Manjulata Sahoo, Keonjhar V. Principal CIT, Sambalpur

ITA 96/CTK/2021

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This case involves an appeal by Smt. Manjulata Sahoo against the order of the Principal Commissioner of Income Tax (Pr. CIT), Sambalpur, which levied a penalty under section 271(1)(c) of the Income Tax Act for alleged concealment of income. The penalty was a consequence of an earlier order under section 263, which directed the addition of cash deposits amounting to Rs.62,10,386 to the assessee's income. The Tribunal noted that the High Court had admitted the assessee's appeal on substantial questions of law, which made the addition itself debatable. Citing precedents from the Karnataka High Court and the Supreme Court, the Tribunal held that the penalty could not be imposed as the issue was under judicial scrutiny and debatable.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113068 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-02-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 15-09-2021
• Other Referred Cases: CIT vs Dr. Harsha N Billiangady, Bansi Dhar and Son vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

BEFORE Smt. Manjulata Sahoo, At: Banulal Colony, New Market, Keo Keonjhar PAN/GIR No. (Appellant Per Bench This is an appeal filed by the assessee against the order of the ld CIT, Sambalpur, in Appeal No. assessment year 2. Shri B.R.Panda, ld AR appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.96/CTK/2021 Assessment Year : 2014-15 Smt. Manjulata Sahoo, At: Banulal Colony, New Market, Keonjhargarh, Vs. Pr. CIT, Sambalpur PAN/GIR No.BEIPS 1809 G (Appellant) .. ( Respondent Assessee by : Shri B.R.Panda, AR Revenue by : Shri M.K.Gautam, Date of Hearing : 21/0 Date of Pronouncement : 21/02 O R D E R This is an appeal filed by the assessee against the order of the ld CIT, Sambalpur, dated 19.3.2021 levying penalty u/s.271(1)(c) of the Act in Appeal No. ITBA/PNL/F/271(1)(c)/2020-21/1031610004(1) assessment year 2014-15. Shri B.R.Panda, ld AR appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. Page1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER Pr. CIT, Sambalpur Respondent) B.R.Panda, AR M.K.Gautam, CIT DR 02/2023 2/2023 This is an appeal filed by the assessee against the order of the ld Pr. 19.3.2021 levying penalty u/s.271(1)(c) of the Act 21/1031610004(1) for the Shri B.R.Panda, ld AR appeared for the assessee and Shri ITA No.96/CTK/2021 Assessment Year : 2014-15 Page2 | 4 3. The appeal is time barred by 109 days. The assessee has filed condonation petition dated 16.9.2021 stating the reasons for filing the appeal late by 109 days. After considering the rival submissions, we are satisfied with the reasons given by the assessee for filing the appeal delay of 109 days. Accordingly, we condone the delay and admit the appeal for hearing. 4. It was submitted by ld AR that the order u/s.263 had been passed by the Pr. CIT, Sambalpur, wherein, the issue of cash deposits of Rs.62,10,386/- had been directed to be added. Consequent to the order passed u/s.263, penalty proceedings u/s.271(1)(c) of the Act had been initiated against the assessee. The assessee had responded but the response was not considered satisfactory and the Pr. CIT has levied penalty u/s.271(1)(c) for concealment of particulars of income. It was the submission that the order passed u/s.263 was subject matter of appeal before the Tribunal and the Tribunal vide its order in ITA No.163/CTK/2019 dated 14.10.2020 had confirmed the order u/s.263 of the Act. It was the submission that against the order of the Tribunal, the assessee has filed appeal before the Hon’ble Jurisdictional High court of Orissa and the Hon’ble Jurisdictional High Court of Orissa was pleased to admit the appeal of the assessee in ITA No.8 of 2021 vide order dated 30.1.2023. It was the submission that as the appeal has been admitted on substantial question of law, then sustainability of the addition itself become debatable and ITA No.96/CTK/2021 Assessment Year : 2014-15 Page3 | 4 consequently, the penalty u/s.271(1)(c) cannot be levied. For this proposition, ld AR placed reliance on the decision of Hon’ble Karanataka High Court in the case of CIT vs Dr. Harsha N Billiangady, 379 ITR 529 (Kar), wherein, it has been held that where the penalty was imposed in respect of any addition where the High Court has admitted the appeal on substantial question of law, then the sustainability of the addition itself becomes debatable. In these circumstances, penalty cannot be levied u/s.271(1)(c) of the Act. Ld AR also placed reliance on the decision of Hon’ble Supreme Court in the case of Bansi Dhar and Son reported in 157 ITR 665 (SC), wherein, it has been held that once the order is subject matter of appeal before the Hon’ble High Court and same has been admitted, the Assessing Officer is to wait to the order before proceeding further. It was the submission that as the appeal has already been admitted by the Hon’ble Jurisdictional High Court of Orissa, the penalty as levied may kindly be cancelled. 5. In reply, ld CIT DR vehemently supported the order of the Pr. CIT. It was the submission that the fact that the Tribunal has upheld the order of the Pr. CIT u/s.263 clearly shows that the assessee has concealed its particulars of income. It was the submission that penalty levied u/s.271(1)(c) for concealment of particulars of its income by the assessee is liable to be upheld. ITA No.96/CTK/2021 Assessment Year : 2014-15 Page4 | 4 6. We have considered the rival submissions. As it is noticed that the appeal against the order of the Tribunal upholding the order u/s.263 representing the quantum addition has already been admitted by the Hon’ble Jurisdictional High Court of Orissa referred (supra), respectfully following the principles laid down by the Hon’ble Karanataka High Court in the case of Harsha N Billiangady(supra) the penalty as levied by the Pr. CIT stands quashed. 7. In the result, appeal of the assessee stands allowed. Order dictated and pronounced in the open court on 21/02/2023. Sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 21/02/2023 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Smt. Manjulata Sahoo, At: Banulal Colony, New Market, Keonjhargarh, Keonjhar 2. The Respondent: Pr. CIT, Sambalpur 3. The CIT(A)-, Sambalpur 4. DR, ITAT, Cuttack 5. Guard file. //True Copy//