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Income Tax Appellate Tribunal - Mumbai

D.C.I.T. Cent. Cir. - 3(4), Cent. Range - ... vs Hemaa Builders & Developers Pvt. Ltd., ... on 13 March, 2019

1 ITA No.116/Mum/2018 M/s. Hemaa Builders & Developers P. Ltd.

Assessment Year-2013-14 आयकर अपीलीय अिधकरण "एच" ायपीठ मुं बई म ।

IN THE INCOME TAX APPELLATE TRIBUNAL "H" BENCH, MUMBAI ी श जीत दे , ाियक सद एवं ी मनोज कुमारअ वाल, लेखा सद के सम ।

BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ I.T.A. No.116/Mum/2018 (िनधा रण वष / Assessment Year: 2013-14) Dy. Commissioner of Income Tax M/s. Hemaa Builders & Developers Ltd. Central Circle 3(4) 511, Vyapar Bhawan, 49 P.D.Mello Rd.

बनाम नाम/ नाम Central Range, Room No.1915, 19th Floor Carnac Bunder Air India Building, Nariman Point V s. Mumbai-400 009. Mumbai-400 021 "थायीले खासं . /जीआइआरसं . /PAN/GIR No. AAACH-2118-P (अपीलाथ /Appellant) : (ू यथ / Respondent) अपीलाथ क ओरसे/ Appellant by : Manoj Kumar Singh-Ld. DR ू यथ क ओरसे/Respondent by : Ruturaj H. Gurjar -Ld.ARs.

सुनवाईक तार ख/ : 07/03/2019 Date of Hearing घोषणाक तार ख / : 13/03/2019 Date of Pronouncement आदे श / O R D E R Per Manoj Kumar Aggarwal (Accountant Member):-

1. Aforesaid appeal by revenue for Assessment Year [in short referred to as 'AY'] 2013-14 contest the order of Ld. Commissioner of Income-Tax 2 ITA No.116/Mum/2018 M/s. Hemaa Builders & Developers P. Ltd.

Assessment Year-2013-14 (Appeals)-51, Mumbai, [in short referred to as 'CIT(A)'], Appeal No. CIT(A)- 51/IT-183/DCIT-CC-3(4)/2016-17 dated 03/10/2017 qua deletion of penalty u/s 271(1)(c) for Rs.23.64 Lacs as levied by Ld. AO vide order dated 30/09/2016.

2. Facts leading to imposition of impugned penalty are that the assessee being resident corporate entity stated to be engaged as builders and developers during impugned AY was assessed u/s 143(3) on 22/03/2016 wherein the assessee has been saddled with estimated addition of 12.5% on account of alleged bogus purchases. Consequently, penalty proceedings u/s 271(1)(c) were initiated against the assessee in the quantum assessment order. During penalty proceedings, the assessee submitted that the addition was made only on an estimated basis and the same was accepted to avoid litigation and to buy peace of mind and therefore, the penalty was not justified. However not convinced, Ld. AO worked out penalty of Rs. 23.64 Lacs against the assessee. It has been submitted before us that the quantum additions have already attained finality.

3. Aggrieved, the assessee agitated the penalty on legal grounds as well as on merits with success before Ld. CIT vide impugned order dated 03/10/2017 wherein Ld. CIT deleted the penalty on legal grounds, inter-alia, by observing that although the penalty was initiated for inaccurate particulars of income, however, the same has finally been levied on the charge of concealment of income. Reliance was placed on following judicial pronouncements while arriving at such conclusion: -

M/s. Hemaa Builders & Developers P. Ltd.

                                                                           Assessment Year-2013-14
No. Title                     Rendered by               Citation
1.  Samson Perincherry        Hon'ble    Bombay         ITA No. 4625/Mum/2013
                              High Court                dated 05/01/2017
2.   Kanbay Software India P. Pune Tribunal             112 TTJ 721
     Ltd.
3.   Manjunath      Cotton & Hon'ble Karnataka          359 ITR 565
     Ginning factory          High court
4.   SSA Emerald Meadows      Hon'ble Karnataka         ITA No. 380 of 2015
                              High court

The matter was finally concluded by first appellate authority by observing as under: -

5.12 from the above facts, it clearly emerges that the penalty was initiated by the AO on the charge of "furnishing of inaccurate particulars of income" whereas it has finally been levied by the AO on the charge of "concealment of particulars of income".

Therefore, in view of the binding decision of the jurisdictional High Court in the case of Samson Perincherry (supra), wherein the decision of Hon'ble Karnataka High Court in the case of Manjunath Cotton and Ginning factory (supra) was followed and which has been approved by the Hon'ble Supreme Court, penalty levied by the AO is cancelled considering the penalty has been levied on a different charge than the charge for which it was initiated. Accordingly, the grounds of appeal of the assessee are allowed.

Aggrieved the revenue is in further appeal before us.

4. The Ld. Departmental Representative [DR] supported the penalty as levied by Ld. AO on the ground that quantum additions have already been confirmed and the penalty was levied after providing sufficient opportunity to the assessee to contest the same and therefore, no prejudice was caused to the assessee. Per Contra, Ld. Authorised Representative for assessee submitted that the additions were made only on estimated basis and secondly non-framing of specific charge vitiates the penalty proceedings as per the settled judicial principles.

M/s. Hemaa Builders & Developers P. Ltd.

Assessment Year-2013-14

5. We have carefully heard the rival submissions and perused relevant material on record. The undisputed position that emerges is that the penalty was initiated by Ld. AO on account of furnishing of inaccurate particulars of income leading to concealment of income by the assessee whereas the penalty has finally been levied for concealment of income. These two expressions i.e. furnishing of inaccurate particulars and concealment of income, as per judicial pronouncements of higher judicial authorities, carry different connotations and non-framing of specific charge against the assessee vitiates the penalty proceedings. The first appellate authority has relied upon these judicial pronouncements while arriving at the said conclusion. No contrary decision of higher judicial authority is available on record. Therefore, no infirmity could be found in the impugned order and we find no reason to interfere with the same.

6. Resultantly, the appeal stands dismissed.

Order pronounced in the open court on 13th March, 2019.

           Sd/-                                      Sd/-
       (Saktijit Dey)                        (Manoj Kumar Aggarwal)
  ाियक सद  / Judicial Member              लेखा सद  / Accountant Member
मुंबई Mumbai; िदनां कDated : 13/03/2019
Sr.PS:-Jaisy Varghese

आदे श की ितिलिप अ !े िषत/Copy of the Order forwarded to :

1. अपीलाथ'/ The Appellant

2. ()थ'/ The Respondent 5 ITA No.116/Mum/2018 M/s. Hemaa Builders & Developers P. Ltd.

Assessment Year-2013-14

3. आयकरआयु (अपील) / The CIT(A)

4. आयकरआयु / CIT- concerned

5. िवभागीय(ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai

6. गाड/ फाईल / Guard File आदे शानुसार/ BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपीलीयअिधकरण, मुंबई / ITAT, Mumbai