Infinite Civil Solutions Pvt. Ltd., Ahmedabad V. The ACIT, Circle-2(1)(1), Ahmedabad

ITA 2108/AHD/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4089 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 11-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Assessee Lawyers: B K PATEL
• Section: 271(1)(c); 143(3); 37(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD [THROUGH VIRTUAL COURT] BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI PRADIPKUMAR KEDIA, ACCOUNTANT MEMBER ITA.NO.2108/AHD/2018 / ASSTT.YEAR : 2012-13 INFINITE CIVIL SOLUTIONS P.LTD. F.P.25, NR.ADITYA ELEGANCE & RAILWAY TRACK CMS HOSPITAL ROAD THALTEJ, AHMEDABAD 380 054. PAN : AABCI 7586 H VS. ACIT, CIR.2(1)(1) AHMEDABAD. / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI S.S. SHUKLA, SR.DR ASSESSEE BY : SHRI B.K. PATEL, AR / DATE OF HEARING : 11/02/2021 / DATE OF PRONOUNCEMENT: 15/02/2021 !'/ O R D E R PER RAJPAL YADAV, VICE-PRESIDENT ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-2, AHMEDABAD PASSED FOR THE ASSTT.YEAR 20 12-13. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING THE PENALTY IMPOSED BY THE AO UNDER SECT ION 271(1)(C) OF THE INCOME TAX ACT, 1961 AMOUNTING TO RS.9,97,256/- . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY WAS ENGAGED IN THE PROVIDING CONSULTANCY SERVICES. IT HAS FILED ITS RETURN OF INCOME ON 29.9.2012 DECLARING TOTAL INCOME AT RS.92 ,14,300/-. AN ASSESSMENT ORDER WAS PASSED ON 19.1.2015 UNDER SECT ION 143(3) OF THE ITA NO.2108/AHD/2018 2 ACT, AND THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.1,23,50,300/-. THE LD.AO HAS MADE TWO ADDITIONS VIZ. (A) DISALLOWANCE OF RENT EXPENSES UNDER SECTION 37(1) A ND UNDER SECTION 40A(2)(B), AND (B) DISALLOWANCE OF BOGUS EXPENSES A MOUNTING TO RS.25,30,500/-. DISSATISFIED WITH THE ABOVE ADDITI ONS, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) HAS DECIDED THE APPEAL AGAINST THE ASSESSEE ON 22.1.201 6. AGGRIEVED WITH THE ORDER OF THE LD.CIT(A) ASSESSEE HAS FILED AN AP PEAL BEARING ITA NO.772/AHD/2016. THIS APPEAL WAS LISTED FOR HEARI NG ON 7.8.2018, AND IT WAS DISMISSED FOR WANT OF PROSECUTION. THE ASSE SSEE HAS FILED AN MA BEARING NO.270/AHD/2018 CONTENDING THEREIN THAT ASS ESSEE WAS VERY MUCH INTERESTED IN PROSECUTING THE APPEAL. THIS MA WAS ALLOWED BY THE TRIBUNAL VIDE ORDER DATED 1.1.2019 AND THE APPEAL W AS RESTORED TO ITS ORIGINAL NUMBER. THE APPEAL AGAIN HEARD BY THE TRI BUNAL ON 17.6.2019. THE ORDER WAS PRONOUNCED ON 11.9.2019. THE ASSESS EE FOUND CERTAIN APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL, AND THEREFORE, FILED ANOTHER MA BEARING NO.324/AHD/2019 ON 4.10.2019. T HIS APPLICATION WAS LISTED BEFORE THE TRIBUNAL ON 20.12.2019, AND T HE TRIBUNAL AGREED WITH CONTENTIONS OF THE ASSESSEE THAT ITS ORDER WAS SUFFERING FROM AN APPARENT ERROR, THEREFORE, MA WAS ALLOWED AND THIS APPEAL WAS AGAIN RESTORED TO ITS ORIGINAL NUMBER. EARLIER ORDER DAT ED 1.1.2019 WAS RECALLED. THE TRIBUNAL HAS AGAIN DECIDED THE APPEA L OF THE ASSESSEE VIDE ORDER DATED 10.11.2020. THE TRIBUNAL HAS DELE TED BOTH THE MAJOR ADDITIONS I.E. DISALLOWANCE OF RS.6 LAKHS OUT OF RE NT EXPENSES AND DISALLOWANCE OF LEGAL AND PROFESSION FEES OF RS.25, 30,500/-. COPY OF THE TRIBUNALS ORDER DATED 10.11.2020 HAS BEEN PLAC ED ON RECORD. 4. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS BEEN VISITED WITH PENALTY UNDER SECTION 271(1)(C) O F THE ACT QUA THE ADDITIONS MADE ON ACCOUNT OF DISALLOWANCE OF RENT O F RS.6 LAKHS AND ITA NO.2108/AHD/2018 3 DISALLOWANCE OF ALLEGED BOGUS EXPENDITURE OF RS.25, 30,500/-. BOTH THE ADDITIONS STAND DELETED AT THE END OF THE TRIBUNAL VIDE ORDER DATED 10.11.2020 PASSED IN ITA NO.772/AHD/2016. THE LD.D R WAS UNABLE TO CONTROVERT THIS FACTUAL POSITION. 5. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES, WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PRO VIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT TH E ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN BUT WHICH SHALL NOT EXCEED T HREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONC EALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON ADDI TION MADE TO THE INCOME OF THE ASSESSEE. SINCE IN THE PRESENT CASE, BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGUISHED BY DELE TING ADDITION BY THE TRIBUNAL VIDE ORDER DATED 10.11.2020 (SUPRA) THE IM PUGNED PENALTY DOES NOT SURVIVE. IN OTHER WORDS, THERE IS NO ROOM FOR THE REVENUE TO IMPOSE PENALTY UNDER SECTION 271(1)(C) IN THIS CASE . THEREFORE, WE CANCEL THE ORDERS OF THE REVENUE AUTHORITIES ON THI S ISSUE, AND ALLOWED GROUNDS OF APPEAL OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 15 TH FEBRUARY, 2021 AT AHMEDABAD. SD/- SD/- (PRADIPKUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 15/02/2021