TRIBHUWAN BAITHA,BHILAI vs. ASSISTANT COMMISSIONER OF INCOME TAX ,CIRCLE 1(1), BHILAI

The captioned appeals filed by the assessee are directed against a common order passed by the CIT(Appeals)-II, Raipur, dated 20.02.2019, which in turn arises from the respective orders passed by the A.O under Sec. 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’) dated 20.04.2017 & 26.04.2017 for the assessment years 2013-14 & 2014-15. As the issues involved in the captioned appeals are inextricably interlinked or in fact interwoven, therefore, the same are being taken up and disposed off by way of a common order. We shall first take up the appeal filed by the assessee for the assessment year 2013-14 wherein the assessee has assailed the impugned order on the following grounds of appeal before us: “1. In the facts and circumstances of the case and in law, the penalty order is illegal and bad-in-law in as much as the penalty was imposed on the ground of concealment of income and furnishing of inaccurate particulars of income on the basis of show cause notice issued u/s 274 read with section 271(1)(c) of the Income-tax Act, 1961 without specifying the exact nature of default i.e. whether there is concealment of income or furnishing of inaccurate particulars of income and contrary to the law laid down by Hon'ble Supreme Court in the case of CIT vs. SSA's Emerald Meadows in SLP CC No. 11485/2016.

Succinctly stated, the assessee who is a salaried employee with Bhilai Steel Plant (“BSP”) and is working as a Senior Manager, had filed his return of income for A.Y. 2012-13 on 11.09.2013 declaring an income of Rs.15,19,940/-.

On the basis of material that had surfaced in the course of survey proceedings conducted on two income tax practitioners, viz. Shri. Vijayendra Rongde and Shri Sandeep Deshmukh, it was gathered by the AO that the assessee as a beneficiary had availed their services for suppressing his returned income by reducing the amount of perquisite and/or salary. Acting upon the aforesaid information the AO reopened the case of the assessee u/s.147 of the Act. In compliance, the assessee filed his return of income disclosing gross total income of Rs.15,77,850/-. Observing, that the assessee had come forth with a correct disclosure of his income only on receipt of a ‘Show Cause Notice’ (SCN) issued u/s.274 r.w.s 271 of the Act, the A.O while culminating the assessment vide his order passed u/s. 143(3)/147 dated 14.10.2016 alleging ‘concealment of income’ initiated penalty proceedings u/s.271(1)(c) of the Act.

Subsequently, the A.O vide his order passed u/s. 271(1)(c), dated 20.04.2017 imposed a penalty of Rs.17,900/- on the assessee for both the defaults contemplated in the aforesaid statutory provision i.e., ‘concealment of income’ and ‘furnishing of inaccurate particulars of income’.

Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without any success.

The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us.

We have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the ld. Authorised Representative (for short “AR”) for the assessee in order to drive home his contentions. At the very outset of the hearing of the appeal, it was submitted by Shri. Nilesh Jain, the ld. AR that as the AO had in the SCN, dated 14.10.2016 failed to strike off the irrelevant default, therefore, he had wrongly assumed jurisdiction and imposed the impugned penalty on the assessee.

Admittedly, it is a matter of fact borne from record that the A.O in the ‘SCN’ dated 14.10.2016 that was issued a/w the assessment order had while initiating the penalty proceedings u/s. 271(1)(c) of the Act failed to strike off the irrelevant

In the result, the appeal of the assessee in for the assessment year 2013-14 is allowed in terms of our aforesaid observations.

As the facts and the issue involved in the present appeal remains the same as were there before us in the aforementioned appeal of the assessee in for assessment year 2013-14, therefore, our order therein passed while disposing off the said appeal shall apply mutatis-mutandis for disposing off the present appeal in ITA No.161/RPR/2019 for the assessment year 2014-15. In this case also we set-aside the order of the CIT(A) and quash the penalty of Rs.21,880/- imposed by the A.O under Sec.271(1)(c) on the same terms and observations as were recorded by us while adjudicating the assessee’s appeal in ITA No.160/RPR/2019 for assessment year 2013-14.

In the result, the appeal of the assessee in 2014-15 is allowed in terms of our aforesaid observations.

In the combined result, both the appeals of the assessee are allowed in terms of our aforesaid observations. Order pronounced in open court on day of 04th August, 2022. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 04th August, 2022 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :