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Income Tax Appellate Tribunal, MUMBAI BENCHES, ‘SMC’ MUMBAI
Before: Shri Joginder Singh
आदेश / O R D E R Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 27/02/2015 of Ld. Commissioner of Income Tax, Mumbai confirming penalty under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act) amounting to Rs.23,80,373/-.
During hearing the learned counsel for the assessee Shri Deepak Tralsawala, contended that penalty notice issued to the assessee under section 274 r.w.s. 271 of the Act does not make any specific charge against the assessee with respect to either concealment of income or furnishing of inaccurate particulars of such income, thus it was claimed that penalty is not leviable. Reliance was placed upon the decision of the Tribunal in the case of Shri Hafeez S. Contractor vs. ACIT (ITA No. 6222 & 6223/Mum/2013 order dated 02.09.2015). This factual matrix was not controverted by Shri Rajesh Ojha, learned D.R. He merely stated that quantum addition has been affirmed by the Tribunal. In reply the learned counsel for the assessee contended that quantum and penalty proceedings are distinct and separate and there is no charge of concealment or furnishing inaccurate particulars in the notice issued to the assessee.
I have considered the rival submissions and perused the material available on record. In view of the above I am reproducing hereunder the relevant portion from the aforesaid order of the Tribunal dated 02.09.2015 for ready reference and analysis: - “12. The Ld A.R invited our attention to the copy of notices issued by the AO u/s 274 read with section 271 of the Act at the time of initiation of penalty proceedings. He submitted that the above said notice issued for “concealment of particulars of income or furnishing of inaccurate particulars of income”. He submitted that the assessing officer has not specified that as to which limb the notice was issued, i.e., whether it is issued for concealment of particulars of income or furnishing of inaccurate particulars of income. The Ld A.R contended that the assessing officer should be clear about the charge at the time of issuing the notice and the assessee should be made aware of the charge. He submitted that the penalty order is liable to be quashed, if the AO has not correctly specified the charge. In this regard, he placed reliance on the decision dated 11.10.2013 passed by the co-ordinate bench of Tribunal in the case of Shri Samson Perinchery in to 4630/M/2013, wherein the Tribunal followed the decision rendered by the Hon’ble Karnataka High Court in the case of CIT Vs. Manjunatha Cotton & Ginning Factory (2013)(35 Taxmann.com 250)(kar dated 13.12.2012) and held as under:- “13. From the above, it is clear that the penalty should be clear as “to the limb for which it is levied and the position being unclear here the penalty is not sustainable. Therefore, considering the same, we are of the opinion that the ground raised
by the assessee should be allowed on technical grounds. Accordingly, adjudication of the penalties on merits become an academic exercise. Therefore, the grounds raised in all the six assessment years are allowed.” In the case considered by the co-ordinate bench also, the assessing officer issued the penalty notice without specifying the charge under which the notice was issued. Before us, the Ld D.R could not distinguish the above said decision. Hence, on this legal ground also, the assessee’s appeal is required to be allowed.
13. In view of the foregoing discussions, we set aside the orders passed by Ld CIT(A) for both the years under consideration and direct the assessing officer to delete the penalty levied u/s 271(1)(c) of the Act in both the years.” 3.1 I have perused the notice issued under section 274 r.w.s. 271 of the Act to the assessee and agreed by the learned D.R. also that no specific charge of concealment or furnishing of inaccurate particulars has been mentioned/ leveled against the assessee. Thus the case of the assessee is squarely covered by the aforesaid order of the Division Bench of this Tribunal in the case of Hafeez S. Contractor (supra), wherein the undersigned is also signatory to the order. In the aforesaid order another decision of the Coordinate Bench in the case of Shri Samson Perinchery (ITA No. 4625 to 4630/Mum/2013 order dated 11.10.2013, wherein the Tribunal followed the decision rendered by Hon’ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton and Ginnng Factory (2013) 35 taxmann.com 250 (Kar.) order dated 13.12.2012 has been relied upon. The Hon’ble High Court observed as under: - “13. From the above, it is clear that the penalty should be clear as “to the limb for which it is levied and the position being unclear here the penalty is not sustainable. Therefore, considering the same, we are of the opinion that the ground raised by the assessee should be allowed on technical grounds. Accordingly, adjudication of the penalties on merits become an academic exercise. Therefore, the grounds raised in all the six assessment years are allowed.” In the light of the ratio laid down by the Hon’ble Karnataka High Court, conclusion drawn by the Tribunal in the case of Hafeez S. Contractor (supra) and also that penalty and quantum proceedings are all together different, we find force in the contention of the assessee, therefore, direct the learned Assessing Officer to delete the penalty imposed under section 271(1)(c) of the Act.
So far as the merits of the appeal is concerned the learned counsel for the assessee contended that the penalty was imposed by the Assessing Officer by invoking the provision of section 50 of the Act being the difference between the declaration made by the assessee and the valuation made by the Stamp Valuation Authority is concerned, since on technical ground the penalty has been deleted, therefore, I am refraining myself to go into the merits of the case. Finally the appeal of the assessee is allowed. This order was pronounced in the open court in the presence of Ld. D.R. at the conclusion of the hearing on 14/07/2016. Sd/- (Joginder Singh) �या�यक सद�य /JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 14/07/2016 ÇAÑA? P.S //.�न.स.