Sama Ramachandra Reddy, Hyderabad V. Dy. Commissioner of Income Tax , Central Circle-2, Hyderabad

ITA 165/Hyd/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6282 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2006-2007
• Appeal Filed On: 23-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad (Through Video Conferencing) Before Shri A. Mohan Alankamony, Accountant Member AND Shri S.S. Godara, Judicial Member ITA No.165/Hyd/2018 Assessment Year: 2006-07 Sama Ramachandra Reddy, Hyderabad. PAN : AUAPS0609R Vs. The DCIT, Central Circle – 2, Hyderabad. (Appellant) (Respondent) Assessee by: Shri P. Murali Mohan Rao Revenue by : Shri Subbaraju Penmetsa Date of hearing: 14/12/2021 Date of pronouncement: 16/12/2021 O R D E R Per S. S. Godara, J.M. This assessee’s appeal for A.Y 2006-07 arises from the Commissioner of Income Tax (Appeals)-1, Hyderabad’s order dated 15.11.2016, in case No.0598/CIT(A)-1/Hyd/2014- 15/2017-18, involving proceedings under section 221(1) of Income Tax Act, 1961 (in short, “the Act”). Heard both the parties. Case file perused. ITA No.165/Hyd/2018 2 2. Coming to the assessee’s sole substantive grievance that both the learned lower authorities have erred in law and on facts in imposing section 221(1) penalty of Rs.6,36,450/-, we note that the corresponding lower appellate discussion to this effect reads as under : ITA No.165/Hyd/2018 3 ITA No.165/Hyd/2018 4 ITA No.165/Hyd/2018 5 3. Mr. Murali Mohan Rao vehemently contended that the impugned penalty is not sustainable in view of the fact that the CIT(A) had granted relief to assessee in quantum proceedings; which in turn, stands upheld upto “tribunal”. He has quoted this tribunal’s co-ordinate bench’s order in ITA No.164/Hyd/2018 in preceding assessment year 2005-06 that the impugned penalty is ITA No.165/Hyd/2018 6 not maintainable once the corresponding quantum addition stands deleted in light of section 221(2) of the Act. His last plea in light of case law Heddle Knowledge (P) Ltd. Vs. ITO (2018) 19 taxmann.com 376 (Mumbai) is that amended provision of section 140A(3) with effect from 01-04-1989 does not envisage any penalty for nonpayment of self-assessment tax, which renders the entire section 221 penal mechanism invalid. 4. The Revenue has placed strong reliance on CIT(A)’s findings. Its specific case is that the impugned penalty pertains to self-assessment than any addition made in the quantum proceedings. 5. We have given our thoughtful consideration to rival pleadings and find prima facie merit in assessee’s case in light of the fact that the CIT(A) has not considered the tribunal’s quantum order declining the Revenue’s appeal on 26.08.2019 thereby upholding the corresponding lower appellate authorities’ action. Coupled with this, the fact that this tribunal yet another co- ordinate bench’s decision has already held that even non-payment of self-assessment tax does not attract section 271(1)(c) penalty (supra). 6. The fact also remains that the clinching issue as to whether the impugned pending penalties to quantum addition or self-assessment requires the Assessing Officer’s afresh adjudication not only in light of section 221(2) of the Act but also going by the tribunal’s co-ordinate bench’s order. It is made clear that the impugned penalty would not survive in case the corresponding quantum addition(s) stands deleted as well as on ITA No.165/Hyd/2018 7 account of the fact that this tribunal has already held that section 140A(3) itself renders the foregoing penalty mechanism inapplicable. The Assessing Officer shall finalize his consequential proceedings within three effective opportunities of hearing. 7. This assessee’s appeal is allowed for statistical purposes in above terms. Order pronounced in the Open Court on 16 th December, 2021. Sd/- Sd/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER Hyderabad, dated 16 th December, 2021. TYNM/sps Copy to: S.No Addresses 1 Sama Ramachandra Reddy, C/o. P. Murali & Co., Chartered Accountants, 6-3-655/2/3, I Floor, Somajiguda, Hyderabad – 82. 2 The Deputy Commissioner of Income Tax, Central Circle – 2, Hyderabad. 3 CIT(A)-1 Hyderabad. 4 Pr.CIT-1 Hyderabad. 5 DR, ITAT Hyderabad Benches 6 Guard File By Order