Pradip Shantilal Shah, Ahmedabad V. Asstt. Commissioner of Income Tax, Ahmedabad

ITA 241/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8385 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1993-1994
• Appeal Filed On: 29-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.241/AHD/2015 ( / ASSESSMENT YEAR : 1993-94) PRADIP SHANTILAL SHAH 931-A, PANCH BUNGALOWS RAMNAGAR, SABARMATI AHMEDABAD-380 009 / VS. THE ACIT CIRCLE-3 AHMEDABAD # ./ ./ PAN/GIR NO. : CNZPS 4732B ( #& / APPELLANT ) .. ( '#& / RESPONDENT ) #&( / APPELLANT BY : SHRI PRAKASH D.SHAH, AR '#& )( / RESPONDENT BY : SHRI MUDIT NAGPAL, SR.DR *+ ), / DATE OF HEARING 23/09/2017 -./0 ), / DATE OF PRONOUNCEMENT 10 / 10 /2017 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-10, AHME DABAD [CIT(A) IN SHORT] DATED 11/12/2014 IN CONFIRMING THE PENA LTY OF RS.54,20,012/- IMPOSED BY THE ASSESSING OFFICER (AO) RELEVANT TO A SSESSMENT YEAR (AY) 1993-94. ITA NO.241/AHD/ 2015 PRADIP SHANTILAL SHAH VS. ACIT ASST.YEAR 1993-94 - 2 - 2. WITH THE ASSISTANCE OF THE LD.AR FOR THE ASS ESSEE, WE NOTE THAT SEARCH ACTION UNDER S.132 OF THE ACT WAS CARRIED OU T AT THE BUSINESS OF THE ASSESSEE ON 28/03/1995. THE ASSESSMENT WAS COMPLE TED PURSUANT THERETO DETERMINING THE TOTAL INCOME AT RS.1,21,49, 743/-. IN THE FIRST APPEAL IN QUANTUM PROCEEDINGS, THE CIT(A) GRANTED P ARTIAL RELIEF OF RS.3,85,000/- THEREIN. THE ASSESSEE HAS PREFERRE D APPEAL AGAINST THE ORDER OF THE CIT(A) BEFORE THE ITAT. THE COORDINAT E BENCH OF ITAT SET ASIDE THE ASSESSMENT TO THE FILE OF THE AO. PURSUA NT THERETO, A FRESH ASSESSMENT WAS FRAMED UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') RWS 254 WHER EIN ADDITION TOWARDS UNEXPLAINED INVESTMENT IN MULTIPLE APPLICATION OF R S.1,17,64,743/- WAS MADE. FURTHER ADDITION OF RS.3,85,000/- WAS MADE I N RESPECT OF UNEXPLAINED CASH DEPOSITS WITH CENTRAL BANK OF INDI A. THE AFORESAID ADDITION IN QUANTUM ASSESSMENT WAS CARRIED TO THE C IT(A) WITHOUT ANY SUCCESS. THE AFORESAID ORDER OF THE CIT(A) IN QU ANTUM PROCEEDINGS WAS CARRIED BEFORE THE ITAT. THE COORDINATE BENCH OF ITAT IN THE QUANTUM PROCEEDINGS IN ITA NO.455-457/AHD/2011 FOR AYS 1993-94 TO 1995-96 VIDE ORDER DATED 10/08/2016 SET ASIDE THE A FORESAID ADDITIONS/DISALLOWANCES TO THE FILE OF THE CIT(A) F OR RE-ADJUDICATION OF THE ISSUE AFRESH. 3. ON THE STRENGTH OF THE TRIBUNAL ORDER, IT HAS B EEN CONTENDED BY THE ASSESSEE THAT SINCE THE ADDITION HAS BEEN SET ASIDE AND RESTORED TO THE FILE ITA NO.241/AHD/ 2015 PRADIP SHANTILAL SHAH VS. ACIT ASST.YEAR 1993-94 - 3 - OF THE CIT(A) FOR RE-ADJUDICATION, THE BASIS FOR IM POSITION OF PENALTY, DOES NOT PRESENTLY SURVIVE. UNDER THESE CIRCUMSTA NCES, THE PENALTY CONFIRMED BY THE CIT(A) VIDE ORDER DATED 11/12/2014 CANNOT BE SUSTAINED. 4. SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES M ECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT TH E ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE BY HIM, WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES OF THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONC EALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF PENALTY IS DEPENDENT UPON ADDITIO N MADE TO THE INCOME OF THE ASSESSEE. UPTO AND UNTIL THE ISSUE REGARDIN G DETERMINATION OF TAXABLE INCOME IS FINALIZED, PENALTY U/S.271(1)(C) OF THE ACT CANNOT BE IMPOSED UPON THE ASSESSEE. THE DETERMINATION OF TA XABLE INCOME OF THE ASSESSEE IN QUANTUM PROCEEDINGS IS STATED TO BE SUB JUDICE BEFORE THE FIRST APPELLATE AUTHORITY. THEREFORE, THE BASIS OF PENAL TY HAS ALREADY BEEN SET ASIDE TO COMMISSIONER OF INCOME TAX (APPEALS). THU S, THE PENALTY ON UNCERTAIN QUANTUM CANNOT BE CONFIRMED. IT WILL BE WITHIN THE DISCRETION OF THE REVENUE AUTHORITY TO INITIATE PENALTY AGAINS T THE ASSESSEE AFTER DETERMINATION OF TAXABLE INCOME IN THE SET ASIDE PR OCEEDINGS. 5. IN VIEW OF ABOVE DISCUSSION, WE ARE OF THE VIEW THAT THIS PENALTY IN THE PRESENT CIRCUMSTANCES IS NOT SUSTAINABLE. WE, THUS ALLOW THE APPEAL ITA NO.241/AHD/ 2015 PRADIP SHANTILAL SHAH VS. ACIT ASST.YEAR 1993-94 - 4 - OF THE ASSESSEE AND DELETE THE PENALTY IN TERMS OF OBSERVATIONS NOTED EARLIER. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 10 / 10 /2017 ( ) ( ) ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 10/ 10 /2017 4..*,.*../ T.C. NAIR, SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '#& / THE RESPONDENT. 3. 567, 8, / CONCERNED CIT 4. 8, ( ) / THE CIT(A)-10, AHMEDABAD 5. 9:;,*67 , 67 0 , 5 / DR, ITAT, AHMEDABAD 6. ;<+ / GUARD FILE. / BY ORDER, '9,, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD