RAMCHANDRA G. VICHARE, NAVI MUMBAI v. DCIT 22(3), NAVI MUMBAI

ITA 2116/MUM/2009 | 2005-2006
Pronouncement Date: 26-02-2010 | Result: Allowed

Appeal Details

RSA Number 211619914 RSA 2009
Bench Mumbai
Appeal Number ITA 2116/MUM/2009
Duration Of Justice 10 month(s) 19 day(s)
Appellant RAMCHANDRA G. VICHARE, NAVI MUMBAI
Respondent DCIT 22(3), NAVI MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted D
Tribunal Order Date 26-02-2010
Date Of Final Hearing 18-02-2010
Next Hearing Date 18-02-2010
Assessment Year 2005-2006
Appeal Filed On 06-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D : MUMBAI BEFORE SHRI A.L. GEHLOT (AM) AND SMT. P. MADHAVI DEVI (JM) ITA NO.2116/MUM/2009 ASSESSMENT YEAR : 2005-06 MR. RAMCHANDRA G. VICHARE A-1 ASHIANA BUILDING B-17 3 RD FLOOR SECTOR-17 VASHI NAVI MUMBAI. ..( APPELLANT ) P.A. NO. (AARPV 0397 A) VS. DY. COMMISSIONER OF INCOME TAX -22(3) INCOME TAX OFFICE VASHI RAILWAY STATION NAVI MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHRI JAIPRAKASH BAIRAGRA RESPONDENT BY : S HRI G. GURSWAMI O R D E R PER A.L. GEHLOT (AM). THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A) DATED 10.12.2008 FOR ASSESSMENT YEAR 2005-0 6 RAISING THE FOLLOWING GROUND OF APPEAL. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A HAS ERRED IN UPHOLDING THE PENALTY LEVIED OF RS.11 55 884/- U/S. 271(1)(C) OF THE INCOME TAX AC T. 2. THE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)( C) ON THE GROUND THAT THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF SUN DRY CREDITORS RS.34 34 000/- RECORDED IN THE BOOKS OF ACCOUNT. D URING THE ASSESSMENT PROCEEDINGS THE A.O. NOTICED THAT THE ASSESSEE HAS SHOWN SUNDRY CREDITORS ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 2 RS.34 34 000/- IN THE BALANCE SHEET OF RAM ENTERPR ISES/R B ENTERPRISES AS PER DETAILS MENTIONED BELOW: SAI ENTERPRISES RS. 6 34 000/- ZINKS MART RS.11 00 000/- KIRAN MEHTA RS.14 00 000/- S.B. BHOOSKAR & CO. RS. 3 00 000/- THE AO ASKED THE ASSESSEE TO FURNISH CONFIRMATION F ROM THE SAID CREDITORS. IN RESPONSE TO SHOW CAUSE NOTICE THE ASSESSEE VIDE LETTER DATED 20.12.2007 OFFERED THIS AMOUNT FOR TAXATION AND REQUESTED TO A LLOW CAPITALIZATION OF THE SAME. IT WAS ALSO SUBMITTED BY THE ASSESSEE THAT T HOUGH CREDITORS ARE GENUINE SINCE ASSESSEE WAS NOT ABLE TO GIVE CONFIRM ATION OF THE CREDITORS WHICH WERE BROUGHT FORWARD FOR YEARS TOGETHER TO CO -OPERATE WITH THE DEPARTMENT TO BUY PEACE HE WAS OFFERING THE AMOUNT FOR TAXATION. THE PENALTY LEVIED BY THE AO HAS BEEN CONFIRMED BY CIT( A) OBSERVING AS UNDER : 2.4 IN THIS CASE IT IS SEEN THAT IT CANNOT BE DOU BLED THAT THERE IS CONSCIOUS CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS. THERE HAS BEEN A CLAIM MAD E WHICH HAS BEEN PROVED TO BE BOGUS FOR WHICH NO SATISFACTO RY EXPLANATION HAS BEEN OFFERED AND OBJECTIVE APPRECI ATION OF FACTS CLEARLY REVEAL THAT LEVY OF PENALTY IS JUSTIF IED. THE ORDER OF THE ASSESSING OFFICER HAS RECORDED A CLEAR FINDING THAT THE PROFITS OF THE CONCERN ARE BEING DIVERTED THROUGH T HESE CLAIMS AND A CASE OF CONCEALMENT EXISTS. THERE IS NOTHIN G OFFERED TO SUBSTANTIATE THE BONAFIDE BY THE APPELLANT IN THE F ORM OF DOCUMENTARY EVIDENCE OR OTHERWISE AND TO PROVE THE CREDITORS AS GENUINE AND AS SUCH PROVISIONS OF SECTION 68 OF THE I.T. ACT ARE ATTRACTED IN THE CASE WHICH DOES NOT MAKE ANY D ISTINCTION BETWEEN COMMERCIAL LOANS AND NON-COMMERCIAL LOANS A ND AS SUCH APPLIES TO BOTH THE CATEGORIES. THE APPELLANT HAS RELIED ON JUDGMENTS DELIVERED BY THE HONBLE COURTS IN HI S FAVOUR. WITH DUE RESPECT TO THE HONBLE COURTS HERE IT MAY BE MENTIONED THAT THERE ARE VARIOUS JUDGMENTS THAT SPE AK AGAINST THE APPELLANT ALSO. AS SUCH IN THIS CASE THE FACTU AL POSITION WOULD NEED TO BE CONSIDERED. RELYING ON THE PRONOU NCEMENT MADE BY THE HONBLE SUPREME COURT IN THE CASE OF UN ION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS 92007) 212 CTR (SC) 432 IT CAN BE SAID THAT THE RECORDS OF THE CASE CL EARLY INDICATE ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 3 THAT THERE IS CONCEALMENT IN THIS CASE AND THIS ALO NE IS SUFFICIENT TO SUSTAIN THE PENALTY U/S.271(1)(C). I N THIS CASE RECORDS HAVE PROVED THAT CONCEALMENT IS DELIBERATE AND INTENTIONAL AND WAS IN THE KNOWLEDGE OF THE APPELLA NT. THE APPELLANT ADMITTED TO THE UNDISCLOSED INCOME AFTER QUERY RAISED AND FAILED TO REBUT THE FINDING OF THE ASSES SING OFFICER AND AS SUCH PENALTY U/S.271(1)(C) WAS SUSTAINABLE I N THIS CASE. 2.4 IN VIEW OF THIS I DO NOT FIND ANY INFIRMITY IN THE ORDER LEVYING THE AFORESAID PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT AGAINST THE APPELLANT BY THE ASSESSING OFFICER AND AS A RESULT AS THERE IS NO MERIT FILED THE APPEAL FAILS ON THIS GROUND AND IS DISMISSED. 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND PERUSED THE RECORDS. THE CIT(A) HAS HEAVILY RELIED ON THE DECIS ION OF DHARMENDRA TEXTILES OF WHICH APPLICATION HAS BEEN CONSIDERED B Y THE ITAT IN THE ABOVE CASE. THE BRIEF FACTS OF THE CASE ARE THAT THE ASS ESSEE EXPRESSED INABILITY TO FURNISH CONFIRMATION OF THE CREDITORS WHICH WERE BR OUGHT FORWARD FROM EARLIER YEARS. ASSESSEE SURRENDERED THE SAID AMOUN T FOR TAXATION BEFORE THE AO. ON IDENTICAL SET OF FACTS THE ISSUE RELATING T O PENALTY U/S.271(1)(C) HAS BEEN DISCUSSED BY THE ITAT IN ITA NO.1985/M/09 DATE D 18.2.2010 IN THE CASE OF ANIL S. BHAWANI VS. ITO FOR THE ASSESSMENT YEAR 2004-05. THE RELEVANT DISCUSSION AND FINDING OF ITAT IS REPRODUC ED AS BELOW:- 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF TH E PARTIES AND PERUSED THE RECORD AS WELL AS GONE THRO UGH THE DECISIONS CITED. INCOME TAX IS COLLECTED FROM T AX PAYERS WHO ARE HAVING TAXABLE INCOME FOR THE WELFA RE OF THE STATE. THE CITIZENS ARE BOUND TO PAY SUCH IN COME TAX AS IT IS A PART OF THEIR DUTY TO THE NATION. TH E INCOME TAX IS PAYABLE YEARLY ON THE ANNUAL TAXABLE INCOME THAT MEANS THIS DUTY TOWARDS THE NATION IS YEARLY DUTY OF THE TAXPAYERS. UNDER THE CIRCUMSTANC ES SOME TIME TAXPAYERS AGREE TO CERTAIN ADDITIONS DURI NG ASSESSMENT PROCEEDINGS NOT ALWAYS BECAUSE THEY ARE CONVINCED THAT SUCH ADDITION IS WARRANTED OR OTHERW ISE JUSTIFIED BUT WITH A VIEW TO BRING FINALITY TO THE WHOLE MATTER TO PURCHASE PEACE AND AVOID LITIGATION. THE GENERAL VIEW HAS ALWAYS BEEN THAT MERE ADMISSION BY ITSELF NEED NOT OFFER IMMUNITY TO THE TAXPAYER WHE RE ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 4 THE ADMISSION HAS BEEN EXTORTED FROM HIM AFTER CONCEALMENT HAD BEEN BROUGHT HOME. BUT THERE ARE A NUMBER OF CASES WHERE THERE IS HARDLY ANY MATERIAL TO JUSTIFY THE ADDITION AT THE TIME WHEN ADDITION IS CONCEDED. IT IS TRUE THAT IN SOME CASES THE ADDITIO N MAY BE AGREED WITH A VIEW TO FORESTALL ENQUIRY. EVE N IN SUCH CASES IT WOULD APPEAR THAT PENALTY MAY NOT BE LEVY ABLE IN ABSENCE OF ANY MATERIAL ON RECORD AGAI NST THE TAXPAYER. IT IS BECAUSE A MERE ATTEMPT TO CONCE AL INCOME HAS NOT BEEN SPECIFICALLY MADE LIABLE FOR PENALTY. EVEN IN A CASE WHERE PROCEEDINGS FOR DETEC TION OF CONCEALMENT IS GOING ON DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE SURRENDERS SOME INCOME AN D AO DROPS THE PROCEEDINGS OF DETECTION OF CONCEALMEN T BY ACCEPTING ASSESSEES SURRENDER WITHOUT MAKING FURTHER EXAMINATION OR INVESTIGATION REGARDING DETE CTION OF CONCEALMENT UNDER THESE CIRCUMSTANCES ALSO IT CAN BE HELD THAT IT IS NOT A CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME; BECAUSE IN THAT SITUATION T HE AO DOES NOT RECORD SATISFACTION AS REQUIRED U/S 271(1) . IN THIS REGARD THE LEGAL POSITION IS WELL SETTLED IN VIEW OF THE SUPREME COURT DECISIONS IN COMMISSIONER OF INCOME TAX MADRAS AND ANR. VS. S.V. ANGIDI CHETTIA R 44 ITR 739 (SC) AND D.M. MANASVI V. COMMISSIONER OF INCOME TAX GUJARAT II AHMEDABAD 86 ITR 557 (SC) THAT POWER TO IMPOSE PENALTY UNDER SECTION 271(1) O F THE ACT DEPENDS UPON THE SATISFACTION OF THE INCOME TAX OFFICER IN THE COURSE OF THE PROCEEDINGS UNDER THE ACT. IT CANNOT BE EXERCISED IF HE IS NOT SATISFIED AND HAS NOT RECORDED HIS SATISFACTION ABOUT THE EXISTENCE O F THE CONDITIONS SPECIFIED IN CLAUSES (B) (C) AND (D) OF SECTION 271(1) OF THE ACT. BEFORE THE PROCEEDINGS ARE CONCL UDED. IT IS TRUE THAT MERE ABSENCE OF THE WORDS I AM SAT ISFIED MAY NOT BE FATAL BUT SUCH A SATISFACTION MUST BE SP ELT OUT FROM THE ORDER OF THE ASSESSING AUTHORITY AS TO THE CONCEALMENT PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS. IN THE ABSENCE OF A CLEAR F INDING AS TO THE CONCEALMENT OF INCOME FURNISHING INACCURA TE PARTICULARS THE INITIATION OF PENALTY PROCEEDINGS WILL BE WITHOUT JURISDICTION. 5.1 THIS VIEW IS ALSO SUPPORTED BY THE PROV ISIONS OF EXPLANATION 1(B) OF SECTION 271 OF THE ACT. ACCO RDING TO US AS PER THE PROVISIONS OF EXPLANATION 1(B) OF S. 271 OF THE ACT THE BURDEN IS ON THE ASSESSEE TO SUBSTANTIATE THE MATTERS STATED IN THE EXPLANATION THAT IT IS SETTLED POSITION IN LAW THAT THERE CANNO T BE AN ESTOPPELS AGAINST A STATUTE. IT IS FOR THE DEPARTME NT TO CONSIDER THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF AN AMOUNT WHICH WAS OFFERED AS TAX. IT I S NOT AUTOMATIC THAT WHENEVER AN AMOUNT WAS OFFERED BY TH E ASSESSEE PENALTY IS TO BE LEVIED. THEREFORE IN TH E PENAL ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 5 PROCEEDINGS WHICH CONCEPTUALLY DIFFER FROM ASSESSME NT PROCEEDINGS THE ASSESSEE CAN FILE AN EXPLANATION JUSTIFYING ITS ACTION IN NOT INCLUDING A PARTICULAR ITEM OF INCOME IN ITS RETURN THOUGH IT MAY HAVE OFFERED TH E AMOUNT TO BE TAXED SUBSEQUENTLY THAT IF SUCH AN EXPLANATION IS OFFERED THE DEPARTMENT HAS TO EXAMI NE ITS ACCEPTABILITY AND RECORD A FINDING AS TO WHETHE R THE EXPLANATION IS ACCEPTABLE OR NOT. ONLY IF THE EXPLANATION IS NOT FOUND ACCEPTABLE THE QUESTION O F PENALTY WILL ARISE. IN OTHER WORDS THE EXPLANATION OF THE ASSESSEE HAS TO BE CONSIDERED ON THE MERITS. DU RING ASSESSMENT PROCEEDINGS IF THE AO ACCEPT THE SURREN DER AMOUNT IN OTHER WORDS IT CAN BE SAID THAT WHATEVE R EXPLANATION SUBMITTED BY THE ASSESSEE IN RESPECT OF SURRENDER OF AMOUNT HAVE BEEN ACCEPTED BY THE AO UNLESS FINDING IS GIVEN BY THE AO THAT EXPLANATION FURNISHED BY THE ASSESSEE WAS FALSE EXPLANATION. 5.2 THE ISSUE RELATING TO BONAFIDE AND FA LSE RETURNS IN IMPOSING PENALTY ON THE ASSESSEE UNDER SECTION 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 AND SECTION 9(2) OF THE CENTRAL SALES TA X ACT 1956 HAVE BEEN EXAMINED BY THE APEX COURT IN T HE CASE OF CEMENT MARKETING CO. OF INDIA LTD. V .ASSIS TANT COMMISSIONER OF SALES TAX [1980] 4 TAXMAN 44 (SC) 124 ITR 15 (SC). FACTS IN BRIEF OF THAT CASE WERE T HAT THE ASSESSEE-COMPANY EFFECTED CERTAIN TRANSACTIONS OF SALE OF CEMENT IN ACCORDANCE WITH THE PROVISIONS OF THE CEMENT CONTROL ORDER DURING THE ASSESSMENT PERIOD 1 - 8-1971 TO 31-7-1972. THE AMOUNT OF FREIGHT INCLUDED IN THE 'FREE ON RAIL DESTINATIONS RAILWAY STATION' WAS PAID BY THE PURCHASERS AND HENCE THE ASSESSEE DEDUCTED FROM THE PRICE SHOWN IN THE INVOICES SENT TO THE PURCHASERS. IN THE COURSE OF ITS ASSESSMENT TO SALE S TAX UNDER THE MADHYA PRADESH GENERAL SALES TAX ACT 195 8 AND THE CENTRAL SALES TAX ACT 1956 THE ASSESSEE D ID NOT INCLUDE THE SAID AMOUNT OF FREIGHT IN ITS TAXAB LE TURNOVER ON THE GROUND THAT IT DID NOT FORM PART OF THE SALE PRICE. IN HIS TWO SEPARATE ASSESSMENT ORDERS ONE UNDER THE CENTRAL SALES TAX ACT 1956 AND THE OTHE R UNDER THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 THE ASSISTANT COMMISSIONER HOWEVER INCLUDED THE SAME IN THE TAXABLE TURNOVER FOR LEVYING TAX. H E ALSO IMPOSED HEAVY PENALTY ON ACCOUNT OF THE ASSESSEE'S FAILURE TO DISCLOSE THE SAME IN ITS TAXA BLE RETURNS. ON DIRECT APPEAL TO THE SUPREME COURT HEL D AS UNDER:-. 5. THE NEXT QUESTION THAT ARISES FOR CONSIDERATION IS WHETHER THE ASSISTANT COMMISSIONER WAS RIGHT IN IMPOSING PENALTY ON THE ASSESSEE FOR NOT SHOWING TH E AMOUNT OF FREIGHT AS FORMING PART OF THE TAXABLE TU RNOVER IN ITS RETURNS. THE PENALTY WAS IMPOSED UNDER SECTI ON 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 A ND ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 6 SECTION 9(2) OF THE CENTRAL SALES TAX ACT 1956 ON THE GROUND THAT THE ASSESSEE HAD FURNISHED FALSE RETURN S BY NOT INCLUDING THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOVER DISCLOSED IN THE RETURNS. NOW IT IS DIFFI CULT TO SEE HOW THE ASSESSEE COULD BE SAID TO HAVE FILED 'F ALSE' RETURNS WHEN WHAT THE ASSESSEE DID NAMELY NOT INCLUDING THE AMOUNT OF FREIGHT IN THE TAXABLE TURN OVER WAS UNDER A BONA FIDE BELIEF THAT THE AMOUNT OF FRE IGHT DID NOT FORM PART OF THE SALE PRICE AND WAS NOT INC LUDIBLE IN THE TAXABLE TURNOVER. THE CONTENTION OF THE ASSE SSEE THROUGHOUT WAS THAT ON A PROPER CONSTRUCTION OF THE DEFINITION OF 'SALE PRICE' IN SECTION 2(O) OF THE M ADHYA PRADESH GENERAL SALES TAX ACT 1958 AND SECTION 2( H) OF THE CENTRAL SALES TAX ACT 1956 THE AMOUNT OF FREI GHT DID NOT FALL WITHIN THE DEFINITION AND WAS NOT LIAB LE TO BE INCLUDED IN THE TAXABLE TURNOVER. THIS WAS THE REAS ON WHY THE ASSESSEE DID NOT INCLUDE THE AMOUNT OF FREI GHT IN THE TAXABLE TURNOVER IN THE RETURNS FILED BY IT. NOW IT CANNOT BE SAID THAT THIS WAS A FRIVOLOUS CONTENTION TAKEN UP MERELY FOR THE PURPOSE OF AVOIDING LIABILITY TO PAY TAX. IT WAS A HIGHLY ARGUABLE CONTENTION WHICH REQUIRED SERIOUS CONSIDERATION BY THE COURT AND THE BELIEF ENTERTAINED BY THE ASSESSEE THAT IT WAS NOT LIABLE TO INCLUDE THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOV ER COULD NOT BE SAID TO BE MALA FIDE OR UNREASONABLE. WHAT SECTION 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 REQUIRES IS THAT THE ASSESSEE SHOULD HAV E FILED A 'FALSE' RETURN AND A RETURN CANNOT BE SAID TO BE 'FALSE' UNLESS THERE IS AN ELEMENT OF DELIBERATENES S IN IT. IT IS POSSIBLE THAT EVEN WHERE THE INCORRECTNESS OF THE RETURN IS CLAIMED TO BE DUE TO WANT OF CARE ON THE PART OF THE ASSESSEE AND THERE IS NO REASONABLE EXPLANATION FORTHCOMING FROM THE ASSESSEE FOR SUCH WANT OF CARE THE COURT MAY IN A GIVEN CASE INFER DELIBERATENESS AN D THE RETURN MAY BE LIABLE TO BE BRANDED AS A FALSE RETUR N. BUT WHERE THE ASSESSEE DOES NOT INCLUDE A PARTICULAR IT EM IN THE TAXABLE TURNOVER UNDER A BONA FIDE BELIEF THAT HE IS NOT LIABLE SO TO INCLUDE IT IT WOULD NOT BE RIGHT TO CONDEMN THE RETURN AS A 'FALSE' RETURN INVITING IMPOSITION OF PENALTY. THIS VIEW WHICH IS BEING TAK EN BY US IS SUPPORTED BY THE DECISION OF THIS COURT IN HINDUSTAN STEEL LTD. V. STATE OF ORISSA [1970] 25 S TC 211 WHERE IT HAS BEEN HELD THAT: '...EVEN IF A MIN IMUM PENALTY IS PRESCRIBED THE AUTHORITY COMPETENT TO I MPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FRO M A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE....' IT IS ELE MENTARY THAT SECTION 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 PROVIDING FOR IMPOSITION OF PENALTY IS PENAL IN CHARACTER AND UNLESS THE FILING OF AN INAC CURATE RETURN IS ACCOMPANIED BY A GUILTY MIND THE SECTION CANNOT BE INVOKED FOR IMPOSING PENALTY. IF THE VIEW ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 7 CANVASSED ON BEHALF OF THE REVENUE WERE ACCEPTED T HE RESULT WOULD BE THAT EVEN IF THE ASSESSEE RAISES A BONA FIDE CONTENTION THAT A PARTICULAR ITEM IS NOT LIABL E TO BE INCLUDED IN THE TAXABLE TURNOVER HE WOULD HAVE TO SHOW IT AS FORMING PART OF THE TAXABLE TURNOVER IN HIS R ETURN AND PAY TAX UPON IT ON PAIN OF BEING HELD LIABLE FO R PENALTY IN CASE HIS CONTENTION IS ULTIMATELY FOUND BY THE COURT TO BE NOT ACCEPTABLE. THAT SURELY COULD NEVER HAVE BEEN INTENDED BY THE LEGISLATURE. 6. WE ARE THEREFORE OF THE VIEW THAT THE ASSESSEE C OULD NOT BE SAID TO HAVE FILED 'FALSE' RETURNS WHEN IT D ID NOT INCLUDE THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOV ER SHOWN IN THE RETURNS AND THE ASSISTANT COMMISSIONER WAS NOT JUSTIFIED IN IMPOSING PENALTY ON THE ASSESS EE UNDER SECTION 43 OF THE MADHYA PRADESH GENERAL SALE S TAX ACT 1958 AND SECTION 9(2) OF THE CENTRAL SALE S TAX ACT 1956. 7. WE ACCORDINGLY REJECT THE APPEALS INSOFAR AS THE Y ARE DIRECTED AGAINST THE INCLUSION OF THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOVER OF THE ASSESSEE BUT ALLOW THE APPEALS INSOFAR AS THEY RELATE TO IMPOSITION OF PENALTY AND SET ASIDE THE ORDERS PASSED BY THE ASSISTANT COMMISSIONER IMPOSING PENALTY ON THE ASSESSEE. 5.3 NOW COMING TO THE DECISIONS RELIED UPON BY TH E LEARNED AR WHICH ARE AS UNDER:- A) THE PUNJAB & HARYANA HIGH COURT IN THE CASE O F CIT VS. RAJIV GARG &ORS. 3 13 ITR 256 HELD AS UNDER:- PURUSANT TO THE NOTICE U/S 148 THE ASSESSEE FILED THE REVISED RETURN OF INCOME SHOWING HIGHER INCOME. THE SAID RETURN OF INCOME WAS ACCOMPANIED BY A NOTE IN WHICH THE ASSESSEE SUBMITTED THAT HE SURRENDERED THE ENTIRE AMOUNT OF SALE PROCEEDS OF SHARES TO BUY PEACE OF MIND AND TO AVOID HAZARDS OF LITIGATION AND ALSO TO SAVE HIMSELF FROM ANY PENAL ACTION. LATER ON ON THE BASIS OF REVISED RETURN THE ASSESSMENT WAS FRAMED AND THE RETURN SUBMITTED BY THE ASSESSEE WAS REGULARIZED AS IT IS. DURING THE COURSE OF ASSESSMENT THE AFORESAID EXPLANATION GIVEN BY THE ASSESSEE WAS NEITHER REJECTED NOR WAS IT HELD TO BE MALA FIDE. THE TRIBUNAL HAS RECORDED A PURE FINDING OF FACT TO THE EFFECT THAT THE REVENUE HAS NOT PLACED ON RECORD ANY MATERIAL OR EVIDENCE TO DISCHARGE ITS BURDEN OF PROVING CONCEALMENT. IN THE ASSESSMENT ORDER NO SUCH FINDING WAS RECORDED. THE DEPARTMENT HAS SIMPLY RESTED ITS CONCLUSION ON THE ACT OF THE ASSESSEE OF HAVING OFFERED ADDITIONAL INCOME IN THE RETURN FILED IN RESPONSE T O THE NOTICE ISSUED UNDER SECTION 148. THE TRIBUNAL ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 8 HAS FURTHER HELD THAT THE ADDITIONAL INCOME SO OFFERED BY THE ASSESSEE WAS DONE IN GOOD FAITH AND TO BUY PEACE. THEREFORE IN VIEW OF THE AFORESAID FINDING THE TRIBUNAL WAS JUSTIFIED IN UPHOLDING THE ORDER OF THE CIT(A) WHEREBY THE PENALTY IMPOSED U/S 271(1)(C) BY THE AO WAS ORDER TO BE DELETED. B) THE LEARNED AR HAS ALSO RELIED UPON THE DEC ISIONS OF ITAT IN CASES OF NITON VALVE INDUSTRIES (P.) LTD . VS. ACIT [2009] 30 SOT 236 (MUM.) ITO VS. GACL FINANC E LTD. [2009] 30 SOT 360 (MUM.) AND TWIN STAR JUPITE R COOPERATIVE HSG. SOC.LTD. VS. ITO [2009] 31 SOT 4 74 (MUM.) THE ITAT IN THE CASE OF M/S OASIS SECURITIES LTD. IN ITA NO. 846/M/08 FOR AY 2002-03 VIDE ITS OR DER DATED 29 TH JANUARY 2010 CONSIDERED ITS DECISION IN GACL LTD. CITED SUPRA AND OTHER DECISIONS OF ITAT A ND UPHELD THE ORDER OF THE CIT(A) WHO DIRECTED THE AO TO DELETE THE PENALTY LEVIED U/S 271(1)(C). THE RELEVA NT FINDINGS OF THE ITAT REPRODUCED BELOW:- 7.3 NOW COMING TO THE MERITS OF THE CASE WE NOTICED THAT THE AO LEVIED PENALTY U/S 271(1)(C) ON THE GROUND THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME. WHAT IS INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT HAS BEEN DISCUSSED IN DETAILS BY THE ITAT MUMBAI BENCH IN THE CASE OF MIMOSA INVESTMENT CO. PVT. LTD IN ITA NO. 2983/MUM/07 FOR AY 2004-05 ORDER DATED 15.01.09. THE SAID ORDER HAS BEEN FOLLOWED BY THE ITAT IN THE CASE OF ITO VS. GACL LTD. IN ITA NO. 6528/M/05 VIDE ORDER DATED 19.03.2009 THE DECISION CITED BY THE LEARNED AR. THE FACTS OF THE CASE OF ITO VS. GACL LTD WERE THAT THE ASSESSEE CLAIMED LOSS AS LOSS FROM TRADING OF SHARES. THE ASSESSING OFFICER TREATED THE SAID LOSS UNDER EXPLANATION TO SECTION 73 AND TREATED THE SAME AS DEEMED SPECULATION LOSS. THE ASSESSING OFFICER HAS APPORTIONED THE INTEREST AND OTHER EXPENSES ATTRIBUTABLE TO SPECULATION BUSINESS INCOME. PENALTY U/S 271(1)(C) LEVIED BY THE AO HAS BEEN CANCELLED BY THE ITAT FOLLOWING THEIR ANOTHER DECISION IN CASE OF MIMOSA INVESTMENT CO PVT LTD ITA NO 2983/MUM/07 FOR AY 2004-05 ORDER DATED 15.01.09 WHEREIN IT WAS HELD THAT THE PROCEEDINGS UNDER SECTION 271(1) (C) CAN BE INITIATED ONLY IF T HE A.O OR THE FIRST APPELLATE AUTHORITY IS SATISFIED I N THE COURSE OF ANY PROCEEDINGS UNDER THE ACT. IF HE IS SATISFIED AS PER CLAUSE (C) THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY THE SUM MENTIONED IN SUB-CLAUSE (III) OF CLAUSE (C). THE EXPRESSION USED IN CLAUSE (C) IS H AS ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 9 CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THEREFORE BOTH IN CASES OF CONCEALMENT AND INACCURACY THE PHRASE PARTICULARS OF INCOME ARE USED. IT WILL BE NOTED THAT AS REGARDS CONCEALMENT THE EXPRESSION IN CLAUSE (C) IS HAS CONCEALED THE PARTICULARS OF HIS INCOME AND NOT HAS CONCEALED HIS INCOME. THE EXPRESSIONS 'HAS CONCEALED THE PARTICULARS OF INCOME' AND 'HAS FURNISHED INACCURATE PARTICULARS OF INCOME' HAVE NOT BEEN DEFINED EITHER IN SECTION 271(1)(C) OR ELSEWHERE IN THE ACT. THERE CANNOT BE A STRAIGHT JACKET FORMULA FOR DETECTION OF THESE DEFAULTS OF CONCEALMENT OF PARTICULARS OR OF FURNISHING INACCURATE PARTICULARS OF INCOME. IT DEPENDS UPON THE FACTS OF THE EACH CASE. THERE WAS CONCEALMENT OR NOT IS ORDINARILY A QUESTION OF FACT. ONCE BEARING IN MIND THE CORREC T PRINCIPLES COMES TO THE CONCLUSION THAT THE ASSESSEE HAS DISCHARGED THE ONUS IT BECOMES A CONCLUSION OF FACT. SIMILARLY WHETHER THE EXPLANATION OFFERED BY THE ASSESSEE WAS BONA FIDE OR NOT IS ALSO A QUESTION OF FACT. IN THE ASSESSMEN T PROCEEDINGS THE ITO WHILE ASCERTAINING THE TOTAL INCOME CHARGEABLE TO TAX WOULD BE IN A POSITION TO DETECT THE SPECIFIC OR DEFINITE PARTICULARS OF INCO ME CONCEALED OR INACCURATE PARTICULARS ARE FURNISHED. WHERE IN THE CONSTITUENTS OF INCOME RETURNED SUCH SPECIFIC OR DEFINITE PARTICULARS OF INCOME ARE DETECTED AS CONCEALED THEN EVEN IN THE TOTAL INCOME FIGURE TO THAT EXTENT THEY REFLECT IT WOULD AMOUNT TO CONCEALMENT TO THAT EXTENT. IN THE SAME WAY WHERE SPECIFIC AND DEFINITE PARTICULARS OF INCOME ARE DETECTED AS INACCURATE THEN SUCH FIGURE WILL ALSO MAKE THE TOTAL INCOME INACCURATE I N PARTICULARS TO THE EXTENT IT DOES NOT INCLUDE SUCH INCOME. IN OTHER WORDS THE AO CANNOT INVOKE PROVISION OF SECTION271 (1) (C) ON THE BASIS ROUTIN E AND GENERAL PRESUMPTIONS. WHETHER IT BE A CASE OF ONLY CONCEALMENT OR OF ONLY INACCURACY OF PARTICULARS OR BOTH THE PARTICULARS OF INCOME SO VITIATED WOULD BE SPECIFIC AND DEFINITE AND BE KNOWN IN THE ASSESSMENT PROCEEDINGS BY THE ITO WHO ON BEING SATISFIED ABOUT EACH CONCEALMENT OR INACCURACY OF PARTICULARS OF INCOME WOULD BE IN A POSITION TO INITIATE THE PENALTY PROCEEDINGS ON ONE OR BOTH OF THE GROUNDS OF DEFAULT AS MAY HAVE BEEN SPECIFICALLY AND DIRECTLY DETECTED. 7.4 IT WAS ALSO HELD THAT FROM THE SCHEME OF THE ACT TWO IMPORTANT THINGS COME OUT ARE THAT IT IS THE DUTY OF THE ASSESSEE TO FURNISH PARTICULARS OF INCOME WHICH SHOULD BE ACCURATE PARTICULARS SIMULTANEOUSLY HE HAS RIGHT TO CLAIM ALL ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 10 EXEMPTIONS AND DEDUCTIONS PROVIDED IN THE ACT ACCORDING TO THE ASSESSEE FOR WHICH HE IS ENTITLED. THE DUTY OF THE ASSESSING OFFICER IS TO ASSESS REAL AND CORRECT INCOME IN ACCORDANCE WITH LAW. THE CBDT IN ITS CIRCULAR NO. 14(XL35) OF 1955 DATED 11.04.1955 STATED THAT OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGES OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS IT IS ONE OF THEIR DUTIE S TO ASSIST A TAX PAYER IN EVERY REASONABLE WAY .ON THE BASIS OF DETAILED DISCUSSIONS IN THIS REGARD TH E ITAT OBSERVED THAT AFTER FURNISHING PARTICULARS REGARDING DETERMINATION OF INCOME THE ASSESSEE HAS RIGHT TO CLAIM EXEMPTION AND DEDUCTION ACCORDING TO HIM WHICH ARE AS PER LAW .THE ASSESSING OFFICER WHILE DISCHARGING HIS DUTY ALLOW OR DISALLOW ASSESSEES CLAIM AND ARRIVED AT A DIFFERENT FIGURE OF TOTAL INCOME THEN THE TOTAL INCOME DECLARED BY THE ASSESSEE THAT CASE CANNOT BE SAID TO BE A CASE OF FURNISHING INACCURATE PARTICULARS OR CONCEALING OF PARTICULARS OF INCOME. 5.4 IN THE CASE UNDER CONSIDERATION THE CIT(A) HAS HEAVILY RELIED UPON THE LATEST JUDGMENT OF DHARMEND RA TEXTILES (SUPRA).THE APPLICABILITY OF THIS JUDGMENT HAS BEEN DISCUSSED IN AN ANOTHER JUDGMENT BY THE SUPREM E COURT IN THE CASE OF UNION OF INDIA V. RAJASTHAN SP G. & WVG. MILLS 224 CTR 1(SC). THE RELEVANT DISCUSSION O F THE APEX COURT IS REPRODUCED AS UNDER:- 20. AT THIS STAGE WE NEED TO EXAMINE THE RECENT DECISION OF THIS COURT IN DHARAMENDRA TEXTILE CASE (SUPRA). IN ALMOST EVERY CASE RELATING TO PENALTY THE DECISION IS REFERRED TO ON BEHALF OF THE REVENUE AS IF IT LAID DOWN THAT IN EVERY CASE O F NON-PAYMENT OR SHORT PAYMENT OF DUTY THE PENALTY CLAUSE WOULD AUTOMATICALLY GET ATTRACTED AND THE AUTHORITY HAD NO DISCRETION IN THE MATTER. ONE OF US (AFTAB ALAM J.) WAS A PARTY TO THE 2009] UOI V. RAJASTHAN SPG. & WVG. MILLS (SC) 621 DECISION IN DHARAMENDRA TEXTILE CASE (SUPRA) AND WE SEE NO REASON TO UNDERSTAND OR READ THAT DECISION IN THAT MANNER. IN DHARAMENDRA TEXTILE CASE (SUPRA) THE COURT FRAMED THE ISSUES BEFORE IT IN PARAGRAPH 2 OF THE DECISION AS FOLLOWS : '2. A DIVISION BENCH OF THIS COURT HAS REFERRED THE CONTROVERSY INVOLVED IN THESE APPEALS TO A LARGER BENCH DOUBTING THE CORRECTNESS OF THE VIEW EXPRESSED IN DILIP N. SHROFF V. JOINT CIT 2007 (8) SCALE 304. THE QUESTION WHICH ARISES FOR DETERMINATION IN ALL THESE APPEALS IS WHETHER SECTION 11AC OF THE CENTRAL EXCISE ACT 1944 (THE INSERTED BY FINANCE ACT 1996 WITH THE INTENTION ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 11 OF IMPOSING MANDATORY PENALTY ON PERSONS WHO EVADED PAYMENT OF TAX SHOULD BE READ TO CONTAIN MENS REA AS AN ESSENTIAL INGREDIENT AND WHETHER THERE IS A SCOPE FOR LEVYING PENALTY BELOW THE PRESCRIBED MINIMUM. BEFORE THE DIVISION BENCH THE STAND OF THE REVENUE WAS THAT THE SAID SECTION SHOULD BE READ AS PENALTY FOR STATUTORY OFFENCE AND THE AUTHORITY IMPOSING PENALTY HAS NO DISCRETION IN THE MATTER OF IMPOSITION OF PENALTY AND THE ADJUDICATING AUTHORITY IN SUCH CASES WAS DUTY BOUND TO IMPOSE PENALTY EQUAL TO THE DUTIES SO DETERMINED. THE ASSESSEE ON THE OTHER HAND REFERRED TO SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 TAKING THE STAND THAT SECTION 11AC OF THE ACT IS IDENTICALLY WORDED AND IN A GIVEN CASE IT WAS OPEN TO THE ASSESSING OFFICER NOT TO IMPOSE ANY PENALTY. THE DIVISION BENCH MADE REFERENCE TO RULE 96ZQ AND RULE 96ZO OF THE CENTRAL EXCISE RULES 1944 AND A DECISION OF THIS COURT IN CHAIRMAN SEBI V. SHRIRAM MUTUAL FUND [2006] 5 SCC 361 AND WAS OF THE VIEW THAT THE BASIC SCHEME FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) SECTION 11AC OF THE ACT AND RULE 96ZQ(5) OF THE RULES IS COMMON. ACCORDING TO THE DIVISION BENCH THE CORRECT POSITION IN LAW WAS LAID DOWN IN CHAIRMAN CASE [2006] 5 SCC 361 AND NOT IN DILIP CASE [2007] 8 SCALE 304 (SC). THEREFORE THE MATTER WAS REFERRED TO A LARGER BENCH.' (P. 280). AFTER REFERRING TO A NUMBER OF DECISIONS ON INTERPRETATION AND CONSTRUCTION OF STATUTORY PROVISIONS THE COURT OBSERVED AND HELD AS FOLLOWS : '28. IN UNION BUDGET OF 1996-97 SECTION 11AC OF THE ACT WAS INTRODUCED. IT HAS MADE THE POSITION CLEAR THAT THERE IS NO SCOPE FOR ANY DISCRETION. IN PARA 136 OF THE UNION BUDGET REFERENCE HAS BEEN MADE TO THE PROVISION STATING THAT THE LEVY OF PENALTY IS A MANDATORY PENALTY. IN THE NOTES ON CLAUSES ALSO THE SIMILAR INDICATION HAS BEEN GIVEN. 29. THE ABOVE BEING THE POSITION THE PLEA THAT THE RULES 96ZQ AND 96ZO HAVE A CONCEPT OF DISCRETION IN-BUILT CANNOT BE SUSTAINED. DILIP N. CASE [2007] 8 SCALE 304 (SC) WAS NOT CORRECTLY DECIDED BUT CHAIRMAN CASE [2006] 5 SCC 361 HAS ANALYSED THE LEGAL POSITION IN THE CORRECT PERSPECTIVES. THE REFERENCE IS ANSWERED....' (P. 302) 21. FROM THE ABOVE WE FAIL TO SEE HOW THE DECISION IN DHARAMENDRA TEXTILE CASE (SUPRA) CAN BE SAID TO HOLD THAT SECTION 11AC WOULD APPLY TO ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 12 EVERY CASE OF NON-PAYMENT OR SHORT PAYMENT OF DUTY REGARDLESS OF THE CONDITIONS EXPRESSLY MENTIONED IN THE SECTION FOR ITS APPLICATION. 22. THERE IS ANOTHER VERY STRONG REASON FOR HOLDING THAT DHARAMENDRA TEXTILE CASE (SUPRA) COULD NOT HAVE INTERPRETED SECTION 11AC IN THE MANNER AS SUGGESTED BECAUSE IN THAT CASE THAT WAS NOT EVEN THE STAND OF THE REVENUE. THE COURT NOTED THE SUBMISSION MADE ON BEHALF OF THE REVENUE AS FOLLOWS : 622 TAXMAN TAX REPORTS [VOL. 180 '5. MR. CHANDRASHEKHARAN ADDITIONAL SOLICITOR GENERAL SUBMITTED THAT IN RULES 96ZQ AND 96ZO THERE IS NO REFERENCE TO ANY MENS REA AS IN SECTION 11AC WHERE MENS REA IS PRESCRIBED STATUTORILY. THIS IS CLEAR FROM THE EXTENDED PERIOD OF LIMITATION PERMISSIBLE UNDER SECTION 11A OF THE ACT. IT IS IN ESSENCE SUBMITTED THAT THE PENALTY IS FOR STATUTORY OFFENCE. IT IS POINTED OUT THAT THE PROVISO TO SECTION 11A DEALS WITH THE TIME FOR INITIATION OF ACTION. SECTION 11AC IS ONLY A MECHANISM FOR COMPUTATION AND THE QUANTUM OF PENALTY. IT IS STATED THAT THE CONSEQUENCES OF FRAUD ETC. RELATE TO THE EXTENDED PERIOD OF LIMITATION AND THE ONUS IS ON THE REVENUE TO ESTABLISH THAT THE EXTENDED PERIOD OF LIMITATION IS APPLICABLE. ONCE THAT HURDLE IS CROSSED BY THE REVENUE THE ASSESSEE IS EXPOSED TO PENALTY AND THE QUANTUM OF PENALTY IS FIXED. IT IS POINTED OUT THAT EVEN IF IN SOME STATUTES MENS REA IS SPECIFICALLY PROVIDED FOR SO IS THE LIMIT OR IMPOSITION OF PENALTY THAT IS THE MAXIMUM FIXED OR THE QUANTUM HAS TO BE BETWEEN TWO LIMITS FIXED. IN THE CASES AT HAND THERE IS NO VARIABLE AND THEREFORE NO DISCRETION. IT IS POINTED OUT THAT PRIOR TO INSERTION OF SECTION 11AC RULE 173Q WAS IN VOGUE IN WHICH NO MENS REA WAS PROVIDED FOR. IT ONLY STATED HE KNOWS OR HAS REASON TO DO. THE SAID CLAUSE REFERRED TO WILFUL ACTION. ACCORDING TO LEARNED COUNSEL WHAT WAS INFERENTIALLY PROVIDED IN SOME RESPECTS IN RULE 173Q NOW STANDS EXPLICITLY PROVIDED IN SECTION 11AC. WHERE THE OUTER LIMIT OF PENALTY IS FIXED AND THE STATUTE PROVIDES THAT IT SHOULD NOT EXCEED A PARTICULAR LIMIT THAT ITSELF INDICATES SCOPE FOR DISCRETION BUT THAT IS NOT THE CASE HERE.' (P. 281) 23. THE DECISION IN DHARAMENDRA TEXTILE CASE (SUPRA) MUST THEREFORE BE UNDERSTOOD TO MEAN THAT THOUGH THE APPLICATION OF SECTION 11AC WOULD DEPEND UPON THE EXISTENCE OR OTHERWISE OF THE CONDITIONS EXPRESSLY STATED IN THE SECTION ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 13 ONCE THE SECTION IS APPLICABLE IN A CASE THE CONCERNED AUTHORITY WOULD HAVE NO DISCRETION IN QUANTIFYING THE AMOUNT AND PENALTY MUST BE IMPOSED EQUAL TO THE DUTY DETERMINED UNDER SUB- SECTION (2) OF SECTION 11A. THAT IS WHAT DHARAMENDRA TEXTILE CASE (SUPRA) DECIDES. 5.5 WE NOTICED THAT THE JUDGMENT IN DHARAMEND RA TEXTILE (SUPRA) IS APPLICABLE IN CASE WHERE IT WAS FOUND THAT ALL THE CONDITIONS LAID DOWN IN THE SECTION 271(1)(C) ARE SATISFIED. ONCE THE SECTION IS APPLIC ABLE IN THAT CASE THE CONCERNED AUTHORITY WOULD HAVE NO DISCRETION IN QUANTIFYING THE AMOUNT AND PENALTY MU ST BE IMPOSED AS PRESCRIBED / DETERMINED UNDER THE SECTION. IN THE LIGHT OF ABOVE DISCUSSION WE FIND T HAT IN THE CASE UNDER CONSIDERATION CONDITIONS LAID DOWN I N SECTION 271(1)(C) ARE NOT SATISFIED THEREFORE PENAL TY PROVISIONS OF SECTION 271(1)(C) NOT APPLICABLE EVEN IN ACCORDANCE WITH ABOVE JUDGMENT OF THE APEX COURT. 4. IN THE LIGHT OF THE ABOVE DISCUSSION WHEN WE CON SIDER THE FACTS UNDER CONSIDERATION WE NOTICE THAT THE SAID AMOUNT OF CRE DITORS WERE BROUGHT FORWARD FROM EARLIER YEARS. THE ASSESSEE HAS SURRE NDERED THE SAID AMOUNT BEFORE RECORDING SATISFACTION BY THE AO AS REQUIRED U/S. 271(1)(C) OF THE ACT. THE AO ACCEPTED SURRENDER OF THE ASSESSEE WITHOUT F URTHER INVESTIGATION OR EXAMINATION. WE THEREFORE ARE OF THE CONSIDERED V IEW THAT THE PENALTY PROVISION UNDER THE CIRCUMSTANCES ARE NOT APPLICABL E. WE CANCEL THE PENALTY LEVIED BY THE AO. 5. IN THE RESULT ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED ON 26.2.2010. SD/- SD/- ( P. MADHAVI DEVI ) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 26.2.2010 JV. ITA NO. 2116 /M/09 ASSESSMENT YEAR :05-06 14 COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 22.2.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 23.2.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 26.2.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 26.2.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER