Income Tax Appellate Tribunal - Patna
Pradeep Kr. Rajgarhi, vs Acit, on 7 April, 2017
1 IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH:PATNA Before Shri Aby T. Varkey, Judicial Member and Shri Waseem Ahmed, Accountant Member ITA No. 115/Pat/2013 Assessment Year:2004-05 Shri Pradeep Kr. Rajgarhia, बनाम Assistant Commissioner of House of Prema Kejriwal, Income-tax, Circle-5, Patna.
/
Patliputra Path, Rajendra
V/s.
Nagar, Near Telephone
Exchange, Patna.
PAN:ABTPR7040R
अपीलाथ /Appellant .. यथ /Respondent
अपीलाथ क ओर से/By Appellant Shri A. K. Rustogi & Shri
Rakesh Kumar, Advocates
यथ क ओर से/By Respondent Shri Kausik Kr. Das, DR
सुनवाई क तार ख/Date of Hearing 04-04-2017
घोषणा क तार ख/Date of Pronouncement 07-04-2017 आदे श /O R D E R PER Bench:
This appeal filed by the assessee is arising out of order of Commissioner of Income- tax(Appeal), Dhanbad dated 30-03-2013 for AY 2004-05.
2. At the outset, Ld. Counsel for the assessee drew our attention to the last page of the penalty order wherein the AO has made the following finding to impose the impugned penalty on the assessee:
"Hence, considering the facts and circumstances of the case, I believe that the assessee has furnished inaccurate particulars of income as well as has concealed his income in the meaning of section 271(1)(c) of the I. T. Act."
3. According to the Ld. Counsel, the penalty u/s. 271(1)(c) of the Act can be levied only if the AO is able to come to a definite finding that the assessee has either furnished inaccurate particulars of income or concealed his income. In this case, it is evident from 2 ITA No. 115/Pat/2013 Shri Pradeep Kr. Rajgarhia,AY 2004-05 the above finding of the AO that he found the assessee to have violated both the limbs of charges specified in sec. 271(1)(c) of the Act. The Ld. Counsel for the assessee submitted that the issue is no longer res integra and the AO should have made a definite finding as to which charge has been made out against the assessee. Without doing so, the order of the AO is patently erroneous and, therefore, it has to be struck down and relied on the order of Hon'ble Karnataka High Court in the case of CIT Vs. SSA's Emerald Medadow in ITA No. 380 of 2015 dated 23.11.2015 wherein their Lordships upheld the decision of the Tribunal. In that case notice issued by the AO before imposing penalty u/s.274 read with section 271(1)(c) of the Act was held by the Tribunal to be bad in law as it did not specify which limb of section 271(1)(c) of the Act, the assessee has violated for which the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Ld. Counsel pointed out that the said order of the Tribunal which had been upheld by the Hon'ble High Court has been dismissed by the Hon'ble Supreme Court in CC No.11485/2016 vide order dated 23.11.2015.
4. The Ld. DR could not controvert the factual aspect which has been stated before us by the Ld. AR on this issue or bring any judicial precedent to support the case of the Revenue.
5. We have heard rival submissions and gone through the facts and circumstances of the case. We find that the AO while passing the penalty order has found the assessee to have furnished inaccurate particulars of income as well as to have concealed his income. As per section 271(1)(c) of the Act, the AO has to make a categorical finding as to whether the assessee falls in either of the faults specified in the two limbs to Sec. 271(1)(c) of the Act i.e. as to whether the assessee has furnished the inaccurate particulars of income or has concealed his income. We take note that in SSA's Emerald Medadow (supra) the Hon'ble Supreme Court has upheld the order of the Hon'ble Karnataka High Court, wherein the Hon'ble High Court upheld the order of the Tribunal by holding that even when the notice is served to the assesse prior to initiation of the penalty proceeding, it was incumbent upon the AO to specify as to whether the assessee is being proceeded against for furnishing 3 ITA No. 115/Pat/2013 Shri Pradeep Kr. Rajgarhia,AY 2004-05 inaccurate particulars or for concealment of income, without doing so the penalty order is fragile in the eyes of law and need to be cancelled. The Hon'ble Gujarat High Court in M/s Sarathi Engineering Company Vs. CIT 282 ITR 642 (Guj) has held that only on specific charge the penalty u/s. 271(1)(c) can be levied on the assessee. So, in the instant case, we take note that the AO in the impugned penalty order has held that the assessee for violation of both the faults u/s. 271(1)(c) of the Act, which action of AO cannot stand the scrutiny of law and, therefore, the penalty order confirmed by the Ld. CIT(A) is cancelled.
6. In the result, assessee's appeal is allowed.
Order is pronounced in open court on 07.04.2017 Sd/- Sd/-
(Waseem Ahmed) (Aby. T. Varkey)
Accountant Member Judicial Member
Date: 7th April, 2017
Jd. Sr. PS
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. अपीलाथ / Appellant
2. यथ / Respondent
3. संबं धत आयकर आयु"त / Concerned CIT
4. आयकर आय"
ु त- अपील / CIT (A)
5. #वभागीय &त&न ध, आयकर अपील य अ धकरण / DR, ITAT, Patna
6. गाड( फाइल / Guard file.
By order/आदे श से, Assistant Registrar, ITAT, Patna,