Bhushan Ramchandra Zinzurde, Pune V. Assistant Commissioner of Income-tax, Circle - 2, Pune

ITA 317/PUN/2022

AI Insights

The case involves an appeal by Bhushan Ramchandra Zinzurde, the legal heir of the original assessee, against the orders of the Commissioner of Income Tax (Appeals) and the Assessing Officer concerning penalties levied under section 271(1)(c) of the Income Tax Act, 1961. The penalties were imposed following additions made to the assessee's income, which included a capital gain of Rs.1.9 crore and a difference in the cost of acquisition amounting to Rs.91,50,570. The ITAT had previously set aside the addition of Rs.1.9 crore for fresh adjudication and deleted the addition related to the cost of acquisition. The main legal issues revolved around the maintainability of the penalties following the adjustments made by the ITAT in the earlier appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134312 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 19-12-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Cost of acquisition
• Section: 271(1)(c)

Judgement Text

आयकर अपीलीय अिधकरण “बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.317/PUN/2022 िनधाᭅरण वषᭅ / Assessment Year : 2011-12 Bhushan Ramchandra Zinzurde, Legal Heir of Bhushan Ramchandra Zinjurde, Flat No.110, Sonigara Kesar, Pune – 411057. PAN: AALPZ 8225 D V s The Asst. Commissioner of Income Tax, Circle-2, Pune. Appellant/ Assessee Respondent /Revenue Assessee by Shri Pramod Shingte - AR Revenue by Shri M.G.Jasnani – DR Date of hearing 20/12/2022 Date of pronouncement 30/01/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeals), Pune-3 dated 03/10/2019 emanating from the order of Assessing Officer(AO) passed under section 271(1)(c) of the Act, 1961 dated 31.03.2017. The Assessee has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in passing the ex-parte order, the same being in violation of the Principal of Natural Justice therefore your appellant prays for restoring the matter to the file of Ld. CIT (A). ITA No.317/PUN/2022 Bhushan Ramchandra Zinzurde L/h of Bhushan Ramchandra Zinjurde [A] 2 2. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in levying the penalty of RS.55,93,018/- U/s 271 (1)(c) without stating correct limb in the notice there by not specifying the correct charge for levying the penalty therefore penalty order may kindly be quashed. 3. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in levying and the penalty of RS.55,93,018/-, without appreciating the fact that it was appellant’s contention to claim that he is taxable for actual sale consideration received, as due to the subsequent development the chances of recovering the balance amount was not possible and therefore penalty is not justifiable in law and in facts.” 2. Brief facts: In this case, the AO has made the addition on two grounds i.e. of Rs.1,90,00,000/- Capital Gain and Rs.91,50,570/- on account of difference in index cost of acquisition. 3. Aggrieved by the order of the Assessing Officer(AO), the assessee filed appeal before the ld.CIT(A). 4. Aggrieved by the order of the ld.CIT(A), the assessee filed appeal before the Tribunal. The ITAT Pune vide its order dated 08.06.2022 in ITA No.2280/PUN/2017 has partly allowed the appeal of the assessee. The ITAT restored the first issue of addition of Rs.1,90,00,000/- to the AO for afresh adjudication after necessary factual verification. As far as difference in cost of acquisition is ITA No.317/PUN/2022 Bhushan Ramchandra Zinzurde L/h of Bhushan Ramchandra Zinjurde [A] 3 concerned, ITAT has allowed appeal of the assessee. 5. However, the AO has levied penalty under section 271(1)(c) of the Act on both the additions i.e. Rs.1,90,00,000/- and Rs.91,50,570/-. 6. The ld.AR submitted that since addition has been deleted by the ITAT, penalty is not maintainable. 7. The ld.Departmental Representative (ld.DR) for the Revenue relied on the orders of the AO. 8. We have heard both the parties and perused the records. In this case, the addition of Rs.1.9 crores has been set-aside for fresh adjudication by ITAT to the AO. The issue related to the addition of Rs.1.9 crore is not final at this moment. Therefore, levy of penalty is pre-mature at this moment. Therefore, we set-aside the order under section 271(1)(c) of the Act with reference to addition of Rs.1.9 crore to the file of the AO without commenting on the merits of the penalty. 9. The AO had made addition of Rs.91,50,570/- on account of difference in cost of acquisition. The said addition has been deleted by ITAT, therefore, penalty under section 271(1)(c) related to addition of Rs.91,50,570/- is not maintainable. Hence, the Assessing Officer is directed to delete it. Accordingly, grounds of appeal raised by the assessee are partly allowed. ITA No.317/PUN/2022 Bhushan Ramchandra Zinzurde L/h of Bhushan Ramchandra Zinjurde [A] 4 10. In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court on 30 th January, 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 30 th Jan, 2023/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.