The ITO, Ward-3(3)(5), Ahmedabad V. Shri Shantilal Ranchoddas Patel, Ahmedabad

ITA 1188/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9778 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Section: 271(1)(c); 143(3); 147; 27; 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 1188/AHD/2019 / ASSESSMENT YEAR: 2006-07 ITO, WARD-3(3)(5) AHMEDABAD. VS SHRI SHANTILAL RANCHHODAS PATEL 19, SUVARN VILLA BUNGALOWS 100 FT. ROAD, HEBATPUR ROAD THALTEJ, AHMEDABAD 380 058. PAN : AFUPP 8597 E / (APPELLANT) / (RESPONDENT) ASSESSEE BY : WRITTEN SUBMISSIONS REVENUE BY : SHRI S.S. SHUKLA, SR.DR / DATE OF HEARING : 27/07/2021 /DATE OF PRONOUNCEMENT : 28/07/2021 O R D E R PER RAJPAL YADAV, VICE-PRESIDENT: PRESENT APPEAL IS DIRECTED THAT THE INSTANCE OF THE REVENUE AGAINST ORDER OF T HE LD.CIT(A)-3, AHMEDABAD DATED 27.1.2016 PASSED FOR THE ASSESSMENT YEARS 2006-07. 2. SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD.CIT (A) HAS ERRED IN CANCELLING PENALTY IMPOSED BY THE AO OF RS.58,13,33 2/-UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. WITH THE ASSISTANCE OF THE LD.REPRSENTATIVES, WE HAVE GONE THROUGH THE RECORD. IT EMERGES OUT FROM THE RECORD THAT A SEARCH UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE HIMALAYA GROU P OF CASE ON 22.4.2018 AND FOUND AND SEIZED CERTAIN INCRIMINATIN G DETAILS. ON THE ITA NO.1188 /AHD/2019 - 2 - BASIS OF CERTAIN ADMISSION BY THE ASSESSEE ABOUT PA YMENT IN CASH IN SOME LAND TRANSACTIONS, THE LD.AO FRAMED ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT AND ASSESSE D THE INCOME OF THE ASSESSEE AT RS.1,74,75,870/- BY MAKING CERTAIN ADDI TIONS. ADDITIONS WERE CONTESTED BY THE ASSESSEE BEFORE THE LD.FIRST APPELLATE AUTHORITY, WHO PARTLY ALLOWED APPEAL OF THE ASSESSEE. NOT SAT ISFIED WITH THE ORDER OF THE LD.CIT(A) THE ASSESSEE WENT IN APPEAL AGAINS T PART ADDITION AND THE REVENUE ALSO CAME IN APPEAL AGAINST PART DELETI ON BEFORE THE TRIBUNAL. IN THE MEANWHILE, THE LD.AO INITIATED P ENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND AFTER HEARIN G THE ASSESSEE, THE LD.AO IMPOSED A PENALTY OF RS.58,13,332/-. IMPOS ITION OF PENALTY WAS CHALLENGED BEFORE THE LD.CIT(A), WHO AFTER CONSIDER ING THE MATERIAL ON RECORD, DELETED THE IMPUGNED PENALTY AND ALLOWED AP PEAL OF THE ASSESSEE. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFO RE THE TRIBUNAL AGAINST THE DELETION OF THE IMPUGNED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. BEFORE US, AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ADDITIONS BASED ON WHICH THE IMPUGNED PENA LTY WAS IMPOSED BY THE AO NOW DO NOT EXIST, BECAUSE THE TRIBUNAL VI DE COMMON ORDER DATED 21.2.2019 IN ITA NO.3472/AHD/2014 OF THE ASSE SSEE AND OTHER ITA NO.3679/AHD/2015 AND OTHER TWO APPEALS OF THE REVEN UE, DELETED THE ADDITIONS, AND THEREFORE, THERE IS NO ROOM FOR THE AO TO VISIT THE ASSESSEE WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD COPY OF ORDER OF THE TRIBUNAL REFERRED ABOVE IN SUPPORT OF HIS ABOVE SUBMISSIONS. ON THE OTHER HAND, THE LD.DR HAS NOT DISPUTED THE FACTUAL POSITION OF THE ADDITIONS DELETED BY THE TRIBUNAL AS AVERRED BY THE LD.COUNSEL FOR THE A SSESSEE. ITA NO.1188 /AHD/2019 - 3 - 5. WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1) (C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE BY HIM, WHICH SHALL NOT BE LESS THAN , BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED B Y REASON OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY I S DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSEE. IN TH E PRESENT CASE, THE ADDITION HAS BEEN DELETED BY THE TRIBUNAL VIDE ORDE R DATED 21.12.2019 CITED SUPRA, AND THEREFORE PENALTY UNDER SECTION 27 1(1)(C) OF THE ACT HAS NO LIMB TO STAND. THEREFORE, IMPUGNED ORDER OF PEN ALTY UNDER SECTION 271(1)(C) DOES NOT SURVIVE AND THE SAME STANDS CANC ELLED. APPEAL OF THE REVENUE IS, THUS, DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 28 TH JULY, 2021. SD/- (WASEEM AHMED) ACCOUNTANT MEMBER SD/- (RAJPAL YADAV) VICE-PRESIDENT