SOUMITRA G. WADALKAR,MUMBAI vs. DCIT 26(2), MUMBAI

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ITA 8/MUM/2015Status: DisposedITAT Mumbai30 June 2016AY 2010-113 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 revenue authorities lacked clarity on the specific reason for levying the penalty. Therefore, the penalty was not legally sustainable.

What were the facts?

The assessee's appeal concerns a penalty levied under Section 271(1)(c) of the Income Tax Act. The core issue is the lack of clarity from the revenue authorities regarding whether the penalty was for concealment of income or furnishing inaccurate particulars.

What were the issues?

Whether a penalty under Section 271(1)(c) is valid when the notice and orders are ambiguous about whether it's for concealment of income or furnishing inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO

For Appellant: Shri H.N. Motiwalla
For Respondent: Shri Ajay, DR
Hearing: 28.06.2016Pronounced: 30.06.2016

सुनवाई की तायीख / Date of Hearing : 28.06.2016 घोषणा की तायीख /Date of Pronouncement : 30.06.2016 आदेश / O R D E R PER D. KARUNAKARA RAO, AM:

This appeal filed by the assessee on 1.1.2015 is against the order of the CIT (A)-28, Mumbai dated 20.10.2014 for the assessment year 2010-2011. In this appeal, assessee raised three grounds in toto. The core issue involved in this appeal is CIT (A)‟s decision in confirming the penalty levied by the AO u/s 271(1)(c) of the Act when it is not specifically mentioned whether the penalty is levied for „concealment of income‟ or „furnishing of inaccurate particular of income‟.

2.

Before me, at the outset, Ld Counsel for the assessee briefly narrated the background facts of the case and brought our attention to para 3 of the assessment order and read out the following. “3.......penalty proceedings u/s 271(1)(c) read with section 274 of the Income Tax Act, 1961 are initiated for concealment of the income and furnishing the inaccurate particulars of his income.”

3.

Further, bringing our attention to the penalty order dated 29.8.2013, Ld Counsel for the assessee read out the operational para 3 and 6 which again read as under:-

3. Penalty proceedings u/s 271(1)(c) of the IT Act, were separately initiated for concealment of income / furnishing inaccurate particulars of income......

6.

I am therefore, satisfied that the assessee has furnished inaccurate particulars of income and concealed income within the meaning of section 271(1)(c) of the Act as discussed above.....”

4.

Further also, Ld Counsel for the assessee brought our attention to the actual penalty notice issued to the assessee and mentioned that the officers ticked both the limbs of the clause (c) of notice u/s 271(1) of the Act. Summing up all the above, Ld Counsel for the assessee submitted that the officer are ambiguous about the reason for which the penalties are levied u/s 271(1)(c) of the Act.

5.

After hearing both the parties and on perusal of the orders of the Revenue Authorities, I find, there is no clarity in the minds of the Revenue Authorities, whether the amount involved is a case of “concealment of income” or “furnishing of inaccurate particulars of income”. In such circumstances, the assessee is entitled to relief considering the binding judgment of Hon‟ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory [2013] 359 ITR 565 (Karn.) will also help the assessee. For all the above reasons, I find, the penalty levied by the AO and confirmed by the CIT (A) is not legally sustainable. Accordingly, grounds raised

by the assessee are allowed.

6. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 30th June, 2016. Sd/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 30.6.2016 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A)- 3. 4. आमकय आमुक्त / CIT 5. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai

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