Income Tax Appellate Tribunal - Panji
Jitendra Prataprao Sonar,, Pune vs Deputy Commissioner Of Income-Tax,, on 5 January, 2018
आयकर अपील
य अ धकरण] पण
ु े यायपीठ "बी" पण
ु े म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
BEFORE MS. SUSHMA CHOWLA, JM AND
SHRI ANIL CHATURVEDI, AM
आयकर अपील सं
. / ITA Nos.1692 to 1694/PUN/2015
नधा रण वष / Assessment Years : 2009-10 to 2011-12
Jitendra Prataprao Sonar, .......... अपीलाथ /
Prop : M.S. Publishers and Printers,
Appellant
Shop No.30/31/32, Pan Bazar Bldg.,
Market Yard, Gultekdi,
Pune - 411 034.
PAN : AFFPS9137N.
बनाम v/s
Dy.Commissioner of Income Tax, ....... यथ /
Circle - 2, Pune.
Respondent
Assessee by : Shri Nikhil Pathak.
Revenue by : Shri Vivek Aggarwal.
सन
ु वाई क तार ख / घोषणा क तार ख /
Date of Hearing : 13.12.2017 Date of Pronouncement: 05.01.2018
आदे श / ORDER
PER ANIL CHATURVEDI, AM :
1. These three appeals filed by the assessee are emanating out of a consolidated order of Commissioner of Income Tax (A)-4, Pune dt.30.10.2015 for the assessment years 2009-10, 2010-11 and 2011- 12 wherein Ld.CIT(A) has confirmed the levy of penalty u/s 271(1)(c) of the Act.
2. Before us, at the outset, Ld.A.R. submitted that though the three appeals of the assessee are for different assessment years but the issue involved in three appeals are common namely, the levy of penalty u/s 271(1)(c) of the I.T. Act. He therefore submitted that the submissions 2 made by him while arguing appeal for one year would be equally applicable to other years and therefore all the three appeals can be heard together. Ld.D.R. did not object to the aforesaid submission of Ld.A.R. We therefore for the sake of convenience proceed to dispose of all the three appeals by a consolidated order.
3. The relevant facts as culled out from the material on record are as under :-
3.1 Assessee is an individual and stated to be engaged in the business of undertaking Publishing and Printing contracts. Assessee filed his original return of income for A.Y. 2009-10 on 30.09.2009 declaring total income at Rs.41,80,600/-. A survey action u/s 133A of the Act was carried out on 22.10.2012 at the business premises of the assessee. During the course of survey action, it was noticed that assessee had made bogus purchases from various parties who were declared hawala dealers by the Sales Tax Department. The aggregate purchases made by the assessee from such parties was to the tune of Rs.82,23,904/-. AO noted that on being confronted, assessee could not provide all the supporting documents to ascertain the veracity of purchases but however assessee offered additional income of Rs.36,85,775/- after applying an estimated gross profit of 24% on the total turnover. Assessee thereafter revised his return of income on 28.03.2013 declaring the total income of Rs.78,66,380/- Thereafter, the case was re-opened and subsequently assessment was framed u/s 143(3) r.w.s. 147 of the Act vide order dt.28.03.2014 and the total income was determined at Rs.78,66,380/- being the same as offered by 3 the assessee in the revised return of income. For the other assessment years the details of income offered by the assessee are as under :
A.Y. Income Addl. income Total income Total income offered in differed in offered in assessed u/s original response to return in 143(3) r.w.s.
return notice u/s 148 response to 147. notice u/s 148 in Rs. in Rs. in Rs. in Rs. 2010-11 99,42,430/- 1,60,34,335/- 2,59,76,780/- 2,59,76,780/- 2011-12 1,33,93,884/- 1,66,42,104/- 3,00,35,988/- 3,00,35,988/-
On the additional income offered by the assessee in the revised return of income for the three assessment years, AO vide order dt.26.09.2014 levied penalty of Rs.12,16,305/- (for A.Y. 2009-10), Rs.48,78,801/- (for A.Y. 2010-11) and Rs.50,28,183/- (for A.Y. 2011-12) u/s 271(1)(c) of the Act on account of concealing the particulars of income and for furnishing inaccurate particulars of income. Aggrieved by the orders of AO, assessee carried the matter before Ld.CIT(A), who vide order dt.30.10.2015 dismissed the appeals of the assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in appeal before us and has raised the following grounds in A.Y. 2009-10 :
"That on the facts and in the circumstances of the case :
1. The learned Commissioner of Income-tax (Appeals) [CIT (A)] erred in upholding the levy of penalty under section 271(1)(c) of the Income Tax act 1961 (the 'Act'). The CIT (A) ought to have held that no penalty was leviable, on the facts and in law.
2. The CIT (A) erred in holding that the appellant has concealed the income/furnished inaccurate particulars of income.
That on the facts and in the circumstances of the case, the CIT(A) failed to appreciate the fact that :
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3. The income declared by the appellant was purely on estimated basis and there is no tangible material found during the course of survey u/s 133A of the act to justify the levy of penalty for concealment.
4. The assessed income was same as the returned income.
5. The taxes were paid and revised return was filed before issue of notices u/s 148, u/s 143(2) and u/s 142(1).
6. Alleging that the return was revised during the course of assessment proceedings.
7. Holding that the original return was filed after the sales tax survey.
8. Concluding that denial of VAT set off was known to the appellant before filing the original return of income and therefore, he ought to have declared his true income in original return.
9. Alleging that the additional income was not voluntarily disclosed by the appellant.
10. Confirming the levy of penalty as it rested upon invalid reassessment which was void ab-initio."
4. Subsequently, the assessee has raised the following additional grounds :
"1. The assessee submits that the penalty order passed u/s. 271 (1) (c) be declared null and void since the said order has been passed without proper application of mind
2. The assessee further submits that the penalty order passed is invalid in law since there is no proper satisfaction recorded by the A.O. and even the notice issued by the ld. A.O. u/s. 274 r.w.s. 271(1)(c) is bad in law."
Similar grounds have been raised by assessee in A.Ys. 2010-11 and 2011-12.
5. Before us, Ld.A.R. submitted that though the assessee has raised several grounds but all the grounds are inter-connected and the sole controversy is with respect to levy of penalty u/s 271(1)(c) of the Act.
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6. Before us, Ld.A.R submitted that in the revised return of income filed by the assessee, the revised income offered by the assessee were accepted in toto by the AO without any change. He submitted that on the additional income offered by the assessee, AO levied penalty u/s 271(1)(c) of the Act. Ld.A.R. submitted that while passing the assessment orders for A.Y. 2009-10 and 2010-11, AO initiated penalty for concealing the particulars of income but while passing the assessment order for A.Y. 2011-12, no satisfaction was recorded by AO. He submitted that thereafter the AO while passing the order for penalty for all the three assessment years, AO levied penalty for concealing the particulars of income as well as for furnishing inaccurate particulars of income. He pointed to the relevant assessment and penalty orders. He therefore, relying on the decision of Hon'ble Bombay High Court in the case of CIT Vs. Samson Perinchery (ITA No.1154 of 2014 order dt.05.01.2017), submitted that when initiation of penalty is for furnishing of inaccurate particulars of income or when no satisfaction for penalty is recorded but when penalty was levied for concealment of income, then in the absence of proper show cause notice to assessee, penalty u/s 271(1)(c) cannot be levied. He therefore submitted that penalty levied by AO be deleted. Ld.D.R. on the other hand, supported the orders of lower authorities.
7. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to levy of penalty u/s 271(1)(c) of the Act. In the present case, it is an undisputed fact that the amount of additional income offered by the assessee pursuant to survey action for all three assessment years has 6 been accepted by Revenue in toto. On the additional income offered and accepted by Revenue, the penalty u/s 271(1)(c) has been levied by AO. The perusal of assessment order passed u/s 143(3) r.w.s 147 of the Act for A.Y. 2009-10 and 2010-11 reveals that AO initiated penalty for concealing the particulars of income. As far as A.Y. 2011-12 is concerned the perusal of assessment order reveals that AO had not recorded any satisfaction for levy of penalty. Thereafter in the penalty orders passed u/s 271(1)(c) of the Act, AO held that assessee had concealed particulars of income by furnishing inaccurate particulars of income. It is a settled law that while levying penalty for concealment, the AO has to record satisfaction and thereafter come to a finding in respect of one of the limbs, which is specified under section 271(1)(c) of the Act. The first step is to record satisfaction while completing the assessment as to whether the assessee had concealed its income or furnished inaccurate particulars of income. Thereafter, notice u/s 274 read with Section 271(1)(c) of the Act is to be issued to the assessee. The Assessing Officer thereafter has to levy penalty under Section 271(1)(c) of the Act for non-satisfaction of either of the limbs. While completing the assessment, the Assessing Officer has to come to a finding as to whether the assessee has concealed its income or furnished inaccurate particulars of income. The Hon'ble Bombay High Court in CIT Vs. Shri Samson Perinchery in ITA No.1154 of 2014 with other ITA Nos.953 of 2014, 1097 of 2014 and 1226 of 2014, vide judgment dated 05.01.2017 held that where initiation of penalty is one limb and the levy of penalty is on other limb, then in the absence of proper show cause notice to the assessee, there is no merit in levy of penalty.
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8. In the present case, as noted hereinabove, it is seen that for A.Y. 2011-12 the AO has not recorded any satisfaction and further levied penalty on both the limbs i.e., for concealment of income and for furnishing of inaccurate particulars of income. For A.Y. 2009-10 and 2010-11, AO recorded that penalty is initiated for concealing the particulars of income but in the penalty order passed levied penalty on both the limbs i.e., for furnishing of inaccurate particulars of income and concealing the income. Considering the aforesaid facts in the light of the decision of Hon'ble Bombay High Court in the case of Samson Perinchery (supra), we are of the view that in the present cases, the basic condition for levy of penalty has not been fulfilled and that the penalty order suffers from non-exercising of jurisdiction power of AO and therefore penalty orders cannot be upheld. We accordingly set aside the penalty orders for all the three years passed by AO. Thus, the grounds of assessee are allowed.
9. In the result, all the three appeals of the assessee are allowed.
Order pronounced on 5th day of January, 2018.
Sd/- Sd/-
(SUSHMA CHOWLA) (ANIL CHATURVEDI)
या यक सद!य / JUDICIAL MEMBER लेखा सद!य / ACCOUNTANT MEMBER
पुणे Pune; दनांक Dated : 5th January, 2018.
Yamini
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आदे श क# $ त&ल'प अ(े'षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. CIT(A)-4, Pune.
4. Pr.CCIT, Pune.
5 "वभागीय %त%न&ध, आयकर अपील य अ&धकरण, "बी" / DR, ITAT, "B" Pune;
6. गाड, फाईल / Guard file.
आदे शानस ु ार/ BY ORDER // True Copy // व.र/ठ %नजी स&चव / Sr. Private Secretary आयकर अपील य अ&धकरण ,पुणे / ITAT, Pune.