TMI Blog2022 (6) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 13-6-2022 - Dr. S. Seethalakshmi, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Shri R. K. Bhatra (C.A.) For the Revenue : Ms Monisha Choudhary (JCIT) ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal by the assessee is directed against the order dated 08.07.2021 of the ld. CIT(A), National Faceless Appeal Centre, Delhi [hereinafter referred to as (NFAC)], arising from penalty order passed U/s. 271(1)(c) of the Income Tax Act, 1961 (in short the Act ) for the AY 2010- 11. 2. The assessee has raised the following grounds:- 1. That on the facts and in the circumstances of the case the Ld. CIT(A) is wrong, unjust and has erred in law in not accepting the plea of the appellant that the notice issued under section 271(1)(c) of the I.T. Act, 1961jfor imposition of penalty is wrong and had in law. 2. That without prejudice to the ground No. (1) above on the facts and in the circumstances of the case the ld. CIT(A) is wrong, unjust and has erred in law in confirming penalty of Rs. 204372 imposed by the Assessing Officer under section 271(1)(c) of the I. T. Act, 1961. 3. That the appellant craves the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 271(1)(c) of the Act, and the imposition of penalty u/s upheld and grounds of appeal is dismissed. 7. During the course of hearing, ld. AR of the assessee also relied on the written submissions filed before the bench and the same is reproduced below:- a) In assessment order:- In body of assessment order in last of para - 8 it is stated 'penalty proceedings u/s 271 (1) (c) of the Act, are initiated separately against the assessee for concealing the particulars of his income and/or furnishing of inaccurate particulars of income'. In para - 11 of assessment order it has been stated 'Penalty proceedings u/s 271 (1) (c) of the Act are initiated separately for concealing particulars of income and/or furnishing inaccurate particulars of income'. Thus in assessment order for the initiation of penalty proceedings there is no satisfaction that whether penalty is initiated for concealment of income or for furnishing inaccurate particulars of income. b) Notice u/s 274 Furthur in the penalty notice u/s 274 read with section 271 of Income Tax Act, 1961 dated 16-02-2015 (copy enclosed) A.O. issued printed notice by putting against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported in 2015 (11) TMI 1620 - , wherein Hon'ble Court has held that: - 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under section 274 read with Section 271 (1) (c) of the Income Tax Act, 1961 (for short 'the Act) to be bad in law as it did not specify which limb of Section 271 (1) (c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee has relied on the decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX - VS - MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgement of the Division Bench of this Court, we are of the opinion, no substantial question of law arised in this appeal for determination by this Court. The appeal.is accordingly dismissed. The department has filed SLP in Hon'ble Supreme Court which has been dismissed. Therefore, Honble Supreme Court has approved the findings made by Hon'ble Karnataka High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned cases: Shri Samson Perinchery. ITA 1154, 953, 1097, 1226 of 2014 (Order date -5.01.2017) (Bombay High Court) ii SSA's Emerald Meadows [2016] 73 taxmann.com 241 (Karnataka High Court) iii Mitsu Industries Ltd. ITA No. 216 of 2004, Gujarat High Court Further attention is drawn towards the following judgement of the Hon'ble ITAT, Jaipur Bench: - (i) Narayana Heights Towers, Vs. I.T.O. Ward - 2- 4 Jaipur ITA No. 1033/JP/2016 has canceled the penalty by holding that there is no specific charge by the Assessing officer. In our considered view, the assessing officer was not justified in imposing the penalty on this basis the action of the assessing officer is contrary to the provision of law. ii) Shankar Lal Khandelwal v. DCIT - ITA No. 878/JP/2003. i) Radha Mohan Maheshwari v. DCIT - ITA No. 773/JP/2013. ii) Murari Lal Mittal ITA No. 334/JP/2015 order dated 09/11/16 iii) Mrs Mradula Agarwal vs I.T.O. - ITA No. 176/JP/2016 1.5 In the resent judgment of the Hon ble jurisdictional High Court in the case of Shevata Construction Co. Pvt. Ltd. ITA No. 534/2008, wherein the Hon ble High Court at para 9 of its o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncealment of particulars of income/furnishing of inaccurate particulars of income), penalty cannot be sustained 1.7 Further the Hon'ble Supreme Court of India in case of PCIT (Central) Vs Golden Peace Hotels Resorts Pvt. Ltd. (2021) 124 Taxmann.Com 249 (SC) held that SLP dismissed against High Court ruling that recording of satisfaction by Assessing Officer that there was concealment of income or that any inaccurate particulars were furnished by assessee was sine qua non for initiation of penalty proceedings and in absence of such satisfaction, both Commissioner (Appeals) as well as Tribunal had correctly ordered to drop penalty proceedings against assessee Therefore, the concealment of income and furnishing inaccurate particulars of income, two are different defaults and they cannot be intermixed. In para - 4 of penalty order the A.O. held the default of concealment of income and levied penalty for concealment of income which too is not correct in law. Therefore, the penalty order of ld. AO deserves to be set aside and penalty levied by AO deserves to be cancelled. (2) The ground No. (2) of appeal is that without prejudice to the ground No. (1) abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;the assessee should have been careful but in absence of due care in a case did not mean that assessee was guilty of either furnishing inaccurate particulars or attempting to conceal the income. Thus no penalty can be levied for a bona fide/inadvertent /human error. Further Hon'ble by M.P. High Court in CIT Vs. SKY Auto Products Pvt. Ltd. (2004) 271 ITR 335 held that where the assessee, a new businessman claimed depreciation for the full year in the first year of starting production though he was entitled only to fractional depreciation, it was a case of bonafide mistake on the part of the assessee. Such a ground cannot be a good ground for imposition of penalty u/s 271 (1) (c). The Hon'ble Supreme Court in the case of M/s K.C. Builders Vs. ACIT (2004) 265 ITR 562 held that mere omission from the return of an item of receipt does neither amount to be concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstance found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in his order with regard to initiation of penalty by stating that the assessee has concealed the income or furnishing inaccurate particulars of income by introducing non-genuine. 10. We observed the order of the CIT(A), where the CIT(A) after considering the detailed Written submissions by the assesee and which has been reiterated in its order in page Nos 3 to 13. The findings of the lower authority is erroneous and bad in law. The interpretation and referring the decisions of Delhi High court s order in CIT Vs Gurbachan Lal reported in 250 ITR 157 and in the case of MAK Data (P)., Vs CIT II (2013) 38 Taxman 448 (SC) does not applicable to the present case. In the present case the assesee was genuine enough to submit all the particulars voluntarily and explained that the income disclosed was accurate particulars of income. We have considered view that assesee doesn t have any intention to evade Tax. 11. Before us the Ld AR for the assesee placed reliance on various decisions of Supreme Court, High Courts and co ordinate benches of ITAT in his Written Submissions that mere omission from the return of an item of receipt does neither amount to be concealment nor deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case have been made as trading additions by invoking Section 145(3) of the Act. As per the ld. AR, the appeal filed by the assessee against order of ld. CIT(A) was got wrongly withdrawn under misconception and in assessee s own case for the preceeding year i.e. A.Y. 2007-08 on the same facts, the ITAT did not uphold disallowance of 15% of purchases but ordered to assess the income of assessee on average gross profit declared and admitted by the A.O.. Thus, in this way, the purchases which was held unverifiable cannot be held to be bogus and the addition on the basis of estimation do not fall within the purview of Section 271 (1) (c) of the Act. 14. After appreciating the facts of the case, we noticed that the assessee had furnished all particulars before the A.O. and no deficiency or mistake was found therein and technically, the invocation of provision of Section 145 (3) of the Act by the A.O. was on account of and lack of verifiability of some of the purchases. In this way, the additions made in the present case were purely on estimation. It is a settled law that additions based on estimation where higher trading profit as declared against the gross profit h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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