Shree Maruti Pole Industries, Baroda V. The Income Tax Officer,Ward-3(2), Baroda

ITA 1595/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8265 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 20-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: M K PATEL
• Section: 142(1); 144

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.1595/AHD/2014 / ASSTT. YEAR: 2006-2007 SHREE MARUTI POLE INDUSTRIES AT & POST : MASAR TAL: PADRA DIST: BARODA PAN : ABBFS 8324 D VS. ITO, WARD-3(2) BARODA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M.K. PATEL, AR REVENUE BY : MS.SONIA KUMAR, SR.DR ! / DATE OF HEARING : 11/10/2017 '#$ ! / DATE OF PRONOUNCEMENT: 12/10/2017 %& / O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-II, BARODA DATED 6.2.2014 PASSED FOR THE ASSTT.YEAR 2006-07. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS.5,84,100/- IMPOSED BY THE AO UNDE R SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE FOLLOW ING ADDITIONS: A) ESTIMATION OF NET PROFIT - RS.10,79,683/- B) ADDITION U/S.68 - RS. 5,68,000/- C) ADDITION U/S.41(1) - RS. 87,500/- ITA NO.1595/AHD/2014 2 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME ON 20.11.2006 DECLARING INCOME AT RS.NIL. THIS RET URN WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICES UNDER SECTION 143(2 ) AND 142(1) WERE ISSUED ON VARIOUS DATES. HOWEVER, THE ASSESSEE DID NOT ATTEND THE HEARING AND ACCORDINGLY, AFTER MAKING CERTAIN ADDIT IONS, AO PASSED ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT BY RE VISING ITS TOTAL INCOME AT RS.47,81,620/- . THIS ORDER OF THE AO WAS CHALLENGED BEFORE THE LD.CIT(A) WHO GAVE PART RELIEF TO THE ASSESSEE. THE AO ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)( C) AND IMPOSED A PENALTY OF RS.5,84,100/- WHICH WAS ALSO CONFIRMED B Y THE LD.CIT(A). NOT SATISFIED WITH THE ORDER OF THE LD.CIT(A), THE ASSESSEE CHALLENGED QUANTUM ADDITION BEFORE THE TRIBUNAL. ASSESSEE SU CCEEDED ITS CASE IN ITA NO.913/AHD/2010 ORDER DATED 20.9.2016. ASSESSE E IS NOW BEFORE ME CHALLENGING IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. THE LD.COUNSEL FOR THE ASSESSEE SUBMITS THAT SIN CE QUANTUM ADDITIONS HAVE BEEN DELETED BY THE TRIBUNAL VIDE IT S ORDER DATED 20.9.2016 (SUPRA), PENALTY UNDER SECTION 271(1)(C) HAS NO BASE TO STAND, AND IMPUGNED PENALTY WILL GET ELIMINATED AUT OMATICALLY. THE LD.DR HAS NOT DISPUTED THIS FACTUAL POSITION ON THE ISSUE. 5. I HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GON E THROUGH THE RECORD CAREFULLY. WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDI TION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN, BUT WHIC H SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED B Y REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSE E. SINCE BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGU ISHED BY DELETING ITA NO.1595/AHD/2014 3 ADDITIONS BY THE TRIBUNAL IN ITS ORDER DATED 20.9.2 016 (SUPRA) IN THE QUANTUM APPEAL OF THE ASSESSEE THE IMPUGNED PENALTY IS NON EST , AND ACCORDINGLY PENALTY UNDER SECTION 271(1)(C) OF THE ACT STANDS CANCELED. APPEAL OF THE ASSESSEE IS THUS ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 12 TH OCTOBER, 2017. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 12/10/2017