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2016 (10) TMI 977 - BOMBAY HIGH COURT

2016 (10) TMI 977 - BOMBAY HIGH COURT - TMI - Penalty under Section 271(1)(c) - area of flat being sold in excess of 1000 sq.ft. being concealed - non entitled to the benefit of Section 80IB(10) - Held that:- The Assessing Officer under the Act considered the Respondent-assessee's explanation in the context in which the penalty proceedings were initiated and did not rightly place any reliance upon the subsequent events. In an appeal from the order of the Assessing Officer, the CIT(A) could not h .....

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initiated penalty proceedings on a new ground in an order in quantum proceedings in appeal from the Assessment Order. This alone could lead to the imposition of penalty under Section 271(1)(c) of the Act on the new ground. The ground on which the penalty was initiated and penalty imposed by the Assessing Officer, namely, that the flat had been sold in the project which was in excess of 1000 sq.ft., the Tribunal has recorded a finding of fact that the flats were sold individually by two separate .....

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gal for the Respondent ORDER P. C. This Appeal under Section 260A of the Income Tax Act, 1961 (the Act) challenges the order dated 13 September 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order is in respect of Assessment Year 2005-06. 2. The Revenue urges the following question of law for our consideration : Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal was justified in deleting the penalty imposed under .....

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joint agreement for purchase of flats which in the aggregate exceeded 1,000 sq.ft (built up area). Consequently, by Assessment Order dated 28 December 2007, he disallowed the deduction claimed under Section 801B(10) of the Act while initiating penalty proceedings under Section 271(1)(c) of the Act on the aforesaid ground for furnishing inaccurate information/concealing of income. 4. The Respondent-assessee carried issue in appeal to the Commissioner of Income Tax (Appeals) (CIT(A)). During pend .....

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Thereafter by order dated 30 March 2010, the Assessing Officer imposed penalty upon the Respondent-assessee under Section 271(1)(c) of the Act. This on the very ground on which the Assessing Officer had initiated penalty proceedings viz. selling of flats to two members of the family which in the aggregate was in excess of 1000 sq.ft. of built up area. Therefore concluding that the Respondent-assessee has furnished incorrect particulars of income/concealed particulars of income. Consequently, a .....

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respect of which Section 801B(10) of the Act was being claimed was not completed before the due date i.e. 31 March 2008. Thus confirming the order dated 30 March 2010. It is to be noted that CIT(A) in its order did not deal with the issue on which the Assessing Officer had initiated and confirmed the penalty upon the Respondent-assessee. 7. Being aggrieved the Respondent-assessee filed a further appeal to the Tribunal. By the impugned order the Tribunal held that the initiation and confirmation .....

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order also noted the fact that at the time when the return of income was filed on 31 October 2005, it was not possible to predict whether the project would be completed on or before the specified date 31 March 2008. Further the impugned order also examined the issue on which the Assessing Officer had imposed penalty, namely, selling of two flats to the members of same family, the area of which in the aggregate exceeded 1000 sq.ft. built up and held that no material was brought on record that the .....

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c) of the Act. 8. Mr. Chhotaray, learned Counsel appearing for the Revenue urges that the very fact that the Respondent-assessee has withdrawn an appeal filed before the Commissioner of Income Tax (Appeal) in quantum proceeding on the ground it is not entitled to the benefit of Section 80IB(10) of the Act, penalty must follow. Therefore, CIT(A) was justified in imposing the penalty on a new ground as the powers of the CIT(A) are coterminus with that of the Assessing Officer, therefore, he could .....

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