SHIVRATAN MOTILAL RATHI,JALNA V. INCOME TAX OFFICER, WARD-1, JANA, JALNA

ITA 1704/PUN/2024

AI Insights

The case involves Shivratan Motilalji Rathi HUF appealing against penalties confirmed by the CIT(A) under section 271(1)(c) of the Income Tax Act, 1961, for the assessment years 2007-08, 2009-10, and 2010-11. The penalties were levied based on protective additions made during re-assessment proceedings, which were later quashed for substantive additions made in the hands of Karta, Mr. Shivratan Motilal Rathi. The Tribunal found that since the substantive additions were quashed, the protective penalties could not stand, leading to the decision to delete the penalties.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24709 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Other Referred Cases: CIT vs. Behari Lal Pyare Lal [1983] 141 ITR 32
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND DESAI
• Assessee Lawyers: SMRUTI SABNIA

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2599, 1704 and 2256/PUN/2024 Assessment Years : 2007-08, 2009-10 and 2010-11 Shivratan Motilalji Rathi HUF, Rathi Rathi and Co., 501-504, Akshay Landmarks, Opp. Pu La Garden, Sinhagad Road, Pune 411 030 Maharashtra PAN : AAEHR5318G Vs. Income Tax Officer, Ward-1, Jalna Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned three appeals at the instance of assessee are filed against the confirmation of penalties by the ld.CIT(A) u/s.271(1)(c) of the Income Tax Act, 1961 in relation to the assessment years 2007-08, 2009-10 and 2010-11 respectively. 2. At the outset, ld. Counsel for the assessee submitted that the impugned penalties have been levied in the hands of the assessee HUF on the additions made on protective basis. He submitted that the substantive additions were made in the hands of Karta Mr.Shivratan Motilal Rathi and further stated that in the quantum appeal this Tribunal in the case of Karta Mr.Shivratan Motilal Rathi for A.Yrs. 2004-05, 2008-09 and 2009-10 and 2011- 12 has quashed the re-assessment proceedings which were Appellant by : Smt. Smruti Sabnia Respondent by : Shri Arvind Desai Date of hearing : 10.02.2025 Date of pronouncement : 20.03.2025 ITA No.2599, 1704 & 2256/PUN/2024 Shivratan Motilalji Rathi HUF 2 carried out based on the information received from the Departmental Valuation Officer (DVO). He further submitted that placing reliance on the decision of the Tribunal in ITA Nos. 730 to 733/PUN/2016, dated 11.03.2019 quashing the assessment orders for A.Y. 2004-05, 2008-09, 2009-10 and 2011-12 the ld.CIT(A) in the other two appeals of Karta for A.Yrs. 2007-08 and 2010-11 has quashed the reopening vide order dated 27.03.2019. Ld. AR submitted that since the substantive additions itself have been deleted, there remains no ground for levy of penalty on the protective addition which itself does not stand for. He further referring to the judgment of Hon’ble Punjab and Haryana High Court in the case of CIT vs. Behari Lal Pyare Lal [1983] 141 ITR 32 where it is held that protective order under law is possible but not order of protective penalties. 3. On the other hand, ld. Departmental Representative supported the orders of the lower authorities. 4. We have heard the rival contentions and perused the record placed before us. Admittedly, the impugned penalties have been levied in the hands of assessee HUF for the impugned years on the additions made on protective basis. It is also not in dispute that the substantive additions were made in the hands of Karta Shivratan Motilal Rathi. The substantive and protective additions were made in the re-assessment proceedings. The substantive additions in the hands of Karta Shivratan Motilal Rathi for F.Yrs. 2004-05, 2008-09, 2009-10 and 2011-12 came up for adjudication before this Tribunal in ITA Nos. 730 to 733/PUN/2016 and vide order dated 11.03.2019 the Tribunal has quashed the reopening proceedings by holding that the AO had no authority to reopen the assessment order u/s.147/148 since ITA No.2599, 1704 & 2256/PUN/2024 Shivratan Motilalji Rathi HUF 3 the basis for reopening is the report of DVO. This decision of the Tribunal dated 11.03.2019 has subsequently been followed by the ld.CIT(A) while deciding the appeal of the Karta and the assessee HUF for the A.Yrs. 2007-08 and 2010-11 and after quashing the reopening proceedings no appeal has been filed before this Tribunal. Since all these facts goes uncontroverted, we find that since the substantive additions itself have been deleted there remains no legs for the protective additions to stand for and therefore even the impugned penalties deserves to be deleted. 5. In view of the above, findings of the ld.CIT(A) for the assessment years under consideration are set-aside. The impugned penalties of Rs.87,715/- for the A.Y. 2007-08, 9,58,367/- for the A.Y. 2009-10 and Rs.5,33,928/- for the A.Y. 2010-11 are hereby deleted. Effective grounds of appeal raised by the assessee are allowed. 6. In the result, all the three appeals of the assessee are allowed. Order pronounced on this 20th day of March, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 20th March, 2025. Satish ITA No.2599, 1704 & 2256/PUN/2024 Shivratan Motilalji Rathi HUF 4 आदेश क\u0002 \u0003ितिलिप अ\tेिषत / Copy of the Order forwarded to : 1. अपीलाथ\f / The Appellant. 2. \r\u000eयथ\f / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय \rितिनिध, आयकर अपीलीय अिधकरण, “B” ब\u0014च, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "