Income Tax Appellate Tribunal - Mumbai
Kesar Realty P.Ltd, Navi Mumbai vs Dcit Cen Cir 2, Thane on 19 December, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL "H"
BENCH, MUMBAI
BEFORE HON'BLE SH. R. C. SHARMA, AM &
HON'BLE SH. SANDEEP GOSAIN, JM
आयकरअपीलसं./ I.T.A. No. 515/Mum/2016
(निर्धारणवर्ा / Assessment Year: 2011-12)
Kesar Realty Pvt. Ltd. DCIT Cen Cir 2
Off No. 802-804, Plot No. बिधम/ Ashar IT Park,
5, Sect-19, Sanpada, Navi Vs. Thane,
Mumbai-400 705 Pin-
स्थायीलेखासं ./ जीआइआरसं ./ PAN No. AADCK0025B
(अपीलाथी/Appellant) : (प्रत्यथी / Respondent)
आयकरअपीलसं./ I.T.A. No. 514 & 513/Mum/2016
(निर्धारणवर्ा / Assessment Year: 2010-11 & 2008-09)
Kesar Housing and DCIT Cen Cir 2
Development Co. Ashar IT Park,
बिधम/ Thane,
Off No. 802-804, Plot No.
Vs.
5, Sect-19, Sanpada, Navi Pin-
Mumbai-400 705
स्थायीलेखासं ./ जीआइआरसं ./ PAN No. AAFFK1653C
(अपीलाथी/Appellant) : (प्रत्यथी / Respondent)
अपीलाथीकीओरसे/ Appellant by : Shri K. Shivaram, &
Shri Rahul K. Hakani,
AR
प्रत्यथीकीओरसे/Respondentby : Shri Manoj Kumar
Singh, DR
सुनवाईकीतारीख/
: 07.12.2018
Date of Hearing
घोषणाकीतारीख /
: 19.12.2018
Date of Pronouncement
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I.T.A. No. 515, 514 & 513 /Mum/2016
Kesar Realty Pvt. Ltd
आदे श / O R D E R
Per Sandeep Gosain, Judicial Member:
The present three Appeals filed by the assessee are against the order of Ld. CIT (Appeal) - 11, Pune for AY 2011-12, 2010- 11 & 2008-09.
2. Since the issues raised in these appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed of by this consolidated order. I.T.A. No. 515/Mum/2016 (AY 2011-12)
3. First of all we take up assessee's appeal in I.T.A. No. 515/Mum/2016 (AY 2011-12) on the grounds mentioned herein below:-
1. The learned CIT(A) erred in confirming penalty ofRs.1,41,17,438/- u/s.271(1)(c) of the Act without appreciating that the appellant had already disclosed the unaccounted income in the return of income filed uls.153C of the Act which was accepted by the AO and thus there is neither any concealment of particulars of 3 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd income nor any inaccurate particulars of income found in the return of income filed u/s.153C of the Act and hence, penalty levied u/s.271(1)(c) of the Act amounting to Rs.1,41,17,438/- is unjustified and may be deleted.
2. The Ld. CIT(A) failed to appreciate that the provisions of search assessment was a separate procedure by itself where a notice is required to be issued for filing a fresh return of income and therefore the act of concealment of particulars of income or furnishing of inaccurate particulars of income ought to be in the return of income filed in pursuance to notice u/s. 153C of the Act and hence, the penalty levied u!s.271(1)(c) of the Act amounting to Rs.1,41,17,438/-
is without any justification and liable to be deleted as there is no addition made in the income returned u/s.153C
3. The Ld. CIT(A) further failed to appreciate that even as per Explanation 5A to section 271(1)(c) of the Act, penalty would be imposable where there is variation between the assessed and returned income filed in pursuance to notice u/s. 1 53C and if there is no such variation, there is no question of any concealment of 4 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd income and thereby no question of levying penalty u/s.271(1)(c) of the Act and hence, the penalty levied uls.271(l)(c) of the Act of Rs.1,41,17,438/- is without any justification and liable to be deleted.
4. The Ld. C1T(A) failed to appreciate that there is no material difference between old Explanation 5 - main part (i.e. without considering the immunity provision under Explanation thereto vis-à-vis Explanation 5A of new provisions and therefore the act of concealment of particulars of income or furnishing of inaccurate particulars of income even for earlier assessment years other than the specified years would depend upon whether there is any variation between assessed and returned income u/s.153C and hence, since there is no such variation between the two in the facts of the present case, the penalty levied u/s.271(1)(c) of the Act amounting to Rs.1.41.17,438/- is unjustified and liable to be deleted.
5. The appellant craves leave to add, amend, alter or delete all or any of the above grounds of appeal. 5
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4. The brief facts of the case are that the original return of income was filed on 27.09.11 disclosing total income of Rs. 1,94,57,710/-. Subsequently, there was a search in the case and the search assessment was completed u/s 143(3) r.w.s 153C of the I.T. Act on 28.02.14, accepting the income of Rs. 6,19,57,710/- disclosed in the return filed in response to the 153C notice. The AO treated the additional income offered in the return filed after the search as 'concealed income' and had levied penalty of Rs. 1,41,17,438/-.
Aggrieved by the order of penalty levied by AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties, dismissed the appeal of the assessee.
Now before us, the assessee has preferred the present appeal by raising the above grounds.
5. The solitary ground raised by the assessee relates to challenging the order of Ld. CIT(A) in confirming the penalty of Rs. 1,41,17,438/- u/s 271(1)(c) of the Act. 6
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6. Ld. AR appearing on behalf of the assessee reiterated the same arguments as were raised before Ld. CIT(A) and submitted before us that Ld. CIT(A) erred in confirming penalty ofRs.1,41,17,438/- u/s.271(1)(c) of the Act without appreciating that the assessee had already disclosed the 'unaccounted income' in the return of income filed u/s.153C of the Act which was accepted by the AO and thus there is neither any concealment of 'particulars of income' nor any 'inaccurate particulars of income' found in the return of income filed u/s.153C of the Act and hence, penalty levied u/s.271(1)(c) of the Act amounting to Rs.1,41,17,438/- is unjustified and may be deleted. It was also submitted that Ld. CIT(A) failed to appreciate that the provisions of search assessment was a separate procedure by itself where a notice is required to be issued for filing a fresh return of income and therefore the act of 'concealment of particulars of income' or furnishing of 'inaccurate particulars of income' ought to be in the return of income filed in pursuance to notice u/s. 153C of the Act and hence, the penalty levied u/s.271(1)(c) of the Act amounting to Rs.1,41,17,438/- is without any justification and liable to be deleted as there is no addition made to the income returned 7 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd u/s.153C. It was also submitted that Ld. CIT(A) further failed to appreciate that even as per Explanation 5A to section 271(1)(c) of the Act, penalty would be imposable where there is variation between the assessed and returned income filed in pursuance to notice u/s. 153C and if there is no such variation, there is no question of any concealment of income and thereby no question of levying penalty u/s.271(1)(c) of the Act. It was also argued that Ld. C1T(A) failed to appreciate that there is 'no material' difference between old Explanation 5 - main part (i.e. without considering the immunity provision under Explanation thereto vis-à-vis Explanation 5A of new provisions and therefore the act of 'concealment of particulars of income' or furnishing of 'inaccurate particulars of income' even for earlier assessment years other than the specified years would depend upon whether there is any variation between assessed and returned income u/s.153C and hence, since there is no such variation between the two in the facts of the present case, the penalty levied u/s.271(1)(c) of the Act is unjustified. 8
I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd 7 Ld. AR submitted that as per the facts of the present case, search action u/s 132 was carried out on the business and residential premises of 'Kesar Group' on 29.09.11 and during the course of search, as per the AO, the assessee admitted a total disclosure of Rs. 21.65 crores from project 'Kesar Exotica', out of which 4.25 crore pertains to AY 2011-12 as Shri Ashwin Lal Ji Gogri, one of the director of the assessee, admitted on account of 'on money' received and also on account of 'interest received on cash loans'. The assessee in response to the notice u/s 153C filed a return of income declaring an income of Rs. 6,19,57,710/- as against the income of Rs. 1,94,57,710/- declared in the return u/s 139(1) of the I.T. Act, therefore penalty proceeding were initiated for concealment of income.
As per Ld. AR, no statement was recorded by assessee on 29.09.11 and assessee had no 'undisclosed income' in his hands. Therefore AO had mentioned incorrect facts in the order of assessment. It was submitted that AO had levied penalty by wrongly applying the provision of Explanation-5A of section
271. The Ld. AR also drawn our attention to the relevant portions of the statement of Ashwin Gogori, given u/s 132(4) o the I.T. 9 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd Act during the course of search on 29.09.11, declaring undisclosed income which is brought out as below:-
Q.4. Please give details of partnership firms and companies run by your family members?
Ans. Partnership firms:
(i) Kesar Housing development co. (KHDC)
(ii) Kesar Corporation (K Corp)
(iii) Kesar Sons (KS)
(iv) Kesar Constructions (K.Con) Companies: Kesar Realty Pvt Ltd (KRPL) Q.5. Please give details of all projects undertaken by above named firms and companies along with percentage completion ie. stage of completion for the last six years ?
Ans. KMDC (a) 'Kesar Garden' completed (2006).
(b) 'Kesar Solitaire' completed 2010 Feb K Corp - 'Kesar Residency' completed more than 6 years above K Sons - 'Kesar Harmony' completed 2008 K Con. - 'Kesar Symphony' completed 2009 KRPL - 'Kesar Exotica' completed 85%.
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I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd Q.10. You were provided an opportunity to consult and discuss the matter of page.5 of the loose paper bundle No.l during the intervening period. Now, you please explain the entries on page 5 of loose paper bundle no.l.
Ans. The entries made/written on page no.5 of loose paper bundle no.l are cash loans given to individuals which are not accounted in the regular books of accounts of any concerns or in my individual books of accounts. There are interest calculations for F.y. 2010- 11 and the amount of interest calculated and written is Rs.2,12,92,925/- on principal amount of Rs.21,65,00,000/-written in col.2 of excel sheet. Q.14. You have already stated that you have given cash loans to different individuals of Rs. 21,65,00,000/- and interest received/receivable of Rs.2,12,925/-. What is the source of this cash amount of Rs.21,65,00,000/- Ans. The source of this cash amount of Rs.21.65 crores is from sale of flats and parking space in which we have received on money ie. unaccounted cash from purchase of flats/office/ parking space. Apart from this I have also paid cash in some of the land dealings in the form of advances. To cover any omissions, I offer additional income of Rs.30 crores (Rs.Thirty Crores) for the year 2010-11 apart from regular business 11 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd income. I will pay taxes on this additional income accordingly. The breakup of additional income of Rs.30 crores will be submitted shortly.
8. Ld. AR also pointed out that from the above statement given u/s 132(4), it is clear that incriminating seized material was pertaining to unaccounted cash loans to the extent of Rs.21.65 crores given by the group members to individuals. It was evident from the statement recorded u/s 132(4) that cash of Rs. 54,74,000/- and Jewellery to the extent of Rs. 99,81, 480/- was found during the search. Apart from above, there was no other incriminating seized material which was found and relied upon for making additions.
Ld. AR drawn our attention to the fact that the penalty u/s 274 r.w.s 271(1)(c) of the I.T. Act was initiated for concealment of income /furnishing of inaccurate particulars of income. It was further submitted that even in the order of penalty, the AO has mentioned in para no. 3 of its order that the notice u/s 271(1)(c) of the I.T. Act was issued for furnishing inaccurate particulars, but the penalty was levied for 'concealing particulars of income' and therefore, such a notice is bad in law and in this respect, Ld 12 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd AR relied upon the judgment of jurisdictional High Court in the case CIT vrs. Samson Pernichery 392 ITR 4, judgment of Hon'ble Karnataka High Court in the case of CIT vrs. Manjunatha Cotton and Ginning Factory 35 taxman.com 250, which was also upheld by the Hon'ble Supreme Court, order of ITAT Mumbai Bench in the case of Tata Communication Ltd. Vrs. DCIT in ITA No. 3108/Mum/16 decided on 21.02.18.
9. By inviting our attention to the case records including the statement of Ashwin Gogori and the order passed by the revenue authorities, it was argued by Ld. AR that there was no incriminating seized material belonging to this assessee, which was found during search operations, which warranted additional income being offered to tax. As per Ld. AR, the AO had merely relied upon the statement of Ashwin Gogari in support of the assessment order and does not cite any seized material which was found during search and which indicated undisclosed income of the assessee. More particularly when no statement of the assessee was recorded.
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10. As per Ld. AR in Para 2 of the assessment order, the AO states that 'during the course of the search action u/s 132 in the Kesar group of cases, certain books /documents were seized, from the office premises of M/s. Kesar Housing & Development Co, pertaining to M/s Kesar Realty Pvt Ltd (this assessee). Accordingly, the case of M/s. Kesar Realty Pvt Ltd was falling within the purview of provisions of Section 153C of the IT Act and hence was covered under Search Assessments in the Kesar group as per the provisions of Section 153C for the A.Y. 2006-07 to A.Y. 2011-12.
11. From the above findings of the AO, it was contended by Ld. AR that the provisions of 153C were invoked only because certain books/documents pertaining to this assessee was found during the course of search u/s 132 in the office premises of Kesar Development Corporation. There are no findings that these books/documents which were found are incriminating in nature and represent the undisclosed income of the assessee. The law as it stands now is very clear that proceedings u/s "153C can be initiated only if there is incriminating seized material belonging to the assessee, which is sine qua non for initiating assessment 14 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd /reassessment proceedings u/s 153C and thus also for levy of penalty.
12. Ld. AR further contended that the assessee in question had not been searched u/s 132. He is not an assessee who is subjected to proceedings u/s 153A. The assessee is subjected to proceeding u/s 153C which implies that the AO of the person searched u/s 132 of the Act is t o record a satisfaction that certain seized\ material found during the course of search did not belong to the person searched, but instead belongs to some other persons. Such a satisfaction is missing in the present case. For this purpose he placed reliance on the judgment of Kiran Shah vrs. ACIT ITA No. 5919 to 5925/Mum/2011, wherein it was held as under:-
"10. The grievance of the assessee in all these assessment years relate to the levy of penalty u/s.
271(1)(c) of the Act though quantum may defer. The return of income for all these years were filed u/s.
153C of the Act which contain income which was not declared in the original return filed u/s. 139 of the Act.
The issue involved is whether penalty can be levied on 15 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd income which is not declared in the original return of income but declared in the return of income filed in response to notice issued u/s. 153A of the Act. It is the claim of the assessee that when the income declared in the return of income filed in response to notice u/s.
153A has been accepted, no penalty u/s. 271(1)(c) is leviable. For this proposition, strong reliance has been placed on the decisions of the Tribunal in the case of :-
1) Prem Arora Vs DCIT --24 Taxmann.come 260 (Delhi Tribunal) 2)Purti Sakhar Karkhana Vs DCIT 35 Taxmann.com 594(Nag.Tri)
3) Vrajlal T. Gala Vs AC1T 33 Taxmann.com 620(Mum.Tribunal)
4) M/s. Unimark Remedies Ltd. Vs ACIT dt. 26.9.2012 In ITA No. 3817/M/2009
5) Smt. Pramila D. Ashtekar Vs ITO-39 Taxmann.
Corn 103(Pune 6)Yogesh Parekh Vs ACIT --ITA No. 6750, 6051/M/08 16 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd
11. The Ld. Departmental Representative strongly contended that if it is held that no penalty is leviable on income not declared in the regular return of income filed u/s. 139 but is declared in return of income filed in response to notice issued u/s. 153A of the Act, such view will render the Explanation 5 or 5A to Section 271(1)(c) redundant. The Ld. DR strongly relied upon the decision of the Tribunal Chennai Bench in the case of ACIT Vs Smt. J. Mythilui 35 Taxmann.com 86. The Ld. DR also relied upon the decision of Mumbai Bench in the case of Ajit B. Zota Vs ACTT 40 SOT 543. It is the say of the Ld. DR that there is no immunity for penalty for those years in respect of which either due date for filing of return has not expired or assessment year relating to the search. The Ld. DR further contended that for those assessment years where return of income has been filed u/s. 139 of the Act prior to the date of search what the assessee is required is simply to declare the income in the returns to be filed in response to notice u/s. 153A of the Act. However, 17 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd where returns of income were not due on the date of search, immunity will be available not on the basis of income declared in the return but on fulfilling the conditions mentioned in Explanation 5A or Explanation 5A of the I.T. Act According to the Ld. DR, this absurd interpretation is required to be avoided because penalty provisions are not to be so interpreted that it places dishonest assessees in advantageous position over honest assessee. It is the say of the Ld. DR that if no penalty is leviable on income disclosed in return of income filed in response to notice u/s. 153A, then all the assessees would be saved from penal provisions simply by disclosing the income in the return of income filed in response to noticed u/s. 153A of the Act. The Ld. DR strongly concluded that this cannot be the intention of the Parliament while framing the law. The Ld. DR submitted that since this involves an important question of law and involved in many cases, the issue should be referred to Special Bench for decision.
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12. We have heard the rival parties and perused the orders of the lower authorities. It is not in dispute that additional income was declared in response to notice u/s. 153A of the Act. The position of originally returned income and the assessed income would be clear from the following chart:
S.No. Asst Appeal Original Returned Addition Difference Penalty Years No. returned income finally between levied income u/s 148 sustained original u/s u/s 153C on which returned 271(1)(c) no income on penalty and income levied income in Col-4 offered u/s 148 & 153C
1. 2000-01 5920/M/11 4,97,038 1994,038 1,19,180 14,97,000 4,65,410
2. 2001-02 5921/M/11 4,03,164 16,03,164 4,40,546 12,00,000 3,90,780
3. 2002-03 5922/M/11 3,88,417 35,38,417 3,24,512 31,50,000 9,79,264
4. 2003-04 5923/M/11 4,51,558 96,38,554- ..... 91,55,000 28,56,525
5. 2004-05 5924/M/11 2,28,867 41,77,873 --- 39,49,000 12,74,570
6. 2005-06 5925/M/11 3,59,499 36,77,495 .... 33.18.000 10,87,667
13. A perusal of the above chart clearly brings the case of the assessee covered by the decisions in favour of the assessee mentioned at page-7 of this order. It would be pertinent to refer to the decision of the Delhi Bench in the case of Prem Arora Vs DCIT (supra) wherein it has been held as under:
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I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd "On bare reading of Section 153A it is seen that this section starts with a non obstante clause relating to normal assessment procedure covered by Sections 139, 147, 148, 149, 151 and 153 in respect of searches made after 31.5.2003. The sections, so excluded, relate to filing of return, assessment and reassessment proceedings. Further, section 153A intends to assess or reassess total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Thus, the legislative intention is not to assessee escaped income as in section 147 or undisclosed income as was assessed u/s. 158BC. The first proviso to Sec. 153A makes it clear that notice Ws. 153A will be for each of such six assessment years for assessment or re-assessment of total income. Second proviso to section I53A provides that such notice will have the effect of abating all the pending assessment or reassessment proceedings, so as to avoid multiplicity of proceedings, which was a feature of block assessment.
Thus, there is complete detachment of assessment proceedings u1s. 143 or 147 from search proceedings u/s. 153A. When scheme of search 20 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd assessment as designed by the legislature does not prescribe to take into account the earlier assessment proceedings whether abated or not, it will not be proper or justified to refer to returned income u/s. 139 for the purpose of imposition of penalty u/s. 271(1)(c). It follows that the concealment of income has to be seen with reference to additional income brought to tax over and above income returned by the assessee in response to notice issued u/s. 153A. Accordingly, for the purpose of imposition of penalty u/s. 271(1)(c) resulting as a result of search assessments made u/s. 153A, the original return of income filed Ws. 139 cannot be considered.
Further, in case of search initiated after 1.62003 a return of income is always filed on issue of notice u/s. 153A. As held above the penalty u/s. 271(1)(c) is impossible when there is variation in assessed and return income. If there is no variation, there will be no concealment. When there is no concealment, question of levy of penalty u/s. 271(1)(c) will not arise. This is settled position of law. The concept of voluntary return of income may be important in penally proceedings initiated in course of normal assessment proceedings made u/s. 143(3) or 147 but not 21 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd under section 153A. From above discussion it follows that where returned income filed under section 153A is accepted by the AO, there will be no concealment of income and, consequently, penalty u/s. 271(1)(c) cannot be imposed."
14. This view has also been followed by the Mumbai Bench in the case of MIs. Unimark Remedies Ltd Vs ACIT in ITA Nos. 409 to 41 1/M109 and ITA Nos. 290 to 2921M109 wherein the Tribunal at para-7 of its order has held as under:
"We have carefully considered the rival submissions in the light of the material placed before us. Penalty in these cases has been imposed on the income disclosed in the return of income filed in response to notice u/s. 153A. The reason for imposition of such penalty is that the act of concealment related to return filed u/s. 139(1) and not to return filed u/s. 153A. Therefore, the question in the present appeals is limited only to the extent that whether concealment penalty can be levied in such a case with reference to original return. The case of the AO is that assessee has committed this default while filing the original return of income, 22 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd therefore concealment has to be viewed with reference to return originally filed and AO also has referred to the provisions of Explanation-5. Ld. C!T(A) has upheld the order of the AO. We found that this issue has been considered at length in the aforementioned order of Delhi ITAT in the case of Shri Prem Arora Vs DC'IT (supra)."
15. In another case before Nagpur Bench In ITA Nos 150 to 155INag/10, the Tribunal has held that where returned income filed u/s. 153A is accepted by the AO and there is no variation in assessed income and returned income, penalty u/s. 271(1)(c) cannot be imposed. In another case before the Tribunal Murnbai Bench in the case of Vrajlal T. Gala Vs ACIT 33 Taxmann. Corn 620 where the Tribunal has held that"
Explanation -5 could not be applicable to assessee's case as it had not been found to be owner of any of asset mentioned in explanation. It was held "yes" and accordingly deleted the penalty levied uls. 271(1)© of the Act. The Tribunal at Pune Bench in the case of Smt. Pramila D. Ashtekar Vs ITO 39 Taxmann. Corn 103 has once again reiterated the view of the Tribunal by holding that when there is no addition over and above the income declared by the assessee in return of income filed in response to notice u/s. 153A, no penalty u/s. 271(1)(c) was to be imposed.23
I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd 15.1. Considering various judicial decisions discussed hereinabove in the light of explanation-5 to Sec. 271(1)(c) which relates to search initiated u/s. 132 of the Act before the first day of June, 2007 and where in the course of search the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing....................In the present case, the assessee was not found to be the owner of any such things mentioned in Explanation-5 therefore explanation -5 does not apply on the facts of the case. The decisions relied upon by the Ld. DR relate to the cases where explanation-5/5A were applicable. Therefore, all the decisions relied on by the Ld. DR are misplaced. The DR has also referred to Sec. 271AAA but that section has been brought in statute by the Finance Act 2007 w.e.f 1.4.2007. Therefore, that section is not applicable in the present case.
15.2. Considering the facts under appeal with the judicial decisions relied upon and cited hereinabove, we do not find any substance for the levy of penalty u/s. 271(1)(c) of the Act. The AO is directed to delete the penalty so levied in all the assessment years under consideration. The appeals filed by the assessee for all the above assessment years are allowed.
17. Before closing, we find that the Tribunal has been very consistent in taking similar views as discussed 24 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd hereinabove. The apprehension of the Ld. DR become redundant do not have any force and as the co- ordinate benches of the Tribunal are consistent in their own views, therefore , we do not find any reason to refer the matter under dispute to a Special Bench. Request of the Ld DR is denied.
13. Ld. AR also relied upon the judgment in the case of Kirit Dahyabhi Patel Vrs. ACIT, ITA No. 1181 of 2010 dated 3.12.14 (Guj HC), Shri Kiran Shah vs. ACIT, ITA Nos. 5919 to 5925/M/2011, DCIT Vrs. Purti Sakhar Karkhand (2013) 23 ITR (T) 667 (Nag Trib), Mrs. Santa Kaur Manjeet Singh Chopra vs. ITO(2015) 174 TTj 516 (Pune)(Trib.), ACIT vs. Dr. Nitin Laxmikant Lad, IT No. 2241 to 2244/PN/20 12, dt.
30/10/2015 (Pune)(Trib.), Shrikant Mohta vs. CIT (2018) 95 taxmann.com 224 203-209 (Cal.)(HC)
14. In support of the above propositions, learned AR also relied on the decision of Delhi High Court in case of Shri Neeraj Jindal (ITA 463/2016 & CM No.26604/2016), order dated 09/02/2017 and SAS Pharmaceuticals (ITA No.1058 of 2009) order dated 08/04/2011.25
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15. On the other hand, Ld. DR relied upon the orders passed by revenue authorities.
16. We have heard the counsels for both the parties at length and we have also perused the material placed on record, judgment cited by the parties as well as the orders passed by revenue authorities. We find that the penalty in this case was levied by applying the provisions of Explantion 5A of section 271 of the I.T. Act.
17. In addition to the above, assessee had also challenged the penalty proceedings as not in conformity with law by raising a specific plea that the penalty was initiated on the ground of furnishing of inaccurate particulars of income as well as concealment of income, but was levied on account of concealment of income.
18. From the records, we noticed that in the Penalty Order, dated 27/08/2014, the AO states in Para 3 of the order that notice u/s 271 (l)(c) was issued for furnishing inaccurate particulars of income and in Para 9 of the Penalty Order, the AO concluded that there was a deliberate act of willfully concealing particulars of 26 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd income. From the above facts, it is clear that there are a number of contradictory findings given by the AO on the issue of initiation of Penalty Proceedings. The concluding portion of the assessment order ie. para 9, the AO has given directions to issue notice u/s 274 r.w.s 271 for Concealment of income/Furnishing inaccurate particulars. Such a notice, if issued is bad in law as held by the Jurisdictional Bombay High Court in the case of CIT vrs. Samson Pernichery 392 ITR 4, following the decision of Karnataka High Court in the case of CIT vrs.
Manjunatha Cotton and Ginning Factory 35 taxman.com 250, which was upheld by the Hon'ble Supreme Court, wherein also it was held that imposition of penalty based on defective show cause notice without specifying the charge against the assessee cannot be sustained. In the present case, the charge is not specified and hence the entire proceedings stands void ab initio. The Hon'ble Karnataka High Court in the case of CIT vs Manjunatha Cotton & Ginning Factory 35 Taxmann.com 250, in paras 58,59,60 & 61 of its judgment explained the requirements of a valid notice u/s 274 of the Act. In the present case the notice u/s 274 is bad in law as the same is not in 27 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd conformity with the provisions thereof. We are of the considered view that in the penalty order, the AO states that notice was issued on grounds of 'furnishing inaccurate particulars of income'. In the concluding para no. 9 of the Penalty order, the AO proceeds to levy penalty on the grounds of 'concealing particulars of income'. This is clearly impermissible in law as has been held by the coordinate bench of the Mumbai ITAT in the case of M/s Tata Communications Ltd vs DCIT in ITA No. 3108/M/2016, order dated 21/02/2018, wherein the bench had held that initiation of penalty on one ground and levy of penalty on another is impermissible in law. Therefore considering the totality of the facts as discussed above, we are of the view that the penalty levied by AO and upheld by Ld. CIT(A) is not sustainable in the eyes of law. Therefore we direct the AO to delete the penalty. Resultantly this ground raised by the assessee is allowed.
ITA No. 514 & 513/Mum/2016 (AY 2010-11 & 2008-09)
19. Now we take up other appeals filed by the assessee in ITA No. 514 & 513/Mum/2016 (AY 2010-11 & 2008-09). Although the facts and circumstances of the present case are also identical 28 I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd that of ITA No. 515/Mum/16, which we have already decided on merits. However in the present two appeals, there are additional facts to the effect that no notice u/s 274 of the Act has been placed on file by the parties. In this respect, we have perused the record and noticed that assessee had moved an application to the information officer under the RTI 2005 for seeking copy of notice u/s 271(1)(c) of the Act in both the years, but the ACIT CC-2 informed that the penalty u/s 274 r.w.s 271(1)(c) in both the years is not traceable. But has further mentioned that assessee himself has admitted the receipt of notice.
20. In these circumstances, although no notice u/s 274 r.w.s 271(1)(c) of the Act was available on the records, but as per the order of penalty, the facts remain the same as were in ITA No. 515/Mum/16. Therefore, following our own decision in ITA No. 515/Mum/16, we apply the same findings in the present appeal in order to maintain judicial consistency which is applicable mutatis mutandis in the present case.29
I.T.A. No. 515, 514 & 513 /Mum/2016 Kesar Realty Pvt. Ltd
21. In the net result, all the appeals filed by the assessee are allowed in terms indicated hereinabove with no order as to cost.
Order pronounced in the open court on 19thDecember, 2018 Sd/- Sd/-
(R. C. Sharma) (Sandeep Gosain) ले खासदस्य / Accountant Member न्याययकसदस्य / Judicial Member मुंबई Mumbai;यदनां कDated : 19.12.2018 Sr.PS. Dhananjay आदे शकीप्रनिनिनिअग्रे नर्ि/Copy of the Order forwarded to :
1. अपीलाथी/ The Appellant
2. प्रत्यथी/ The Respondent
3. आयकरआयुक्त(अपील) / The CIT(A)
4. आयकरआयुक्त/ CIT- concerned
5. यवभागीयप्रयतयनयध, आयकरअपीलीयअयधकरण, मुंबई/ DR, ITAT, Mumbai
6. गार्ड फाईल / Guard File आदे शधिुसधर/ BY ORDER, उि/सहधयकिंजीकधर .
(Dy./Asstt.Registrar) आयकरअिीिीयअनर्करण, मुंबई/ ITAT, Mumbai