M/s. Whitelene Chemicals, Surat V. The Income tax Officer,Ward-2(1), Surat

ITA 1430/AHD/2010

• Counselvise Citation: 143020514 RSA 2010
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-04-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 04-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'D' BEFORE SHRI D K TYAGI - JM AND SHRI A MOHAN ALANKAMONY - AM ITA NO.1430/AHD/2010 (ASSESSMENT YEAR:-2004-05) M/S WHITELENE CHEMICALS, ROAD NO.6, PLOT NO.2/13, OPP. VEENA VIHAR BLDG., UDHYOGNAGAR, UDHNA, SURAT V/S THE INCOME-TAX OFFICER, WARD-2(1), AAYAKAR BHAVAN, MAJUGAGATE, SURAT PAN: AAAFW 2495 D [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI MITISH MODI, AR REVENUE BY:- SHRI B L YADAV, SR. DR DATE OF HEARING:- 16-04-2012 DATE OF PRONOUNCEMENT:- 16-04-2012 O R D E R PER D K TYAGI (JM) :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER DATED 15-01-2010 PASSED B Y THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-II, [HEREINAFT ER REFERRED TO AS THE LEARNED CIT(A)] SURAT FOR ASSESSMENT YE AR (AY) 2004-05. THE ONLY GROUND RAISED BY THE ASSESSEE REL ATES TO CONFIRMATION OF PENALTY OF RS.2,90,265/- LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2 THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE , ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED MAKING ADDITION S / DISALLOWANCES TOTALING RS.16,72,565/- WHICH INCLUDE D A SUM OF RS.8,09,100/- BEING UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. 2 2 THE ASSESSEE WAS ASKED TO FURNISH EVIDENCE ESTABLIS HING THE IDENTITY AND CREDITWORTHINESS OF THE DEPOSITORS AND GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE, ACCORDING TO THE AO, FAILED TO FURNISH THE SAME AND CONSEQUENTLY A SUM OF RS.8,09, 100/- WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDITS AND PENALTY PROCEEDINGS U/S 271(1)(C) WERE ALSO INI TIATED. THE ASSESSEES APPEAL AGAINST THIS ADDITION WAS DISMISS ED BY THE LEARNED CIT(A). THEREFORE, THE AO PROCEEDED TO IMPO SE PENALTY U/S 271(1)(C) OF THE ACT AFTER GIVING FURTHER OPPOR TUNITY TO THE ASSESSEE TO EXPLAIN ITS CASE. AFTER TAKING INTO CON SIDERATION THE SUBMISSIONS OF THE ASSESSEE, THE AO WAS OF THE VIEW THAT THE ASSESSEE HAS WILLFULLY FURNISHED INACCURATE PARTICU LARS OF INCOME AND CONCEALED THE INCOME TO THE EXTENT OF RS.8,09,1 00/- AND THEREFORE, A PENALTY OF RS.2,90,265/- BEING 100% OF THE TAX SOUGHT TO BE EVADED, WAS IMPOSED. THIS ACTION OF T HE AO WAS CONFIRMED BY THE LEARNED CIT(A). 3 FURTHER AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE US. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE QUANTUM APPEAL, THE HONBLE T RIBUNAL VIDE ITS ORDER DATED 03-02-2012 IN ITA NO.629/AHD/2009 H AS SET ASIDE THE ORDER OF THE LEARNED CIT(A) BY OBSERVING AS UND ER:- 10 WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND T HAT THERE WAS SUFFICIENT REASON FOR THE ASSESSEE FOR ITS FILING T HE NEEESSARY EVIDENCES R-BEFORE THE CIT(A). IN THE FACTS OF THE CASE, WE C ONSIDER THAT IT SHALL BE IN THE INTEREST OF JUSTICE TO SET ASIDE THE ISSU E OF ADDITION OF RS.8,09,100/- UNDER SECTION 68 TO THE FILE OF THE A O WITH DIRECTION TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING 3 3 REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. WE DIRECT ACCORDINGLY. THEREFORE, PENALTY U/S 271(1)(C) OF THE ACT IS NOT SUSTAINABLE IN LAW. 4 THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE LOWER AUTHORITIES. SINCE THE ISSUE IN RESPECT O F THE ADDITION ON THE BASIS OF WHICH THE PENALTY HAS BEEN IMPOSED, HAS BEEN RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUD ICATION, PENALTY DOES NOT SURVIVE. HOWEVER, THE AO WILL BE FREE TO R E-INITIATE PENALTY PROCEEDINGS, IF HE IS SO SATISFIED AFTER DE CIDING THE PROCEEDINGS IN THE QUANTUM MATTER. 5 IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTI CAL PURPOSE. ORDER PRONOUNCED IN THE COURT TODAY ON 16-04-2012 SD/- SD/- (A MOHAN ALANKAMONY) ACCOUNTANT MEMBER (D K TYAGI) JUDICIAL MEMBER DATE : 16-04-2012 COPY OF THE ORDER FORWARDED TO: 1. M/S WHITELENE CHEMICALS, ROAD NO.6, PLOT NO.2/13 , OPP. VEENA VIHAR BLDG., UDHYOGNAGAR, UDHNA, SURAT 2. THE INCOME-TAX OFFICER, WARD-2(1), AAYAKAR BHAVA N, MAJUGAGATE, SURAT 3. CIT CONCERNED 4 4 4. CIT(A)-II, SURAT 5. DR, ITAT, AHMEDABAD BENCH-D, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD