SHAILENDRAKUMAR MANSINGRAO BHOITE,VADODARA V. THE ACIT, CIRCLE-3(1), VADODARA

ITA 1581/AHD/2024

AI Insights

The case involves an appeal by Shailendrakumar Mansingrao Bhoite against the order of the Commissioner of Income Tax (Appeals), which confirmed the levy of a penalty under Section 271(1)(c) of the Income Tax Act. The penalty was imposed due to certain additions amounting to Rs. 33,45,099, which were added to the assessee's income by the Assessing Officer, citing the assessee's failure to prove the capacity of the loan creditors. The assessee's appeal against the quantum additions is still pending before the CIT(A), yet the penalty was confirmed. The Tribunal found that proceeding with the penalty while the quantum appeal is pending could lead to unjust outcomes, hence set aside the penalty to be reconsidered after the decision on the quantum appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314392 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDRA
• Assessee Lawyers: NIRAJ SHAH
• Section: 143(3); 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER I.T.A. No.1581/Ahd/2024 (Assessment Year: 2016-17) Shailendrakumar Mansingrao Bhoite, 201, Subhadra Avenue, B/h. Akshar Pavilion Yoginagar, Gotri, Vadodara-390021 Vs. Assistant Commissioner of Income Tax, Circle-3(1), Vadodara [PAN No.ADCPB9899D] (Appellant) .. (Respondent) Appellant by : Shri Niraj Shah, A.R. Respondent by: Shri Ravindra, Sr. DR Date of Hearing 05.05.2025 Date of Pronouncement 08.05.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi confirming levy of penalty under Section 271(1)(c) of the Act vide order dated 30.06.2024 passed for A.Y. 2016-17. 2. At the outset, we observe that the appeal is time barred by 05 days. The delay of 05 days is condoned on due consideration of facts and owing to smallness of delay causing no perceptible prejudice to other side. 3. The Assessee has taken the following grounds of appeal:- “1. The ld. CIT(A) have erred on facts and in law in dismissing the appeal as non-est without adjudication on merits.” ITA No. 1581/Ahd/2024 Shailendrakumar Mansingrao Bhoite vs. ACIT Asst.Year –2016-17 - 2– 4. During the course of hearing the Counsel for the assessee submitted that in this case Ld. CIT(A) had confirmed levy of penalty under Section 271(1)(c) on the assessee on account of certain additions amounting to Rs. 33,45,099/- which were added in the hands of the assessee by the Ld. Assessing Officer since the assessee had failed to prove the capacity of the alleged loan creditors. The Counsel for the assessee submitted that the assessee had filed appeal before Ld. CIT(A) on 29.04.2021 against the assessment order dated 22.12.2018 passed by the Assessing Officer under Section 143(3) of the Act. However, till date Ld. CIT(A) has not yet passed the order in the appeal challenging the additions made in quantum proceedings before him. However, while the appeal in relation to quantum proceedings is still pending before Ld. CIT(A), however, Ld. CIT(A) has proceeded to confirm levy of penalty with respect to the same additions, in respect of which quantum appeal is still pending. 5. On perusal of the contents of the order passed by the Ld. CIT(A), it is observed that there was delay of 614 days in filing of appeal before Ld. CIT(A) against the penalty order passed by the Assessing Officer under Section 271(1)(c) of the Act. Further, the assessee also did not provide any explanation for such delay before Ld. CIT(A). However, it is a well settled law that if the quantum additions are themselves deleted on merits, then in respect of such quantum additions, there is no question of levy of penalty under Section 271(1)(c) of the Act for concealment of income. Accordingly, in our considered view, in the interest of justice, the levy of penalty is set-aside to the file of Ld. CIT(A), to be taken up along with appeal filed by the assessee against quantum proceedings. The Counsel for the assessee submitted that the ITA No. 1581/Ahd/2024 Shailendrakumar Mansingrao Bhoite vs. ACIT Asst.Year –2016-17 - 3– assessee has a good case on merits and if given an opportunity of hearing, he would be able to satisfy the Revenue Authorities that this is not a fit case for making any additions in the hands of the assessee. 6. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 08/05/2025 Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 08/05/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 06.05.2025 2. Date on which the typed draft is placed before the Dictating Member 07.05.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 07.05.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement .05.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 08.05.2025 7. Date on which the file goes to the Bench Clerk 08.05.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "