Income Tax Appellate Tribunal - Panji
Madhavi S. Lad, Mumbai vs Itov 20(2)(2), Mumbai on 1 September, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL " B" BENCH, MUMBAI
BEFORE SRI MAHAVIR SINGH, JM AND SRI RAJESH KUMAR, AM
ITA No. 7027/Mum/2014
(A.Y:2007-08)
Mrs. Madhavi S. Lad, Income Tax Officer w ard
6C, Swami Vivekananda Hsg. Soc., 20(2)(2), Mumbai
Azad Nagar 3, Veera Desai Road, Vs.
Andheri West, Mumbai-400 058
PAN ABCPL 2515 J
Appellant .. Respondent
ITA No. 7028/Mum/2014
(A.Y:2008 -09)
Mrs. Madhavi S. Lad, ACIT 20(2), Mumbai
6C, Swami Vivekananda Hsg. Soc., ACIT 20(2), Piramal
Azad Nagar 3, Veera Desai Road, Vs. Chambers, Lower Parel
Andheri West, Mumbai-400 058 East, Mumbai -13
PAN ABCPL 2515 J
Appellant .. Respondent
Assessee by .. None
Revenue by .. Shri Suman Kumar, DR
Date of hearing .. 23-08-2017
Date of pronouncement .. 01-09-2017
ORDER
PER MAHAVIR SINGH, JM:
These appeals by the assessee are arising out of the different orders of CIT(A)-31, Mumbai, in appeal Nos. CIT(A)-31/IT-128/ITO 20(2)(2)/13-14, CIT(A)-31/IT-233/ACIT20(2)/10-11 dated 11-09-2014 & 03-09-2014. The Assessments were framed by ITO Ward 20(2)(2) & ACIT circle-20(2), Mumbai for the A.Ys. 2007-08 & 2008-09 respectively, vide orders dated 15-12-2009 & 20-12-2010 under section 143(3) of the 2 ITA No. 7027 & 7028/ Mum/2014 Mrs. Madhavi S. Lad, ( A . Y s : 0 7 - 0 8 & 0 8 - 0 9 ) Income Tax Act, 1961(hereinafter 'the Act'). The penalty under dispute was levied by ITO Ward 20(2)(2), Mumbai u/s 271(1)(c) of the Act vide his order dated 26-03-2013.
2. The only issue in ITA No. 7028/Mum/2014 for AY 2008-09 in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in disallowing the loss of 2,01,141/-.
3. At the outset, it is noticed that the AO has estimated profit at Rs. 4,80,633/- being 15% of total turnover of Rs. 32,04,224/- as against the claims of the loss of Rs. 2,01,141/-. The CIT(A) also confirmed the action of the AO. It seems that the CIT(A) allow the claim of the set off carry forward loss of Rs. 4,82,146/- claim by assessee before CIT(A) by way of additional ground. The CIT(A) allowed the claim of the assessee vide Para 5.3 of additional ground subject to verification by AO as under: -
"5.3 Additional Ground: During appeal proceedings, the appellant raised an additional ground vide submissions dated 03-01-2013, stating that the AO had erred in not allowing set off of carried forward loss of Rs. 4,82,146/- pertaining to AY 2004-05. The ground raised is allowed subject to verification by the AO."
It means that in case additional ground is allowed, the assessee's income will be nil. We find that the CIT(A) has already allowed the claim of the assessee and directed the AO accordingly. We find no infirmity in the order of CIT(A) and hence, the appeal of assessee is dismissed.
4. Coming to assessee's appeal in ITA No. 7029/Mum/2014 for AY 2007-08 is as regards to the order of CIT(A) confirming the levy of penalty under section 271(1)(c) of the Act.
3ITA No. 7027 & 7028/ Mum/2014 Mrs. Madhavi S. Lad, ( A . Y s : 0 7 - 0 8 & 0 8 - 0 9 )
5. At the outset, it is noticed that the penalty was initiated on estimation of profit at Rs. 15,64,733/-. The AO initiated the penalty proceedings on estimation of profit on business and levied the penalty under section 271(1)(c) of the Act.
6. It is noticed that the AO levied the penalty for furnishing of inaccurate particulars of income but also invoked the explanation (1) under section 271(1)(c) of the Act. For this, the AO observed as under: -
"Further, by operation of the explanation 1 to section 271(1)(c), the onus squarely lies on the assessee and the findings given at the time of assessment are relevant and have much probative value. In such cases, it cannot be said that the assessee has discharged the onus even by a preponderance of probabilities. I am therefore of the opinion that the assessee has knowingly and deliberately furnished inaccurate particulars of income as discussed above. I am further of the opinion that the assessee's case squarely falls within the ambit of explanation 1 to section 271(1)(c) and the assessee's case is a fit case to levy penalty for furnishing inaccurate particulars of her income, where the assessee has knowingly and deliberately tried to mislead the department and has attempted to evade taxes by furnishing inaccurate particulars. Therefore, the mensrea is clearly established in this case and this is a clear cut case of deliberate and conscious disregard of law."4
ITA No. 7027 & 7028/ Mum/2014 Mrs. Madhavi S. Lad, ( A . Y s : 0 7 - 0 8 & 0 8 - 0 9 )
7. We find from the facts of the case that the penalty order passed by the AO under section 271(1)(c) of the Act is on the charge of inaccurate particulars of income in relation to estimation of business income whereas initiation is on the charge in the order of assessment is for concealment of particulars of income by invoking the explanation 1 to section 271(1)(c) of the Act. The penalty cannot be levied under section 271(1)(c) of the Act on the charge which is different than the charge initiated i.e. charge initiated under explanation 1 under 271(1)(c) of the Act and penalty levied under different charge for filing of inaccurate particulars of income. Accordingly, we find that this issue is covered by Hon'ble Bombay High Court in the case of CIT vs. Samson Perinchery (Bom) in ITA No. 1154 of 2014 and dated 05-01-2017.
8. As regards to the specific charge, we find that the AO while levying penalty under section 271(1)(c) of the Act in his discussion clearly stated that the expression used in section 271(1)(c) of the Act "furnishing of inaccurate particulars of income" and " concealing the particulars of income" are two distinct term but according to him both lead to the same effect. He acknowledged that making bogus claim of expenses/ expenditure/ deduction / excess claim of depreciation amounts to furnish of inaccurate particulars income and therefore false claim of expenditure would amount to concealing the particulars of income or deliberate in furnishing inaccurate particulars of such income. This issue is dealt by Hon'ble Bombay High Court in the case of Samson Perinchery (supra) wherein Hon'ble Supreme Court relying on the decision of the Karnataka High Court in the case of CIT vs. Manjunath Cotton & Ginning Factory [2013] 359 ITR 565 (Karnataka) observed as under: -
"The impugned order of the Tribunal deleted the penalty imposed upon the Respondent Assessee. This by holding that the initiation of penalty under Section 271(1)(c) of the Act by Assessing Officer 5 ITA No. 7027 & 7028/ Mum/2014 Mrs. Madhavi S. Lad, ( A . Y s : 0 7 - 0 8 & 0 8 - 0 9 ) was for furnishing inaccurate particulars of income while the order imposing penalty is for concealment of income. The impugned order holds that the concealment of income and furnishing inaccurate particulars of income carry different connotations. Therefore, the Assessing Officer should be clear as to which of the two limbs under which penalty is imposable, has been contravened or indicate that both have been contravened while initiating penalty proceedings. It cannot be that the initiation would be only on one limb i.e. for furnishing inaccurate particulars of income while imposition of penalty on the other limb i.e. concealment of income. Further, the Tribunal also noted that notice issued under Section 274 of the Act is in a standard proforma, without having striked out irrelevant clauses therein. This indicates non application of mind on the part of the Assessing Officer while issuing the penalty notice."
Hence, on the issue of specific charge penalty levied by the AO cannot be sustained. Accordingly, we reverse the orders of the lower authorities i.e. of the AO and CIT(A) levying and confirming the penalty and allow the appeal of the assessee.
9. In the result, the appeal of assessee in ITA No. 7028/Mum/2014 is dismissed and appeal in ITA No. 7027/Mum/2014 is allowed.
Order pronounced in the open court on 01-09-2017.
Sd/- Sd/-
(RAJESH KUMAR) (MAHAVIR SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 01-09-2017
Sudip Sarkar /Sr.PS
6
ITA No. 7027 & 7028/ Mum/2014
Mrs. Madhavi S. Lad, ( A . Y s : 0 7 - 0 8 & 0 8 - 0 9 )
Copy of the Order forwarded to:
1. The Appellant
2. The Respondent.
3. The CIT (A), Mumbai.
4. CIT
5. DR, ITAT, Mumbai
6. Guard file. //True Copy//
BY ORDER,
Assistant Registrar
ITAT, MUMBAI