Shri Balkesh A. Patel, Ahmedabad V. Income Tax Officer, Ward-7(2)(1), Ahmedabad

ITA 2496/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8089 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 04-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Section: 27

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.2496/AHD/2016 / ASSTT. YEAR: 2011-2012 SHRI BALKESH A. PATEL PLOT NO.506-1, PHASE-IV GIDC ESTATE, NARODA AHMEDABAD. PAN : ACNPP 2333 C VS. ITO, WARD-7(2)(1) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.B. PARMAR, AR REVENUE BY : SHRI PRASOON KABRA, SR.DR ! / DATE OF HEARING : 19/06/2018 '#$ ! / DATE OF PRONOUNCEMENT: 21/06/2018 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-7, AHMEDABAD DATED 4.7.2016 PASSED FOR TH E ASSESSMENT YEAR 2011-12. 2. ONLY ISSUE AGITATED BY THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING PENALTY OF RS.8,13,560/- IMPOSED BY T HE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSE SSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD S HOWN RS.9,14,558/- ITA NO.2496/AHD/2016 2 AS OUTSTANDING LIABILITY AGAINST ICE CARTING EXPENS ES AND RS.17,80,141/- TOWARDS SUNDRY CREDITORS. SINCE NO EXPLANATION WAS FORTHCOMING FROM THE ASSESSEE, THE AO MADE ADDITION OF BOTH THESE AM OUNTS AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THIS ADDITION WAS CONFIRMED BY THE LD.CIT(A). THEREAFTER, THE AO INITIATED PENALTY UN DER SECTION 271(1)(C) OF THE ACT AND IMPOSED A PENALTY OF RS.8,13,560/-. THIS ACTION OF THE LD.AO WAS ALSO CHALLENGED BEFORE THE LD.FIRST APPEL LATE AUTHORITY, WHO AFTER A DETAILED DISCUSSION CONFIRMED ACTION OF THE AO. NOW, ASSESSEE IS CHALLENGING CONFIRMATION OF IMPUGNED PENALTY BEFORE THE TRIBUNAL. 4. BEFORE GOING TO THE MERIT OF THE CASE, IT WAS PO INTED OUT BY LD.COUNSEL FOR THE ASSESSEE THAT ISSUE OF QUANTUM A DDITION ON ACCOUNT OF CARTING EXPENSES AND OUTSTANDING SUNDRY CREDITORS W AS CHALLENGED BEFORE THE TRIBUNAL BY THE ASSESSEE IN ITA NO.1831/ AHD/2015. THE TRIBUNAL VIDE ORDER DATED 23.08.2017 DELETED BOTH T HE ADDITIONS, AND THEREFORE, PENALTY ON THIS COUNT DOES NOT SURVIVE. THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD COPY OF ORDER OF THE TRIBUNAL PASSED IN THE QUANTUM APPEAL OF THE ASSESSEE CITED SUPRA. THE LD.DR, HOWEVER, DID NOT CONTROVERT TO THIS SUBMISSION OF T HE LD.COUNSEL FOR THE ASSESSEE. 5. AFTER HEARING BOTH SIDES AND CONSIDERING MATERIA L AVAILABLE ON RECORD, WE FIND THAT SUB-CLAUSE (III) OF SECTION 27 1(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE 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 THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED B Y REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSE E. SINCE IN THE PRESENT CASE, BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGUISHED BY DELETING BOTH THE ADDITIONS BY THE TRIBUNAL IN QUANTUM ITA NO.2496/AHD/2016 3 APPEAL OF THE ASSESSEE, THE IMPUGNED PENALTY DOES N OT SURVIVE. IN OTHER WORDS, THERE IS NO ROOM FOR THE REVENUE TO IM POSE PENALTY UNDER SECTION 271(1)(C) IN THIS CASE. THEREFORE, WE CANC EL THE IMPUGNED PENALTY AND SET ASIDE BOTH ORDERS OF THE REVENUE AU THORITIES PASSED UNDER SECTION 271(1)(C) OF THE ACT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 21 ST JUNE, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER