Income Tax Appellate Tribunal - Mumbai
Sia Lifestyles P. Ltd, Mumbai vs Dcit Cen Cir 2(1), Mumbai on 5 March, 2019
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IN THE INCOME TAX APPELL ATE TRIBUNAL "G" BENCH, MUMB AI
BEFORE SRI MAHAVIR SINGH, JM AND SRI M BALAGENSH, AM
Aayakr ApIla saM
sa M . / ITA No.365/Mum/2018
(inaQa- a rNa baYa- / Assessment Year 2012-13)
Sia Lifestyles Pvt Ltd., 1 s t DCIT, Cent. Circle 2(1),
floor, Rangm ahal Arcade, 1 s t Mumbai,
Vs.
Gauthan Lane, Santacruz,
Mumbai.
(ApIlaaqaI
ApIlaaqaI- / Appellant) .. (p`p`%yaqaaI
%yaqaaI- / Respondent)
%yaqaa
PAN No. AAFCS 0567G
Revenue by : Shri Choudhury Arun Kumar
Singh
Assessee by : Mansi Chheda
Date of hearing: 5.3.2019 Date of pronouncement : 5-03-2019
AadoSa / O R D E R
PER MAHAVIR SINGH, JM:
This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-48, Mumbai [in short CIT(A)], in appeal No.48/I.T.-234/DCCC-291)/2015-16 dated 15.11.2017. The Assessment was framed by the Assistant Commissioner of Income Tax, Ward 2(4), Kalyan (in short 'ITO, Kalyan') for the A.Y. 2013-14 vide order 2 ITA N o. 365/M um/ 2018 Assessment Year 2012-13 dated 30.3.2016 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act').
2. The only issue raised in this appeal is against the order of the CIT(A) confirming lev y of penalty under section.271(1)(c) of the Act by the Assessing Officer in respect to addition of alleged bogus purchases by estim ating the same at 12.5%. For this, the assessee has raised jurisdictional issue as well as issue on m erits. The assessee has raised the first jurisdictional issue vide Ground No.1 as under:
"1. The ld CIT(A) erred in levying penalty of ₹1,72,870/- under section.271(1)(C).
A. Validit y of penalt y proceedings under section.274 r.w.s271(1)(c).
a. The notice received by the assessee under section 274 read with s.271(1)(c) does not specify on which ground the penalt y under section.271(1)(C) is proposed to be levied.
b. The ld CIT(A) erred in concluding that the penalty proceedings ae valid although the ld AO has not striked off any of the option & hence not clarified whether penalt y is for concealm ent of particulars of incom e or furnishing of inaccurate particulars of income.
c The penalty proceeding's even if tenable suffer from legal infirmity at the stage of initiati8on itself and therefore no penalt y can be levied."
3. At the outset, ld Counsel for the assessee first of all took us to the assessment order and stated that the initiation of penalty proceedings by the Assessing Officer vide para 3.8 was for furnishing of inaccurate particulars of income and also for concealment of particulars of incom e. Ld Counsel referred to the 3 ITA N o. 365/M um/ 2018 Assessment Year 2012-13 followings as noted by the Assessing Officer in the assessm ent order:
"Penalt y proceedings under section.271(1)(c) of the I.T.Act 1961 is initiated separately f or furnishing inaccurate particulars of incom e and concealment of particulars of income."
4. Ld Counsel took us through the penalty order dated 9.9.2015 under section.271(1)(c) read with section. 274 of the Act, wherein, the Assessing Officer has levied penalty for concealm ent of incom e vide para 5 as under:
"5. Assessee's reply has been considered carefully and the same is not acceptable as the addition made by the AO has reached its finality as the assessee has not preferred an appeal before the CIT(A) at the Assessing Officer's stage assessee failed to prove the genuineness of the purchases of ₹42,62,451/- of 11 parties as mentioned in para 2 above. This proves beyond doubt that assessee has concealed the particulars of income to the extent addition made @ 12% of ₹5,32,806/- and made itself liable for penalty on this account. The assessee during the assessment proceedings agreed the addition only when the AO brought to the notice of the assessee regards to the bogus purchases. it leads to concealm ent of income as held in the decision in the case of Indus Engg. Co vs ACIT (Inv) 17(1), Mumbai by the Hon'ble H.C. in W .P. 539/1993 (2009) 184 Taxman 869(Bom) in which case the assessee offered loans as other income voluntarily under section.132(4) which was not disclosed in original nor in revised return of income, is a clear case of concealm ent of income."
5. Ld Counsel for the assessee also referred to show cause notice issued under section 274 read with section 271(1)(c)(1)(c) of the Act dated 12.3.2015 & 31.7.2015 i.e. statutory notices and stated that none of the clause was striked out by the Assessing Officer while issuing the notices. In view of these facts, ld Counsel stated that the issue is squarely covered by the decision of Hon'ble 4 ITA N o. 365/M um/ 2018 Assessment Year 2012-13 Bom bay High Court in the case of Commissioner of Income Tax11 .. v/s. Shri Samson Perinchery, (2017) 392 ITR 4 (Bom.), wherein it is held as under
:-
"3. 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 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.
6. When these facts were pointed out by this Bench to ld Sr Departmental Representative, he only relied on the assessment order, penalty order and the order of the CIT(A).
7. We have heard the rival contentions and gone through the facts and circumstances of the case. Admittedly, as noticed from the notice issued by the Assessing Officer under section.274 read with section 271(1)(c)(1)(c) of the Act dated 12.3.2015 for initiating penalty proceedings, the Assessing Officer has not striked out the relevant clauses in this section. The Assessing Officer has initiated penalty proceedings for both limbs i.e. for furnishing of inaccurate particulars of income as well concealment of particulars of income as is evident from the assessment order.. It means that the assessing officer is not sure about the charge on which penalty is to be levied. Hence, respectfully following 5 ITA N o. 365/M um/ 2018 Assessment Year 2012-13 the decision of Hon'ble Bombay High Court in the case of Shri Samson Perinchery(supra), we delete the penalty of rs.1,72,870/- levied by the Assessing Officer under section.271(1)(c) of the Act and allow the appeal of the assessee.
8. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 5-03-2019. Aado S a kI Gaao YaNaa Y aNaa Ku l ao mao idnaM k 15.03.2019 kao kI ga SD/ - SD/ -
(M BALAGANESH) (MAHAVIR SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 5--03-2019
Sudip Sarkar /Sr.PS
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