIK,NAGPUR vs. ITO, WARD-1(3), NAGPUR

PER AMARJIT SINGH, J.M.

The assessee has filed the present appeal against the impugned

order dated 18th March 2013, passed by the learned Commissioner

(Appeals)–I, Nagpur, relevant to the assessment year 2008–09. The

effective ground raised by the assessee is reproduced below:–

“On the facts and in the circumstances of the case, the learned Hon’ble Commissioner of Income Tax (Appeals)–II, was arbitrary and unjustified in confirming the penalty levied under section 271(1)(c) of the I.T. Act, 1961.”

income declaring total income of ` 2,77,180 on 4th March 2010. The

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order under section 143(3) of the Act was passed on 20th December

2009. During the year of assessment the assessee purchased land

from the following persons:–

Amount Sr. Name & Address of paid for Description of Property no. Seller purchase of property Smt. Gopikabai Survey no.31, admeasuring Yadavrao Khodankar, 3.77 H.R. at Mauza : Salai ` 4,35,000 1. Kondhali, Teh. Katol (Khurd) Khursapar, Tah. Dist. Nagpur Katol Dist. Nagpur Shri Arun Yadvarao Survey no.38, admeasuring Khodankar, Kondhali, 1.45 H.R. at Mauza : Salai ` 3,00,000 2. Teh. Katol Dist. (Khurd) Khursapar, Tah. Nagpur Katol Dist. Nagpur Smt. Kuntilabai Survey no.40, admeasuring Arunrao Khodankar, 0.97 H.R. at Mauza : Salai ` 90,000 3. Kondhali, Teh. Katol (Khurd) Khursapar, Tah. Dist. Nagpur Katol Dist. Nagpur Survey no.30/2, admeasuring Shri Kiritbhai 1.62 H.R. at Mauza : Salai Jivrajbhai Patel, ` 3,00,000 4. (Khurd) Khursapar, Tah. Surya Nagar, Nagpur Katol Dist. Nagpur

therefore, to verify the genuineness of the transactions, the seller

were summoned. One seller Shri Arun Khodankar was appeared and

made the statement before the Assessing Officer to the effect that he

received the amount of ` 1,03,00,000, for the alienation of the land to

Shri Karim Kamruddin Malik, whereas, the assessee Shri Karim

Kamruddin Malik, has shown the payment of ` 30 lakh. The transaction

was found not genuine, therefore, notice was given and the assessee

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surrendered the additional income to the tune of ` 1,01,25,000 to buy

peace and thereafter the income of the assessee was assessed to the

tune of ` 1,04,09,803. The learned Commissioner (Appeals) confirmed

the penalty, therefore, the assessee filed the present appeal before the

Tribunal.

perused the material on record. The facts are that, the assessee

purchased the land from four parties whose details have been given at

Page–1 of the penalty order. The Assessing Officer examined Shri Arun

Khodankar. He deposed that he received a sum of ` 1,03,00,000 in

cash from Shri Karim Kamruddin Malik over and above the registered

value and he invested the cash received for the purchase of land to the

tune of ` 80,000. He also produced the agreement of sale. The

statement of Shri Meghraj Malani, broker was also recorded. The said

piece of evidence was confronted to the assessee. The assessee

admitted the undisclosed income to the tune of ` 1,01,25,000.

Thereafter, the assessment was completed by adding the said amount

and penalty proceedings under section 271(1)(c) of the Act was

initiated. The first contention of the assessee is that the notice of

penalty under section 271(1)(c) of the Act has not been issued in

accordance with law because no specific limb was mentioned on the

basis of which the penalty is levied. Therefore, the penalty is not liable

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to be sustainable. In support of this contention, the learned Counsel

for assessee placed reliance upon the law settled by the Hon’ble

Jurisdictional High Court in the following decisions:–

i) CIT v/s Shri Samson Perinchery, [2017] 392 ITR 4 (Bom.);

ii) CIT & Ors. v/s M/s. SSA’s Emerald Meadows, ITA no.380 of 2015, judgment dated 23rd November 2015;

iii) CIT and Anr. v/s Manjunatha Cotton & Ginning Factory, [2013] 359 ITR 565 (Kar.);

iv) Siddhi Home Makers v/s ITO, ITA no.4168/Mum./2013, order dated 28th April 2017; and

v) New Sarothia Engineering Co. v/s CIT, [2006] 282 ITR 642 (Guj.).

order passed by the learned Commissioner (Appeals) in question. IN

the instant case also, we find that the notice was issued in a simple

proforma in which both the limbs to levy the penalty has been

mentioned. No specific limb has been mentioned under which the

penalty is going to be levied. In view of the law settled in the above

mentioned case, we are of the view that the penalty levied by the

Assessing Officer and confirmed by the learned Commissioner

(Appeals) is not liable to be sustained in the eyes of law. In view of the

said circumstances, we are of the view that the order passed by the

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learned Commissioner (Appeals) is not liable to be sustained in the

eyes of law. Therefore, we set aside the same and delete the penalty.

Order pronounced in the open Court on 30.06.2017

Sd/- Sd/- P.K. BANSAL AMARJIT SINGH VICE PRESIDENT JUDICIAL MEMBER

NAGPUR, DATED: 30.06.2017

Copy of the order forwarded to:

(1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Nagpur City concerned; (5) The DR, ITAT, Nagpur; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary

(Dy./Asstt. Registrar) ITAT, Nagpur