SIDDQUE AHMED ABBASALI CHODHARY,MUMBAI vs. ITO WD 21(3)(2), MUMBAI

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ITA 4522/MUM/2016Status: DisposedITAT Mumbai04 May 2022AY 2009-104 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the quantum addition, which formed the basis for the penalty, was set aside, the penalty could not survive. Therefore, the order of the CIT(A) upholding the penalty was set aside.

What were the facts?

The assessee appealed against a penalty levied for furnishing inaccurate particulars of income. The penalty was based on an addition sustained by the CIT(A), but this addition was later restored to the Assessing Officer for fresh examination by the Tribunal.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the underlying addition to income has been set aside for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY

For Respondent: Mr. Hoshang B. Irani, DR
Hearing: 04/05/2022Pronounced: 04/05/2022

PER OM PRAKASH KANT, AM

1.

This appeal has been preferred by the assessee against the order dated 31.03.2016 passed by the Ld. Commissioner of Income Tax (Appeals)-38, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2009-10, wherein he has upheld the penalty levied by the Assessing Officer for furnishing inaccurate particulars of income.

Siddique Ahmed Abbasali Chowdhary

2.

At the outset, we may like to mention that when the appeal was called for, neither anyone appeared on behalf of the assessee nor adjournment was sought. On perusal of the record, it is also seen that no compliance has been made on behalf of the assessee for hearing dated 03.12.2020, 11.02.2021, 28.04.2021, 07.07.2021 and 14.10.2021. We may also liked to mention that this appeal was earlier heard ex-parte qua the assessee, on 19.09.2017 but has been recalled by the Tribunal by way of the order dated 11.06.2019 in Miscellaneous Application No. 372/Mum/2018.

3.

In the case, penalty has been levied in respect of addition of the cash deposit sustained by the Ld. CIT(A), however, the said addition has been restored back to the file of the Assessing Officer by the Tribunal vide order dated 02.09.2016 in ITA No. 1795/Mum/2013. Relevant finding of the Tribunal (supra) is reproduced as under :

“7. We have heard the rival contentions and perused the record. We have earlier noticed that the Assessing Officer has made addition only on the reasoning that the assessee could not furnish date-wise cash flow statement. Now, learned AR submits that the assessee has Siddique Ahmed Abbasali Chowdhary since prepared the same by way of cash book. Hence, in the interest of natural justice, we are of the view that the cash book prepared by the assessee requires examination at the end of the Assessing Officer. Accordingly, we restore the issue contested by the assessee to the file of the Assessing Officer with the direction to examine afresh by duly considering the cash book prepared by the assessee and take appropriate decision in accordance with law, after providing adequate opportunity of being heard to the assessee.

8.

In the result, appeal filed by the assessee is allowed for statistical purposes and appeal of the Revenue is dismissed”.

4.

Since, the quantum addition in respect of which the penalty was levied, has been set aside therefore, the present penalty levied by the Assessing Officer cannot survive. Accordingly, the order of the Ld. CIT(A) is set aside and the ground of appeal of the assessee are allowed.

5.

In the result, the appeal of the assessee is allowed.

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