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Income Tax Appellate Tribunal, MUMBAI BENCHES “G”, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI S. RIFAUR RAHMAN
O R D E R
PER SAKTIJIT DEY, JM
This is an appeal by the assessee against order dated 18.01.2019 of learned Commissioner of Income Tax (Appeals)–34, Mumbai confirming the penalty imposed of Rs. 1,24,843 under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2008-09.
Briefly the facts are, the assessee is an individual. For the assessment year under dispute, the assessee filed her return of income on 02.09.2009 declaring total income of Rs. 3,97,700/-. Subsequently, based upon a survey conducted in case of M/s Shivam Corporation and one of its partner, the Assessing Officer (AO) reopened the assessment under section 147 of the Act on the reasoning that the assessee has earned income from undisclosed sources and has also wrongly claimed deduction under section 54EC of the Assessment Year: 2008-09 Act. Ultimately, the AO completed the assessment under section 143(3) r.w.s. 147 of the Act vide order dated 31.01.2013 after making addition of Rs. 4,04,024/- from undisclosed sources and disallowing deduction claimed under section 54EC of the Act. Against the assessment order so passed, the assessee preferred appeal before learned Commissioner (Appeals) and thereafter before the Tribunal. During the pendency of assessee’s appeal, the Assessing Officer, based on the addition made in the assessment order, initiated proceedings for imposition of penalty under section 271(1)(c) of the Act in respect of addition of Rs. 4,04,024/- and ultimately passed an order on 26.03.2015 imposing penalty of Rs. 1,24,843/-. Against the penalty order so passed, the assessee preferred an appeal before learned Commissioner (Appeals). However, the penalty imposed was confirmed.
When the appeal was called for hearing, none appeared on behalf of the assessee to represent the case. However, considering the nature of dispute, we proceed to dispose of the appeal ex-parte qua the assessee after hearing the learned Departmental Representative and on the basis of materials on record.
We have heard the learned Departmental Representative and perused the material on record. Undisputedly, the subject matter of penalty imposed under section 271(1)(c) of the Act is the addition of Rs. 4,04,024/- made in the assessment order passed under section 143(3) r.w.s. 147 of the Act. As stated earlier, against the assessment order so passed the assessee had preferred an appeal before learned Commissioner (Appeals) and thereafter before the Tribunal. While deciding the aforesaid appeal, the Tribunal in dated 13.05.2016 has restored the issue relating to addition of Rs. 4,04,024/- to the AO for deciding afresh. Thus, on restoration of the issue back to the Assessing Officer, the basis for imposition of penalty under section 271(1)(c) of the Act stood/obliterated. That being the case, the impugned order passed by learned Commissioner (Appeals) confirming the penalty imposed under section 271(1)(c) of the Act cannot be sustained.
Assessment Year: 2008-09 5. Even, otherwise also, as could be seen from the statement of facts and grounds of appeal filed by the assessee, in pursuance to the direction of the Tribunal, the AO has passed a fresh assessment order under section 143(3) of the Act r.w.s. 254 of the Act, wherein, no penalty proceeding under section 271(1)(c) of the Act was initiated. Thus, it is very much clear, the AO was convinced that no case under section 271(1)(c) of the Act was made out against the assessee. In any case of the matter, as discussed earlier, the addition the based on which the penalty order under section 271(1)(c) of the Act was passed having lost its existence, the penalty order cannot survive. Accordingly, we delete the penalty imposed of Rs. 1,24,843/-. Grounds are allowed.
In the result, appeal is allowed. Order pronounced in the open court on 28th June, 2021.