ITO, WARD-2(3)(1), SURAT V. SHRI AMRATLAL MAGANLAL DESAI, SURAT

ITA 164/SRT/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 2583 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-12-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 02-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Keywords: Tax effect
• Section: 147; 271(1)(c); 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND Dr. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No.164/SRT/2020 (AY 2009-10) (Hearing in Virtual Court) The Income Tax Officer, Ward-2(3)(1), Surat. Vs Shri Amratlal Maganlal Desai, At & PO Dindoli Gam, Brahman Falia, B/h.Central Bank of India, Surat – 394 210. PAN: ANBPD 0258 K Appellant Respondent Assessee by None Revenue by Mrs. Anupama Singla – Sr.DR Date of hearing 22/12/2021 Date of pronouncement 22/12/2021 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of ld. Commissioner of Income Tax(Appeals)-1, Surat dated 16.01.2020for the Assessment Year 2009-10.The Revenue raised the following grounds of appeal: “(i) On the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in deleting the penalty levied u/s 271(1)(c) of the Act of Rs.65,12,153/- despite of the fact that quantum addition was confirmed by the Ld. CIT(A) on account of undisclosed long term capital gain. (ii) On the facts and circumstances of the case and in Law, the Ld. CIT (A) has erred in deleting the penalty levied u/s 271(1)(c) of the Act of Rs. 65,12,153/- on the basis of decision of the Hon'ble ITAT in the quantum proceeding, without appreciating the detailed enquiry made by the AO during the course of the assessment order/penalty order which established the undisclosed long term capital gain on sale of immovable Property during the year under consideration. ITA No.164//SRT/2020 (AY 2009-10) Shri Amratlal Maganlal Desai, Surat 2 (iii) On the facts and circumstances of the case and in Law, the Ld.CIT(A), Surat ought to have upheld the penalty order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A)-1Surat may be set-aside and that of the Assessing Officer's penalty order may be restored. (iv) On the facts and circumstances of the case and in law, the appellant craves its right to add, alter, amend, deleted, any of the ground or grounds of appeal.” 2. Brief facts of the case as extracted from the orders of the lower authorities are that the assessee filed his return of income for the A.Y. 2009-10 on 21.07.2009 declaring income of Rs.1,54,752/-. The case of assessee was re- opened on the basis of information that assessee owned agricultural land bearing Survey No.188/1-A & 188/1-B Block No.309 in Revenue Survey no.187 in Village Dindoli, Surat, which was acquired by State Government for construction of Sewage Treatment Plant in Surat Municipal Corporation (SMC) on 25.03.2009. The assessee received compensation of Rs.2.42 crore and Rs. 4.51 Crore against acquisition of his two survey numbers of agriculture land. On the basis of such information, the case of assessee was re-opened under section 147 of the Act and the assessment was completed on 25.03.2015 assessing total income at Rs.3.18 crore by making addition of Rs.3.16 crore on account of undisclosed long term capital gain (LTCG). 3. Aggrieved against the addition in the assessment order passed under section 143(3)/ 147 dated 25.03.2015, the assessee filed appeal before the ld.CIT(A). The addition of LTCG was upheld by ld CIT(A). On receipt of ITA No.164//SRT/2020 (AY 2009-10) Shri Amratlal Maganlal Desai, Surat 3 order from office of ld. CIT(A), the Assessing Officer levied penalty of Rs.65,12,153/- being 100% of tax sought to be evaded. On further appeal before the ld. CIT(A), the entire penalty was deleted by taking view that Surat Bench of Tribunal in order dated 13.12.2019 in ITA No.448/AHD/2017. Aggrieved by the order of ld. CIT(A), the Revenue has filed present appeal before this Tribunal. 4. None appeared on behalf of assessee despite the sending of notice of hearing served through Registered Post with Acknowledgement Due (RPAD) for the hearing fixed on 22.12.2021 (today). Perusal of record shows that notice of appeal sent along with memo of appeal is returned back by the postal authorities in the remark “Left”. Under these circumstances, we left no option except to hear the submission of learned Senior Departmental Representative (DR) for the Revenue and to decide the appeal on the basis of material available on record. The ld.Sr.DR for the Revenue submits that assessment in the present case was completed on 25.03.2015 under section 143 r.w.s. 147 of the Act. The AO while passing the assessment order made addition on account of undisclosed long term capital gain (LTCG) of Rs.3.16 crore. The addition in the quantum assessment was sustained by the ld. CIT(A). Though the addition of undisclosed LTCG was deleted by Tribunal, the Revenue could not file appeal before the Hon’ble jurisdictional ITA No.164//SRT/2020 (AY 2009-10) Shri Amratlal Maganlal Desai, Surat 4 High Court as the tax effect in the quantum assessment was less than the monetary limit fixed by the Central Board Direct Tax (CBDT) for filing the appeal by the Revenue before the Hon’ble High Court. The ld.Sr.DR submits that the facts remains assessee while filing return of income not disclosed LTCG. However, the decision of Tribunal in quantum assessment is not acceptable to Revenue. The ld.Sr.DR, accordingly submitted that the penalty levied by the AO may be restored by reversing the order of ld. CIT(A). 5. We have considered the submission of ld. Sr. DR for the Revenue and perused the order of lower authorities carefully. We find that there is no dispute that in the re-assessment order passed under section 143(3) r.w.s 147 of the Act on 25.03.2015, the AO made addition on undisclosed LTCG of Rs.3.16 crore. The AO levied penalty under section 271(1)(c) being 100% of tax sought to be evaded. It is an admitted fact that on second appeal before the Tribunal, the entire addition on account of undisclosed LTCG was deleted in assessee’s appeal in ITA No.448/AHD/2017 dated 13.12.2019. It is settled position under law that once the addition on the basis of which penalty was levied has been deleted, the penalty levied under section 271(1)(c) will not survive. The ld CIT(A) while deleting the penalty clearly held that the entire addition in the quantum assessment has been deleted by ITA No.164//SRT/2020 (AY 2009-10) Shri Amratlal Maganlal Desai, Surat 5 Tribunal in ITA No.448/AHD/2017 dated 13.12.2019, hence, penalty order would not survive. Considering the legal position that once addition in the quantum assessment is deleted, penalty order would not survive. Therefore, we concur with the finding of ld. CIT(A) and dismiss the appeal of Revenue. 6. In the result, appeal of the Revenue is dismissed. Order announced on 22 nd December, 2021 in open court, while hearing the appeal. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat Dated: 22 /12/2021 /SGR* Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR 6. Guard File By order / / TRUE COPY / / Sr.Pvt. Secretary, ITAT, Surat