The ITO, Ward-1(2), Bhavnagar V. Bansidhar Cotfiber Industries Pvt.Ltd., Bhavnagar

ITA 3082/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6104 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 26-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHAN POPAT
• Assessee Lawyers: DINESH SINGH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.3082/AHD/2013 ( / ASSESSMENT YEAR : 2007-08) ITO WARD-1(2) BHAVNAGAR / VS. BANSIDHAR COTFIBER INDUSTRIES P.LTD. TALAJA MAHUVA ROAD TALAJA, DIST.BHAVNAGAR $ ./ ./ PAN/GIR NO. : AACCB 9080 A ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI ROHAN POPAT, AR ($' *) / RESPONDENT BY : SHRI DINESH SINGH, SR.DR +,*- / DATE OF HEARING 24/04/2017 ./0*- / DATE OF PRONOUNCEMENT 25/ 04/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE PRESENT APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS )-XX, AHMEDABAD [CIT(A) IN SHORT] DATED 08/10/2013 FOR THE ASSESSMENT YEAR (AY) 2007-08. ITA NO. 3082/AH D/2013 ITO VS. BANSIDHAR COTFIBER INDUSTRIES P LTD. ASST.YEAR 2007-08 - 2 - 2. THE SOLITARY GRIEVANCE OF THE REVENUE IN T HE PRESENT APPEAL IS AGAINST THE DELETION OF PENALTY LEVIED UNDER S.271( 1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ) BY THE CIT(A). 3. THE LD.DR FOR THE REVENUE RELIED UPON THE ORDER OF THE AO. 4. THE LD.AR, AT THE OUTSET, BROUGHT TO OUR NOTICE THAT ADDITIONS/DISALLOWANCE GIVING RISE TO PENALTY PROCE EDINGS UNDER S.271(1)(C) HAVE BEEN SUBJECT MATTER OF APPEAL BEFO RE THE TRIBUNAL IN ITA NOS.928 & 388/AHD/2011 FOR AY 2007-08 IN THE CASE O F THE ASSESSEE. APPEALS BEFORE THE TRIBUNAL HAS BEEN DECIDED VIDE O RDER DATED 15/05/2015. IN TERM S OF THE AFORESAID ORDER, THE ITAT HAS SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER (AO) FOR READJUDICATION. THE FINDINGS OF THE TRIBUNAL IN QUANTUM APPEAL READS AS UNDER: 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPE CT TO ADDITION U/S. 68. IT IS A.O'S CONTENTION THAT THE ASSESSEE HAS NO T PROVED THE GENUINENESS OF THE CREDITS AND FURTHER MANY OF THE DEPOSITORS HAD SUBMITTED THE CROPS GROWN BY THEM WAS AT VARIANCE W ITH THE RELEVANT LAND RECORDS OF THE DEPOSITORS TO WHICH A.R'S SUBMI SSION IS THAT THE DISCREPANCY IS ON ACCOUNT OF NON-UPDATION OF RECORD S. IT IS ALSO ID. A.R.'S SUBMISSION THAT THE STATEMENT OF VARIOUS SHA REHOLDERS WERE RECORDED AT THE BACK OF ASSESSEE. CONSIDERING THE A FORESAID FACTS, WE ARE OF THE VIEW THAT IN A CASE WHEN ANY MATERIAL IS USED AGAINST THE ASSESSEE, THE ASSESSEE SHOULD BE GRANTED AN OPPORTU NITY TO PRESENT ITS SIDE. IN THE PRESENT CASE, WE FIND THAT DUE OPP ORTUNITY OF CROSS EXAMINATION WAS NOT MADE AVAILABLE TO ASSESSEE. IN SUCH CIRCUMSTANCE, WE ARE OF THE VIEW THAT ONE MORE OPPO RTUNITY NEEDS TO ITA NO. 3082/AH D/2013 ITO VS. BANSIDHAR COTFIBER INDUSTRIES P LTD. ASST.YEAR 2007-08 - 3 - BE GRANTED TO ASSESSEE TO JUSTIFY ITS STAND AND PLA CE ALL THE NECESSARY MATERIAL BEFORE A.O. WE THEREFORE WITHOUT COMMENTIN G ON THE MERITS OF THE CASE, REMIT THE ENTIRE ISSUE TO THE FILE OF A.O TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. THE ASSESSEE IS DIRE CTED TO PROMPTLY FURNISH ALL THE REQUIRED DETAILS CALLED FOR BY THE A.O. IN CASE THE ASSESSEE FAILS TO FURNISH THE DETAILS, THE A.O SHAL L BE FREE TO PROCEED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. NEEDL ESS TO STATE THAT A.O SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS THE GROUNDS OF ASSESSEE AND REVENUE ARE DECIDE D AS PER DIRECTIONS CONTAINED HEREINABOVE. 5. ON THE STRENGTH OF THIS ORDER, IT HAS BEEN CONTE NDED BY THE ASSESSEE THAT SINCE ADDITIONS/DISALLOWANCES HAVE BEEN VACATE D BY THE TRIBUNAL AND SET ASIDE TO THE FILE OF AO FOR RE-ADJUDICATION. T HE CONSEQUENTIAL PENALTY DO NOT SURVIVE ANY MORE. 6. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES OF THE CASE, WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT TH E 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 T HREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDENT UPON THE ADDITIONS MADE TO THE INCOME OF THE ASSESSEE. UPTO AND UNTIL THE ISSUES REGARDING DETERMINATION OF THE TAXABLE INCOME IS FINALIZED, P ENALTY UNDER SECTION 271(1)(C) OF THE ACT CANNOT BE IMPOSED UPON THE ASS ESSEE. THE ITA NO. 3082/AH D/2013 ITO VS. BANSIDHAR COTFIBER INDUSTRIES P LTD. ASST.YEAR 2007-08 - 4 - DETERMINATION OF TAXABLE INCOME OF THE ASSESSEE IS PRESENTLY SUBJUDICED BEFORE THE AO OWING TO THE ORDER OF THE ITAT IN QUA NTUM PROCEEDINGS. AFTER ADJUDICATION THE ISSUE OF QUANTUM ON MERIT, I T WILL BE IN THE DISCRETION OF THE AO TO CONSIDER INITIATION OF PENA LTY PROCEEDINGS ON THIS ISSUE AGAINST THE ASSESSEE AFRESH IN ACCORDANCE WIT H LAW. IN VIEW OF THE ABOVE, WE DISMISS THE APPEAL OF THE REVENUE AND THE ORDER OF THE CIT(A) IS UPHELD. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . THIS ORDER PRONOUNCED IN OPEN COURT ON 25 / 0 4 /201 7 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 25/ 04 /2017 4..+,.+../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-XX, AHMEDABAD 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD