The ACIT, Circle-2, Surat V. Smt. Chanchalben K. Patel, Surat

ITA 1819/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94364 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 18-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D C MISHRA
• Section: 143(3); 142(1)

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.1819/AHD/2011 /BLOCK ASSTT. YEAR: 2006-2007 DCIT , CIR.2 SURAT. VS SMT.CHANCHALABEN K. PATEL TAMNNA BUNGLOW, MHADEV RNAGAR SOCIETY MAJURA GATE, SURAT PAN : ABAPP 0410 M %& / (APPELLANT) '( %& / (RESPONDENT) REVENUE BY : SHRI D.C. MISHRA, SR.DR ASSESSEE BY : NONE / DATE OF HEARING : 20/08/2015 / DATE OF PRONOUNCEMENT: 26/08/2015 )*/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE LD.CIT(A)-II DATED 4.5.2011 PASSED FOR THE ASSTT.YE AR 2006-07. 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LD .CIT()HAS ERRED IN DELETING THE PENALTY IMPOSED UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HIS RETURN OF INCOME ON 29.3.2007 DECLARING TOTAL INCOME AT RS.8, 54,628/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMEN T AND NOTICE UNDER SECTION 143(2) AND 142(1) WAS ISSUED AND SERVED UPO N THE ASSESSEE. THE LD.AO HAS PASSED THE ASSESSMENT ORDER UNDER SEC TION 143(3) ON ITA NO.1819/AHD/2011 2 26.12.2008. HE HAS DETERMINED THE TAXABLE INCOME O F THE ASSESSEE AT RS.26,20,480/-. 4. APPEAL TO THE CIT(A), DID NOT BRING ANY RELIEF T O THE ASSESSEE. 5. DISSATISFIED WITH THE ORDER DATED 31.3.2009, PAS SED BY THE LD.CIT(A) THE ASSESSEE HAS FILED APPEAL BEFORE THE TRIBUNAL BEARING ITA NO.2007/AHD/2009. THIS APPEAL OF THE ASSESSEE HAS BEEN ALLOWED BY THE TRIBUNAL FOR STATISTICAL PURPOSE VIDE ORDER DAT ED 22.6.2012. COPY OF THE ORDER HAS BEEN PLACED ON RECORD BY THE ASSESSEE . THE TRIBUNAL HAS SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR RE-AD JUDICATION. THE FINDING OF THE TRIBUNAL RECORDED IN PARA-7 READS AS UNDER: 7. WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULLY CONSIDERED THE MATERIALS ON RECORD. FROM THE ORDER OF THE LEAR NED AO IT APPEARS THAT THE LEARNED AO DID NOT HAVE THE MATERI ALS FILED BY THE ASSESSEE BEFORE HIM WHILE ARRIVING AT THE DECIS ION. BEFORE US, THE ASSESSEE HAS FILED VARIOUS DOCUMENTS WHICH WE A RE OF THE HUMBLE OPINION NEEDS TO BE EXAMINED BY THE LEARNED AO FOR ARRIVING AT A JUDICIOUS CONCLUSION. THEREFORE, IN T HE INTEREST OF JUSTICE, WE HEREBY REMIT THE ISSUE BACK TO THE FILE OF THE LEARNED AO FOR PROPER EXAMINATION OF ALL THE EVIDENCES FILE D BY THE ASSESSEE AND PASS APPROPRIATE ORDER AS PER LAW AND MERIT. THE ASSESSEE IS DIRECTED TO CO-OPERATE WITH PROCEEDINGS BEFORE THE REVENUE WITHOUT SEEKING UNNECESSARY ADJOURNMENTS FO R THE SPEEDY DISPOSAL OF THE CASE. 6. AFTER THE ASSESSMENT ORDER, THE LD.AO HAS ISSUED NOTICE UNDER SECTION 274 R.W.S. SECTION 271(1)(C) OF THE ACT INV ITING EXPLANATION OF THE ASSESSEE AS TO WHY HE BE NOT VISIT WITH PENALTY QUA THE ADDITIONS MADE TO THE TOTAL INCOME OF THE ASSESSEE. THE LD.A O HAS ULTIMATELY PASSED ORDER DATED 23.3.2010, AND IMPOSED PENALTY O F RS.6,49,487/-. ON APPEAL, THE LD.FIRST APPELLATE AUTHORITY HAS DEL ETED THE PENALTY VIDE ORDER DATED 4.5.2011. THIS ORDER OF THE CIT(A) IS BEING IMPUGNED BY THE REVENUE. ITA NO.1819/AHD/2011 3 7. IN RESPONSE TO THE NOTICE OF HEARING, NONE HAS C OME PRESENT ON BEHALF OF THE ASSESSEE. THE ASSESSEE HAS FILED WRI TTEN SUBMISSIONS. 8. WITH THE ASSISTANCE OF THE LD.DR, WE HAVE GONE T HROUGH THE WRITTEN SUBMISSIONS. THE SECTION 271(1)(C) OF THE ACT READS AS UNDR: '271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTIC ES, CONCEALMENT OF INCOME, ETC. (1) THE ASSESSING OFFICER OR THE C OMMISSIONER (APPEALS) OR THE CIT IN THE OF COURSE OF ANY PROCEE DINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) AND (B) ** ** ** (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HE MAY DIREC T THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY. (I)AND (INCOME-TAX OFFICER,)** ** ** (III) IN THE CASES REFERRED TO IN CLAUSE (C) OR CLA USE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL N OT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULA RS OF HIS INCOME OR FRINGE BENEFIT THE FURNISHING OF INAC CURATE PARTICULARS OF SUCH INCOME OR FRINGE BENEFITS: EXPLANATION 1- WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMM ISSIONER (APPEALS) OR THE CIT TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MAT ERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOT AL INCOME OR SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURP OSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INC OME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED.' 9. A PERUSAL OF SUB-CLAUSE (III) OF SECTION 271(1)( C) WOULD INDICATE THAT IF IT IS PROVED THAT THE ASSESSEE HAS CONCEALE D THE PARTICULARS OF HIS INCOME, OR FURNISHED INACCURATE PARTICULARS OF INCO ME, THEN IN ADDITION ITA NO.1819/AHD/2011 4 TO TAX, IF ANY PAYABLE BY SUCH PERSON, HE WILL BE ASKED TO PAY A SUM WHICH SHALL NOT BE LESS THAN, BUT SHALL NOT EXCEED 3 TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. MEANING THEREBY, WHATEVER AMOUNT OF ADDITION HAS BEEN MADE TO THE INCOME FOR WHICH IT IS TO BE CONSTRUED THAT THE ASSESSEE HAS C ONCEALED PARTICULARS OR FURNISHED INACCURATE PARTICULARS OF INCOME, THEN SUCH ASSESSEE WILL BE REQUIRED TO PAY AN AMOUNT EQUIVALENT TO TAX SOUGHT TO BE EVADED ON THAT ADDITION OR WHICH CAN BE THREE TIMES OF THE TA X. IN THE PRESENT CASE, THE MOMENT, ASSESSMENT ORDER HAS BEEN SET ASI DE BY THE ITAT, THE VERY ADDITION ON WHICH THE AMOUNT TAX SOUGHT TO BE EVADED WAS TO BE CALCULATED, HAS BEEN EXTINGUISHED. IN OTHER WOR DS, THE VERY BASIS TO COMPUTE THE PENALTY AMOUNT IMPOSABLE ON THE ASSESSE E, NO MORE REMAIN. THEREFORE, COMPUTATION FAILS. FOR THIS RE ASON, WE DO NOT DEEM IT NECESSARY TO ADJUDICATE THE ISSUE ON MERIT, WHET HER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS FOR VISITING HIM WITH PENALTY UNDER SECTION 271(1)( C), BECAUSE SUCH EXERCISE WILL BE AN ACADEMIC EXERCISE IN THE PRESEN T PROCEEDINGS. THE ORDER OF THE CIT(A) IS NOT SUSTAINABLE FOR THE REAS ON THAT ASSESSMENT ORDER WHICH GAVE RISE TO THE PENALTY PROCEEDINGS HA S BEEN SET ASIDE BY THE TRIBUNAL, AND CONSEQUENTLY, THE PENALTY PROCEED ING BECAME REDUNDANT BY VIRTUE OF NON-EXISTENCE OF FIRST ASSES SMENT ORDER DATED 26.12.2008. IT WILL BE IN THE DISCRETION OF THE AO TO INITIATE OR NOT TO INITIATE FRESH PENALTY PROCEEDINGS AFTER PASSING OF THE SECOND ASSESSMENT ORDER, BECAUSE FOR US, IT WILL BE ONLY A SPECULATION ABOUT THE NATURE OF EVIDENCE PRODUCED BY THE ASSESSEE. AFTER FINALIZING THE QUANTUM ADDITION AND EVALUATING THE NATURE OF EVIDE NCE, IT IS FOR THE AO TO INITIATE PROCEEDINGS OR NOT AGAINST THE ASSESSEE . IN VIEW OF THE ABOVE DISCUSSION, WE ALLOW THIS APPEAL OF THE DEPAR TMENT FOR STATISTICAL PURPOSE AND SET ASIDE THE ORDER OF THE CIT(A) AND R ESTORE THIS ISSUE TO THE FILE OF THE AO. THE LD.AO WILL BE AT LIBERTY T O INITIATE OR NOT INITIATE ITA NO.1819/AHD/2011 5 PENALTY, AFTER EVALUATING THE MATTER BEFORE HIM, CO NSEQUENT TO THE SECOND ROUND OF ASSESSMENT ORDER. THUS, THIS GROUN D OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 26 TH AUGUST, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 26/08/2015