DCIT CENTRAL CIRCLE 1(1) , AHMEDABAD V. .SUNIT SUDHIRBHAI CHOKSHI, AHMEDABAD

ITA 1474/AHD/2024

AI Insights

The case involves two appeals by the Revenue against the orders of the Commissioner of Income Tax (Appeals) concerning penalties levied under section 271AAB of the Income Tax Act for the Assessment Years 2017-18 and 2018-19. The penalties were initially based on additions made to the assessee's income, which were later reduced following appeals to the ITAT. The Revenue challenged the CIT(A)'s decision to delete the penalties proportionate to the reduced additions, arguing that the matter was still under litigation in the High Court. The Tribunal dismissed the Revenue's appeals, emphasizing the need to adhere to the procedural requirements under Section 275(1A) of the Act for any future adjustments to the penalties.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23261 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Appeal Filed On: 12-08-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Bogus
• Section: 143(3); 263; 153A; 69C; 69A; 246; 264; 246A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: DR. BRR Kumar, Vice President And Shri T.R. Senthil Kumar, Judicial Member The DCIT, Central Circle-1(1), Ahmedabad (Appellant) Vs Sunit Sudhirbhai Chokshi 62, Sonarpura Apartments Ellisbridge, Navrangpura, Ahmedabad-380006 Gujarat PAN: ABDPC2570K (Respondent) Revenue Represented: Shri Rignesh Das, Sr.D.R. Assessee Represented: Shri Biren Shah & Shri Gulab Thakor, A.Rs. Date of hearing : 11-12-2024 Date of pronouncement : 13-12-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- These two appeals are filed by the Revenue as against common appellate order dated 19.07.2022 passed by the Commissioner of Income Tax (Appeals)-11, Ahmedabad partly confirming the penalty levied under section 271AAB(1A) and section 271AAB of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years 2017-18 & 2018-19 respectively. ITA Nos: 1474 & 1475/Ahd/2024 Asst. Years: 2017-18 & 2018-19 I.T.A Nos. 1474 & 1475/Ahd/2024 A.Ys. 2017-18 & 2018-19 Page No DCIT Vs. Sunit Sudhirbhai Chokshi 2 2. Brief facts are that the assessment order u/s. 143(3) r.w.s. 153A was passed on 31-12-2019 for the Asst. Year 2017-18 wherein total income assessed at Rs.23,87,99,020/- after making addition to the returned income. As there is difference between the returned and assessed income, the A.O. initiated penalty proceedings u/s. 271AAB(1A)(b) of the Act. In the meanwhile, assessee filed appeal before Ld. CIT(A) on the quantum addition, wherein Ld. CIT(A) confirmed the addition to Rs.4,71,46,684/- only. Thus the Assessing Officer levied penalty of Rs.2,80,88,610/- being 60% of addition confirmed by Ld. CIT(A) u/s. 271AAB of the Act. 3. On further appeal by the assessee against quantum addition before ITAT, the Hon’ble ITAT in ITA No. 25/Ahd/2021 dated 08- 08-2023 had confirmed the addition to Rs. 30,68,140/- as against the total addition made by the Assessing Officer of Rs.28.37 crores. The summary of additions/disallowances confirmed by Ld. CIT(A) and the Hon’ble ITAT are as follows: Sr. No Particulars Amount as per assessment order Amount confirmed/upheld by CIT(A) Amount confirmed/ upheld by ITAT 1. Addition on account of on money as unaccounted income 6,74,24,296 The Ld. CIT(A) has restricted the addition at Rs.36,30,000/- The Ld. ITAT has restricted the addition @ 20% i.e. Rs.7,26,000/- vide para 9.5 of ITAT order. 2. Addition on account of unsecured loans received from various companies 12,41,89,902 The Ld. CIT(A) has restricted the addition atRs.1,81,79,546/-. The Ld. ITAT has deleted the addition vide para 22.3 of ITAT order. 3. Disallowance of interest expenditure on bogus unsecured loan , 2,29,79,570 The Ld. CIT(A) has deleted the addition. - I.T.A Nos. 1474 & 1475/Ahd/2024 A.Ys. 2017-18 & 2018-19 Page No DCIT Vs. Sunit Sudhirbhai Chokshi 3 4. Addition on account of commission expenses for arranging unsecured loans 3,10,475 The Ld. CIT(A) has confirmed addition on this ground. The Ld. ITAT has confirmed addition on this ground vide para 23 of ITAT order. 5. Addition on account of unexplained expenditure u/s 69C 2,29,96,000 The Ld. CIT(A) has confirmed addition on this ground. The Ld. ITAT has deleted the addition. 6. Unexplained money u/s 69A 45,24,000 The Ld. CIT(A) has restricted the addition at Rs.16,40,000/- The Ld. ITAT has confirmed addition amounting to Rs.16,40,000/- on this ground vide para 26 of ITAT order 7 Addition on account of unaccounted money u/s 69A 3,91,663/- The Ld. CIT(A) has confirmed addition on this ground. The Ld. ITAT has confirmed addition on this ground vide para 27 of ITAT order. 4. The Assessing Officer had given effect to ITAT’s order and determined the assessed income as Rs.35,75,250/- vide order dated 25-04-2024. Thus the Ld. CIT(A) deleted the penalty of Rs.2,64,47,726/- (which the quantum deleted by ITAT) and confirmed the balance penalty of Rs.18,40,884/- which was confirmed by ITAT. Thus Ld. CIT(A) partly allowed the assessee appeal. 5. Similar is the case for the Asst. Year 2018-19 wherein the Assessing Officer made addition of Rs.23,87,99,020/- which was reduced to Rs.1,51,27,899/- by the Ld. CIT(A) and the ITAT confirming the additions to Rs.4,83,533/-. Though the Assessing Officer levied penalty u/s. 271AAB on the addition confirmed by Ld. CIT(A) of Rs.1,51,27,894/- at 60% namely Rs. 90,76,736/-. The Ld. CIT(A) restricted the penalty to Rs.2,90,120/- being the I.T.A Nos. 1474 & 1475/Ahd/2024 A.Ys. 2017-18 & 2018-19 Page No DCIT Vs. Sunit Sudhirbhai Chokshi 4 addition of Rs. 4,83,533/- confirmed by the ITAT for the Asst. Year 2018-19. 6. Aggrieved against the above common appellate orders, the Revenue is in appeal before us raising the solitary Ground (except change in figures) for both the Asst. Years 2017-18 & 2018-19: 1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the penalty of Rs.2,64,47,726/- under section 271AAB(1A) of the Income Tax Act as tax appeal against the order of ITAT in quantum proceedings in the case of the assessee is pending for adjudication before the High Court in Tax Appeal No. 137 of 2024. 7. Ld. Sr. D.R. Shri Rignesh Das appearing for the Revenue submitted that since the quantum appeals are challenged by the Revenue before High Court of Gujarat in Tax Appeal No. 137 of 2024 and 467 of 2024 relating to Asst. Years 2017-18 and 2018-19 respectively, the Ld. CIT(A) is not correct in deleting the proportionate penalty u/s. 271AAB of the Act. 8. Per contra the Ld. Counsel for the assessee supported the order passed by the Ld. CIT(A). 9. We have given our thoughtful consideration and perused the materials available on record. In our considered view, these appeals filed by the Revenue are frivolous appeals, since there is built in provision available u/s. 275(1A) of the Act, which reads as follows: “275(1A) In a case where the relevant assessment or other order is the subject matter of an appeal 33[to the Joint Commissioner (Appeals) or] to the Commissioner (Appeals) under section 246 or section 246A or an appeal to the Appellate Tribunal under section 253 or an appeal to the High Court under section 260A or an appeal to the Supreme Court under section 261 or revision under section 263 or section 264 and an order imposing or enhancing or reducing or I.T.A Nos. 1474 & 1475/Ahd/2024 A.Ys. 2017-18 & 2018-19 Page No DCIT Vs. Sunit Sudhirbhai Chokshi 5 cancelling penalty or dropping the proceedings for the imposition of penalty is passed before the order of 33[the Joint Commissioner (Appeals) or] the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the 34[***] Principal Commissioner or Commissioner or the order of revision under section 263 or section 264 is passed, an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty may be passed on the basis of assessment as revised by giving effect to such order of 33[the Joint Commissioner (Appeals) or] the Commissioner (Appeals) or, the Appellate Tribunal or the High Court, or the Supreme Court or order of revision under section 263 or section 264: Provided that no order of imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty shall be passed— (a) unless the assessee has been heard, or has been given a reasonable opportunity of being heard; (b) after the expiry of six months from the end of the month in which the order of 34a[the Joint Commissioner (Appeals) or] the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the 34b[***] Principal Commissioner or Commissioner or the order of revision under section 263 or section 264 is passed:” 10. As per Section 275(1A), the Assessing Officer is empowered in passing an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty on the basis of assessment as revised by giving effect to the orders passed by the Joint Commissioner (Appeals) or the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court or Revision Order passed u/s. 263 or 264 of the Act, by giving reasonable opportunity of hearing to the assessee and within six months from the receipt of the said appellate or revision order. 11. Thus in our considered view, in the event of the order passed by the Tribunal is modified by Hon’ble High Court of Gujarat, the Assessing Officer is required to give effect to the judgment passed I.T.A Nos. 1474 & 1475/Ahd/2024 A.Ys. 2017-18 & 2018-19 Page No DCIT Vs. Sunit Sudhirbhai Chokshi 6 by the Hon’ble High Court by invoking provisions of Section 275(1A) of the Act and revise the penalty order accordingly. Thus we do not find any infirmity in the orders passed by Ld. CIT(A) who has duly followed Co-ordinate Bench decision of this Tribunal and deleted proportionate penalty levied by the Assessing Officer. Further the Revenue could not place on record, whether any order staying the operation of the impugned Tribunal order issued by the High Court of Gujarat. Thus we do not find any infirmity in the order passed by the Ld. CIT(A) confirming the penalty to the extent of additions confirmed by the ITAT. Thus the Ground raised by the Revenue is devoid of merits and liable to be dismissed. 12. In the result, the appeals filed by the Revenue are hereby dismissed. Order pronounced in the open court on 13-12-2024 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 13/12/2024 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "