The Income Tax Office, Ward-1(2), RAJKOT-GUJARAT V. Shri Pravinchandra C. Parekh (HUF), GONDAL

ITA 238/RJT/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5907 (ITAT-RAJKOT)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-05-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 14-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR J B JHAVERI
• Keywords: Wrong claim
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM AND SHRI B. R. JAIN, A M ITA NO. 238/RJT/2013 / ASSESSMENT YEAR : 2004-05 ITO, WARD-1(2), RAJKOT ( / APPELLANT) SHRI PRAVINCHANDRA C. PAREKH (HUF), M/S. PARDESH DEHYDRATION CO., N.H. 8B, GUNDALA CROSSING, GONDAL, DIST. RAJKOT PAN : AAIHP 4156 Q / RESPONDENT ITA NO. 239/RJT/2013 / ASSESSMENT YEAR : 2005-06 ITO, WARD-1(2), RAJKOT ( / APPELLANT) SHRI PRAVINCHANDRA C. PAREKH (HUF), PAN : AAIHP 4156 Q / RESPONDENT ! '# / REVENUE BY DR. J. B. JHAVERI, DR $% ! '# / ASSESSEE BY NONE ' & ' %( / DATE OF HEARING 31.12.2013 ) %( / DATE OF PRONOUNCEMENT 03.01.2014 / ORDER .. , / T. K. SHARMA, J. M.: THESE TWO APPEALS BY THE REVENUE ARE AGAINST TWO SEPARATE ORDERS OF LD. CIT( A)-I, RAJKOT, BOTH DATED 14.03.2013, CANCELLING THE PENALTY OF RS.9,74,938/- AND RS.9,98 ,219/- LEVIED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEARS 2004-05 AND 2005-0 6 RESPECTIVELY. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSING OFFI CER LEVIED PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 FOR RS.9,74,938/- FOR THE ASSESSMENT YEAR 2004-05 AND RS.9,98,219/- FOR THE ASSESSMENT YEAR 2005-06. ON A PPEAL, IN THE IMPUGNED ORDER, LD. CIT(A) CANCELLED THE PENALTY LEVIED U/S 271(1)(C) F OR BOTH THE ASSESSMENT YEARS. THE REASONING GIVEN BY THE LD. CIT(A) IS IDENTICAL IN B OTH THE CASES I.E. FIRSTLY THE ASSESSING OFFICER SHOULD GIVE APPEAL EFFECT TO THE ORDER DATE D 13.07.2011 OF LD. CIT(A) AND THEREAFTER IF ANY ADDITION/DISALLOWANCE SOUGHT TO B E SUSTAINED THEN ONLY THE ASSESSING OFFICER SHOULD LEVY PENALTY BY PASSING A FRESH ORDE R ON THAT PARTICULAR AMOUNT OF ADDITION/DISALLOWANCE SO SUSTAINED, IF CONSIDERED N ECESSARY. THEREFORE, FOR THE SAKE OF 238 & 239-RJT-2013 SH PRAVINCHANDRA C. PAREKH 2 CONVENIENCE WE REPRODUCE HEREUNDER THE REASONING GI VEN BY THE LD. CIT(A) IN THE IMPUGNED ORDER FOR ASSESSMENT YEAR 2004-05, WHICH R EADS AS UNDER:- 5. I HAVE CAREFULLY CONSIDERED THE FINDING GIVEN B Y THE ASSESSING OFFICER IN THE PENALTY ORDER AND THE SUBMISSION OF THE APPELLA NT. IF FIND FORCE IN THE CONTENTIONS OF THE APPELLANT. I ALSO FIND THAT THE A.O. IN A HASTEN TO LEVY PENALTY HAS OVERLOOKED THE DIRECTIONS OF THE HONBLE ITAT I N ITS ORDER DATED 24.04.2009 AND ALSO FAILED TO CONSIDER THE CONSOLIDATED RETURN S FILED BY THE APPELLANT AS NOTED BY THE HONBLE ITAT IN THE SAID ORDER. THE FA CT REMAINS THAT MY PREDECESSOR CIT(A) HAS ALLOWED THE APPEAL FILED BY THE APPELLANT AGAINST ORDER PASSED U/S 143(3) R.W.S. 254 OF THE ACT DATED 1.12. 2010, VIDE ORDER IN APPEAL NO.CIT(A)-I/0119,0120 &0121/10-11 DATED 13.07.2011. THE FACT ALSO REMAINS THAT WHEN APPELLANT IS IN APPEAL BEFORE THE CIT(A) AGAINST ORDER U/S 143(3) R.W.S. 254 PASSED ON 01.12.2010, IN VIEW OF THE PROVISIONS OF SECTION 274 THE A.O. CANNOT LEVY PENALTY TILL ORDER OF CIT(A). THE A.O. HAS WRONGLY LEVIED PENALTY MERELY ON THE BASIS OF THE ORDER U/S 143(3) R.W.S. 254 DATED 1.12.2010 WITHOUT GIVING EFFECT TO THE ORDER OF THE CIT(A) DATED 13.0 7.2011 WHICH IS LEGALLY NOT CORRECT. MOREOVER, MY PREDECESSOR CIT(A), VIDE HIS ORDER DATED 13.07.2011, HAS NOTED THAT CONSOLIDATED RETURNS HAVE BEEN FILED BY THE APPELLANT AND ALL SUCH RETURNS ARE FILED WITHIN TIME AND ACCORDINGLY DIREC TED THE A.O. TO VERIFY OFFICE RECORDS AND THEN DETERMINE CARRY FORWARD LOSS, IF A NY AND AS A COROLLARY ALLOW SET OFF OF LOSS OF ONE UNIT AGAINST PROFIT OF ANOTHER U NIT. THUS, ONLY AFTER GIVING APPEAL EFFECT, THE A.O. CAN PASS ANY PENALTY ORDER ON ADDI TIONS REMAINING, IF ANY. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE APPELLAN TS CASE, THE PENALTY SO LEVIED BY THE A.O. IS HEREBY DIRECTED TO BE CANCELLED. THE A.O. IS DIRECTED TO FIRST GIVE EFFECT TO THE ORDER OF THE CIT(A) VIDE HIS ORDER DA TED 13.07.2011 AND THEREAFTER IF ANY ADDITION/DISALLOWANCE SOUGHT TO BE SUSTAINED TH EN ONLY THE A.O. SHOULD LEVY A PENALTY BY PASSING A FRESH ORDER ON THAT PARTICUL AR AMOUNT OF ADDITION/DISALLOWANCE SO SUSTAINED, IF CONSIDERED N ECESSARY. BUT IN PRESENT CIRCUMSTANCE PENALTY LEVIED BY THE A.O. IS PREMATUR E AND THUS STANDS CANCELLED. IN THE ASSESSMENT YEAR 2005-06 ALSO THE REASONING GIVEN BY THE LD. CIT(A) FOR CANCELLING THE PENALTY IS IDENTICAL. 3. AT THE TIME OF HEARING BEFORE US, NONE WAS PRESE NT FROM THE SIDE OF THE ASSESSEE. ON BEHALF OF THE REVENUE DR. J. B. JHAVER I, DR APPEARED AND CONTENDED THAT INSTEAD OF CANCELLING THE PENALTY, THE LD. CIT(A) S HOULD HAVE CONFIRMED THE PENALTY AS THE ASSESSEE MADE WRONG CLAIM OF CARRY FORWARD LOSS FROM HUF OWNED FAMILY BUSINESS OF RS.14,06,400/- FOR THE ASSESSMENT YEAR 2004-05 A ND RS.30,52,259/- FOR THE ASSESSMENT YEAR 2005-06. 4. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER THE LD. CIT(A) CANCELLED THE PENALTY BUT DIRE CTED THE ASSESSING OFFICER TO FIRST GIVE APPEAL EFFECT TO THE ORDER DATED 13.07.2011 OF LD. CIT(A) AND THEREAFTER IF ANY 238 & 239-RJT-2013 SH PRAVINCHANDRA C. PAREKH 3 ADDITION/DISALLOWANCE SOUGHT TO BE SUSTAINED THEN O NLY THE ASSESSING OFFICER SHOULD LEVY A PENALTY BY PASSING A FRESH ORDER ON THAT PAR TICULAR AMOUNT OF ADDITION/DISALLOWANCE SO SUSTAINED, IF CONSIDERED N ECESSARY. IN OUR CONSIDERED OPINION, THIS DIRECTION OF LD. CIT(A) IS FACTUALLY AND LEGAL LY CORRECT; THEREFORE, WE DECLINE TO INTERFERE. 5. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- (B. R. JAIN) (T. K. SHARMA) #( '* / ACCOUNTANT MEMBER '* /JUDICIAL MEMBER *#+ ,*-/ ORDER DATE 03.01.2014 /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- ITO,WARD-1(2),RAJKOT 2. /RESPONDENT- 1) SHRI PRAVINCHANDRA C. PAREKH (HUF), M/S. PARDESH DEHYDRATION CO., N.H. 8B, GUNDALA CROSSING, GONDAL, DIST. RAJ KOT 3. '-2- % & 3% / CIT-I, RAJKOT 4. & 3%- / CIT (A)-I, RAJKOT 5 . 678 % , , / DR, ITAT, RAJKOT 6 . 89 :; / GUARD FILE. *#+ '# / BY ORDER , TRUE COPY PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.