Shri Nileshbhai R Patel, Baroda V. The ITO, Ward 4(1)(2), Baroda

ITA 2606/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8029 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 27-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Keywords: Rectification of order; Set aside
• Section: 271(1)(c); 143(3); 54B; 154

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO.2606/AHD/2017 / ASSESSMENT YEAR: 2011-12 NILESHBHAI R. PATEL 7, MUKTANAND SOCIETY NR. MENTAL HOSPITAL KARELIBAUG, BARODA 390 018. PAN : AIAPP 2041 G VS ITO, WARD-4(1)(2) BARODA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI SAKAR SHARMA, AR REVENUE BY : SHRI G.C. DAXINI, SR.DR / DATE OF HEARING : 26/03/2019 /DATE OF PRONOUNCEMENT : 18/04/2019 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)- 4, VADODARA DATED 5.9.2017 PASSED FOR THE ASSTT.YEAR 2011-12. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY AMOUNTING TO RS.3,86,240/- I MPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.48,030/-. ASSE SSMENT ORDER WAS PASSED ON 18.3.2014 UNDER SECTION 143(3) OF THE ACT . HIS TOTAL INCOME WAS DETERMINED AT RS.18,65,990/-. ADDITION OF RS.1 8,13,939/- ON ITA NO.2606/AHD/2017 - 2 - ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF AGRICU LTURE LAND WAS CONSIDERED FOR VISITING THE ASSESSEE WITH PENALTY. IT FURTHER EMERGES OUT THAT A RECTIFICATION ORDER UNDER SECTION 154 WAS PA SSED ON 5.9.2014 WHEREBY THE AO HAS OBSERVED AN APPARENT MISTAKE IN ALLOWING EXEMPTION OF RS.59,000/- UNDER SECTION 54B WAS NOT AVAILABLE, AND HE ENHANCED THE CAPITAL GAIN ASSESSABLE IN HIS HAND AT RS.18,72,989/-. SIMILARLY, AN ADDITION OF RS.4019/- ON ACCOUNT OF I NTEREST ON DEPOSIT IN BANK WAS ALSO CONSIDERED FOR VISITING THE ASSESSEE WITH PENALTY. 4. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET SUBMITTED THAT THESE ADDITIONS TRAVELLED UPTO THE TRIBUNAL, AND TH E TRIBUNAL HAS REMITTED THIS ISSUE TO THE FILE OF THE AO FOR RE-AD JUDICATION. THE AO HAS PASSED A FRESH ASSESSMENT ORDER ON 5.12.2018 UNDER SECTION 143(3) R.W.S. 254. IN THIS ASSESSMENT ORDER, HE DETERMINED THE T AXABLE INCOME OF THE ASSESSEE AT RS.52,050/- AS AGAINST RS.19,24,991/- D ETERMINED IN THE FIRST ROUND, AFTER RECTIFICATION PASSED UNDER SECTION 154 ON 10.9.2014. THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD CO PY OF THE ASSESSMENT ORDER, AND CONTENDED THAT SINCE ADDITIONS HAVE NOT BEEN MADE BY THE AO, THEREFORE, NO PENALTY IS IMPOSABLE UPON THE ASS ESSEE. THE LD.DR WAS UNABLE TO CONTROVERT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 5. ON DUE CONSIDERATION OF THE ABOVE FACTS, WE FIND THAT ORIGINAL ASSESSMENT ORDER AND ORDER OF THE LD.CIT(A) WHICH L ED TO THIS PENALTY PROCEEDINGS WERE SET ASIDE BY THE TRIBUNAL VIDE ORD ER DATED 29.8.2017 PASSED IN ITA NO.3337/AHD/2015. IN PURSUANCE TO TH IS ORDER, THE AO HAS PASSED FRESH ASSESSMENT ORDER, WHEREBY HE DID N OT MAKE ADDITIONS ITA NO.2606/AHD/2017 - 3 - OF THE AMOUNTS ON WHICH PENALTY HAS BEEN IMPOSED AN D IMPUGNED IN THE PRESENT APPEAL. 6. WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(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 THE AO BY NOT MAKING ADDITIONS PURS UANT TO THE ORDER OF THE TRIBUNAL CITED (SUPRA), 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 AND SET ASIDE BOTH ORDERS OF THE REVENUE AUTHORITIE S PASSED UNDER SECTION 271(1)(C) OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 18 TH APRIL, 2019. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 18/04/2019