Ramesh N. Patel, Ahmedabad V. The Income Tax Officer, Ward-7(2)(4), Ahmedabad

ITA 2563/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1054 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 20-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APOORVA BHARDWAJA
• Keywords: Set aside
• Section: 27; 271(1)(c); 144

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 2563/AHD/2017 / ASSESSMENT YEAR: 2010-11 RAMESH N. PATEL A-10, PULIN PARK SOCIETY-2 MACHHALI CIRCLE, NARODA AHMEDABAD 382 330. PAN : AIBPP 5527 G VS ITO, WARD-7(2)(4) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI HEM CHHAJED REVENUE BY : SHRI APOORVA BHARDWAJA, SR.DR / DATE OF HEARING : 20/03/2019 /DATE OF PRONOUNCEMENT : 22/ 03/2019 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)- 7, AHMEDABAD DATED 22.8.2017 PASSED FOR THE ASSTT.YEAR 2010-11. 2. THOUGH THE ASSESSEE HAS TAKEN THREE GROUNDS OF A PPEAL, BUT HIS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE L D.CIT(A) HAS ERRED IN CONFIRMING PENALTY OF RS.2,82,4323/- WHICH WAS IMPO SED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT. 3. AT THE VERY OUTSET, THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT PENALTY HAS BEEN IMPOSED BY THE ASSESSEE ON THE ADD ITIONS MADE BY THE ITA NO.2563/AHD/2017 - 2 - AO VIDE ASSESSMENT ORDER DATED 17.3.2015 PASSED UND ER SECTION 144 R.W.S. 147 OF THE INCOME TAX ACT. THIS ASSESSMENT ORDER HAS BEEN QUASHED BY THE TRIBUNAL IN ITA NO.2380/AHD/2016. T HE TRIBUNAL HAS HELD THAT REOPENING OF THE ASSESSMENT IS BAD IN LAW , AND THEREFORE, RE- ASSESSMENT PROCEEDINGS WERE QUASHED. COPY OF THE T RIBUNAL ORDER DATED 1.11.2018 HAS BEEN PLACED ON RECORD. ON THE STRENGTH OF THIS ORDER, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED TH AT SINCE ADDITIONS MADE BY THE AO WHICH HAS BEEN CONSIDERED FOR VISITI NG THE ASSESSEE WITH PENALTY STANDS DELETED BY VIRTUE OF QUASHING O F ASSESSMENT ORDER, NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS SU STAINABLE. THE LD.DR ON THE OTHER HAND WAS UNABLE TO CONTROVERT THIS CON TENTION OF THE LD.COUNSEL OF THE ASSESSEE. 4. 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 QUASHING THE RE-ASSESSMENT ORDER AN D THEREBY DELETING ADDITION BY THE TRIBUNAL, THE IMPUGNED PENALTY DOES NOT 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 ITA NO.2563/AHD/2017 - 3 - AND SET ASIDE BOTH ORDERS OF THE REVENUE AUTHORITIE S PASSED UNDER SECTION 271(1)(C) OF THE ACT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH, 2019. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER