PABITRA BORO,TANGLA vs. INCOME TAX OFFICER, WARD-MANGALDAI, MANGALDAI

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ITA 23/GTY/2022Status: DisposedITAT Guwahati09 June 2023AY 2012-133 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the assessment order, which formed the basis for the penalty, was set aside by the Coordinate Bench, the penalty order became infructuous. A de novo assessment was subsequently completed.

What were the facts?

The assessee claimed exemption under Section 10(26) of the Income-tax Act, which was initially allowed but later enhanced by the CIT(A) treating the claim as bogus. Consequently, a penalty was imposed under Section 271(1)(c). However, the ITAT set aside the assessment order and restored the matter to the AO for fresh adjudication.

What were the issues?

Whether a penalty under Section 271(1)(c) can sustain when the underlying assessment order has been set aside by a higher appellate authority.

Which sections of the Income-tax Act were involved?

Section 10(26),Section 271(1)(c),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GAUHATI BENCH

Before: SHRI SANJAY GARG & SHRI GIRISH AGRAWAL

For Appellant: Shri Manoj Nahata, FCA
For Respondent: Shri N. T. Sherpa, JCIT
Hearing: 06.06.2023Pronounced: 09.06.2023

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

1.

This appeal filed by the assessee is against the penalty order passed by Ld. CIT(A), Guwahati-1, Guwahati vide Appeal No. Mangal- 2/15-16/214 dated 24.09.2020 u/s. 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) for AY 2012-13.

2.

The moot point raised in this appeal is on imposition of penalty of Rs.3,17,04,016/- u/s. 271(1)(c) of the Act when the assessment in relation to which penalty has been imposed has been set aside by the Coordinate Bench of ITAT, Gauhati in the quantum appeal of the assessee in dated 08.11.2021.

Pabitra Boro, AY: 2012-13 3. Brief facts of the case are that the assessee was assessed u/s. 143(3) on 13.03.2015 wherein the assessee was directed to substantiate the exemption claimed u/s. 10(26). The assessee is stated to be Scheduled Tribe, resident of Tangla Town under Harisinga revenue circle, P. S. Tangla in the district of Udalguri of Bodoland Territorial Council, Assam and is stated to be engaged in civil contract work and sale/supply business. Assessment u/s. 143(3) of the Act was completed by making an addition of Rs.17,42,310/- as income from other sources outside the purview of section 10(26) of the Act. Assessee went in appeal before the Ld. CIT(A) which was dismissed and the assessed income was enhanced by the Ld. CIT(A) by an amount of Rs.10,30,95,325/- by treating the purported claim of exempt income as bogus. Thereafter, penalty proceedings were initiated u/s. 271(1)(c) and a penalty of Rs.3,17,04,016/- was imposed u/s. 271(1)(c) of the Act.

4.

Against the order of Ld. CIT(A) in relation to assessment including enhancement of income, assessee went in appeal before the Tribunal in ITA No. 56/Gau/2020. The Coordinate Bench of ITAT pronounced its decision on 08.11.2021 whereby the order was set aside, restoring the matter back to the file of Ld. AO for fresh adjudication. The relevant finding given by the Coordinate Bench is reproduced as under:

“Keeping in view the submissions made by the Ld. AR and documents placed before us in the paper book we find the impugned order is not sustainable since the turnover could not be considered to be assessee’s income. Therefore, we deem it fit to set aside the impugned order & restore the matter back to the file of the Ld. AO for fresh adjudication with a direction to the assessee to substantiate its claim with satisfactory documentary evidences.”

Pabitra Boro, AY: 2012-13 5. Consequent to this direction by the Coordinate Bench, an appeal effect giving order of assessment u/s. 143(3) read with sec. 254 was passed by the Ld. AO dated 31.03.2023 wherein the total income is assessed at Rs.25,77,380/-. The demand raised by way of this assessment has been paid by the assessee. Considering the above facts on record, the very basis on which the impugned penalty has been imposed has been set aside by the Coordinate Bench, rendering this impugned order of penalty infructuous, by virtue of de novo assessment directed to be completed by the Ld. AO which also has been done as noted above. Accordingly, we dismiss this present appeal as infructuous.

6.

In the result, appeal of the assessee is dismissed as infructuous.

Order pronounced in the open Court on 9th June, 2023.

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