M/s. Siddhi Vinayak Construction, Surat V. The Income tax Officer,Ward-5(4), Surat

ITA 1267/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5961 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 02-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 29-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR MAJUMDAR
• Assessee Lawyers: M K PATEL
• Keywords: Initiation of penalty proceedings

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.1267/AHD/2014 ( / ASSESSMENT YEAR : 2007-08) M/S.SIDDHI VINAYAK CONSTRUCTION G-6, SIDDHI VINAYAK COMPLEX RATNAPURI SOCIETY KAMREJ CHAR RASTA KAMREJ, SURAT 394 180 / VS. THE ITO WARD-5(4) SURAT $ ./ ./ PAN/GIR NO. : ABGFS 5714 C ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY SHRI M.K. PATEL, AR ($'*) / RESPONDENT BY SHRI PRADEEP KUMAR MAJUMDAR, SR.DR +,*- / DATE OF HEARING 02/05/2017 ./0*- / DATE OF PRONOUNCEMENT 04/ 05/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS )-I, SURAT [CIT(A) IN SHORT] DATED 14/03/2014 FOR THE ASSESSMENT YEAR (AY) 2007-08. ITA NO. 1267/AH D/2014 SIDDHI VINAYAK CONSTRUCTION VS. ITO ASST.YEAR 2007-08 - 2 - 2. THE SOLITARY GRIEVANCE IN THE PRESENT APPEAL I S AGAINST THE IMPOSITION OF PENALTY UNDER S.271(1)(C) OF THE INCO ME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') BY THE ASSES SING OFFICER (AO) AND CONFIRMED BY THE CIT(A). 3. THE LD.AR AT THE OUTSET SUBMITTED THAT THE AO MA DE ADDITION OF RS.10 LAKHS ON ACCOUNT OF ALLEGED UNEXPLAINED BOGUS CREDITS UNDER S.68 OF THE ACT 1961 IN THE QUANTUM PROCEEDINGS AND IMPO SED PENALTY THEREON WHICH IS IN CHALLENGE. IT WAS BROUGHT TO OUR NOTIC E THAT THE AFORESAID ACTION OF THE AO IN THE QUANTUM PROCEEDINGS WAS CHA LLENGED BEFORE THE TRIBUNAL IN ITA NO.2114/AHD/2010 ORDER DATED 23/01/ 2015. IT WAS SUBMITTED THAT THE TRIBUNAL HAS SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR READJUDICATION VIDE PARA-7 OF THE ORDER. ON TH E STRENGTH OF THE TRIBUNAL ORDER, IT HAS BEEN CONTENDED BY THE ASSESS EE THAT SINCE THE ADDITION HAS BEEN SET ASIDE AND RESTORED TO THE FIL E OF THE AO FOR READJUDICATION, THE BASIS FOR IMPOSITION OF PENALTY DOES NTO SURVIVE ANY MORE. 4. THE LD.DR FOR THE REVENUE RELIED UPON THE ORDER OF THE CIT(A). 5. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES OF THE CASE, WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT TH E ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH ITA NO. 1267/AH D/2014 SIDDHI VINAYAK CONSTRUCTION VS. ITO ASST.YEAR 2007-08 - 3 - SHALL NOT BE LESS THAN BUT WHICH SHALL NOT EXCEED T HREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDENT UPON THE ADDITIONS MADE TO THE INCOME OF THE ASSESSEE. UPTO AND UNTIL THE ISSUE R EGARDING DETERMINATION OF THE TAXABLE INCOME IS FINALIZED, PENALTY UNDER S ECTION 271(1)(C) OF THE ACT CANNOT BE IMPOSED UPON THE ASSESSEE. THE DETER MINATION OF TAXABLE INCOME OF THE ASSESSEE IS PRESENTLY SUBJUDICED BEFO RE THE AO OWING TO THE ORDER OF THE ITAT IN QUANTUM PROCEEDINGS. AFTE R ADJUDICATION THE ISSUE OF QUANTUM ON MERIT, IT WILL BE IN THE DISCRE TION OF THE AO TO CONSIDER INITIATION OF PENALTY PROCEEDINGS ON THIS ISSUE AGAINST THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW. IN VIEW OF THE ABOVE, WE ALLOW THE APPEAL OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 04/ 05/2017 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 04/ 05 /2017 4..+,.+../ T.C. NAIR, SR. PS ITA NO. 1267/AH D/2014 SIDDHI VINAYAK CONSTRUCTION VS. ITO ASST.YEAR 2007-08 - 4 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-I, SURAT 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 2.5.17 (DICTATION-PAD 3-P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2.5.17 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.4.5.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 4.5.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER