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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI RAJESH KUMAR (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) (Assessment Year: 2011-12) Chetna Sanjay Patil ITO, Ward 1, C-1, Indraprasth Building Bhim Vs. Aayakar Bhavan, Nagar, Trapur Road, Boisar (W), Income Tax Office, Dist. Palghar, BIDCO Road, Tal & Dist. Maharashtra – 401501 Palghar, Maharashtra 401404 PAN No. AHGPP8098N (Assessee) (Revenue) Assessee by : Shri Subodh Ratnaparkhi, A.R Revenue by : Ms. Sheekala Pardeshi, D.R Date of Hearing : 29/07/2021 Date of pronouncement : 30/07/2021 ORDER PER RAVISH SOOD, J.M: The present appeal filed by the assessee is directed against the order passed by the CIT(A)-3, Thane, dated 08.07.2019, which in turn arises from the order passed by the A.O u/s 271(1)(c) of the Income Tax Act, 1961 (for short ‘Act’), dated 29.06.2017.
Briefly stated, the assessee had filed his return of income for A.Y. 2011-12 on 06.09.2011, declaring a total income of Rs.7,83,290/-. The return of income was initially processed as such u/s 143(1) of the Act. Subsequently, the case of the assessee was reopened u/s 147 of the Act. Assessment was thereafter framed by the A.O vide his order passed u/s 143(3) r.w.s 147, dated 15.12.2016 ,
2 Chetna Sanjay Patil Vs. ITO, Ward 1 wherein after making an addition under Sec. 68 qua an unexplained cash credit of Rs.25,00,000/- the income of the assessee was assessed at Rs.32,83,290/-.
On appeal, the CIT(A) vide his order passed in dated 05.07.2019 scaled down the addition of Rs.25,00,000/- made by the A.O to an amount of Rs.12,50,000/-.
Subsequently, the A.O after framing the assessment vide his order passed u/s 271(1)(c), dated 29.06.2017 imposed a penalty of Rs.7,72,500/- on the assessee.
The assessee assailed the order passed by the A.O u/s 271(1)(c) of the Act, dated 29.06.2017 before the CIT(A), who after taking cognizance of the fact that the addition made in the hands of the assessee was in the course of the quantum appeal restricted to an amount of Rs.12,50,000/-, therein sustained the penalty qua the addition that was upheld by his predecessor. Insofar the contention advanced by the assessee to drive home his claim that no penalty u/s 271(1)(c) was liable to be imposed on him, the same did not find favour with the CIT(A) and was rejected. Accordingly, the appeal filed by the assessee was partly allowed.
Aggrieved, the assessee has assailed the order passed by the CIT(A), dated 08.07.2019 in appeal before us. The ld. Authorized Representative (for short ‘A.R’) for the assessee at the very outset of the hearing of the appeal submitted that the quantum appeal filed by the assessee against the order passed by the CIT(A), had been allowed by the Tribunal, vide its order passed in ITA No. 6103/Mum/2019, dated 20.07.2021. It was thus submitted by the ld. A.R that the Tribunal vide its aforesaid order had quashed the assessment framed by the A.O. u/s 143(3) r.w.s 147, dated 15.12.2016. In order to buttress his aforesaid claim the ld. A.R had taken us through the order passed by the Tribunal disposing off the quantum appeal of the assessee. It was submitted by 3 Chetna Sanjay Patil Vs. ITO, Ward 1 the ld. A.R that now when the assessment order had been quashed by the Tribunal, therefore, the penalty imposed by the A.O u/s 271(1)(c) of the Act could not be allowed to exist on a standalone basis and was liable to be quashed on a similar footing.
Per contra, ld. Departmental Representative (for short ‘D.R’) did not controvert the aforesaid factual position.
We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record. As stated by the ld. A.R, and rightly so, the Tribunal vide its order passed in dated 20.07.2021 had quashed the assessment order passed by the A.O u/s 143(3) r.w.s 147 of the Act. Accordingly, now when the very genesis for imposing the penalty u/s 271(1)(c) of the Act i.e the assessment order passed by the A.O u/s 143(3) r.w.s 147 had been quashed and ceases to exist anymore, therefore, penalty imposed u/s 271(1)(c) cannot survive on a standalone basis, and has to meet the same fate. We, thus, in terms of our aforesaid observations quash the order passed by the A.O u/s 271(1)(c) of the Act, dated 29.06.2017.
The appeal filed by the assessee is allowed in terms of our aforesaid observations.
Order pronounced in the open court on 30.07.2021