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Income Tax Appellate Tribunal, DELHI BENCH: ‘I(2
Before: MS SUCHITRA KAMBLE, & SHRI PRASHANT MAHARISHI
ORDER PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order dated 23/8/2011 passed by CIT(A)-XXI, New Delhi for Assessment Year 2006-07.
The grounds of appeal are as under:-
“Ground No. 1 That the Ld. Asstt. Director of Income Tax (E) and the CIT(A) in confirming the same, has erred both on laws as on facts, for imposing Penalty u/s 271(l)(c) of Rs. 16,40,708/- (100% of tax on the assessed income of Rs. 48,74,860/- consisting of returned income of Rs. 11,21,177/- and addition of Rs. 37,88,178/- u/s 68. Ground No. 2
That the levy of penalty on interest earned on deposits with banks of Rs. 10,86,177/- declared in income tax return for relevant year, is wholly wrong , illegal and against all cannons of justice. Ground No. 3 That the levy of penalty on addition of Rs.37,88,178/- u/s 68 is again wrong and illegal, since the addition made on account of differences in loans is deleted by the Hon'ble ITAT later on. Ground No.4 That the AO is wrong and unjustified in not keeping the penalty proceedings in abeyance and levying the penalty in great hurry. Ground No.5 That the penalty order has passed without allowing due and proper opportunity to the appellant before passing the impugned order and thus the cannons of natural justice have been violated. Ground No.6 That any other or further ground of appeal may be allowed to be taken at the time of hearing of appeal, which may be deemed necessary in the facts and circumstances of the case. Ground No.7 That the appellant be allowed to file additional evidence, if so required for proper’ prosecution of the case, based on the facts and circumstances, which has not been or cannot be educed or filed before lower authorities either because proper and sufficient opportunity was not provided or because it was not solicited or its need was not appreciated.”
3. The assessee company filed its return of income for Assessment Year 2006-07 on 29/11/2006 declaring income of Rs. 11,21,177/- which comprises of interest received from bank at Rs. 10,86,177/- and miscellaneous income of Rs. 35,000/-. The assessee paid taxes of Rs. 3,93,318/- including interest. The addition in respect of income from other sources and addition u/s 68 was made by the Assessing Officer. In the meanwhile the penalty order dated 28.07.2010 was passed imposing penalty of Rs. 16,40,708/-.
Being aggrieved by the penalty order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that in the assessment proceedings, the tax consultant did not produce the facts that the assessee suo-moto while filing income tax return paid the tax on the addition of Rs. 10,86,177/-.The assessee had paid the demand of Rs. 21,87,102/- on 12.3.2010. Against the said additions the assessee company has filed an appeal before CIT (A). The CIT (A) dismissed the appeal in his order dated 29.01.2010. The assessee went into appeal before the Tribunal against the Appellate order. Meanwhile the Assessing Officer initiated penalty proceedings and imposed a minimum penalty of Rs. 16,40,708/- on the additions of Rs. 48,74,360/- u/s 271(l)(c). The date of order is 28.07.2010. Aggrieved by the penalty order assessee company filed an appeal before CIT (A) and paid Rs. 5,00,000/- on 22.3.2011 against the penalty order. The CIT(A) partially allowed the appeal vide his order dated 23.08.2011. However there was no relief from the penalty imposed by Assessing Officer but CIT (A) redirected the Assessing Officer to re-compute the penalty on additions made during the assessment proceedings and not on the tax sought to be evaded on assessed income. Further the concerned tax consultant did not proceed to go in appeal before Tribunal against the CIT (A) order. Consequently, the assessee is liable to pay the balance penalty i.e. Rs. 16,40,708- Rs. 5,00,000/-= Rs. 11,40,708/-. Meanwhile the order of Tribunal dated 30.11.2015 was passed in which the Tribunal deleted the addition of Rs. 37,88,178/- and confirmed the addition of Rs. 10,86,177/-. Thereafter the assessee received an appeal effect order u/s 254/250/143(3) dated 05.07.2016 in which income was reassessed as follows:- Particulars Amount Income as per return of income 11,21,177/- Add: Addition confirmed after the order of 10,86,177/-
Hon’ble ITAT Total income after giving effect to the 22,07,354/- order of ITAT
This resulted in tax of Rs. 9,46,90/- including interest. The Ld. AR submitted that this results in double taxation. The Ld. AR further submitted that the penalty proceedings were re-initiated again in light of addition of Rs. 10,86,177/- earned by assessee from fixed deposit confirmed by the Tribunal resulting in another penalty order u/s 271(1)( c) dated 29.09.2016 imposing a minimum penalty of Rs. 3,65,607/-. Against which the assessee went into appeal before CIT (A) which is allowed.
The Ld. DR relied upon the order of the CIT(A), penalty order as well as assessment order.
We have heard both the parties and perused the material available on record. There is a delay of 2,440/- days for filing the present appeal which was duly explained by the assessee vide affidavit dated 9th July, 2018. The Ld. AR prayed that the delay be condoned as the tax consultant in the present appeal was frequently changed and, therefore, the assessee was not able to file the appeal within time. The Ld. DR objected to the same. The reason appears to be genuine and therefore, we are condoning the delay. The order of Tribunal dated 30.11.2015 was passed in which the Tribunal deleted the addition of Rs. 37,88,178/- and confirmed the addition of Rs. 10,86,177/-. Thereafter the assessee received an appeal effect order u/s 254/250/143(3) dated 05.07.2016 in which income was reassessed as follows:- Particulars Amount Income as per return of income 11,21,177/- Add: Addition confirmed after the order of 10,86,177/- Hon’ble ITAT Total income after giving effect to the 22,07,354/-
order of ITAT
From the perusal of record it seems that the contention of the Ld. AR that this resulted in tax of Rs. 9,46,90/- including interest amounts to double taxation. The penalty proceedings were re-initiated again in light of addition of Rs. 10,86,177/- earned by assessee from fixed deposit confirmed by the Tribunal resulting in another penalty order u/s 271(1)( c) dated 29.09.2016 imposing a minimum penalty of Rs. 3,65,607/-. Against which the assessee went into appeal before CIT (A) which is allowed. Thus, at this juncture the penalty does not survive, hence, we, therefore, set-aside the order of the CIT(A) and direct the Assessing Officer to cancel the penalty so levied. The appeal of the assessee is allowed.
In result, appeal of the assessee is allowed.
Order pronounced in the Open Court on 19th March, 2020.