TAJ EXIM INTERNATIONAL LTD,MUMBAI vs. DCIT 3(3), MUMBAI

The present appeal has been filed by the assessee challenging the impugned order dated 03/04/2012, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals)–7, Mumbai, [“learned CIT(A)”], for the assessment year 2006–07, which in turn, arose from the penalty order dated 10/03/2011, passed under section 271(1)(c) of the Act.

M/s. Taj Exim International Limited ITA no.6356/Mum./2012

M/s. Taj Exim International Limited ITA no.6356/Mum./2012

2. Without prejudice to above, on the facts and circumstances of the case and judicial proposition, Ld. CIT (Appeals) erred in confirming the levying of penalty u/s 271(1)(c) by Ld. AO on let out property, excess claim of depreciation on Plant & Machinery and Building block of assets and late payment of PF/ESIC and such levy is erroneous in facts and bad in law and liable to be reduced.

3. The appellant craves leave to add, amend, alter or delete all or any of the previously mentioned grounds of appeal

4. The assessee hereby contends that all known and evident facts have been disclosed by the assessee in its Return as was considered proper by the assessee and that there is no deliberate intention on the part of the assessee in furnishing inaccurate particulars of income or concealing the particulars of any amount in his Return of Income.

5. CIT(Appeals)-7 confirmed the order passed by Ld. AO u/s 271(1)(c) of Income Tax Act, 1961.”

5. The only grievance of the assessee, in the present appeal, is against the penalty levied under section 271(1)(c) of the Act.

6. We have considered the rival submissions and perused the material available. The brief facts of the case are that the assessee is engaged in the business of manufacturing and export of garments and fabrics made on SBPF. For the year under consideration, the assessee filed its return of income on 30/11/2006 declaring a total income of Rs.59,56,779. Vide order dated 26/12/2008 passed under section 143(3) of the Act, the Assessing Officer (“AO”) assessed the total income of the assessee at Rs.2,36,26,410 after making addition on account of rejection of deduction under section 80IB of the M/s. Taj Exim International Limited ITA no.6356/Mum./2012 Act, depreciation on let out property, excess claim of depreciation on plant & machinery and building, and late payment of PS/ESIC. In further appeal, the learned CIT(A) vide order dated 01/04/2010 dismissed the appeal filed by the assessee against the aforesaid order passed under section 143(3) of the Act. In the quantum appeal against the aforesaid order passed by the learned CIT(A), the coordinate bench of the Tribunal vide order dated 14/02/2020 passed, inter-alia, in ITA No.617/Del./2019 set aside the order passed by the learned CIT(A) and remanded the matter to the file of the AO to conclude the assessment afresh after affording opportunity to the assessee.

7. Meanwhile, vide penalty order dated 10/03/2011 passed under section 271(1)(c) of the Act, the AO levied a penalty of Rs.58,31,000 on the basis that the assessee has furnished inaccurate particulars of its income. In further appeal, learned CIT(A) vide impugned order dated 03/04/2012 granted partial relief to the assessee in respect of the penalty imposed on the issue of late payment of PS/ESIC. Being aggrieved, the assessee is in appeal before us.

8. We are of the considered opinion that since in the quantum appeal, the coordinate bench of the Tribunal has already restored the matter to the file of the AO for de novo assessment, the penalty as levied under section 271(1)(c) of the Act, at this stage, does not survive and therefore is set aside. However, the AO shall be at liberty to take a fresh call on the levy of penalty, as per law, in consonance with the fresh assessment as and when framed. As a result, grounds raised by the assessee are allowed for statistical purposes.

M/s. Taj Exim International Limited ITA no.6356/Mum./2012