Ashokbhai Jamnadas Patel, JAMNAGAR V. The Income Tax Officer, Ward-2(1)(3), RAJKOT-GUJARAT

ITA 251/RJT/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6153 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE SHRI RAJPAL YADAV, HONBLE JUDICIAL MEMBER AND SHRI WASEEM AHMED HONBLE ACCOUNTANT MEMBER ITA NO.251/RJT/2017 / ASSTT. YEAR: 2007-08 ASHOKBHAI JAMNADAS PALA MILAN, 4, PUJARA PLOT RAJKOT. VS. ITO,WARD - 2(1)(3) RAJKOT. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : WRITTEN SUBMISSIONS REVENUE BY : SHRI ANIL KUMAR DAS, DR / DATE OF HEARING : 20/09/2019 / DATE OF PRONOUNCEMENT: 03/10/2019 )*+/ 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)-2, RAJKOT DATED 23.6.2017 PASSED FOR THE ASSTT.YEAR 2007-08. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING PENALTY OF RS.6,92,657/- IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS FI LED HIS RETURN OF INCOME ON 31.3.2008 DECLARING TOTAL INCOME AT RS.1,24,471/-. DURING THE YEAR, THE AO HAS GOT INFORMATION THAT THE ASSESSEE HAS DEPOSITED CERTAIN AMOUNTS IN CASH WITH CORPORATION BANK, RAJKOT. ON VERIFICATION OF PASS BOOK, AN ENTRY ITA NO.251/RJT/2017 2 AMOUNTING TO RS.21.00 LAKHS COULD NOT BE EXPLAINED BY THE ASSESSEE. THEREFORE, HE MADE ADDITION TO THIS EFFECT TO THE T OTAL INCOME OF THE ASSESSEE. THE ADDITION WAS CONFIRMED BY THE LD.CIT(A). SIMUL TANEOUSLY, THE REVENUE HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) OF THE ACT. THE QUANTUM ADDITION WAS CHALLENGED BY THE ASSESSEE BEF ORE THE TRIBUNAL, AND THE TRIBUNAL VIDE ORDER IN ITA NO.186/RJT/2017 DATED 31 .7.2017 SET ASIDE THE ISSUE TO THE FILE OF LD.CIT(A) FOR FRESH ADJUDICATI ON IN THE LIGHT OF EVIDENCES SUBMITTED BY THE ASSESSEE QUA CREDITORS CONFIRMATION, AFFIDAVIT, PAN, BANK STATEMENT, PASSPORT AND ACCOUNT DETAILS PERTAINING TO CREDITOR NRE BANK. ASSESSEE HAS FILED A COPY OF ORDER OF THE TRIBUNAL DATED 31.7.2017 PASSED IN THE QUANTUM APPEAL OF THE ASSESSEE. THE SAME IS PL ACED ON RECORD. 4. AFTER HEARING BOTH THE SIDES, AND A PERUSAL OF T HE ORDER OF THE TRIBUNAL CITED SUPRA, WE FIND THAT, ISSUE OF QUANTUM ADDITIO N, AS OF NOW, IS PENDING BEFORE THE LD.CIT(A). THEREFORE, QUESTION OF IMPO SITION OF PENALTY UNDER SECTION 271(1)(C) DOES NOT ARISE NOW. SUB-CLAUSE ( III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES 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 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 THE ADDITIONS MADE TO THE INCOME OF THE ASSESSEE. UPTO AND UNTIL, THE ISSUE REGARDING DETERMINATION OF THE TAXABLE INCOME IS FINALIZED, PENALTY UNDER SECT ION 271(1)(C) OF THE ACT CANNOT BE IMPOSED UPON THE ASSESSEE. THE DETERMINA TION OF TAXABLE INCOME OF THE ASSESSEE IS SUBJUDICED BEFORE THE LD.CIT(A). AFTER ADJUDICATION THE ISSUE OF QUANTUM, IT WILL BE IN THE DISCRETION OF T HE LD.AO TO REINITIATE OR NOT TO ITA NO.251/RJT/2017 3 INITIATE PENALTY PROCEEDINGS AGAINST THE ASSESSEE. THEREFORE, WE SET ASIDE THE IMPUGNED PENALTY ORDER AND ALLOW THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 3 RD OCTOBER, 2019 AT AHMEDABAD. SD/- SD/- (WASEEM AHMED ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER