BIMAL V. PALA, MUMBAI V. PRINCIPAL COMMISSIONER OF INCOME TAX - 26, MUMBAI

ITA 2803/MUM/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0223 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 04-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Revision of order
• Section: 271(1)(c); 143(3); 147; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BEFORE HONBLE HONBLE SHRI ( BIMAL V. PALA L/H OF LATE SMT RANJANA PALA BUNGLOW NO.2, SHRI AMBAJI NIWAS DAKSHINA MURTHI CHS ROAD NO.10, OPP.JUHU CIRCLE JUHU, MUMBAI-400 049 ( APPELLANT A SSESSEE RE DATE OF HEARING DATE OF PRONOUNCEMENT PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR CONTEST INVOCATION OF REVISIONAL JURISDICTION U/S 263 BY LD . PRINCIPAL IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI !'#$ %&$' , $' ( HONBLE SHRI SAKTIJIT DEY, JM SHRI MANOJ KUMAR AGGARWAL, AM I.T.A. NO. 2803/MUM/2018 ASSESSMENT YEAR: 2007- 08 L/H OF LATE SMT RANJANA PALA BUNGLOW NO.2, SHRI AMBAJI NIWAS ROAD NO.10, OPP.JUHU CIRCLE VS. PRINCIPAL COMMISSIONER OF INCOME TAX-26 4 TH FLOOR, C-10 PRATYAKSHKAR BHAVAN, BKC MUMBAI- 400 051 PAN/GIR NO. APMPP-6636- G APPELLANT ) : ( )* RESPONDENT SSESSEE BY : RAJESH P. SHAH, LD.AR RE VENUE BY : N.S. JANGPANGI, LD. CIT DR # DATE OF HEARING : 26/09/2018 # / DATE OF PRONOUNCEMENT : 05/12/2018 O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 20 INVOCATION OF REVISIONAL JURISDICTION U/S 263 BY LD . PRINCIPAL ITA NO.2803/MUM/2018 BIMAL V. PALA ASSESSMENT YEAR-2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL $' ( + SHRI SAKTIJIT DEY, JM AND MANOJ KUMAR AGGARWAL, AM 2803/MUM/2018 08 ) PRINCIPAL COMMISSIONER OF PRATYAKSHKAR BHAVAN, BKC 400 051 G RESPONDENT ) RAJESH P. SHAH, LD.AR N.S. JANGPANGI, LD. CIT DR ASSESSMENT YEAR [AY] 20 07-08 INVOCATION OF REVISIONAL JURISDICTION U/S 263 BY LD . PRINCIPAL COMMISSIONER OF INCOME TAX THE GROUNDS RAISED READS AS FOLLOWS: 1. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISS OF INCOME TAX, ERRED IN INVOKING REVISIONARY POWERS U/S 263 WITHOUT APPRECIATING THE FACT THAT ORDER PASSED BY AO IS NEITHER ERRONEOUS N OR PREJUDICIAL TO THE REVENUE. 2. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONE OF INCOME TAX, ERRED IN CONCLUDING THAT THE ORDER P ASSED BY AO IS ERRONEOUS AND PREJUDICIAL ON THE BASIS THAT ADEQUATE INQUIRY WERE NOT MADE BY AO. CIT DID NOT APPRECIATE THAT AO HAD CALLED FOR NECESSARY DETAILS AND HAD DROPPED THE PENALTY PROCEEDING ONL Y AFTER BEING SATISFIED. ACTION OF CIT OF INVOKING REVISIONARY POWERS IS BAD IN LAW. 3. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONER OF INCOME TAX, ERRED IN SETTING ASIDE THE ORDER OF THE AO HOLDING THAT THE ASSESSEE HA D GIVEN TWO DIFFERENT EXPLANATION FOR THE DEPOSIT O F RS.3.64 CRORE WITHOUT APPRECIATING THE FACT THAT EXPLANATION GIVEN BY ASS ESSEE WERE ON THE BASIS OF INFORMATION GIVEN BY THE BANK TO THE ASSESSEE VIDE EMAIL DATED 30.06.2015 AND SUCH FACTUAL INFORMATION PENALTY PROCEEDINGS. 4. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONER OF INCOME TAX, ERRED IN SETTING ASIDE THE ORDER OF THE AO HOLDING THAT ADEQUATE INQUIRY WERE N OT BY AO AND NO DISCUSSIONS WERE MADE REGARDING ADD ITION MADE ON ACCOUNT OF INTEREST INCOME OF RS.34,791/ RS.1,24,925/- WITHOUT CONSIDERING THE DISTINCTION OF LACK OF ENQ UIRY AND INADEQUATE ENQUIRY. IF THE AO HAS CALLED FO FURNISHED THE SAME, THE FACT THAT THE AO IS SILENT IN THE PENALTY ORDER DOES NOT TANTAMOUNT TO NON THE CIT. 2.1 BRIEFLY STATED THE DECEASED AS VRAJLAL PALA WAS RE- ASSESSED 31/03/2015 AT RS.375.28 LACS. THE ASSESSEE HAD NOT FILED ANY RETURN INCOME FOR THE IMPUGNED AY REASSESSMENT PROCEE DINGS, THE QUANTUM ADDITIONS:- NO. NATURE OF ADDITION 1. INTEREST INCOME 2. INCOME FROM FOREIGN BANK ACCOUNT WITH HSBC BANK 3. UNEXPLAINED CREDIT IN BANK ACCOUNT HELD WITH HDFC BANK, TOTAL 2 COMMISSIONER OF INCOME TAX -26 [PR.CIT] VIDE ORDER DATED 28/03/2018. THE GROUNDS RAISED READS AS FOLLOWS: - ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISS OF INCOME TAX, ERRED IN INVOKING REVISIONARY POWERS U/S 263 WITHOUT APPRECIATING THE FACT THAT ORDER PASSED BY AO IS NEITHER ERRONEOUS N OR PREJUDICIAL TO THE REVENUE. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONE OF INCOME TAX, ERRED IN CONCLUDING THAT THE ORDER P ASSED BY AO IS ERRONEOUS AND PREJUDICIAL ON THE BASIS THAT ADEQUATE INQUIRY WERE NOT MADE BY AO. CIT DID NOT APPRECIATE THAT AO HAD CALLED FOR NECESSARY DETAILS AND HAD DROPPED THE PENALTY Y AFTER BEING SATISFIED. ACTION OF CIT OF INVOKING REVISIONARY POWERS IS ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONER OF INCOME TAX, ERRED IN SETTING ASIDE THE ORDER OF THE AO HOLDING THAT THE ASSESSEE D GIVEN TWO DIFFERENT EXPLANATION FOR THE DEPOSIT O F RS.3.64 CRORE WITHOUT APPRECIATING THE FACT THAT EXPLANATION GIVEN BY ASS ESSEE WERE ON THE BASIS OF GIVEN BY THE BANK TO THE ASSESSEE VIDE EMAIL DATED 30.06.2015 AND SUCH FACTUAL INFORMATION WERE MADE AVAILABLE TO THE ASSESSEE ONLY AT THE TIM E OF PENALTY PROCEEDINGS. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONER OF INCOME TAX, ERRED IN SETTING ASIDE THE ORDER OF THE AO HOLDING THAT ADEQUATE OT BY AO AND NO DISCUSSIONS WERE MADE REGARDING ADD ITION MADE ON ACCOUNT OF INTEREST INCOME OF RS.34,791/ - AND UNEXPLAINED INVESTMENT OF WITHOUT CONSIDERING THE DISTINCTION OF LACK OF ENQ UIRY AND INADEQUATE ENQUIRY. IF THE AO HAS CALLED FO R THE NECESSARY DETAILS AND THE ASSESSEE HAS FURNISHED THE SAME, THE FACT THAT THE AO IS SILENT IN THE PENALTY ORDER DOES NOT TANTAMOUNT TO NON - APPLICATION OF MIND SO AS TO JUSTIFY EXERCISE OF RE VISION POWERS BY BRIEFLY STATED THE DECEASED AS SESSEE NAMELY LATE ASSESSED U/S 143(3) READ WITH SECTION 147 31/03/2015 AT RS.375.28 LACS. THE ASSESSEE HAD NOT FILED ANY RETURN INCOME FOR THE IMPUGNED AY U/S 139(1 ) OF THE INCOME TAX ACT, 1961 DINGS, THE ASSESSEE WAS SADDLED WITH FOLLOWING NATURE OF ADDITION AMOUNT (RS.) INTEREST INCOME 34,791/- INCOME FROM FOREIGN BANK ACCOUNT WITH HSBC BANK 1,24,925/- UNEXPLAINED CREDIT IN BANK ACCOUNT HELD WITH HDFC BANK, MUMBAI 3,73,69,000/ 3,75,28,716/ ITA NO.2803/MUM/2018 BIMAL V. PALA ASSESSMENT YEAR-2007-08 VIDE ORDER DATED 28/03/2018. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISS IONER OF INCOME TAX, ERRED IN INVOKING REVISIONARY POWERS U/S 263 WITHOUT APPRECIATING THE FACT THAT ORDER PASSED BY AO IS NEITHER ERRONEOUS N OR PREJUDICIAL TO THE REVENUE. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONE R OF INCOME TAX, ERRED IN CONCLUDING THAT THE ORDER P ASSED BY AO IS ERRONEOUS AND PREJUDICIAL ON THE BASIS THAT ADEQUATE INQUIRY WERE NOT MADE BY AO. CIT DID NOT APPRECIATE THAT AO HAD CALLED FOR NECESSARY DETAILS AND HAD DROPPED THE PENALTY Y AFTER BEING SATISFIED. ACTION OF CIT OF INVOKING REVISIONARY POWERS IS ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONER OF INCOME TAX, ERRED IN SETTING ASIDE THE ORDER OF THE AO HOLDING THAT THE ASSESSEE D GIVEN TWO DIFFERENT EXPLANATION FOR THE DEPOSIT O F RS.3.64 CRORE WITHOUT APPRECIATING THE FACT THAT EXPLANATION GIVEN BY ASS ESSEE WERE ON THE BASIS OF GIVEN BY THE BANK TO THE ASSESSEE VIDE EMAIL DATED 30.06.2015 AND WERE MADE AVAILABLE TO THE ASSESSEE ONLY AT THE TIM E OF ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONER OF INCOME TAX, ERRED IN SETTING ASIDE THE ORDER OF THE AO HOLDING THAT ADEQUATE OT BY AO AND NO DISCUSSIONS WERE MADE REGARDING ADD ITION MADE ON AND UNEXPLAINED INVESTMENT OF WITHOUT CONSIDERING THE DISTINCTION OF LACK OF ENQ UIRY AND INADEQUATE R THE NECESSARY DETAILS AND THE ASSESSEE HAS FURNISHED THE SAME, THE FACT THAT THE AO IS SILENT IN THE PENALTY ORDER DOES NOT APPLICATION OF MIND SO AS TO JUSTIFY EXERCISE OF RE VISION POWERS BY LATE MS. RANJANA U/S 143(3) READ WITH SECTION 147 ON 31/03/2015 AT RS.375.28 LACS. THE ASSESSEE HAD NOT FILED ANY RETURN OF ) OF THE INCOME TAX ACT, 1961 . IN ASSESSEE WAS SADDLED WITH FOLLOWING AMOUNT (RS.) 3,73,69,000/ - 3,75,28,716/ - CONSEQUENTLY, P ENALTY PROCEEDINGS QUANTUM ADDITIONS IN THE RE DATED READ WITH SECTION ASSESSEE. 2.2 IN RESPONSE, THE DREW ATTENTION TO THE FACT THAT THE HIGH PITCHED QU ANTUM ADDITIONS WAS BEING AGITATED BEFORE FIRST APPELLATE AUTHORITY. TH E ATTENTION WAS FURTHER DRAWN TO THE FACT THAT THE AMOUN OF THE ASSESSEE AS UNEXPLAINED CREDIT WAS HDFC BANK AGAINST THE UNITS OF OVERDRAFT ACCOUNT AND COMMUNICATION IN THE FORM OF WAS FURNISHED TO SUBSTANTIATE THE SUBMISSIONS. SAME, LD. AO DROPPED THE PENALTY PROCEEDINGS VIDE O RDER DATED 25/08/2016. 3.1 SUBSEQUENTLY, THE ORDER DROPPING THE PENALTY PROCEE DINGS W SUBJECT MATTER OF REVISIONAL JURISDICT DATED 28/03/2018 FOR THE REASONS STAT THE SAME REVEALS THAT JURISDICTION WAS FACT THAT THE ASSESSEE, DURING ASSESSMENT PROCEEDIN GS, HAD CATEGORICALL Y STATED THAT THE AMOUNT OF RS.3 AGGREGATING TO RS.373.69 LACS WERE INTERNEATIONAL CO. LTD. BAHRAIN PENALTY PROCEEDINGS THAT THE SAID AMOUNT WAS NOTHIN G BUT OVER OBTAINED FROM HDFC BANK FACT THAT NO DISCUSSION RS.34,791/- & RS.1,24,925/ 3 ENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED AGAINST IN THE RE -ASSESSMENT PROCEEDINGS AND NOTICE U/S 274 READ WITH SECTION 271 DATED 31/03/2015 WAS ISSUED TO THE IN RESPONSE, THE ASSESSEE, VIDE SUBMISSIONS DATED 13/08/2015 DREW ATTENTION TO THE FACT THAT THE HIGH PITCHED QU ANTUM ADDITIONS WAS BEING AGITATED BEFORE FIRST APPELLATE AUTHORITY. TH E ATTENTION WAS FURTHER DRAWN TO THE FACT THAT THE AMOUN T OF RS.3.64 CRORES ADDED AS UNEXPLAINED CREDIT WAS , IN FACT, OVERDRAFT GRANTED BY AGAINST THE UNITS OF UNIT TRUST OF INDIA. THE COPY OF THE COMMUNICATION IN THE FORM OF EMAIL WAS FURNISHED TO SUBSTANTIATE THE SUBMISSIONS. CONVINCED WITH THE SAME, LD. AO DROPPED THE PENALTY PROCEEDINGS VIDE O RDER DATED SUBSEQUENTLY, THE ORDER DROPPING THE PENALTY PROCEE DINGS W SUBJECT MATTER OF REVISIONAL JURISDICT ION U/S 263 BY LD. PR.CIT DATED 28/03/2018 FOR THE REASONS STAT ED THEREIN IN PARA 2. THE SAME REVEALS THAT JURISDICTION WAS TRIGGERED PRIMARILY IN VIEW OF THE FACT THAT THE ASSESSEE, DURING ASSESSMENT PROCEEDIN GS, HAD Y STATED THAT THE AMOUNT OF RS.3 .64 CRORES AND RS.9.69 LACS AGGREGATING TO RS.373.69 LACS WERE REMITTANCE FROM INTERNEATIONAL CO. LTD. BAHRAIN IN CONTRAST TO THE SUBMISSIONS DURING PENALTY PROCEEDINGS THAT THE SAID AMOUNT WAS NOTHIN G BUT OVER HDFC BANK . ANOTHER REASON TO INVOKE TH DISCUSSION AS TO PENALTY AGAINST OTHER TWO ADDITIONS & RS.1,24,925/ - WAS MADE IN THE AFORESAID ORDER. ITA NO.2803/MUM/2018 BIMAL V. PALA ASSESSMENT YEAR-2007-08 WERE INITIATED AGAINST AND NOTICE U/S 274 271 DATED 31/03/2015 WAS ISSUED TO THE ASSESSEE, VIDE SUBMISSIONS DATED 13/08/2015 , DREW ATTENTION TO THE FACT THAT THE HIGH PITCHED QU ANTUM ADDITIONS WAS BEING AGITATED BEFORE FIRST APPELLATE AUTHORITY. TH E ATTENTION WAS FURTHER T OF RS.3.64 CRORES ADDED TO THE INCOME OVERDRAFT GRANTED BY THE COPY OF THE SAID EMAIL OF THE BANK CONVINCED WITH THE SAME, LD. AO DROPPED THE PENALTY PROCEEDINGS VIDE O RDER DATED SUBSEQUENTLY, THE ORDER DROPPING THE PENALTY PROCEE DINGS W AS BY LD. PR.CIT VIDE ORDER PARA 2. THE PERUSAL OF TRIGGERED PRIMARILY IN VIEW OF THE FACT THAT THE ASSESSEE, DURING ASSESSMENT PROCEEDIN GS, HAD AND RS.9.69 LACS FROM BAHRAIN INDIA IN CONTRAST TO THE SUBMISSIONS DURING PENALTY PROCEEDINGS THAT THE SAID AMOUNT WAS NOTHIN G BUT OVER DRAFT . ANOTHER REASON TO INVOKE TH E SAME IS THE AGAINST OTHER TWO ADDITIONS OF WAS MADE IN THE AFORESAID ORDER. 3.2 ACCORDINGLY, A SHOW CA THE ASSESSEE. IN RESPONSE, THE ASSESSEE SUBMITTED T HAT AT THE TIME OF ASSESSMENT, FINAL CLARIFICATION AVAILABLE. HOWEVER, THE SAME WAS M EMAIL DATED 30/06/2015 WHICH WAS SUBMI APPLICATION OF MIND, DROPPED THE TH ERE WAS NO ERROR IN THE APPEAL BEFORE APPELLATE AUTHORITY COULD NOT THE TRUTH OF THE SUBMISSIONS AND THEREFORE, THE ORDER DROPPING THE PENALTY WAS FAIR AND JUSTIFIED. 3.3 HOWEVER, NOT CONVINCED OBSERVED THAT THE ASSESSEE TOOK DIVERGENT STANDS IN ASSESSME NT PROCEEDINGS AND PENALTY PROCEEDINGS FURTHER NOTED THAT LD. AO ACCEPTED THE ASSESSEES S UBMISSIONS MERELY ON THE BASIS OF EMAIL COMMUNICATION CARRYING OUT ANY FURTHER INQUIRY OR EXAMINING REQUI SITE DOCUMENTARY EVIDENCES INCLUDING COPY OVERDRAFT FACILITY PROVIDED, FUND ETC. IT WAS FURTHER NOTED THAT NO DISCUSSION, WHATSOEVER , WAS MADE WITH RESPECT TO PENALTY ON OTHER TWO QUANTUM ADDITI ONS. INVOKING THE PROVISIONS OF SECTION 263, THE ORDER D ROPPING THE PENALTY WAS TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE AND LD. AO WAS DIRECTED TO DECIDE THE SAME AFRESH A FTER DUE VERIFICATION. AGGRIEVED, THE ASSESSEE IS IN 4 SHOW CA USE NOTICE DATED 21/03/2018 THE ASSESSEE. IN RESPONSE, THE ASSESSEE SUBMITTED T HAT AT THE TIME OF ASSESSMENT, FINAL CLARIFICATION ON CREDIT ENTRY IN HDFC BANK AVAILABLE. HOWEVER, THE SAME WAS M ADE AVAILABLE BY THE BANK 30/06/2015 WHICH WAS SUBMI TTED TO LD. AO, WHO WITH DUE APPLICATION OF MIND, DROPPED THE PENALTY PROCEEDINGS AND ERE WAS NO ERROR IN THE SAME. IT WAS FURTHER S UBMITTED THAT PENDENCY OF APPELLATE AUTHORITY COULD NOT PREVENT THE LD. AO TO ACCEP SUBMISSIONS AND THEREFORE, THE ORDER DROPPING THE JUSTIFIED. HOWEVER, NOT CONVINCED WITH ASSESSEES EXPLANATION THAT THE ASSESSEE TOOK DIVERGENT STANDS IN ASSESSME NT PROCEEDINGS AND PENALTY PROCEEDINGS QUA UNEXPLAINED CREDIT FURTHER NOTED THAT LD. AO ACCEPTED THE ASSESSEES S UBMISSIONS MERELY EMAIL COMMUNICATION AND BANK STATEMENT CARRYING OUT ANY FURTHER INQUIRY OR EXAMINING REQUI SITE DOCUMENTARY EVIDENCES INCLUDING COPY OF SANCTION LETTER / SANCTION ORDER OF S OVERDRAFT FACILITY PROVIDED, DOCUMENTS EVIDENCING ACTUAL UTILIZATION OF THIS IT WAS FURTHER NOTED THAT NO DISCUSSION, WHATSOEVER , WAS MADE WITH RESPECT TO PENALTY ON OTHER TWO QUANTUM ADDITI ONS. INVOKING THE PROVISIONS OF SECTION 263, THE ORDER D ROPPING THE PENALTY WAS TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE AND LD. AO WAS DIRECTED TO DECIDE THE SAME AFRESH A FTER DUE VERIFICATION. ASSESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO.2803/MUM/2018 BIMAL V. PALA ASSESSMENT YEAR-2007-08 21/03/2018 WAS ISSUED TO THE ASSESSEE. IN RESPONSE, THE ASSESSEE SUBMITTED T HAT AT THE TIME OF HDFC BANK WAS NOT ADE AVAILABLE BY THE BANK VIDE AO, WHO WITH DUE PROCEEDINGS AND THEREFORE, UBMITTED THAT PENDENCY OF PREVENT THE LD. AO TO ACCEP T SUBMISSIONS AND THEREFORE, THE ORDER DROPPING THE WITH ASSESSEES EXPLANATION , LD. PR. CIT THAT THE ASSESSEE TOOK DIVERGENT STANDS IN ASSESSME NT UNEXPLAINED CREDIT . IT WAS FURTHER NOTED THAT LD. AO ACCEPTED THE ASSESSEES S UBMISSIONS MERELY BANK STATEMENT WITHOUT CARRYING OUT ANY FURTHER INQUIRY OR EXAMINING REQUI SITE DOCUMENTARY OF SANCTION LETTER / SANCTION ORDER OF S AID DOCUMENTS EVIDENCING ACTUAL UTILIZATION OF THIS IT WAS FURTHER NOTED THAT NO DISCUSSION, WHATSOEVER , WAS MADE WITH RESPECT TO PENALTY ON OTHER TWO QUANTUM ADDITI ONS. THEREFORE, INVOKING THE PROVISIONS OF SECTION 263, THE ORDER D ROPPING THE PENALTY WAS TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE AND LD. AO WAS DIRECTED TO DECIDE THE SAME AFRESH A FTER DUE VERIFICATION. 4. THE LD. AUHTORIZED REITERATED HIS STAND AS TAKEN BEFORE CONTROVERTED BY LD. DEPARTMENTAL REPRESENTATIVE. 5. WE HAVE CAREFULLY MATERIAL ON RECORD INCLUDING ASSESSEES SUBMISSIONS DURING PENALTY PROCEEDINGS AND PROCEEDINGS U/S 263. UPON PERUSAL, WE FIND THAT I UNDISPUTED FACT THAT THE ASSESSEE HAS SUBMITTED DIVERGENT EXP AS TO DEP OSIT MADE IN THE ADDIT IONAL DOCUMENTS IN THE SHAPE OF STATEMENT DURING PENALTY PROCEEDINGS. DURING PENALTY PROCEEDINGS, THE QUANTUM APPEAL FIRST APPELLATE AU THORITY AND THE THE SAID APPEAL. IT IS TRUE THAT ASSESSMENT PROCEED INGS AND PENALTY PROCEEDINGS ARE SEPARATE PROCEEDINGS AND NOTHING PR EVENTED THE ASSESSEE TO CONTEST THE IMPOSITION OF PENALTY H OWEVER, LD. AO, IN THE PROCESS OF ADJUD TO EXAMINE THE ADDITIONAL DOCUMENTS SUBMITTED BY TH E ASSESS CONTESTED THE VERY VALIDITY OF QUANTUM ADDITIONS MADE IN THE QUAN TUM PROCEEDINGS. THE ISSUE APPELLATE AUTHORITY AND THEREFORE, LD. AO WAS OUSTE D WITH JURISDICTION TO RE- EXAMINE THE SAME DURING PENALTY PROCEEDINGS. ORDER DROPPING THE PENALTY THAT LD. AO, UPON REACHI NG A CONCLUSI THE SAID DEPOSIT WAS MERELY AN WITHOUT APPRECIATING THE OUTCOME OF THE ADJUDICATIO N MADE BY FIRST APPELLATE AUTHORITY. THIS COULD GIVE RISE TO WHERE THE QUANTUM ADDITIONS 5 THE LD. AUHTORIZED REPRESENTATIVE [AR], SHRI RAJESH P.SHAH HIS STAND AS TAKEN BEFORE LOWER AUTHORITIES WHICH CONTROVERTED BY LD. DEPARTMENTAL REPRESENTATIVE. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AND PERUSED INCLUDING ASSESSEES SUBMISSIONS DURING PENALTY PROCEEDINGS AND PROCEEDINGS U/S 263. UPON PERUSAL, WE FIND THAT I THE ASSESSEE HAS SUBMITTED DIVERGENT EXP OSIT MADE IN THE HDFC BANK ACCOUNT AND HAD SUBMITTED IONAL DOCUMENTS IN THE SHAPE OF EMAIL AND STATEMENT DURING PENALTY PROCEEDINGS. IT IS ALSO AN UNDISPUTED FACT THAT DURING PENALTY PROCEEDINGS, THE QUANTUM APPEAL WAS PENDING THORITY AND THE AFORESAID ADDITION W AS SUBJECT MATTER OF THE SAID APPEAL. IT IS TRUE THAT ASSESSMENT PROCEED INGS AND PENALTY PROCEEDINGS ARE SEPARATE PROCEEDINGS AND NOTHING PR EVENTED THE ASSESSEE TO CONTEST THE IMPOSITION OF PENALTY AGAINST QUANTUM ADDITION. OWEVER, LD. AO, IN THE PROCESS OF ADJUD ICATION OF PENALTY, TO EXAMINE THE ADDITIONAL DOCUMENTS SUBMITTED BY TH E ASSESS VERY VALIDITY OF QUANTUM ADDITIONS MADE IN THE QUAN TUM THE ISSUE ON MERITS, WAS ALREADY PENDING WITH LD. FIRST APPELLATE AUTHORITY AND THEREFORE, LD. AO WAS OUSTE D WITH JURISDICTION TO EXAMINE THE SAME DURING PENALTY PROCEEDINGS. IT IS EVIDENT FROM THE ORDER DROPPING THE PENALTY THAT LD. AO, UPON REACHI NG A CONCLUSI THE SAID DEPOSIT WAS MERELY AN OVERDRAFT AMOUNT, DROPPED THE PENALTY WITHOUT APPRECIATING THE OUTCOME OF THE ADJUDICATIO N MADE BY FIRST THIS COULD GIVE RISE TO AN UNWARRANTED ADDITIONS WERE CONFIRMED BY FIRST APPELLATE AUTHORITY ITA NO.2803/MUM/2018 BIMAL V. PALA ASSESSMENT YEAR-2007-08 SHRI RAJESH P.SHAH HAS AUTHORITIES WHICH HAS BEEN RIVAL CONTENTIONS AND PERUSED RELEVANT INCLUDING ASSESSEES SUBMISSIONS DURING PENALTY PROCEEDINGS AND PROCEEDINGS U/S 263. UPON PERUSAL, WE FIND THAT I T IS THE ASSESSEE HAS SUBMITTED DIVERGENT EXP LANATIONS AND HAD SUBMITTED AND BANK OVERDRAFT IT IS ALSO AN UNDISPUTED FACT THAT WAS PENDING BEFORE LD. AS SUBJECT MATTER OF THE SAID APPEAL. IT IS TRUE THAT ASSESSMENT PROCEED INGS AND PENALTY PROCEEDINGS ARE SEPARATE PROCEEDINGS AND NOTHING PR EVENTED THE AGAINST QUANTUM ADDITION. PENALTY, WENT AHEAD TO EXAMINE THE ADDITIONAL DOCUMENTS SUBMITTED BY TH E ASSESS EE THAT VERY VALIDITY OF QUANTUM ADDITIONS MADE IN THE QUAN TUM ON MERITS, WAS ALREADY PENDING WITH LD. FIRST APPELLATE AUTHORITY AND THEREFORE, LD. AO WAS OUSTE D WITH JURISDICTION TO IT IS EVIDENT FROM THE ORDER DROPPING THE PENALTY THAT LD. AO, UPON REACHI NG A CONCLUSI ON THAT DROPPED THE PENALTY WITHOUT APPRECIATING THE OUTCOME OF THE ADJUDICATIO N MADE BY FIRST AN UNWARRANTED SITUATION WERE CONFIRMED BY FIRST APPELLATE AUTHORITY WHEREAS THE PENALTY WAS DROPPED BY LD. AO BY CONSID ERING THE MERITS THE ADDITION ON THE BASIS OF ADDITIONAL DOCUMENTS S UBMITTED BY THE ASSESSEE DURING PENALTY PROCEEDINGS. THEREFORE, LD. AO, BY DELVING INTO THE MERITS, AUTHORITY AT RELEVANT POINT OF TIME. AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, HAS RIGHTLY BEEN SUBJECTED TO REVISIONAL JURISDICTION U/S 263 BY LD. SAME, WE DISMISS THE APPEAL. RECONSIDER THE SAME IN THE LIGHT OF ADJUDICATION MA DE BY CONCERNED APPELLATE AUTHORITY IN THE QUANTUM APPEAL FILED BY THE ASSESSEE. 6. RESULTANTLY, THE APPEAL ORDER PRONOUNCED IN THE OPEN COURT SD/- (SAKTIJIT DEY) %& $' / JUDICIAL MEMBER MUMBAI; &$ DATED : 05/12/2018 SR.PS:- JAISY VARGHESE ! COPY OF THE ORDER FORWARDED TO 1. / THE APPELLANT 2. )* / THE RESPONDENT 3. ' / THE CIT(A) 4. ' / CIT CONCERNED 5. &,-)&#&&. &. 6. -/01 GUARD FILE 6 WHEREAS THE PENALTY WAS DROPPED BY LD. AO BY CONSID ERING THE MERITS THE ADDITION ON THE BASIS OF ADDITIONAL DOCUMENTS S UBMITTED BY THE ASSESSEE DURING PENALTY PROCEEDINGS. THEREFORE, LD. AO, DELVING INTO THE MERITS, TRANSGRESSED THE POWER VESTED IN HIGHER AUTHORITY AT RELEVANT POINT OF TIME. THEREFORE, THE SAME BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, HAS RIGHTLY BEEN SUBJECTED TO REVISIONAL JURISDICTION U/S 263 BY LD. PR. CIT. FINDING NO INFIRMITY IN THE SAME, WE DISMISS THE APPEAL. NEEDLESS TO ADD THAT LD. AO MAY RECONSIDER THE SAME IN THE LIGHT OF ADJUDICATION MA DE BY CONCERNED APPELLATE AUTHORITY IN THE QUANTUM APPEAL FILED BY THE ASSESSEE. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH DECEMBER, 2018. SD/- (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER $' / ACCOUNTANT MEMBER 05/12/2018 COPY OF THE ORDER FORWARDED TO : / THE CIT(A) CONCERNED &. / DR, ITAT, MUMBAI ' # '$% ITA NO.2803/MUM/2018 BIMAL V. PALA ASSESSMENT YEAR-2007-08 WHEREAS THE PENALTY WAS DROPPED BY LD. AO BY CONSID ERING THE MERITS OF THE ADDITION ON THE BASIS OF ADDITIONAL DOCUMENTS S UBMITTED BY THE ASSESSEE DURING PENALTY PROCEEDINGS. THEREFORE, LD. AO, IN OUR OPINION, THE POWER VESTED IN HIGHER THEREFORE, THE SAME BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, HAS RIGHTLY BEEN SUBJECTED PR. CIT. FINDING NO INFIRMITY IN THE NEEDLESS TO ADD THAT LD. AO MAY RECONSIDER THE SAME IN THE LIGHT OF ADJUDICATION MA DE BY CONCERNED APPELLATE AUTHORITY IN THE QUANTUM APPEAL FILED BY THE ASSESSEE. DECEMBER, 2018. AGGARWAL) ACCOUNTANT MEMBER ' / BY ORDER, '$% (DY./ASSTT.REGISTRAR) / ITAT, MUMBAI.