SHRI SAMAR GOYAL, MUMBAI V. THE ITO WD 20(3)(3), MUMBAI

ITA 7314/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1112 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 08-07-2010
• Assessment Year: 1996-1997
• Appeal Filed On: 07-12-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: RAJESHMAL LODHA
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI PRAMOD KUM AR ,(AM) ITA NO.7314/MUM/2007 ASSESSMENT YEAR : 1996-97 SHRI SAMAR GOYAL 6/163, UDIT MITTAL INDL. ESTATE ANDHERI KURLA ROAD, SAKINAKA ANDHERI (E) MUMBAI-400 059. ..( APPELLANT ) P.A. NO. (AACPG 3982 L) VS. INCOME TAX OFFICER WARD 20(3)(2) INCOME TAX OFFICE PIRAMAL CHAMBERS, LALBAUG MUMBAI-400 012. ..( RESPONDENT ) APPELLANT BY : SHRI RAJESHMAL LODHA RESPONDENT BY : SHRI HAR I GOVIND SINGH O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE COMMON ORDER DATED 3.9.2007 PASSED BY THE LD. CIT(A) F OR THE ASSESSMENT YEAR 1996-97 CONFIRMING THE PENALTY OF RS.10,0 00/- AND RS.2,18,514/- IMPOSED BY THE ASSESSING OFFICER U/S.271(1)( B) AND 271(1)(C) OF THE INCOME TAX ACT , 1961(THE ACT) RESPECTI VELY. 2. DURING THE COURSE OF HEARING IT WAS OBSERVED THAT TH E ASSESSEE HAS FILED ONE APPEAL BEFORE THE TRIBUNAL AGAINST THE COMMON ORDER ITA NO.7314/M/07 A.Y:96-97 2 PASSED BY THE LD. CIT(A) SUSTAINING TWO PENALTIES, AS AB OVE, IMPOSED BY THE ASSESSING OFFICER. WHEREAS THE ASSESSING OFFICER HAS PA SSED TWO SEPARATE ORDERS AND, HENCE, ACCORDING TO THE RELEVAN T PROVISIONS OF THE ACT, THE ASSESSEE IS REQUIRED TO FILE TWO SEPARATE APPEALS. WITH THIS OBSERVATION AND WITH THE CONSENT OF THE PARTIES IT WAS DECIDED TO TREAT THE APPEAL FILED BY THE ASSESSEE AGAINST THE SUSTEN ANCE OF PENALTY U/S.271(1)(C) OF THE ACT. THE ASSESSEE MAY FILE SE PARATE APPEAL AGAINST THE SUSTENANCE OF PENALTY IMPOSED U/S.271 (1)(B) IF HE SO ADVISED. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, DERIVES INCOME FROM EXPORTS AND LOCAL TRADI NG OF GARMENTS. THE RETURN WAS FILED DECLARING TOTAL INCOME OF RS.4,51, 744/-. HOWEVER, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.10,04,440/- VIDE ORDER DATED 10.3.2004 PASSED U/S.14 3(3) R.W.S. 148 OF THE ACT. AGAINST THE SAID ORDER PASSED BY THE ASSE SSING OFFICER THE ASSESSEE FILED 1 ST APPEAL BEFORE THE LD. CIT(A) WHO PARTLY ALLOWED THE ASSESSEE'S APPEAL. WHILE MAKING THE ASSESSMENT THE ASSESSIN G OFFICER ALSO INITIATED PENALTY PROCEEDING U/.S.271(1)( C) OF THE ACT. IN RESPONSE TO NOTICE TO SHOW CAUSE AS TO WHY PENALTY U/S.271( 1)(C) MAY NOT BE IMPOSED, IT WAS SUBMITTED BY THE ASSESSEE THAT THE DISALLOWANCE VARIOUS EXPENSES ON ESTIMATE BASIS ON WHICH PE NALTY U/S.271(1)(C) IS NOT LEVIABLE. FURTHER AGAINST THE OR DER PASSED BY THE ITA NO.7314/M/07 A.Y:96-97 3 LD. CIT(A) IN QUANTUM APPEAL THE ASSESSEE HAS FILED SECON D APPEAL BEFORE THE TRIBUNAL WHICH IS PENDING. FURTHER, IT WA S SUBMITTED THAT THE PROCEEDINGS U/S.147/148 ARE BAD IN LAW AND HENCE, CONSEQUENTIAL PROCEEDINGS ARE ALSO BAD IN LAW. HOWEVER, THE ASSESSING O FFICER DID NOT ACCEPT THE ASSESSEE'S EXPLANATION. HE WAS OF THE VIEW T HAT THE ASSESSEE HAS CONCEALED HIS INCOME AND FURNISHED INACCURATE PARTICULARS OF HIS INCOME COMING WITHIN THE MEANING OF SECTION 271(1)(C) READ WITH EXPLANATION 1 THERETO AND ACCORDIN GLY HE IMPOSED MINIMUM PENALTY OF RS.2,18,514/- VIDE ORDER DATED 26 .3.2007 PASSED U/S.271(1)(C) OF THE ACT. ON APPEAL, THE LD. CIT(A) WHILE OBSERVING THAT DURING THE COURSE OF REASSESSMENT PROCEEDING, THE APP ELLANT DID NOT FURNISH ANY DETAILS CALLED FOR BY THE ASSESSING OFFICE R WHICH WERE REQUIRED FOR THE PURPOSE OF COMPUTATION OF CORRECT INCO ME OF THE APPELLANT, AND AGREEING WITH THE VIEWS OF THE ASSESSING OFFICER, CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND DISMISSED THE APPEAL. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE SU STENANCE OF PENALTY IMPOSED BY THE ASSESSING OFFICER . 5. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT THE TRIBUNAL IN THE QUANTUM APPEAL IN THE CASE O F SAMAY GOYAL VS. ITO IN ITA NO.5921/MUM/2005 FOR ASSESSMENT YEAR 2004 -05 ORDER ITA NO.7314/M/07 A.Y:96-97 4 DATED 11.8.2008 HAS SET ASIDE THE ASSESSMENT TO THE FILE O F THE ASSESSING OFFICER, THEREFORE, PENALTY IMPOSED BY THE ASSESSI NG OFFICER AND SUSTAINED BY THE LD. CIT(A) BE DELETED. HE ALSO PLA CED ON RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNAL. 6. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A). 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIN D THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS THERE IS NO DISPUTE THAT T HE TRIBUNAL IN THE QUANTUM APPEAL SUPRA, HAS SET ASIDE THE ORDER OF TH E LD. CIT(A) AND RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFF ICER FOR FRESH ASSESSMENT AS PER PROVISIONS OF LAW. SINCE THE ASSESSMENT HAS B EEN SET ASIDE BY THE TRIBUNAL, VIRTUALLY THE BASIS FOR IMPO SITION AND LEVY OF PENALTY IS NOT AVAILABLE. WHEN SUCH IS THE POSITION, T HE IMPOSITION OF PENALTY IS NOT IN ACCORDANCE WITH LAW AND ACCORDINGLY THE SAME IS DELETED. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE , ALLOWED. 8. IN THE RESULT, ASSESSEE'S APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.7.2010. SD/- SD/- (PRAMOD KUMAR) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 16.7. 2010. JV. ITA NO.7314/M/07 A.Y:96-97 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 8.7.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 9.7.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 16.7.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 20.7.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER