Income Tax Appellate Tribunal - Pune
Income-Tax Officer,, Nashik vs Narendra P. Musale,, Nashik on 5 February, 2021
आयकर अपीऱीय अधिकरण "बी" न्यायपीठ पण
ु े में ।
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, PUNE
(Through Virtual Court)
BEFORE SHRI R.S.SYAL, VP AND
SHRI PARTHA SARATHI CHAUDHURY, JM
M.A. No. 38/PUN/2020
( Arising out of ITA No.1853/PUN/2016)
नििाारण वषा / Assessment Year : 2011-12
The Income Tax Officer,
Ward-1(4), Nashik.
........... आवेदक/Applicant
बिाम / V/s.
Shri Narendra P. Musale
1st Floor, Ganesh Apartment,
Near Bus Stand, Satpur,
Nashik-422 007.
PAN : AFFPM7810N
......प्रत्यथी / Respondent
Revenue by : Shri Vitthal Bhosale
Assessee by : Shri Sanket Joshi
सुनवाई की तारीख / Date of Hearing : 05.02.2021
घोषणा की तारीख / Date of Pronouncement : 05.02.2021
आदे श / ORDER
PER PARTHA SARATHI CHAUDHURY, JM:
This Miscellaneous Application has been filed by the Revenue arising out of ITA No.1853/PUN/2016 for assessment year 2011-12 u/s. 254(2) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟) seeking rectification in the order of Tribunal dated 27.03.2019. 2 MA No. 38/PUN/2020
A.Y.2011-12
2. The grievance of the Revenue in the Miscellaneous Application as per the relevant Paras extracted as follows:
"04. The Hon'ble Tribunal vide instant order dt.27/03/2019 has allowed the appeal of the assessee on technical ground and deleted the penalty of Rs. 39,77,580/- levied u/s 271(1)(c) of the Act stating that:
" That taking guidance from the decision of Hon'ble Bombay High Court in the case of CIT Vs. Samson Perinchery (supra)wherein the Hon'ble Bombay High Court has considered the decision of Hon'ble Karnataka High Court in the case of CIT Vs. Manjunath Cotton and Ginning Factory (supra, the legal proposition that comes out and which is binding in nature is that 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 ... "
05. The decision of the Hon. ITAT is not acceptable respectfully as the Hon'ble Tribunal has not appreciated the fact that merely for the reason of mistake or defect of striking-off the relevant limb i.e. for concealment of income and for furnishing of inaccurate particulars of income, inter-alia, cannot be considered as non-substantive to the intent and purpose of the Act. The issue stated is to be covered within the meaning of section 292B of the Act. The Hon'ble Tribunal has not appreciated the decision of the Hon'ble Supreme Court in the case of MAK Data (P) Ltd. vs. CIT-II 38 Taxman 448(SC) whereby the Hon'ble Apex Court held that the AO [Hon'ble CIT(A)-l, Nashik in the instant case] has to satisfy whether the penalty proceedings be initiated or not during the course of the assessment proceedings, and the AO is not required to record his satisfaction in a particular manner or reduce it to writing." The Ld. DR placed strong reliance on the aforesaid Miscellaneous Application and the decision of the Hon‟ble Supreme Court in the case of MAK Data (P) Ltd. Vs. CIT-II, 38 Taxman 448 (SC).
3. The Ld. AR of the assessee while opening his argument at the very outset submitted that the Ld. DR could not bring out a case through their Miscellaneous Application which can be stated within the purview "mistake apparent from record" in the order of the Tribunal. That what the Revenue essentially wants to is re-argue the matter seeking, therefore, before the Tribunal to review its decision which is not permissible within the realm of the Miscellaneous Application filed u/s.254(2) of the Act. Referring to the 3 MA No. 38/PUN/2020 A.Y.2011-12 decision of the Hon‟ble Supreme Court in the case of MAK Data (P) Ltd. Vs. CIT-II (supra.) on which the Ld. DR has placed reliance, the Ld. AR submitted that in the order of the Tribunal, they have relied on the decision of the Hon‟ble Bombay High Court in the case of CIT Vs. Samson Perinchery in ITA No.1154 of 2014 and the decision of the Hon‟ble Karnataka High Court in the case of CIT Vs. Manjunath Cotton and Ginning Factory reported as 359 ITR 565 and the Tribunal has given relief to the assessee following these decisions wherein principles of natural justice has been emphasized as core pillar of judicial process. The Tribunal has held and observed as follows:
"That taking guidance from the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Samson Perinchery (supra.) wherein the Hon'ble Bombay High Court has considered the decision of Hon'ble Karnataka High Court in the case of CIT Vs. Manjunath Cotton and Ginning Factory (supra.), the legal proposition that comes out and which is binding in nature is that 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.
21. The sanctity in terms of natural justice with regard to this proposition is that the assessee under the scheme of welfare legislation which is embedded in the Income Tax Act, 1961 should get an opportunity to prepare himself for the defense as regards to the exact charge on which penalty is imposed upon him u/s. 271(1)(c) of the Act. In the instant case, the charge is vague and therefore, levy of penalty is not warranted. Taking totality of facts and legal scenario into consideration, we set aside the order of the Ld. CIT(Appeals) and direct the Assessing Officer to delete the penalty from the hands of the assessee.
22. In the result, appeal of the assessee in ITA No.1853/PUN/2016 is allowed."
4. The Ld. AR further submitted referring to the decision of the Hon‟ble Supreme Court in the case of MAK Data (P) Ltd. Vs. CIT-II (supra.) and the Hon‟ble Supreme Court therein has not discussed the issue of natural justice and therefore, considering the facts and circumstances of the present case, placing reliance on the aforesaid decision of the Hon‟ble Supreme Court by 4 MA No. 38/PUN/2020 A.Y.2011-12 the Revenue is not appropriate. The Ld. AR of the assessee has relied on the decisions of the Hon‟ble Bombay High Court wherein the decision of the Hon‟ble Supreme Court in the case of MAK Data (P) Ltd. Vs. CIT-II (supra.) has been discussed vide Para 8 of its order in the case of Pr. Commissioner of Income Tax (Central) Vs. Goa Coastal Resorts and Recreation Pvt. Ltd. (2020) 272 TAXMAN 0157 (Bombay). In this case, the Hon‟ble Bombay High Court following the principles as laid down in the case of CIT Vs. Samson Perinchery (supra.) held and observed that the notice of penalty issued to the assessee must indicate whether the Assessing Officer is satisfied that the case of the assessee involves concealment of particulars of income or furnishing of inaccurate particulars of income or both, with clarity. That vide Para 8, it has been held as follows:
"8. The contention based upon MAK Data (P) Ltd. (supra) also does not appeal to us in the peculiar facts of the present case. The notice in the present case is itself is defective and further; there is no finding or satisfaction recorded in relation to the concealment or furnishing of inaccurate particulars of income."
5. That further, in the Miscellaneous Application of the Revenue, they have stated that the matter is covered within the meaning of Section 292B of the Act. In this regard, the Ld. AR has placed on record and relied on the decision of the Pune Bench of the Tribunal in MA No.56/PUN/2017 arising out of 532/PUN/2015 dated 15.05.2018 for the assessment year 2009-10 and the relevant Paras are extracted as follows:
"4. We have heard the rival contentions and perused the record. The present Miscellaneous Application is against the order of Tribunal dated 31.01.2017, where the issue of levy of penalty under section 271 (1 )(c) of the Act was decided in turn, relying on earlier decision of Pune Bench of Tribunal in Kanhaiyalal D. Jain Vs. ACIT in ITA Nos.1201 to 1205/PN/2014, relating to assessment years 2003-04 to 2007-08, dated 30.11.2016. The perusal of said order would reflect that the issue was decided after taking note of the decision of the Hon'ble Bombay High Court in CIT Vs. Kaushalya (supra) and also taking note of the decision of Hon'ble Supreme Court in Mak Data Pvt. Ltd. Vs. CIT (supra). In other words, once- the order has 5 MA No. 38/PUN/2020 A.Y.2011-12 been decided after considering different decisions, there is no merit in the plea of applicant that the said decisions have not been considered by the Tribunal. Further, it may be pointed out that even the issue of applicability of section 271 (1 B) of the Act was not raised by the learned Departmental Representative for the applicant while arguing penalty appeal and the proposition raised by way of Miscellaneous Application amounts to re-arguing the issue which cannot be allowed in the garb of Miscellaneous Application filed under section 254(2) of the Act. But the proposition of applicant Revenue that the mistake in non striking of one limb is curable under section 292B of the Act does not stand since for levying penalty under section 271 (1 )(c) of the Act, dictate of section and various Courts implementing the section is that the Assessing Officer has to record satisfaction as to which limb of said section has not been complied with by the assessee and show cause the assessee in this regard while initiating penalty proceedings under section 271 (1 )(c) of the Act. The failure of the Assessing Officer to record such satisfaction makes the order levying penalty invalid and bad in law and such mistake is not curable defect under section 292B of the Act as it goes to the jurisdiction of levy of penalty for concealment. Accordingly, there is no merit in the present Miscellaneous Application filed by the applicant Revenue and the same is dismissed on all counts.
6. Having heard both the parties herein and considering relevant documents on record, we are in conformity with the argument placed by the Ld. AR of the assessee. Therefore, in view of the judicial pronouncements referred hereinabove, we are of the considered view that in the findings of the Tribunal in ITA No.1853/PUN/2016, there is no mistake apparent from record within the purview of Section 254(2) of the Act and hence, Miscellaneous Application filed by the Revenue is dismissed on all counts.
7. In the result, Miscellaneous Application filed by the Revenue is dismissed.
Order pronounced on 05th day of February, 2021.
Sd/- Sd/-
R.S.SYAL PARTHA SARATHI CHAUDHURY
VICE PRESIDENT JUDICIAL MEMBER
ऩण
ु े / Pune; ददनाांक / Dated : 05th February, 2021. SB 6 MA No. 38/PUN/2020 A.Y.2011-12 आदे श की प्रनिलऱपप अग्रेपषि / Copy of the Order forwarded to :
1. अऩीऱाथी / The Appellant.
2. प्रत्यथी / The Respondent.
3. The CIT(Appeals)-1, Nashik.
4. The Pr. CIT-1, Nashik.
5. ववभागीय प्रतततनधध , आयकर अऩीऱीय अधधकरण, "बी" बेंच, ऩण ु े / DR, ITAT, "B" Bench, Pune.
6. गार्ड फ़ाइऱ / Guard File.
आदे शानुसार / BY ORDER, // True Copy // तनजी सधचव / Private Secretary आयकर अऩीऱीय अधधकरण, ऩण ु े / ITAT, Pune.
7MA No. 38/PUN/2020 A.Y.2011-12 Date 1 Draft dictated on 05.02.2021 Sr.PS/PS 2 Draft placed before author 05.02.2021 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order