Amirali Abdulsultan Jiwani Mumbai v. Ito 13 3 3 Mumbai

In The Income Tax Appellate Tribunal Mumbai Bench A Mumbai Before Shri D T Garasia Judicial Member And Shri N K Pradhan Accountant Member Ita No 7605 Mum 2013 Assessment Year 2007 08 Amirali Abdul S Ultan Jiwani Makker Co Shop No 9 Shamjimorarji Building Champsibhimji Road Mazgaon Mumbai 400010 Vs Ito 13 3 3 Aayakarbhavan New Marine Lines Mumbai 400020 Pan No Adwpj 8074 A Appellant Respondent Assessee By Mr Jitendra Singh Ar Revenue By Mr Rajesh Kumar Yadav Dr Date Of Hearing 03 10 2017 Date Of Pronouncement 14 12 2017 Order Per N K Pradhan A M This Is An Appeal Filed By The Assessee The Relevant Assessment Year Is 2007 08 The Appeal Is Directed Against The Order Of The Commissioner Of Income Tax Appeals 24 Mumbai And Arises Out Of The Penalty Order U S 271 1 C Of The Income Tax Act 1961 The Act 2 The Solitary Ground Raised By The Assessee In This Appeal Is Against The Order Of The Ld Cit A Confirming The Penalty Of Rs 6 78 000 Imposed By The Assessing Officer Ao U S 271 1 C Amirali Abdulsultan Jiwani Ita No 7605 Mum 2013 2 3 Briefly Stated The Facts Of The Case Are That The Assessee Filed His Return Of Income For The Ay 2007 08 On 11 05 2007 Declaring Taxable Income Of Rs 97 820 The Ao Found During The Course Of Assessment Proceedings That The Assessee Had Deposited Cash Of Rs 21 66 000 In Bank Account No 0031040000 4875 With D Evelopment C Redit B Ank During The Period From 01 04 2006 To 31 03 2007 And Purchased F Lat From The Same The Assessee Was Not In A Position To Furnish The Source Of Cash Credit S And Submitted Before The Ao That He Had Decided To Offer The Amount Of Rs 22 60 000 As His Income During The Financial Year 2006 07 Relevant To The Impugned Assessment Year Therefore The Ao M Ade An Addition Of Rs 22 60 000 U S 69 A Then He Imposed A Minimum Penalty Of Rs 6 78 000 4 Aggrieved By The Order Of The Ao The Assessee Filed An Appeal Before The Ld Cit A The Ld Cit A Upheld The Penalty Levied By The Ao And Dismissed The Appeal Filed By The Assessee 5 Before Us The Ld Counsel Of The Assessee Submits That In The Present Case The Ao Has Initiated Penalty On One L Imb I E Concealment Whereas He Has Imposed Penalty On The Other L Imb I E Furnishing Inaccurate Particulars Of Income Relying On The Judgment Of The Honble Bombay High Court In Cit Vs Shri Samson Perinchery Ita No 1154 953 1097 1226 Of 2014 He Submits That The Penalty Of Rs 6 78 000 Levied By The Ao U S 271 1 C Be Deleted 6 On The Other Hand The Ld Dr Relies On The Decision In K P Madhusudhanan Vs Cit 2001 118 Taxman 324 Sc And Samson Maritime Ltd Vs Cit Ita No 1718 Of 2014 Bombay High Court Amirali Abdulsultan Jiwani Ita No 7605 Mum 2013 3 7 We Have Heard The Rival Submissions And Perused The Relevant Materials On Record The Reasons For Our Decisions Are Given Below We Find That In The Assessment Order Dated 21 12 2009 Page 4 The Ao Has In Itiated The Penalty Proceedings U S 271 1 C For Concealment Whereas In The Penalty Order Dated 12 03 2012 Page 4 He Has Levied The Penalty On The Assessee For Filing Inaccurate Particulars Of Income Before A Penalty Is Imposed The Assessee Must B E Apprised Of The Precise Charge Brought Against Him He Must Be Told Distinctly Whether He Is Held Guilty Of Having Concealed The Particulars Of His Income Or Of Having Furnished Inaccurate Particulars Thereof Section 274 1 Provides For A Reasonable Opp Ortunity To Be Given To The Assessee So That He Can Meet The Charge Where The Penalty Proceedings U S 271 1 C Are Commenced Against The Assessee On A Particular Footing Viz Of Concealment Of Particulars Of Income But The Final Conclusion Of Levying T He Penalty Is Based On A Different Footing Altogether Viz On The Footing Of Furnishing Inaccurate Particulars Of His Income It Cannot Be Said That In Such Circumstances The Assessee Had Been Given A Reasonable Opportunity Of Being Heard Before The Orde R I Mposing The Penalty Was Passed In Such A Case The Penalty Imposed Is Not Justified As Held In Cit Vs Lakhdhir Lalji 1972 85 Itr 77 In Samson Perincherry Supra The Honble Bombay High Court Held Therefore The Satisfaction Of The Assessing Officer With Regard To Only One Of The Two Breaches Mentioned Under Section 271 1 C Of The Act For Initiation Amirali Abdulsultan Jiwani Ita No 7605 Mum 2013 4 Of Penalty Proceedings Will Not Warrant Permit Penalty Being Imposed For The Order Breach This I S More So As An Assessee Would Respond To The Ground On Which The Penalty Has Been Initiated Notice Issued It Must Therefore Follow That The Order Imposing Penalty Has To Be Made Only On The Ground Of Which The Penalty Proceedings Has Been Initiated A Nd It Cannot Be On A Fresh Ground Of Which The Assessee Has No Notice 7 1 Thus The Basis Of The Issuance Of Notice Should Remain The Same While Imposing Penalty If The Notice Is Issued In The Context Of Concealment Of Income Then The Penalty Cannot B E Levied By Shifting The Basis To Inaccuracy Of Particulars This Is To Insure That The Assessee Gets An Adequate Opportunity In Respect Of The Default Which Is Detected And Alleged Against Him And Which Forms The Basis Of The Issuance Of The Notice U S 27 1 1 C The Purpose Is To Ensure That The Assessee Is Not Put To Peril Of Answering Against Something Which Never Was Specifi Cally Determined As His Default As Held In A M Shah And Co Vs Cit 1999 238 Itr 415 433 Guj 7 2 We May Mention Here That The Decisions Relied On By The Ld Dr In K P Madhusudhanan And Samson Mari Time Supra Do Not Address The Above Aspects In K P Madhusudhanan It Is Held That The Explanation To Section 271 1 C Is A Part Of Section 271 When The Ao Issues To An Assessee A Notice U S 271 He Makes The Assessee Aware That The Provisions The Reof Are To Be Used Against Him In Samson Maritime It Is Held That The So Called Voluntary Disclosure Was Not Voluntary But Made Only In Response To Notices U S 142 And 143 Of The Act 7 3 We Are Of The Considered View That The Decisions Delineated At Para 7 7 1 Hereinbefore Squarely Apply To The Facts In The Instant Case Amirali Abdulsultan Jiwani Ita No 7605 Mum 2013 5 Following The Same We Delet E The Penalty Of Rs 6 78 000 Levied By The Ao U S 271 1 C 8 In The Result The Appeal Is Allowed Order Pronounced In The Open Court On 14 12 2017 Sd Sd D T Garasia N K Pradhan Judicial Member Accountant Member Mumbai Dated 14 12 2017 Rahul Sharma Sr P S Copy Of The Order Forwarded To 1 The Appellant 2 The Respondent 3 The Cit A 4 Cit 5 Dr Itat Mumbai 6 Guard File By Order True Copy Dy Asstt Registrar Itat Mumbai