The ITO, Ward-1(4), Surat V. M/s. Pankaj Enka Pvt. Ltd., Surat

ITA 2904/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6075 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 03-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SITA RAM MEENA
• Keywords: Reopening of assessment
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH , ACCOUNTANT MEMBER ./ ITA NO. 2592 /AHD/201 4 / ASSTT. YEAR: 2005 - 06 M/S. PANKAJ ENKA PVT LTD, 105, J.K. TOWER, RING ROAD, SURAT 395002 PAN : AABCP 4028 R VS. ITO WARD 1 (4), SURAT ./ ITA NO. 2904 /AHD/2014 / ASSTT. YEAR: 2005 - 06 ITO WARD 1 (4), SURAT VS. M/S. PANKAJ ENKA PVT LTD, SURAT 395002 PAN : AABCP 4028 R / (APPELLANT) / (RESPONDENT) ASSESSEE BY : MR. MEHUL SHAH REVENUE BY : MR. SITA RAM MEENA, SR DR / DATE OF HEARING : 27 / 0 4 /201 7 / DATE OF PRONOUNCEMENT: 28 / 0 4 /201 7 / O R D E R PER RAJPAL YADAV , JUDICIAL MEMBER : THE ASSESSEE AND REVENUE ARE IN CROSS APPEALS AGAINST THE ORDER OF THE LD. CIT(A) - I, SURAT DATED 11.08.2014 PASSED FOR AY 2005 - 06 . 2. WITH THE ASSISTANCE OF LEARNED R EPRESENTATIVE S , WE HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD THAT LD. ASSESSING OFFICER HAS IMPOSED A PENALTY OF RS.38,78,805/ - UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) UPON THE ITA NO. 2592 & 2904/AHD/ 2014 ASSESSEE : PANKAJ ENKA PVT LTD A&R AY : 2005 - 06 2 ASSESSEE. ON APPEAL, LEARNED FIRST APPELLATE AUTHORITY HAS CONFIRMED THE PENALTY TO THE EXTENT OF RS. 1,82,963/ - AND DELETED THE BALANCE. THE REVENUE IS AGGRIEVED WITH REGARD TO THE DELETION OF PENALTY; WHEREAS THE ASSESSEE IS IMPUGNING THE RET ENTION OF PENALTY. 3. THE LD. COUNSEL FOR THE ASSESSEE, AT THE VERY OUTSET, CONTENDED THAT THE PENALTY HAS EMANATED FROM AN ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DATED 11.05.2012. ORIGINALLY , THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 17.10.2005 DECLARING TOTAL INCOME OF RS.96,520 / - . THIS RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 20.03.2006. THE ASSESSMENT WAS REOPENED BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT ON 01 .07.2011. THIS REOPENING OF THE ASSESSMENT WAS CHALLENGED BY THE ASSESSEE BEFORE THE ITAT IN QUANTUM APPEAL BEARING ITA NO.816/AHD/2013. THE APPEAL OF THE ASSESSEE HAS BEEN ALLOWED BY THE TRIBUNAL ON THIS ISSUE VIDE ORDER DATED 14.05.2015. THE LEARNED C OUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD COPY OF THE TRIBUNALS ORDER. THE TRIBUNAL HAS QUASHED THE REOPENING OF ASSESSMENT IN THE FINDING S RECORDED IN PARAGRAPH 5.3 OF ITS ORDER. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT EVEN THE APPEAL O F THE REVENUE AGAINST THIS ORDER OF ITAT HAS ALSO BEEN DISMISSED BY THE HONBLE HIGH COURT, BUT HE FAILED TO FILE COPY OF THE HONBLE HIGH COURTS ORDER. 4. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT SUB - CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT IN THE CASES REFERRED TO IN CLAUSE (C) OF SECTION 271(1), IN ADDITION TO TAX, IF ANY , PAYABLE BY AN ASSESSEE, A SUM WHICH SHALL NOT BE LESS THAN, B UT WHICH SHALL NOT EXCEED THREE TIMES OF THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF ITA NO. 2592 & 2904/AHD/ 2014 ASSESSEE : PANKAJ ENKA PVT LTD A&R AY : 2005 - 06 3 THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME CAN BE DIRECTED TO BE PAID BY AN ASSESSEE. IN OTHER WORDS, PENALTY WOULD BE COMPUTED ON THE ADDITIONS MADE TO THE INCOME OF AN ASSESSEE EITHER EQUIVALENT TO THE TAX SOUGHT TO BE EVADED ON THOSE ADDITIONS OR UP TO THREE TIMES OF THE TAX SOUGHT TO BE EVADED. SINCE THE REASSESSMENT ORDER ITSELF HAS BEEN QUASHED, THE RE IS NO BASIS TO SAY THAT THE ASSESSEE HAS EVADED THE TAXES. RESULTANTLY, THERE IS NO ADDITION TO THE INCOME OF THE ASSESSEE ON WHICH PENALTY COULD BE COMPUTED. CONSIDERING THIS ASPECT, WE ALLOW THE APPEAL OF THE ASSESSEE AND QUASH THE PENALTY ORDER. C ONSEQUENTLY, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THAT OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 2 8 T H APRIL, 2017 AT CAMP SURAT . SD/ - SD/ - ( AMARJIT SINGH ) ACCOUNTANT MEMBER ( RAJPAL YADAV) JUDICIAL MEMBER SURAT ; DATED 2 8 / 0 4 /201 7 * BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE . / BY ORDER, T R U E C O P Y / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD