Vildirect: IncomeTax-caselaws-2009-VIL-341-ITAT-AGR

2009-VIL-341-ITAT-AGR

Equivalent Citation: TTJ 129, 389, [2011] 8 ITR 383

Income Tax Appellate Tribunal AGRA

Date: 15.10.2009

INCOME-TAX OFFICER.

CHHAIL BEHARI.

BENCH

Member(s) : I. C. SUDHIR., DEEPAK R. SHAH.

JUDGMENT

By this miscellaneous application the Revenue desires that the Tribunal may rectify its order in ITA No. 429/Agra/2007, dt. 17th July, 2007.

2. The Tribunal in appeal against order levying penalty under s. 271(1)(c) held that there was no proper satisfaction arrived at as required under s. 271(1)(c) of the Act. It was held that the satisfaction was qua "furnishing inaccurate particulars of income" as recorded in the assessment order but in the order levying penalty under s. 271(1)(c), the same was qua "concealment of particulars of income". The Tribunal thereafter held as under:

"6. We have heard the rival submissions and perused the material available on record. The case law relied upon before us has also been taken into consideration. On a careful consideration of the same, we are of the view that once the AO has initiated penalty proceedings in the assessment order on the basis of which jurisdiction can be said to have been acquired by him is on only count i.e., the count of filing of inaccurate particulars of his income and admittedly not for concealment or for that matter on both these counts. However, penalty instead has been imposed on the count of concealment of particulars of assessee's income. In these facts, we are inclined to agree with the arguments of the learned Authorised Representative as it is found that in terms of the principle laid down by the apex Court in the case of Dilip N. Shroff vs. Jt. CIT & Anr. (2007) 210 CTR (SC) 228 : (2007) 291 ITR 519 (SC), the AO lacked jurisdiction to levy penalty for concealment. Accordingly, for the reasons given hereinabove, in terms of the pronouncement made in the open Court, ground No. 8 raised by the assessee is allowed."

In the petition it is averred that by the Finance Act, 2008, an amendment has been made retrospectively w.e.f. 1st April, 1989 to provide that where an assessment order contains a direction for initiation of penalty proceedings, such an order of assessment shall be deemed to constitute satisfaction of the AO for initiation of penalty proceedings for concealment in respect of any amount added or disallowed in computing the total income or loss of the assessee. Thus it can be said that the mention by the AO of direction for initiation of proceedings under s. 271(1)(c) of the Act in the assessment order would cover both the actions of the assessee i.e., "concealment of particulars of income" as well as "furnishing of inaccurate particulars of income."

3. The learned Departmental Representative Shri A.R. Khan submitted that as per sub-s. (1B) to s. 271 inserted by Finance Act, 2008 w.r.e.f. 1st April, 1989, a direction contained in assessment order for initiation of penalty proceedings will amount to satisfaction and that will be proper satisfaction. Thus due, to retrospective amendment, the law to be applied is the law as per amended provision of s. 271(1B) inserted with retrospective effect. Not applying the retrospectively amended law will amount to a mistake apparent on record. He accordingly urged that for correct application of law as amended with retrospective effect be applied and for this purpose the order of Tribunal dt. 17th July, 2007 be recalled and decided again.

The learned counsel for the assessee applicant Shri Anurag Sinha on the other hand, submitted that the Tribunal has not decided the matter on the ground that no satisfaction was arrived at. He submitted that though the Tribunal noted that satisfaction is arrived at, the same was for different limb. The satisfaction arrived at was in respect of "furnishing inaccurate particulars of income", whereas the penalty is levied for concealment of particulars of income. Hon'ble Supreme Court in the case of Dilip N. Shroff vs. Jt. CIT & Anr. (2007) 210 CTR (SC) 228 : (2007) 291 ITR 519 (SC) held that the phrases "concealment of income" and "furnishing inaccurate particulars" are different. Both referred to deliberate act on the part of the assessee. Thus one cannot be substituted for the other. The Tribunal has not decided the matter on the ground that satisfaction is not recorded but the satisfaction being recorded in one limb of s. 271(1)(c) whereas the penalty was levied for another limb of s. 271(1)(c) and hence both are different. Even after the retrospective amendment, there is no provision that two limbs will be counted as one for the purpose of levy of penalty. Accordingly, even after retrospective amendment, there is no mistake apparent on record.

4. We have considered the rival submissions. We are in agreement, with the submission made on behalf of assessee. The Tribunal noted in para 6 of the order as extracted hereinabove that whereas the penalty was initiated on the count of filing inaccurate particulars of income but penalty was levied for concealment of particulars of income. Thus the Tribunal also held that both are different and hence if the satisfaction arrived at during assessment proceedings was for one reason, penalty cannot be levied for another reason. While so holding the Tribunal relied upon the decision of Hon'ble Supreme Court in the case of Dilip N. Shroff. Thus the Tribunal had not cancelled the penalty on the ground that there is no satisfaction recorded in the assessment order. The retrospective amendment was by insertion of sub-s. (1B) in s. 271 which is extracted hereunder:

"(1B) Where any amount is added or disallowed in computing the total income or loss of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under cl. (c) of sub-s. (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the AO for initiation of the penalty proceedings under the said cl. (c)."

Hence even after retrospective amendment, since the difference between two limbs of s. 271 (1)(c) is not erased or is considered as one, the distinction between "concealment of particulars of income" and "furnishing of inaccurate particulars of income" is still maintained. This view is further fortified by the decision of Hon'ble Gujarat High Court in the case of New Sorathia Engineering Co. vs. CIT (2006) 202 CTR (Guj) 188 : (2006) 282 ITR 642 (Guj), wherein the Hon'ble Gujarat High Court following its earlier decision in the case of CIT vs. Manu Engineering Works (1979) 8 CTR (Guj) 141 : (1980) 122 ITR 306 (Guj), held that "it is incumbent upon the AO to state whether penalty was being levied for concealment of particulars of income by the assessee or whether any inaccurate particulars of income had been furnished by the assessee." It was held that when penalty order and appellate order did not show clear-cut finding had been reached, the order of penalty could not be upheld by the Tribunal. We, therefore, hold that even if amended provision as amended with retrospective effect is applied, in view of the apparent distinction between the phrases "concealment of particulars of income" and "furnishing of inaccurate particulars of income", it cannot be said that there is any mistake apparent on record.

5. In the result, the miscellaneous application is dismissed.

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