PUSHPA RAJAWAT,JAIPUR vs. ITO, JAIPUR
What did the Tribunal hold?
The Tribunal held that since the Hon'ble High Court had ruled in favour of the assessee in the quantum appeal, the penalty levied under Section 271(1)(c) could not be sustained. The penalty was consequential to the quantum addition.
What were the facts?
The assessee filed an appeal against a penalty levied under Section 271(1)(c) of the Income Tax Act. The assessee contended that the penalty could not be sustained as the Hon'ble Rajasthan High Court had allowed the appeal in the quantum proceedings in favour of the assessee.
What were the issues?
Whether a penalty under Section 271(1)(c) can be sustained when the underlying addition has been deleted by a higher appellate authority. The validity of a second show cause notice under Section 148 was also a related issue.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC
Before: SHRI BHAGCHANDvk;dj vihy la-@ITA No. 250/JP/2016
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh Hkkxpan] ys[kk lnL;] ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 250/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 1997-98 cuke Pushpa Rajawat, Income Tax Officer, Vs. W/o- Shri Bhawani Singh Ward-6(2), Rajawat, Present R/o- 111, Jaipur. Sumer Nagar Extension-A, Opp. Dhanvantri Hospital, New Sanganer Road, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABDPR 1401 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri C.M. Sharma (Adv) jktLo dh vksj ls@ Revenue by : Smt. Poonam Roy (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 11/12/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 12/12/2017 vkns'k@ ORDER
PER: BHAGCHAND, A.M. This is an appeal filed by the assessee emanates from the order of the ld. CIT(A)-5, Jaipur dated 18/01/2016 for the A.Y. 1997-98.
At the outset of hearing, the ld. AR of the assessee has submitted that this appeal is against sustaining the penalty of Rs. 5,03,327/- levied U/s 271(1)(c) of the Income Tax Act, 1961 (in short
ITA 250/JP/2016_ 2 Pushpa Rajawat Vs ITO
the Act). He further pleaded that the Hon’ble Rajasthan High Court has
allowed the appeal of the assessee in quantum, therefore, in
consequence of the order, no penalty could be sustained.
On the other hand, the ld DR has relied on the orders of the
authorities below.
I have heard both the sides. The matter in quantum went up to
the Hon'ble High Court and the Hon'ble High Court has answered the
question in favour of the assessee. The relevant portion of the order of
the Hon'ble High Court is reproduced hereunder:
“8. We have heard counsel for the parties. 9. Taking into consideration the provisions of Section 148 of the Income Tax Act which reads as under:- 148. Issue of notice where income has escaped assessment. (1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 : Provided that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and
ITA 250/JP/2016_ 3 Pushpa Rajawat Vs ITO
(b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub- section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice : Provided further that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub- section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. 10. Since, the original proceedings were pending before the CIT(A), without entering into the question of jurisdiction of the Sawaimadhopur A.O., the fact remains that the adjudicating authority could not have issued second show cause notice U/s 148. In that view of the matter, without entering into the matter whether the Gwalior or the Sawaimadhopur, A.O. has jurisdiction or not, the second show cause is held to be not legal. 11. In that view of the matter, first issue is required to be answered in favour of the assessee and against the department. The second issue being consequential to first issue, the same is also to be answered in favour of the assessee. 12. Hence, both the issues are answered in favour of assessee and against the Department.”
Considering this fact, no penalty can be sustained. Hence appeal of the
assessee stands allowed.
ITA 250/JP/2016_ 4 Pushpa Rajawat Vs ITO 5. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 12/12/2017.
Sd/- ¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 12th December, 2017 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Smt. Pushpa Rajawat, Jaipur. 1. izR;FkhZ@ The Respondent- The Ward-6(2), Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 250/JP/2016) 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत
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