DCIT (IT) 3(3)(2), MUMBAI V. HEMANT MANSUKHLAL PANDYA, MUMBAI

ITA 5654/MUM/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8858 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 19-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSHIL KUMAR POTDAR
• Assessee Lawyers: DR K SHIVRAM SHRI RAHUL SARDA
• Keywords: Double taxation relief
• Section: 271(1)(c); 143(3)

Judgement Text

1 HEMANT MANSUKHLAL PANDYA IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI JOGINDER SINGH(VICE PRESIDENT) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) ITA NOS 5654 & 5655/MUM/2016 (ASSESSMENT YEARS 2007-08 & 2006-07) DCIT (IT) 3(3)(2), MUMBAI VS SHRI HEMANT MANSUKHLAL PANDYA B 201/202, DHEERAJ KUNJ, BAJAJ ROAD VILE PARLE (W), MUMBAI 400 056 PAN :AGPPP6132P APPELLANT RESPONDEDNT APPELLANT BY SHRI SUSHIL KUMAR POTDAR RESPONDENT BY DR K SHIVRAM / SHRI RAHUL SARDA DATE OF HEARING 26-11-2018 DATE OF PRONOUNCEMENT 19-12-2018 O R D E R PER G MANJUNATHA, AM : THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECT ED AGAINST SEPARATE, BUT IDENTICAL ORDERS OF THE CIT(A)-56, MU MBAI DATED 21-03-2015 AND THEY PERTAIN TO ASSESSMENT YEARS 2007-08 AND 20 06-07, RESPECTIVELY. THESE TWO APPEALS ARE ARISING OUT OF ORDER PASSED B Y THE CIT(A)-56, MUMBAI DELETING PENALTY LEVIED BY THE AO U/S 271(1) (C) OF THE INCOME-TAX ACT, 1956. 2 HEMANT MANSUKHLAL PANDYA 2. THE REVENUE, MORE OR LESS TAKEN COMMON GROUNDS O F APPEAL FOR BOTH THE ASSESSMENT YEARS. FOR THE SAKE OF BREVITY , GROUNDS OF APPEAL TAKEN FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO.565 5/MUM/2016 ARE REPRODUCED HEREUNDER:- /. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) IS CORRECT IN DELETING THE PENALTY DEMAN D U/S. 271(L)(C) HOLDING THAT THE QUANTUM APPEAL HAS BEEN ALLOWED IN FAVOR OF THE ASSESSEE IN ITS FIRST APPEAL, IGNORING THE FACT THAT THE QUANTUM APPEAL H AS BEEN CHALLENGED BY THE DEPARTMENT BEFORE THE HON 'BLE IT AT, WHICH IS PEND ING AND HAS NOT ATTAINED ANY FINALITY. 3. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CAS E, THE ASSESSMENTS FOR AYS 2006-07 AND 2007-08 HAVE BEEN COMPLETED U/S 143(3) R.W.S 147 OF THE INCOME- TAX ACT, 1961 ON 31-03-2015 BY MAKING ADDITION TOWA RDS UNEXPLAINED DEPOSITS FOUND IN HSBC BANK ACCOUNT IN GENEVA ON THE BASIS O F INFORMATION RECEIVED FROM THE FRENCH GOVERNMENT UNDER DTAA IN THE FORM O F BASE NOTE. THE ASSESSEE CHALLENGED THE ORDERS PASSED BY THE AO BEF ORE THE FIRST APPELLATE AUTHORITY. THE LD.CIT(A), FOR THE DETAILED REASONS RECORDED IN HIS ORDER DATED 21-03-2016 DELETED ADDITION MADE BY THE AO TOWARDS DEPOSITS FOUND IN HSBC BANK ACCOUNT, GENEVA ON THE GROUND THAT THE SAID DE POSITS WERE NOT TAXABLE IN INDIA UNDER THE INDIAN INCOME-TAX ACT, 1961. THE R EVENUE CARRIED THE MATTER IN APPEALS BEFORE THE ITAT AND THE ASSESSEE FILED CROS S OBJECTIONS. THE ITAT, MUMBAI BENCH C IN ITA NOS 4679 & 4680/MUM/2016 AF FIRMED THE FINDINGS OF 3 HEMANT MANSUKHLAL PANDYA THE LD.CIT(A) IN DELETING THE ADDITION MADE BY THE AO TOWARDS DEPOSITS FOUND IN HSBC BANK ACCOUNT, GENEVA. 4. THESE TWO APPEALS ARISING OUT OF ORDER OF LD.CIT (A) DATED 16-10-2015 WHEREIN THE LD.CIT(A) HAS DELETED PENALTY LEVIED BY THE AO U/S 271(1)(C) BY HOLDING THAT ONCE ADDITION MADE BY THE AO HAS BEEN DELETED, PENALTY LEVIED ON SUCH ADDITIONS CANNOT BE SUSTAINED. THE LD.CIT(A), BY FOLLOWING THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS ROY DURLABHJI (1995) 211 ITR 470 (RAJ) HELD THAT THE MATTER OF PENALTY IS QUA TA X AND THERE IS NO LIABILITY TO TAX, NO PENALTY CAN BE LEVIED. ACCORDINGLY, HE DEL ETED PENALTY LEVIED BY THE AO U/S 271(1)(C) FOR BOTH THE ASSESSMENT YEARS. AGGRI EVED BY THE ORDER OF LD.CIT(A), THE REVENUE IS IN APPEALS BEFORE US. 5. AT THE TIME OF HEARING, THE LD.COUNSEL FOR THE A SSESSEE AND THE LD.DR PRESENT FOR THE REVENUE STATED THAT IN QUANTUM PROC EEDINGS, THE ADDITION MADE BY THE AO HAS BEEN FINALLY DELETED BY THE ITAT IN ITA NOS 4679 & 4680/MUM/2016. THEREFORE, CONSEQUENT PENALTY LEVIE D BY THE AO U/S 271(1)(C) CANNOT SURVIVE UNDER THE LAW. 6. HAVING HEARD BOTH THE SIDES, WE FIND THAT THE IT AT HAS AFFIRMED THE FINDINGS OF LD.CIT(A) IN ITA NOS 4679 & 4680/MUM/20 16, VIDE ITS ORDER DATED 16-11-2018 WHEREIN IT WAS HELD THAT DEPOSITS FOUND IN HSBC BANK ACCOUNT, GENEVA IS NOT TAXABLE IN INDIA SINCE THE ASSESSEE I S A NON RESIDENT FOR INDIAN 4 HEMANT MANSUKHLAL PANDYA INCOME-TAX PURPOSE. ONCE THE ADDITION ON WHICH PEN ALTY U/S 271(1)(C) HAS BEEN LEVIED WAS DELETED IN QUANTUM PROCEEDINGS, CON SEQUENT PENALTY U/S 271(1)(C) COULD NOT BE SUSTAINED UNDER THE LAW. TH EREFORE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO ERROR IN THE FINDI NGS OF THE LD.CIT(A) IN DELETING PENALTY LEVIED U/S 271(1)(C) AND HENCE, WE ARE INCL INED TO UPHOLD THE FINDINGS OF LD.CIT(A) AND DISMISS THE APPEALS FILED BY THE R EVENUE FOR AYS 2006-07 & 2007-08. 7. IN THE RESULT, APPEALS FILED BY THE REVENUE ARE DISMISSED. 8. FURTHER, THE ASSESSEE HAS FILED AN APPLICATION U /R 27 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963, VIDE ITS LETTER D ATED 13-11-2018 AND HAD TAKEN A GROUND CHALLENGING THE ORDER OF THE LD.CIT(A) ON THE GROUND THAT THE LD.CIT(A) OUGHT TO HAVE DISCUSSED THE ISSUE OF PENA LTY LEVIED U/S 271(1)(C) ON MERITS, WHEREAS THE LD.CIT(A) HAS DELETED PENALTY L EVIED BY THE AO U/S 271(1)(C) ON TECHNICAL GROUND. ALTHOUGH THERE IS A GROUND IN THE APPLICATION FILED BY THE ASSESSEE U/R 27 OF THE INCOME-TAX (APP ELLATE TRIBUNAL) RULES, 1963, YET, THE FACT REMAINS THAT THE TRIBUNAL HAS AFFIRME D THE FINDINGS OF THE LD.CIT(A) IN QUANTUM PROCEEDINGS, THEREFORE, THERE IS NO NECE SSITY TO DISCUSS THE ISSUE OF PENALTY LEVIED U/S 271(1)(C), ON MERITS. HENCE, TH E APPLICATION FILED BY THE ASSESSEE U/R 27 OF THE INCOME-TAX (APPELLATE TRIBUN AL) RULES, 1963 FOR BOTH THE ASSESSMENT YEARS IS DISMISSED AS INFRUCTUOUS. 5 HEMANT MANSUKHLAL PANDYA 9. AS A RESULT, APPEALS FILED BY THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19-12-2018 . SD/- SD/- (JOGINDER SINGH) (G MANJUNATHA) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DT : 19 TH DECEMBER, 2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI