ITO -13(3)(2), MUMBAI V. Sri. HITESH BHANSALI, MUMBAI

ITA 2600/MUM/2007

• Counselvise Citation: 260019914 RSA 2007
• Duration Of Justice: 4 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 10-10-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 03-04-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: VIMAL PUNMIYA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER, A ND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 2600/MUM./2007 (ASSESSMENT YEAR : 2001-02 ) INCOME TAX OFFICER WARD-13(3)(2), R.NO.428 AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 .. APPELLANT V/S MR. HITESH BHANSALI, PROPRIETOR INDO PIGMENT INDUSTRIES 102, JYOTI CHAMBERS 372, NARSHI NATHA STREET MASJID BUNDER (WEST) MUMBAI 400 009 PAN ADTPB1038P .... RESPONDENT REVENUE BY : MR. V.V. SHASTRI ASSESSEE BY : MR. VIMAL PUNMIYA DATE OF HEARING 10.10.2011 DATE OF ORDER 21.10.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE REVENUE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 12 TH JANUARY 2007, PASSED BY THE COMMISSIONER (APPEALS)-XIII, MUMBAI, FOR ASSESSMENT YEAR 2001-02 , ON THE FOLLOWING GROUNDS:- 1. ON TILE FACTS AND IN THE CIRCUMSTANCES OF THE EA SE AND IN LAW, THE LD. CIT(A)-XIII, MUMBAI, HAS ERRED BOTH IN FAC TS AND IN LAW IN MR. HITESH BHANSALI ITA NO. 2600/MUM./2007 2 CANCELING THE PENALTY U/S. 271(I)(C) OF RS.31,05,91 1/- HOLDING THAT THE A.O. HAS NOT PROVED THAT THE EXPLANATION IS FALSE O R UNSUBSTANTIATED WITHOUT APPRECIATING THE TACT THAT THE ASSESSEE WAS ASKED TO PRODUCE THE PARTIES OR GIVE THE DETAILS OF THE PATTIES FROM WHOM THE LOANS WERE TAKEN AND THE ASSESSEE HAS NOT COMPILED WITH THIS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A)-XIII, MUMBAI, HAS ERRED BOTH IN FACTS AND IN LAW IN CANCELING THE PENALTY IMPOSED U/S. 271(1)(C) OF RS. 31,05,911/- HOLDING THAT NO PENALTY PROCEEDINGS WERE INITIATED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WITH REGARD TO THE ADDITION OF RS.98,97,267/- U/S. 69 OF THE I.T. ACT WITHOUT APPRECIATING THE FA CT THAT THE A.O. INITIATED THE PENALTY PROCEEDINGS ON ALL THE ADDITI ONS ON WHICH INCOME HAS BEEN CONCEALED OR FURNISHED INACCURATE PARTICUL ARS OX INCOME BY MENTIONING AT THE END OF THE ASSESSMENT ORDER. 2. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE, MR. V.V. SHASTRI, ON BEHALF OF THE REVENUE AND LEARNED COUNSEL, MR. V IMAL PUNMIYA, ON BEHALF OF THE ASSESSEE. 3. THE COMMISSIONER (APPEALS), IN THIS CASE, CANCELLED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) ON TWO GROUNDS I.E., (I) ON MERITS, AS THE ADDITION WA S NOT ON ACCOUNT OF UNCONFIRMED LOANS AND THAT THERE WAS CORRESPONDING SALE ALREADY CREDITED IN THE PROFIT & LOSS ACCOUNT OF THE DELHI BRANCH AND T HAT THE ADDITION WAS CONFIRMED DUE TO INCREASE IN THE BALANCE IN MUMBAI BRANCH AND (II) ON TECHNICAL GROUND THAT NO PENALTY PROCEEDINGS WERE I NITIATED UNDER SECTION 271(1)(C) ON THIS PARTICULAR ADDITION IN THE ASSESS MENT ORDER. 4. WE FIND THAT THE TRIBUNAL, IN ITA NO.4884/MUM./2005 , ORDER DATED 15 TH JULY 2011, HAS RESTORED THIS ISSUE ON MERITS OF THE ADDITION TO THE FILE OF THE COMMISSIONER (APPEALS) FOR FRESH ADJUDICATION. THUS , ON MERITS, WE RESTORE THE ISSUE OF PENALTY BACK TO THE FILE OF COMMISSION ER (APPEALS). 5. COMING TO THE FINDINGS OF THE COMMISSIONER (APPEALS ) THAT NO PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WAS INITIATED A GAINST THE ADDITION MADE IN PARA-8 OF THE ASSESSMENT ORDER, WE FIND FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEED INGS UNDER SECTION 271(1)(C) AT THE END OF THE ASSESSMENT ORDER IN ADD ITION TO THE ASSESSING MR. HITESH BHANSALI ITA NO. 2600/MUM./2007 3 OFFICER MENTIONING INITIATION OF PENALTY ON SAME AD DITIONS SPECIFICALLY AS RECORDED AT THE END OF THE ASSESSMENT ORDER THAT PE NALTY HAS BEEN INITIATED UNDER SECTION 271(1)(C). IN OUR OPINION, SUFFICIENT COMPLIANCE HAS BEEN MADE AND THE FINDINGS OF THE COMMISSIONER (APPEALS) THAT PENALTY SHOULD BE INITIATED AGAINST EACH AND EVERY ADDITIONS MADE IN THE ASSESSMENT ORDER SEPARATELY, IS BAD-IN-LAW. CONSEQUENTLY, WE SET ASI DE THE IMPUGNED ORDER PASSED BY THE COMMISSIONER (APPEALS) AND ALLOWED TH E GROUND RAISED BY THE REVENUE. 6. IN THE RESULT, REVENUES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER 2011 SD/- VIJAY PAL RAO JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 21 ST OCTOBER 2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, H BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI