IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.3114 / AHD/2009 (ASSESSMENT YEAR 2004-05) SHRI DIPESH P SUKHADIA, PROP M/S. BHAVYA CORPORATION, 9, PRAGATI ESTATE, GUJARAT BOTTING ROAD, RAKHAIL, AHMEDABAD-23. VS. DCIT, CIRCLE 12, AHMEDABAD PAN/GIR NO. : AEGPS5956K (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI J. C. SHAH, A.R. RESPONDENT BY: SHRI S.K. MEENA, SR. DR O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF LD. CIT(A) XX, AHMEDABAD DATED 123.08.2009 FOR THE ASSESSMENT YEAR 2004-05. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1 THE LEARNED CIT ( A ) HAS ERRED IN LAW AN D ON FACTS IN CONFIRMING THE ACTION OF AO IN LEVYING THE PENALTY U/S. 271 (1) (C) OF THE INCOME TAX ACT 1961 ON THE ADDITION OF RS.70,56 0/-MADE BY THE A O IN RESPECT OF PURCHASES OF RS. 2,82, 238/- FROM M /S YAMUNA TRADERS AHMEDABAD. I HAD MADE PAYMENT THROUGH PAYEE'S A/C C HEQUES TO M/S. YAMUNA TRADERS. I AM RELYING DECISION OF CIT V /S M K BROTH. ITR 249 (GUJ HIGH COURT). THE APPELLANT COULD NOT B E CHARGED WITH ANY GUILT OF FURNISHING INACCURATE PARTICULARS OF I NCOME OR CONCEALING PARTICULARS OF INCOME WITHIN MISCHIEF OF SECTION 27 1 (1) (C) OF THE INCOME TAX ACT 1 961 , THE LEVY OF PENALTY BEING WI THOUT JURISDICTION AND TOTALLY UNCALLED FOR, DESERVES TO BE QUASHED. 2 IN ANY CASE, QUANTIFICATION OF THE PENALTY IS ERRONEOUS AND EXCESSIVE. I.T.A.NO.3114 /AHD/2009 2 3 THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN INITIATING AND LEVYI NG PENALTY UNDER SECTION 271 (1) (C) OF THE ACT, WITHOUT RECOR DING MANDATORY SATISFACTION AS CONTEMPLATED UNDER THE ACT AT THE T IME OF FRAMING THE ASSESSMENT ORDER 4 THE ORDER PASSED BY CIT (A ) IS WITHOUT PRO PERTY APPRECIATING THE FACT AND THAT HE FURTHER ERRED IN GROSSLY IGNOR ING VARIOUS SUBMISSION EXPLANATION AND INFORMATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDER ED BEFORE PASSING THE IMPUGNED ORDER. THIS ACTION OF ID CIT ( A ) IS IN CLEAR BREACH OF LAW AND PRINCIPAL OF NATURAL JUSTICE AND THEREFORE DESERVES TO BE QUASHED. 5 THE APPELLANT CRAVES LEAVE TO ADD, AMEND, A LTER, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEA L AT THE TIME OF OR BEFORE THE HEARING OF THE APPEAL. 2. IT IS SUBMITTED BY THE LD. A.R. THAT PENALTY WAS IMPOSED BY THE A.O. IN THE PRESENT CASE IN RESPECT OF ADDITION OFRS.70, 560/- AND RS.4,58,102; TOTAL RS.5,28,662/-. IT IS SUBMITTED THAT LD. CIT(A) HAS UPHELD THE PENALTY ;IN RESPECT OF ADDITION OF RS.70,560/- AND HE HAS DELET ED THE PENALTY ON THE BALANCE AMOUNT OF ADDITION OF RS.45,910/-. IT IS F URTHER SUBMITTED BEFORE US THAT THE ISSUE REGARDING THIS ADDITION OF RS.70,560 /- HAS BEEN RESTORED BACK BY THE TRIBUNAL TO THE FILE OF LD. CIT(A) FOR A FRE SH DECISION IN I.T.A. NO. 302/AHD/2008 DATED 11.06.2010. HE SUBMITTED A COP Y OF THIS TRIBUNAL DECISION AND DRAWN OUR ATTENTION TO PARA 1.3 OF THI S TRIBUNAL ORDER. 3. AS AGAINST THIS, THE LD. D.R. OF THE REVENUE SUP PORTED THE ORDERS OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IN THE COURSE OF QUANTUM PROCEEDINGS, THE TRIBUNAL HAS RESTORED BACK THE MATTER REGARDING ADDITION OF RS.70,560/- TO THE FIL E OF THE A.O. FOR A DE NOVO INVESTIGATION. HENCE, THE PENALTY IN RESPECT OF SU CH AN ADDITION CANNOT BE UPHELD AT THIS STAGE. IF THE A.O. MAKES THIS ADDIT ION AGAIN, THEN HE MAY IMPOSE PENALTY AGAIN IF HE FEELS THAT THERE IS CONC EALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BUT AT THE PRESENT STAGE, I.T.A.NO.3114 /AHD/2009 3 PENALTY IMPOSED BY HIM FOR SUCH AN ADDITION WHICH H AS ALREADY BEEN SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE A.O. FOR A DE NOVO DECISION, IS NOT SUSTAINABLE. HENCE, WE DELETE THIS PENALTY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED. 6. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JULY, 2011. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 29 TH JULY, 2011 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE 1. DATE OF DICTATION 25/7 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26/7 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 27/7 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 29/7 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 29/7 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29/7/11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..