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10-06-2019, Harish Chand Narang, Section 133A, 271, 271(1)(c), Tribunal Jaipur

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3 months 1 week ago #9731 by amit
Section - 133A, 271, 271(1)(c), 274
Order Date - 10-06-2019
Favouring - Revenue
Court - Tribunal Jaipur
Appellant - Harish Chand Narang
Respondent - ACIT
Citation - 619Taxpundit147
Appeal No. - ITA No. 675/JP/2017
Asstt. Year - 2008-09



This is an appeal filed by the assessee against the order of ld.CIT(A), Alwar dated 01/06/2017 for the A.Y. 2008-09 in the matter of imposition of penalty U/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act). Following grounds have been taken by the assessee:

“1 On the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in confirming levied by Ld. AO by ignoring the fact that penalty proceedings were initiated for furnishing inaccurate particulars of income whereas penalty was levied for concealment of income as well as for furnishing inaccurate particulars of income, which is not in accordance with law. It is therefore prayed that penalty levied u/s 271(1)(c) is not accordance with law and deserves to be deleted.

2. On the facts and in the circumstances of the case the Ld. CIT(A) has grossly erred in confirming penalty of around 80,936/- levied u/s 271(1)(c) of the income Tax Act, 1961on the additions of Rs.2,61,930/- made by Ld. AO, alleging the same as Shortage of Stock arbitrarily solely relying upon conclusions drawn in assessment proceedings though penalty proceedings are separate and distinct proceedings, thus the penalty so confirmed deserves to be deleted.

3. The appellant craves the right to add, delete or amend any of the grounds of appeal either before or at the time of hearing of appeal.”

2. Rival contentions have been heard and record perused. From the record we found that a survey under section 133A of the Act was conducted at the business premises of the assessee on 18/03/2008. During the course of survey operation, short stock of Rs. 7,77,010/- was detected on physical verification and after addition on account of perceived sale of short stock, a total addition of Rs. 2,61,930/- was made in the assessment. The CIT(A) and thereafter the ITAT, Jaipur Bench in its order dated 08/02/2017 have confirmed the addition of Rs. 2,61,930/-. The A.O has levied penalty u/s 271(1)(c) of the Act on this amount.

3. By the impugned order, the ld. CIT(A) has confirmed the action of the A.O. for levy of penalty, against which the assessee is in further appeal before us.

4. It was argued by the ld. AR of the assessee that the penalty proceedings in the case of assessee were specifically initiated for furnishing inaccurate particulars of income as has been evident from the perusal of the assessment order at page 15 para 1 However, while imposing the penalty, ld. AO has recorded the conclusion that assessee has concealed the income in addi ion to furnishing of inaccurate particulars of income.

5. The ld AR has further submitted that while initiating penalty u/s 271(1)(c) of the Act the AO has recorded satisfaction and directed initiation of penalty for 'furnishing of inaccurate particulars of income', which is evident from the assessment order, whereas in the penalty order the same has been levied alleging 'concealment of income and also furnishing of inaccurate particulars of income. According to provisions of sec. 271 (1)(c), the AO has to show that the assessee has either concealed his income or has furnished inaccurate particulars of income. Concealment of income is quite different from furnishing inaccurate particulars of income and the satisfaction recorded during assessment proceedings regarding the kind of charge i.e. whether penalty proposed is for furnishing inaccurate particulars or for concealment of income has to be confirmed in the penalty order. Thus, if penalty is proposed for one charge the assessee cannot be found guilty of another while imposing penalty.

6. Reliance was placed on the decision of the Hon'ble ITAT Amritsar bench, in the case of HPCL Mittal Energy Ltd. Vs. ACIT in ITA No. 554 & 555/ Asr/2014 dated 03.05.2018. wherein it has been held that where satisfaction of the AO while initiating penalty proceedings u/s 271(1)(c) of the I T Act is with regard to alleged 'concealment of income' by the assessee, whereas imposition of penalty is for 'Concealment/ furnishing inaccurate particulars of income', the levy of penalty is not sustainable.

7. On the other hand, the ld DR has submitted that no objection was raised by the assessee either before the A.O. or before the ld. CIT(A) with regard to recording of satisfaction for initiating the penalty. He has further submitted that quantum addition was made with reference to the survey carried out at the assessee’s business premises wherein physical stock was taken and it was found that the assessee has sold the goods without entering in the regular books of

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