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TMI Blog2016 (7) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s.143(2)notice. We should not forget that only a miniscule percentage of the returns are selected for scrutiny by the department. Therefore, it is the duty of the taxpayers to pay due taxes.It is their right that they are not taxed for the income that has not been received or accrued to them. But,the other side of the coin is that they should not put forth totally inadmissible claim and reduce the tax liability. For such a omission, if penal provisions are invoked by the AO they should not have any grudge. Therefore, we hold that the AO had rightly levied penalty for claiming maintenance charges against the rental income. - Decided against assessee - I.T.A. /3428 /Mum/2014, I.T.A. / 3429/Mum/2014 - - - Dated:- 20-7-2016 - S/Sh Joginder Singh, Judicial Member Rajendra, Accountant Member Revenue by: Shri Ganesh Bare-DR Assessee by: S/Shri Vijay Mehta Anuj Kishnadwala-AR s Order u/s.254(1)of the Income- tax Act ,1961(Act ) PER RAJENDRA, AM Challenging the orders, dated 14.2.14,of the CIT(A)-27,Mumbai the assessees have filed the above mentioned appeals.As the same issue-levy of penalty u/s.271(1)(c)(1)(c) of the Act-is involved in both the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the assessee to disclose the true amount of total income for the year under appeal,that the reason for revising the return was claim of maintenance charges against the rent which was not allowable u/s.23/24 of the Act, that the assessee had claimed that he was not having full information about the bank interest on FDRs held by him as well as held on behalf of his minor son.The AO further held that cases relied upon by the assessee were not applicable to the facts of the matter before him.He finally held that assessee had concealed/ furnished inaccurate particulars of income in the original return,that it was a fit case where penalty u/s.271(1)(c) was required to be imposed.Finally, the AO imposed a penalty of ₹ 2.58 lakhs. 4.Aggreived by the order of the AO,imposing penalty,the assessee preferred an appeal before the First Appellate Authority(FAA).Before him,it was argued that he had filed belated return of income on 29/03/2010, that upon discovering the fact that maintenance charges were claimed against the rental income and that interest on fixed deposit was inadvertently not disclosed while filing the regional return of income the assessee voluntarily rectified the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own the income arising out of the interest from the FDRs.He referred to the reconciliation statement of the interest income.With regard to maintenance charges,he stated that the assessee had inadvertently claimed the charges in the original return, that while filing the revised return the property income was increased by ₹ 54/864/-, that there was no intention to furnish inaccurate particulars or conceal the income, that the assessee revised the return as soon as he came to know about the mistakes committed by him. He further stated that the penalty was not levied for the same reason for which notice was issued.He referred to the cases of Kishore J Janani (ITA/6890/M/2012-11/03/2016),Hafiz Contractor(ITA/622/ Mum/ 2013-02/9/2015),Mangalam Drug Organics Ltd.(ITA/5454/Mum/2011-24/09/ 2015), Mahabir Prasad Agarwal (IT A/739/KOL/2013-dated,15/01/2016) and Manjunath Cotton Ginning Factory (359ITR565). The Departmental Representative (DR) argued that it was a clear case of furnishing of inaccurate particulars, that the assessee himself had admitted inadvertent mistake with regard to house property income, that the accrual of interest was not dependent on TDS, both the auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has held in the case of Manjunath Cotton Ginning Factory(supra) is that penalty should not be levied for furnishing of inaccurate particulars,if same was initiated for concealing the particulars of income.The Hon ble court has not deliberated upon a situation where both the omissions are there and penalty is initiated for both counts but penalty is levied only for one omission/ commission, after considering the explanation filed by the assessee.If the AO at the time of finalising the assessment arrives at the conclusion that an assessee has furnished inaccurate particulars and finally levies penalty for that omission only,then in our opinion it cannot be held that failure of the AO to cancel a particular phrase in the notice is fatal and the penalty order should be treated invalid. Decision to initiate penalty proceedings during the assessment order , issuing a show cause notice in pursuance of the assessment order and passing of penalty order after hearing the assessee are the three stages of levy of penalty. Therefore,the notice alone cannot be considered in isolation-all the three stages are to be considered cumulatively. 6.2.Now,coming back to the facts of the case und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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