TMI Blog2017 (1) TMI 1726X X X X Extracts X X X X X X X X Extracts X X X X ..... t against the assessee. The Department is not in appeal against the order of Commissioner of Income Tax (Appeals). - Decided in favour of assessee. - ITA No. 288/PUN/2013, ITA No. 289/PUN/2013, ITA No. 290/PUN/2013 - - - Dated:- 30-1-2017 - Shri R.K. Panda, AM And Shri Vikas Awasthy, JM Assessee by: Shri Sunil Ganoo Revenue by: Shri Anil Chaware ORDER Vikas Awasthy, JM : These three appeals by the different assessees are taken up together for hearing as the issues raised in the appeals are arising from same set of facts. In the assessee has assailed the order of Commissioner of Income Tax (Appeals), Aurangabad dated 03-12-2012 for the assessment year 2002-03 confirming the levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). In ITA No. 289/PUN/2013, the assessee has impugned the order of Commissioner of Income Tax (Appeals), Aurangabad dated 03-12-2012 for the assessment year 2006-07 confirming the levy of penalty u/s. 271(1)(c) of the Act and in ITA No. 290/PUN/2013, the assessee has assailed the order of Commissioner of Income Tax (Appeals), Aurangabad dated 03-12-2012 for the assessment year 2003-04 conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessees. In pursuance to the said notice, the assessees filed their respective return of income. Assessments were framed u/s. 143(3) r.w.s. 153A of the Act. The ITA Nos. 288, 289 290/PUN/2013 additions made during the assessment proceedings were accepted by the assessee and no appeals were filed against the additions. Thereafter, the Assessing Officer initiated penalty proceedings u/s. 271(1)(c) in the case of all the assessees. The ld. AR pointed that a perusal of assessment order shows that satisfaction for levy of penalty was recorded u/s. 271(1)(c) r.w. Explanation 1. However, at the time of levy of penalty, the Assessing Officer invoked the provisions of Explanation 5A. When the matter travelled to the First Appellate Authority, the Commissioner of Income Tax (Appeals) held that penalty levied as per Explanation 5A to section 271(1)(c) is not justified. The Commissioner of Income Tax (Appeals) levied the penalty by invoking the provisions of Explanation 3 to section 271(1)(c) of the Act. The ld. AR submitted that the provisions of Explanation 3 to section 271(1)(c) are not applicable in the case of assessees. Provisions of Explanation 3 applies where the return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act on 20-06-2008. ITA No. 288/PUN/2013 6. A perusal of the assessment order in the case of assessee in ITA No. 288/PN/2013 shows that certain additions were made in the ITA Nos. 288, 289 290/PUN/2013 income retuned by the assessee. The Assessing Officer while recording satisfaction for levy of penalty u/s. 271(1)(c) r.w. Explanation 1 has not specified whether penalty proceedings are initiated for concealment of income or furnishing of inaccurate particulars of income. Thereafter, while passing penalty order on 13-05-2010 the penalty was levied u/s. 271(1)(c) r.w. Explanation 5A. During the First Appellate proceedings, the Commissioner of Income Tax (Appeals) observed that the provisions of Explanation 5A are not attracted as no incriminating material was found during search action. However, the Commissioner of Income Tax (Appeals) confirmed the levy of penalty by invoking Explanation 3 to section 271(1)(c) of the Act. 7. Before proceedings further it would be relevant to refer to the provisions of Explanation 3. The same are reproduced here-in-under : Explanation 3.--Where any person fails, without reasonable cause, to furnish within the period specified in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Explanation 5 or 5A as the case may be are attracted, provided other conditions set out in the said explanations are fulfilled. Explanation 3 is attracted only where the assessment is made under regular provisions and not in case of search. Thus, we are of the considered view that the Commissioner of Income Tax (Appeals) has erred in invoking the provisions of Explanation 3 for confirming penalty u/s. 271(1)(c) of the Act in the present case. Therefore, no case for levy of penalty u/s. 271(1)(c) r.w. Explanation 3 is made out against the assessee. The Department is not in appeal against the order of Commissioner of Income Tax (Appeals). Hence, in ITA Nos. 288, 289 290/PUN/2013 the peculiar facts and circumstances of the case, the impugned order is set aside and the appeal of the assessee is allowed. ITA No. 289/PUN/2013 9. A perusal of assessment order dated 31-12-2009 passed u/s. 143(3) r.w.s. 153A of the Act in ITA No. 289/PUN/2013 for assessment year 2006-07 shows that while recording satisfaction for initiating penalty u/s. 271(1)(c) r.w. Explanation 1 specific charge i.e. whether the penalty proceedings are initiated for concealment of income or furnishing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stainable. Hence, the impugned order is set aside and the appeal of the assessee is allowed. ITA No. 290/PUN/2013 10. A perusal of the assessment order dated 22-12-2009 passed u/s. 143(3) r.w.s. 153A of the Act in ITA No. 290/PUN/2013 for assessment year 2003-04 shows that the Assessing Officer has accepted the return of income filed by the assessee in response to notice u/s. 153A without any addition. The Assessing Officer initiated penalty proceedings u/s. 271(1)(c) for concealment of income. However, while levying penalty u/s. 271(1)(c) vide order dated 13-05-2010 the Assessing Officer invoked Explanation 5A. In first appeal, the Commissioner of Income Tax (Appeals) observed that since, no incriminating material was found during the course of search, Explanation 5A is not attracted. However, ITA Nos. 288, 289 290/PUN/2013 the Commissioner of Income Tax (Appeals) invoked Explanation 3 for confirming the levy of penalty. For the detailed reasons given while deciding the appeal of the assessee in, the provisions of Explanation 3 are not attracted where the return of income has been filed in response to notice issued u/s. 153A of the Act. The findings given by us in parag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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