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Income Tax Appellate Tribunal, MUMBAI BENCHES “F”, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI MANOJ KUMAR AGGARWAL
O R D E R
PER SAKTIJIT DEY, JM
The captioned appeals by the revenue relating to the same assessee arise out of three separate orders, all dated 27.06.2019, of learned Commissioner of Income Tax (Appeals) 38, Mumbai deleting the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for the assessment years 2005-06, 2006- 07 and 2007-08. 2 MUM/2019 Assessment Years: 2005-06, 2006-07 & 2007-08 2. We have considered the submissions of Smt. Usha Gaikwad, the learned Departmental Representative and Shri Pradip Kapasi, the learned counsel for the assessee. 3. Briefly the facts are, the assessee is an individual. For all the assessment years are dispute the assessee had filed his return of income in regular course. Subsequently, the Assessing Officer having received information that the assessee had not disclosed certain deposits, interest and other transactions in a particular bank account, reopened the assessments under section 147 of the Act. Ultimately, the Assessment Officer completed assessments under section 143(3) r.w.s. 147 of the Act for all the aforesaid assessment years making certain additions. Against the assessment orders so passed the assessee preferred appeals before learned Commissioner (Appeals) and thereafter before the Tribunal. During the pendency of assessee’s appeals before the Tribunal, based on the additions made in the assessment orders the Assessing Officer initiated proceedings for imposition of penalty under section 271(1)(c) of the Act of various amounts. Against the penalty orders so passed the assessee preferred appeal before learned Commissioner (Appeals). Learned Commissioner (Appeals) disposed of the appeals filed by the assessee with the following common observations:
“5.1 I have perused the order dated 09.11.2017 passed by the Hon’ble ITAT, “SMC” Bench, Mumbai, in in the appellant’s own case on the quantum appeal filed by the appellant. It is seen that the Hon’ble Tribunal have directed the AO to re-examine the claim of the assessee, the factual matrix and then decide in accordance with law on the above additions and in view of the same, the Hon’ble Tribunal has restored the matter back to the file of the AO with a direction to decide the issue afresh by affording an opportunity. In obedience to the directions of the Hon’ble ITAT the AO has made the assessment vide order u/s 143 (3) r.w.s. 254 dated 31.12.2018. In the said facts and circumstances since assessment 5.2 In view of the above, the penalty order passed by the AO is non maintainable anymore as the assessment order wherein the penalty proceedings u/s 271 (1) (c) was initiated and levied does not exist. Hence, the grounds of appeal are not adjudicated. The appeal of the appellant is disposed as non-maintainable.”
4. In our view, the observations of learned Commissioner (Appeals) reproduced herein above are self explanatory. Undisputedly, the penalty proceedings under section 271(1)(c) of the Act were initiated based on additions made in the assessment orders passed under section 143(3) r.w.s. 147 of the Act. It is a fact on record that while deciding assessee’s appeals arising out of those assessment orders, the Tribunal vide order dated 09.11.2017 in ITA No. 6900 to 6903/Mum/2016 has set aside the assessments back to the file of Assessing Officer with a direction to make afresh assessments. Therefore, when the assessment orders based on which penalty under section 271(1)(c) of the Act have lost their existence, the orders passed imposing penalty cannot survive.
5. Pertinently, in pursuance to the directions of the Tribunal, the Assessing Officer has passed afresh assessment orders under section 143(3) r.w.s. 254 of the Act vide orders dated 31.12.2018. Further, while doing so the Assessing Officer has again initiated proceedings for imposition of penalty under section 271(1)(c) of the Act based on the additions made. For the aforestated reasons, we fully agree with the view expressed by the learned Commissioner (Appeals).
6. In the result, appeals filed by the revenue are dismissed.