The Deputy Commissioner of Income Tax, Central Circle-3, Vadodara V. Shri Rajesh D. Prajapati, Baroda

ITA 1225/AHD/2017

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax, Vadodara against Shri Rajesh D. Prajapati concerning a penalty under section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2007-08. The penalty was initially levied by the Assessing Officer but was later deleted by the Commissioner of Income Tax (Appeals)-12, Ahmedabad. The main contention in the appeal was the calculation of the penalty amount, which the assessee argued was incorrectly calculated by the Assessing Officer. The tribunal dismissed the appeal due to the low tax effect, adhering to the CBDT Circular No. 17 of 2019, but allowed the Revenue to reapply if the tax liability upon reassessment exceeds Rs. 50 lakhs.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114179 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-08-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 17-05-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Tax effect
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member The Deputy Commissioner of Income Tax, Central Circle-3, Vadodara (Appellant) Vs Shri Rajesh D Prajapati Satyanarayan Bhavan, Gorwa, Refinery Road, Baroda PAN: ACSPP2112L (Respondent) Assessee Represented: Shri Manish J Shah, A.R. Revenue Represented: Ms. Saumya Pandey Jain, Sr.D.R. Date of hearing : 23-08-2023 Date of pronouncement : 25-08-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the appellate order dated 25.01.2017 passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad on deletion of penalty levied under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2007-08. ITA No. 1225/Ahd/2017 Assessment Year 2007-08 I.T.A No. 1225/Ahd/2017 A.Y. 2007-08 Page No DCIT Vs. Shri Rajesh D. Prajapati 2 2. At the outset, Ld. Counsel for the assessee Mr. Manish Shah submitted that the working of Penalty made in the Penalty order u/s. 271(1)(c) is not correct in law. However he has given the correct calculation of Penalty as follows: Addition on which penalty is levied : Rs. 1,47,64,341/- Penalty levied : 100% of tax sought to be evaded Amount to Penalty as per tax rate of 30.9% : Rs. 45,62,181/- Amount of Penalty as per maximum Marginal rate of 33.99% : Rs. 50,18,400/- (Levied by the AO) 3. Ld. Counsel further submitted that the quantum appeal in this case is a regular assessment u/s. 143(3) of the Act and not a reopening of assessment and therefore exemption as mentioned in the CBDT Circular No. 17 of 2019 dated 08-08-2019 will be not applicable in the present case. However the assessee being succeeded before the Ld. CIT(A) has not challenged the quantum of penalty levied by the A.O. As per his calculation the penalty leviable is Rs. 45,62,181/- whereas the A.O. levied penalty of Rs. 50,18,400/-. Since the quantum of correct penalty is less than Rs. 50 Lacs, the present appeal filed by the Revenue is liable to be dismissed on the basis of Low Tax Effect vide CBDT Circular No. 17 of 2019 dated 08-08-2019. 4. Per contra, the Ld. Sr. D.R. submitted that the correct working of penalty u/s. 271(1)(c) is being sought from the Assessing Officer and the same is yet to be received from the Assessing Officer. However Ld. Sr. D.R. fairly accepted that the appeal can be disposed of with liberty to restore the same, in the event, the tax liability is above Rs. 50 lacs. I.T.A No. 1225/Ahd/2017 A.Y. 2007-08 Page No DCIT Vs. Shri Rajesh D. Prajapati 3 5. Recording the above statements of both parties, the present appeal filed by the Revenue is hereby dismissed following CBDT Circular No. 17 of 2019 dated 08-08-2019. However liberty is given to the Revenue to make appropriate application, in the event the tax liability in the penalty order exceeds Rs. 50 lacs. 6. In the result, the appeal filed by the Revenue is hereby dismissed. Order pronounced in the open court on 25-08-2023 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 25/08/2023 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