KUVAWALLA DRILL EQUIPMENT,PUNE vs. INCOME-TAX OFFICER, WARD - 14 (1), PUNE

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ITA 1375/PUN/2019Status: DisposedITAT Pune22 August 2022AY 2011-124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings were initiated without an independent application of mind by the Assessing Officer, rendering them bad in law. Consequently, the assessment order was annulled.

What were the facts?

The assessee, a partnership firm engaged in manufacturing drilling equipment, had its assessment reopened based on information about purchases from hawala dealers. The Assessing Officer made additions on account of these purchases.

What were the issues?

The primary issue was the validity of the reassessment proceedings initiated by the Assessing Officer. The secondary issue was the consequent levy of penalty.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI INTURI RAMA RAO & SHRI S. S. VISWANETHRA RAVI

For Appellant: Shri Vijay Mecwan
For Respondent: Shri S. P. Walimbe
Hearing: 03.08.2022Pronounced: 22.08.2022

ORDER PER INTURI RAMA RAO, AM: These are the appeals filed by the assessee directed against the separate orders of ld. Commissioner of Income Tax- 7, Pune [‘the CIT(A)] dated 04.06.2019 for the assessment years 2010-11 & 2011-12 respectively.

1.

2 & 1375/PUN/2019 2. Since the identical facts and common issues are involved in all the above captioned two appeals, we proceed to dispose of the same by this common order.

3.

For the sake of convenience and clarity, the facts relevant to the appeal in ITA No.1374/PUN/2019 for the assessment year 2010-11 are stated herein. ITA No.1374/PUN/2019, A.Y. 2010-11 : 4. Briefly, the facts of the case are that the appellant is a partnership firm. It is engaged in the business of manufacturing in drilling equipments. The return of income for the assessment year 2010-11 was filed on 07.10.2010 declaring total income of Rs.81,67,464/- and no scrutiny assessment was made. Subsequently, on receipt of the information from the Investigation Wing of the Department that the appellant made purchase from Hawala dealers, the Income Tax Officer, HQ- 6(2), Pune (‘the Assessing Officer’) reopened the assessment and completed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (‘the Act’) vide 3 ITA Nos.1374 & 1375/PUN/2019 order dated 27.03.2015 after making addition on account of Hawala purchase. Subsequently, the assessment was annulled by this Tribunal in ITA Nos.2534 & 2535/PUN/2017 for the assessment years 2010-11 and 2011-12 vide order dated 26.10.2021 by holding that the reassessment proceedings were bad in law for the reasons that the re-assessment proceedings were initiated without independent application of mind by the Assessing Officer. Thus, the assessment order came to be annulled by this Tribunal. Therefore, the question of levy of penalty u/s 271(1)(c) does not arise.

5.

In the result, the appeal of the assessee in ITA No.1374/PUN/2019 for A.Y. 2010-11 stands allowed.

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