The ACIT, Valsad Circle, Surat V. Shri Nilesh Himatlal Shah, Valsad

ITA 3264/AHD/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50721 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-09-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 10-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 271(1)(c)

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , , , , !' !' !' !', , , , #$ #$ #$ #$ %&' ( %&' ( %&' ( %&' (, , , , ) ) ) ) & ' & ' & ' & ' BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND BHAVNESH SAINI, JUDICIAL MEMBER) ITA NO.3243/AHD/2010 [ASSTT.YEAR : 1998-1999] SHRI NILESH HIMATLAL SHAH DARSHAN VRINDAVAN SOCIETY B/H. JALARAM TEMPLE, VALSAD. PAN : ACQPS 9921 C /VS. ACIT, CENT.CIR.4 SURAT. ITA NO.3264 AND 3265/AHD/2010 [ASSTT.YEAR : 1999-2000 AND 2000-2001] ACIT, CENT.CIR.4 SURAT. /VS. SHRI NILESH HIMATLAL SHAH DARSHAN VRINDAVAN SOCIETY B/H. JALARAM TEMPLE, VALSAD. ( (( (+, +, +, +, / APPELLANT) ( (( (-.+, -.+, -.+, -.+, / RESPONDENT) /0 1 2 &/ ASSESSEE BY : SHRI TUSHAR HEMANI ) 1 2 &/ REVENUE BY : SHRI VINOD TANWANI 45 1 06/ DATE OF HEARING : 30 TH SEPTEMBER, 2011 789 1 06/ DATE OF PRONOUNCEMENT : 30 TH SEPTEMBER, 2011 &' / O R D E R PER G.D. AGARWAL, VICE-PRESIDENT : THESE ARE ONE ASSESSEES APPEAL AND TWO REVENUES APPEALS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ARISING OUT OF THE ORDERS OF T HE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. S INCE THE ISSUES RAISED IN ALL THESE APPEALS ARE COMMON, THEY ARE BEING DISPOSED O F TOGETHER. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THE CIT(A) HEARD AND DISPOSED OF THE APPEALS OF THE ASSESSEE ITA NO.3243, 3264 AND 3265/AHD/2010 -2- AGAINST LEVY OF PENALTY IMPOSED UNDER SECTION 271(1 )(C) FOR A.Y.1998-1999 TO 2000-2001 TOGETHER. HE CANCELLED THE PENALTY IN A .Y.1999-2000 AND 2000- 2001 BECAUSE IN THE QUANTUM APPEAL, THE ITAT HAD DE LETED THE ADDITION VIDE ITA NOS.312, 213, 314 & 315/AHD/2007, ORDER 6-11-20 09. HE SUSTAINED THE PENALTY FOR A.Y.1998-999 BECAUSE THE ITAT HAD SUSTA INED THE ADDITION. IN OUR OPINION, WHEN THE ADDITION IS DELETED IN THE QUANTU M APPEAL, THE APPELLATE AUTHORITIES IN THE PENALTY PROCEEDINGS WOULD BE JUS TIFIED IN CANCELING THE PENALTY BECAUSE WHEN THE ADDITION ITSELF IS DELETED , THE PENALTY BASED ON SUCH ADDITION CANNOT SURVIVE. HOWEVER, WHERE THE ADDITI ON IS SUSTAINED IN THE QUANTUM APPEAL, THE LEVY OF THE PENALTY IS NOT AUTO MATIC THEREFORE, THE APPELLATE AUTHORITY IN THE APPEAL, AGAINST THE LEVY OF PENALT Y, HAS TO DECIDE THE ISSUE ON MERIT. IN THIS CASE, WE FIND THAT IN A.Y.1998-99, THE ASSESSEE FURNISHED BEFORE THE CIT(A) PAPER BOOK OF 44 PAGES INCLUDING WRITTEN SUBMISSIONS RUNNING INTO FOUR PAGES. IN THE WRITTEN SUBMISSIONS THE ASSESSEE EXPLAINED IN DETAIL WHY THE LEVY OF PENALTY UNDER SECTION 271(1)(C) IS NOT JUST IFIED DESPITE THE ADDITION HAVING BEEN CONFIRMED BY THE ITAT. HOWEVER THE CIT (A) DID NOT REFER EITHER THE WRITTEN SUBMISSIONS OR THE PAPER BOOK AND SIMPL Y CONFIRMED THE PENALTY WITH THE FOLLOWING FINDINGS: 4....... I HAVE CONSIDERED THE FACTS AND CIRCUMSTA NCES OF THE CASE. THE QUANTUM APPEAL WAS SUSTAINED BY T HE ITAT, THE HIGHEST FACT FINDING AUTHORITY WHICH CLEARLY IN DICATED THAT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF THE CONCEALED INCOME AND THEREBY THE ACTION OF THE AO I S APPROPRIATE AND NEEDS NO AMENDMENT. THEREFORE, PEN ALTY LEVIED BY THE AO IS CONFIRMED AND THE APPELLANTS A PPEAL IS DISMISSED. IN OUR OPINION, THE ABOVE ORDER OF THE CIT(A) CANNO T BE SUSTAINED. MERELY BECAUSE THE ADDITION IS SUSTAINED BY THE ITAT, THE PENALTY IS NOT AUTOMATIC. IT HAS TO BE EXAMINED ON MERIT WHETHER THE ASSESSEE HA S CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE CI T(A) OUGHT TO HAVE ITA NO.3243, 3264 AND 3265/AHD/2010 -3- CONSIDERED THE ASSESSEES WRITTEN SUBMISSIONS AND T HEREAFTER SHOULD HAVE PASSED A SPEAKING ORDER THEREON. IN VIEW OF THE AB OVE, WE SET ASIDE THE ORDER OF THE CIT(A) FOR A.Y.1998-99 AND RESTORE THE MATT ER BACK TO HIS FILE FOR RE- ADJUDICATION AFTER ALLOWING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. SO FAR AS A.Y.1999-2000 AND 2000-2001 IS CONCERN ED, THE ITAT HAS DELETED THE ADDITION IN QUANTUM APPEALS, THEREFORE, PENALTY BASED ON SUCH ADDITION CANNOT SURVIVE. WE THEREFORE HOLD THAT TH E CIT(A) WAS JUSTIFIED IN CANCELING THE PENALTY LEVIED U/S.271(1)(C) FOR A.Y. 1999-2000 AND 2000-2001. 4. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y.199 8-1999 IS DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSE. WHILE THE REVENUE S APPEALS FOR A.Y.1999- 2000 AND 2000-2001 ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&' ( %&' ( %&' ( %&' ( /BHAVNESH SAINI ) ) ) ) ) /JUDICIAL MEMBER ( . .. . . .. . G.D. AGARWAL) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD 1. DATE OF DICTATION : 30-09-2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER. : 30-09-2011 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT. : 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER : 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. :