INCOME TAX OFFICER, WARD-3-2, Jaipur V. SILVER SAND BUILDERS PVT. LTD., Jaipur

ITA 1243/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5698 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 01-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA
• Assessee Lawyers: S R SHARMA C A DHK
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH JES'K LH- 'KEKZ] YS[KK LNL; ,O A H JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C. SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA-@ ITA NO. 1243/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. INCOME TAX OFFICER, WARD 3(2), JAIPUR. CUKE VS. M/S. SILVER SAND BUILDERS PVT. LTD., C-3A/1A, SAWAI JAI SINGH HIGHWAY, BANI PARK, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAECS 7851 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI ASHOK KHANNA (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S. R. SHARMA (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13.05.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 14/05/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT (A)-1, JAIPUR DATED 20 TH AUGUST, 2018 ARISING FROM THE PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE IT ACT FOR THE ASSESSMENT YEAR 201 2-13. THE REVENUE HAS RAISED THE SOLITARY GROUND AS UNDER :- WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS JUSTIFIED IN DELETING THE PENAL TY U/S 271(1)(C) OF THE I.T. ACT AMOUNTING TO RS. 26,00,670/- WHEN THE DELE TION OF QUANTUM ADDITION BY THE HONBLE ITAT IN ITA NO. 284/JP/2017 HAD NOT BEEN ACCEPTED ON MERITS. 2 ITA NO. 1243/JP/2018 M/S. SILVER SAND BUILDERS PVT. LTD., JAIPUR. 2. WE HAVE HEARD THE LD. D/R AS WELL AS THE LD. A/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT TH E PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) AGAINST THE ADDITION ON ACCOUNT O F DETERMINATION OF ALV OF THE PROPERTY UNDER SECTION 23(1)(A) OF THE ACT WAS DELE TED BY THE LD. CIT (A) BY CONSIDERING THE FACT THAT THE SAID ADDITION ITSELF WAS DELETED BY THE TRIBUNAL IN QUANTUM APPEAL. THE RELEVANT FINDING OF THE LD. CI T (A) IN PARA 3.1.2 ARE AS UNDER :- (I) I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPELL ANT, THE PENALTY ORDER AND THE MATERIAL PLACED ON RECORD. IT IS NOTED THAT VIDE APPELLATE ORDER DATED 27.04.2018 IN ITA NO. 28 4/JP/2017 FOR THE YEAR UNDER CONSIDERATION, THE APPEAL OF THE APPELLANT HAS BEEN ALLOWED AND THE ADDITION HAS BEEN DELETED BY T HE HONBLE ITAT, JAIPUR BY OBSERVING AS UNDER :- 7. ..ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCE S OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE AL V OF THE PROPERTY IN QUESTION WOULD BE NIL AS IT WAS NOT POSSIBLE TO LET OUT THE PROPERTY DURING THE YEAR UN DER CONSIDERATION AND FURTHER THE UNAUTHORIZED CONSTRUC TION OF THE PROPERTY IS OTHERWISE NOT ELIGIBLE FOR DETER MINATION OF STANDARD RENT OR RATEABLE VALUE AND CONSEQUENTLY THERE IS NO BASIS FOR DETERMINATION OF ALV OF THE PROPERT Y UNDER SECTION 23(1)(A) OF THE ACT. HENCE WE DELETE THE AD DITION MADE BY THE A.O. (II) THUS, THERE REMAINS NO BASIS FOR IMPOSITION OF PENA LTY U/S 271(1)(C) OF THE ACT AS FAR AS ADDITION OF RS. 81,7 5,605/- IS CONCERNED. IT MAY BE MENTIONED THAT IN THE CASE OF K.C. BUILDERS VS. ACIT (2004) 135 TAXMAN 461 (SC), IT HA S BEEN HELD BY THE HONBLE APEX COURT THAT : 3 ITA NO. 1243/JP/2018 M/S. SILVER SAND BUILDERS PVT. LTD., JAIPUR. WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER, ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT WAS LEVI ED, ARE DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVY ING THE PENALTY FOR CONCEALMENT AND, THEREFORE, IN SUCH A C ASE NO SUCH PENALTY CAN SURVIVE AND THE SAME IS LIABLE TO BE CANCELLED AS IN THE INSTANT CASE. ORDINARILY, THE PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. WHERE AN ORDER OF ASSESSMENT OR REASSESSMENT ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED ON THE ASSESSEE HAS I TSELF BEEN FINALLY SET ASIDE OR CANCELLED BY THE TRIBUNAL OR OTHERWISE, THE PENALTY CANNOT STAND BY ITSELF AND T HE SAME IS LIABLE TO BE CANCELLED AS IN THE INSTANT CA SE ORDERED BY THE TRIBUNAL AND LATER CANCELLATION OF P ENALTY BY THE AUTHORITIES. (III) FURTHER, NO PENALTY COULD BE LEVIED ON THE BASIS OF ADHOC DISALLOWANCE OF RS. 2,40,804/- MADE BY THE AO IN TH E ASSESSMENT ORDER OUT OF VARIOUS EXPENSES CLAIMED BY THE APPELLANT WITHOUT BRINGING ON RECORD ANY POSITIVE M ATERIAL, WHICH MAY JUSTIFY THE IMPOSITION OF PENALTY U/S 271 (1)(C) OF THE ACT. IN VIEW OF THE ABOVE DISCUSSION, THE PENALTY OF RS. 26,00,670/- IMPOSED BY THE AO U/S 271(1)(C) OF THE ACT HAS NO LEGS TO STAND AND CANNOT BE UPHELD, HENCE CANCELLED . THE REVENUE HAS NOT DISPUTED THE FACT THAT THE ADDI TION MADE BY THE AO HAS BEEN DELETED BY THIS TRIBUNAL IN THE QUANTUM APPEAL AS R EFERRED BY THE LD. CIT (A) IN THE IMPUGNED ORDER. HOWEVER, THE REVENUE HAS CHALLENGE D THE ORDER OF THE LD. CIT (A) CANCELLING THE PENALTY LEVIED UNDER SECTION 271(1)( C) ONLY ON THE GROUND THAT THE ORDER OF THIS TRIBUNAL IN QUANTUM APPEAL HAS NOT BE EN ACCEPTED BY THE REVENUE. THE REVENUE HAS NOT PRODUCED ANY RECORD OR EVEN CLA IMED THAT THE SAID ORDER OF THE TRIBUNAL DATED 27.04.2018 IN QUANTUM APPEAL HAS BEE N REVERSED BY THE HONBLE HIGH COURT. ACCORDINGLY, IN THE FACTS AND CIRCUMST ANCES OF THE CASE, WHEN THE 4 ITA NO. 1243/JP/2018 M/S. SILVER SAND BUILDERS PVT. LTD., JAIPUR. ADDITION ITSELF IS NOT IN EXISTENCE THEN THE PENALT Y LEVIED UNDER SECTION 271(1)(C) HAS NO LEGS TO STAND. 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 14/05/2 019. SD/- SD/- ( JES'K LH- 'KEKZ ) ( FOT; IKY JKWO (RAMESH C. SHARMA ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 14/05/2019. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ITO WARD 3(2), JAIPUR. 2. THE RESPONDENT M/S. SILVER SAND BUILDERS PVT. LTD., JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1243/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR