M/s. Parshwa Corporation, Nadiad V. The ACIT, Central Circle-2, Baroda

ITA 2477/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8886 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-03-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 21-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Assessee Lawyers: P M MEHTA
• Section: 147; 148; 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA NO.2477/AHD/2013 / ASSTT. YEAR: 2002-2003 M/S.PARSHWA CORPORATION JALDHARA APPT OPP: MAHA GUJARAT HOSPITAL COLLLEGE ROAD NADIAD 387 001. PAN : AACFP 3995 R VS. ACIT, CENT.CIR.2 BARODA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.M. MEHTA, AR REVENUE BY : SHRI G.C. DAXINI, SR.DR ! / DATE OF HEARING : 16/03/2017 '#$ ! / DATE OF PRONOUNCEMENT: 20/03/2017 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)-IV, AHMEDABAD DATED 23.9.2013 PASSED FOR THE ASSTT.YEAR 2002-03. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) ERRE D IN CONFIRMING THE PENALTY OF RS.4,40,200/- IMPOSED BY TH E AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. ITA NO.2477/AHD/2013 2 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SEC TION 132 OF THE INCOME TAX ACT WAS CARRIED OUT IN THE CASE OF RAMESHBHAI BABULAL SHAH GROUP ON 3.4.2008. ACCORDING TO THE AO, DURING THE COURSE OF SEARCH UMPTEEN NUMBER OF INCRIMINATING DOCUMENTS WERE SEIZED INCLUDING LENOVO MAKE LAPTOP. THIS LAPTOP WAS CONTAINING DATA OF 65 COMPAN IES. AMONGST THESE 63 ENTITIES, THE ASSESSEE WAS ONE OF THEM, WHOSE BOOKS OF ACCOUNTS WERE MAINTAINED. ACCORDINGLY, HE RECORDED REASONS AND ISSUED A NOTICE UNDER SECTION 148 ON 30.3.209 WHICH WAS SERVED UPON THE ASSESSEE. THE AO HAS PASSED ASSESSMENT ORDER UNDER SECTION 43(3) R.W.S. SECT ION 147 OF THE INCOME TAX ACT, 1961 ON 18.11.2009. HE DETERMINED TAXABLE INCOME OF THE ASSESSEE AT RS.87,6 5,438/- AGAINST DECLARED INCOME OF RS.76,760/-. DISSATISFIE D WITH THE ADDITION, ASSESSEE CARRIED THE MATTER IN APPEAL. THE LD.CIT(A) HAS UPHELD THE REOPENING OF THE ASSESSMENT. SIMILARLY, THE LD.CIT(A) HAS ALSO UPHELD THE ADDITIONS T HOUGH IT APPEARS THAT SHE HAS REDUCED QUANTUM. DISSATISFIED WIT H THE ORDER OF THE LD.CIT(A), REVENUE FILED AN APPEAL BEF ORE THE TRIBUNAL BEARING NO.1568/AHD/2011. 4. IN THE REVENUES APPEAL, ASSESSEE TOOK OBJECTION WI TH THE AID OF RULE 27 OF THE INCOME TAX (APPELLATE TRIBUNA L) RULES, 1961 AND CONTENDED THAT THE AO DID NOT DISPOSE OF OBJECTIONS RAISED BY THE ASSESSEE QUA REOPENING OF THE ASSESSMENT. HENCE, REASSESSMENT ORDER IS NOT SUSTAINABLE IN ITA NO.2477/AHD/2013 3 VIEW DECISION HONBLE GUJARAT HIGH COURT RENDERED IN THE C ASE OF GENERAL MOTORS INDIA P.LTD. VS. DCIT, 354 ITR 24 4. THE TRIBUNAL HAS ACCEPTED THIS STAND OF THE ASSESSEE AND QUASHED THE ASSESSMENT ORDER. ACCORDINGLY, THE TRIBUNAL TREAT ED THE APPEAL OF THE REVENUE AS ACADEMIC AND WHICH HAS BECOME REDUNDANT BY VIRTUE OF QUASHING OF RE-ASSESSMENT ORDER. COPY OF THIS TRIBUNALS ORDER DATED 30.6.2015 HAS BEE N PLACED ON RECORD BY THE LD.COUNSEL FOR THE ASSESSEE. H E CONTENDED THAT SINCE RE-ASSESSMENT ORDER HAS BEEN QUASHED, NO PENALTY IMPOSABLE UPON THE ASSESSEE. THE LD.DR WAS UNABLE TO CONTROVERT THIS CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT S UB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICA TION OF PENALTY. IT CONTEMPLATES THAT THE ASSESSEE WOUL D 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 THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDE D UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSEE. SINCE BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGUISHED BY QUASHING THE RE-ASSESSMENT ORDER BY THE ITA NO.2477/AHD/2013 4 TRIBUNAL VIDE ORDER DATED 30.6.2015 IN THE APPEAL OF THE REVENUE IN ITA NO.1568/AHD/2011 (SUPRA) THE IMPUGNED PENALTY IS NON EST IN THE PRESENT CASE, AND ACCORDINGLY APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE COURT ON 20 TH MARCH, 2017. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 20/03/2017