Case Law Details
Smt. Yannaben Anilbhai Jethani Vs ITO (ITAT Rajkot)
We find that the issue for our consideration is, whether penalty initiated and levied under section 18(1)(c) of the Wealth Tax Act, without clearly specifying particular default relates concealment of wealth and/or furnishing of inaccurate particulars is valid in law ? The contention of the assessee that assessing officer has failed to specify charge whether penalty is being imposed for furnishing inaccurate particulars or concealment of income. The case of the assessee is that show cause notice was issued “for filing inaccurate particulars and concealing the particulars of wealth” while penalty was imposed “for concealment or furnished inaccurate particulars of her wealth.” This distinction is fatal to the proceedings, and glaring contradiction on the part of the Revenue authorities while imposing penalty on the assessee, and therefore, wrong mentioning of the charge either in the penalty notice or in the penalty order renders them bad in law. We noticed this change of charge for imposition of penalty by of the Revenue authorities from the notice and the impugned order. They were not disputed by the Revenue. The Revenue contended the same to be technical and a clerical mistake, which did not help the assessee to render the impugned orders otiose. We have confronted earlier with similar issue in some other penalty cases imposed under section 271(1)(c) of the Income Tax Act, 1961 and held that Revenue should arrive at a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income had been furnished by the assessee. In the present case, there is no clear-cut or certain charges based on which impugned penalty has been imposed. As pointed out above, the Revenue used two distinct expressions of charge; one in the penalty notice and other in penalty order. This gives rise to the ambiguity and vitiate the proceedings. We find that similar aspect has been considered by the Hon’ble Gujarat High Court in the case of Snita Transport P. Ld. Vs. ACIT 42 taxmann.com 54 (Guj). In the case of Snita Transport P.Ltd. (supra), Hon’ble jurisdictional High Court has observed that while issuing notice under section 271(1)(c) r.w.s. 274 provide an opportunity to explain as to why penalty be not imposed. If an Assessing Officer used expression “or” in between the concealment of income/furnishing inaccurate particulars, then that show cause notice be not fatal to the proceedings, but while visiting the assessee with penalty the ld.AO ought to have recorded a specific finding, for which breach, he has visited the assessee with penalty i.e. whether he has visited the assessee with penalty for concealment of income or furnishing inaccurate particulars of income. In the penalty order he cannot use both the expression.
If the penalty order is perused in the light of the judgment of Hon’ble jurisdictional High Court, then it will reveal that the ld.AO was not specific in his finding for which he has visited the assessee with penalty. We also find support from the order of the ld.Third Member, ITAT Amristar Bench in the case of HPCL Mittal Energy Ltd. Vs. ACIT, in ITA No.554 & 555/Asr/2014 and others order dated 7.5.2018 wherein the ld.Third Member held that where the satisfaction of the AO while initiating penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961 is with regard to alleged concealment of income by the assessee, whereas the imposition of the penalty is for ‘concealment/furnishing inaccurate particulars of income’, the levy of penalty is not sustainable. It is pertinent here to note that section 271(1)(c) of the Income Tax Act, 1961 and section 18(1)(c) of the Wealth Tax Act, 1957 are pari materia to each other in terms of purpose and object, and therefore, proposition of law laid down by various higher judicial forums would be applicable on the same analogous in the cases of proceedings under section 18(1)(c) of the Act as well. Therefore, the impugned order is not in line of law laid down by the Hon’ble jurisdictional High Court, and hence not sustainable. The ld.CIT(A) has erred in upholding this order of the AO. We allow this appeal of the assessee and quash the penalty order.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
Present appeal is directed at the instance of the assessee against order of the ld.Commissioner of Wealth-Tax(A)-2, Rajkot dated 19.5.2017 passed under section 23A of the Wealth Tax Act, 1957 for the assessment year 2011-12 by which the ld.CWT(A) confirmed action of the Assessing Officer in imposing penalty of Rs.56,780/-under section 18(1)(c) of the Act.
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