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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI ARUN KHODPIA
आदेश / ORDER
PER RAVISH SOOD, JM:
The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-II, Raipur dated 14.01.2019, which in turn arises from the orders passed by the A.O under Sec. 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’) dated 21.03.2017 for the assessment year 2012-13. Before us the assessee has assailed the impugned order on the following grounds of appeal:
“1. That the order of the Ld. CIT(A) is bad in law as well as on facts and has gross erred in dismissing the appeal.
2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in sustaining penalty of Rs.6,58,800/- under section 271(1)(c) of the Income Tax Act, 1961.
3. The Ld. CIT(A) has erred on facts and in law in deciding the appeal without adjudicating ground number 4 challenging the issuance of notice under section 271(1)(c) itself and therefore, the order passed by the CIT(A) is in violation of principle of natural justice and bad in law.
4. That any other relief/deduction which the Hon’ble Tribunal may deem fit be granted to the appellant.
5. That the appellant craves, leave to urge, add, amend, alter, enlarge, modify, substitute and delete any of the ground or grounds and to adduce fresh evidence at the time of hearing of the appeal.”
Succinctly stated, the assessee who is engaged in the business of trading of computer and computer accessories had filed his return of income for the assessment year 2012-13 on 12.03.2013, declaring an income of Rs.9,23,850/-. Subsequently, the case of the assessee was selected for scrutiny assessment
3 Nitesh Kumar Goyal Vs. ACIT-4(1) u/s.143(2) of the Act. Assessment was thereafter framed by the A.O vide his order passed u/s.143(3) of the Act dated 30.03.2015, wherein, after making a solitary addition of Rs.20.70 lacs u/s.68 of the Act the income of the assessee was determined at Rs.34,02,650/-. Also, the A.O while culminating the assessment proceedings being of the view that the assessee had concealed his income and furnished inaccurate particulars of income, therein, 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 21.03.2017 imposed penalty of Rs.6,58,800/-, for the reason that the assessee had concealed his income and furnished inaccurate particulars of income to extent of Rs.20.70 lacs.
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. AR in order to drive home his contentions.
4 Nitesh Kumar Goyal Vs. ACIT-4(1)
At the very outset it was submitted by the Ld. Authorized Representative ( for short ‘AR’) for the assessee that as both the two defaults contemplated u/s.271(1)(c) of the Act viz., (i) concealment of income; and (ii) furnishing of inaccurate particulars of income are separate and distinct defaults which operate in their respective fields, therefore, initiation and imposition of penalty u/s.271(1)(c) of the Act by the A.O qua the solitary addition of Rs.20.70 lacs u/s.68 of the Act for both the defaults was not sustainable in the eyes of law. It was, thus, submitted by the Ld. AR that as the penalty imposed by the A.O u/s.271(1)(c) of the Act was not sustainable in the eyes of law, therefore, the same was liable to be struck down on the said count itself. Our attention was drawn by the Ld. AR to the respective ‘SCN(s)’ dated 21.02.2017 and 30.03.2015, Page 8-9 of APB, as per which the impugned penalty proceedings had been initiated by the A.O without clearly pointing out the default for which the same was sought to be imposed upon the assessee. Elaborating on his aforesaid contention, it was submitted by the Ld. AR that in both the aforesaid SCN(s) the A.O had called upon the assessee to show cause as to why the penalty may not be imposed upon him for “concealment of income” or “furnishing of inaccurate particulars of such income”. Backed by his aforesaid contentions, it was submitted by the Ld. AR that without prejudice to his contention that the A.O could not have initiated penalty proceedings for the aforesaid solitary addition made u/s.68 of the Act by triggering both the defaults contemplated u/s.271(1)(c) of the Act i.e. “concealment of income” and “furnishing
5 Nitesh Kumar Goyal Vs. ACIT-4(1) of inaccurate particulars of income”, even otherwise, the aforesaid respective ‘SCN(s)’, dated 21.02.2017 and 30.03.2015 were absolutely vague and nothing could be gathered therefrom as to for what default the assessee was called upon to put forth an explanation in his defense. On the basis of his aforesaid contentions the Ld. AR had sought for quashing of the impugned penalty imposed u/s.271(1)(c) of the Act.
Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities.
We have given a thoughtful consideration to the issue in hand and find substance in the claim of the Ld. AR. Admittedly, it is a matter of fact borne from record that the impugned penalty proceedings u/s.271(1)(c) of the Act were initiated by the A.O in the body of the show cause notice allegedly for both the defaults, viz. “concealment of income” and “furnishing of inaccurate particulars of income” qua the solitary addition of Rs.20.70 lacs u/s.68 of the Act. Also, it is borne from the record that the A.O had vide his order passed u/s.271(1)(c) dated 21.03.2017 imposed penalty for both the defaults i.e. “concealment of income” and “furnishing of inaccurate particulars of income” qua the aforesaid addition of Rs.20.70 lacs. In our considered view, as both the defaults i.e., ‘concealment of income’ and ‘furnishing of inaccurate particulars of income’ are separate and distinct defaults which operate in their exclusive fields, therefore, imposition of 6 Nitesh Kumar Goyal Vs. ACIT-4(1)
penalty by the A.O qua the aforesaid solitary addition for both of the aforesaid defaults contemplated in Section 271(1)(c) of the Act cannot be sustained and is liable to be struck down on the said count itself. We find that the fine distinction between the said two defaults contemplated in Sec. 271(1)(c), viz. ‘concealment of income’ and ‘furnishing of inaccurate particulars of income’ had been appreciated at length by the Hon’ble Supreme Court in its judgments passed in the case of Dilip & Shroff Vs. Jt. CIT (2007) 210 CTR (SC) 228 and T. Ashok Pai Vs. CIT (2007) 292 ITR 11 (SC). The Hon’ble Apex Court in its aforesaid judgments, had observed, that the two expressions, viz. ‘concealment of particulars of income’ and ‘furnishing of inaccurate particulars of income’ have different connotation. We are of the considered view, that there was no justification on the part of the A.O in initiating penalty proceedings u/s.271(1)(c) of the Act in the body of the assessment order and thereafter imposing the same for both the defaults’ i.e ‘concealment of income’, and ‘furnishing of inaccurate particulars of income’.
We have deliberated on the issue in hand and are unable to subscribe to the imposition of penalty by the A.O u/s.271(1)(c) for both the aforesaid defaults i.e. “concealment of income” and “furnishing of inaccurate particulars of income” qua the solitary addition of Rs.20.70 lacs made u/s.68 of the Act. Alternatively, even otherwise, as the A.O in the respective ‘SCN(s)” dated 30.03.2015 and 21.02.2017 had failed to clearly put the assessee to notice as regards the default for which 7 Nitesh Kumar Goyal Vs. ACIT-4(1)
the impugned penalty was sought to be imposed on him, therefore, the penalty therein imposed by him can also not be sustained on the said count. We, thus, for the aforesaid reasons not being able to persuade ourselves to subscribe to the imposition of penalty by the A.O, therefore, set-aside the order of the CIT(A) who had upheld the same. The penalty of Rs.6,58,800/- imposed by the A.O under Sec.271(1)(c) is quashed in terms of our aforesaid observations.
In the result, the appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced in open court on 04th day of 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 :
1. 1. अपीलाथ� / The Appellant. 2. ��यथ� / The Respondent.
3. The CIT(Appeals)-II, Raipur (C.G) 4. The Pr. CIT-II, Raipur (C.G) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण,रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // �नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur.
8 Nitesh Kumar Goyal Vs. ACIT-4(1)
Date 1 Draft dictated on 26.07.2022 Sr.PS/PS 2 Draft placed before author 27.07.2022 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr. Sr.PS/PS PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order