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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. SANJAY ARORA & SH. N.K.CHOUDHRY
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA No.361(Asr)/2017 Assessment Year:2006-07
M/s PMS Diesels Vs. Asst. CIT, Village:- Jamalpur Phagwara Range G.T. Road, Phagwara Phagwara PAN:AAAFP9505H (Appellant) (Respondent) Appellant by: Sh. Tarun Bansal (Ld. Adv.) Respondent by: Sh. Charan Dass (Ld. DR) Date of hearing: 21.03.2018 Date of pronouncement: 22.03.2018 ORDER PER N.K.CHOUDHRY, JM:
The instant appeal has been preferred by the Assessee/Appellant, on feeling aggrieved against the order dated 03.04.2017 passed by the Ld. CIT(A)-2, Jalandhar, u/s 250(6) of the I.T. Act, 1961 (hereinafter called as ‘the Act’).
The assessee has raised the following grounds of appeal. “1. That on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in confirming penalty, levied u/s 271(1)(c) of the Income-tax Act, 1961.”
ITA No.361/Asr/2017 (A.Y.2006-07) 2 M/s. PMS Diesels, Phagwara vs. ACIT
That the ld. AO as well as CIT(A) had gravely erred in law and facts of the case by most arbitrarily imposing penalty u/s 271(1)(c) of the Act in the hands of the assessee firm w.r.t. the allege unclaimed fictitious liabilities, brushing aside the explanation of the assessee firm in the light of the settled position of law and has also not seen the proposition of law u/s 41(1). 3. That the ld. AO has not established the following conditions, before imposing penalty, hence, the imposition of penalty is bad-in-law:- (i) AO not established that liability did not exist. (ii) AO not established that a particular expenditure is not justifiable from a commercial point of view and not brought on record any evidence of concealment. 4. That the ld. AO has held the liability as bogus, then the question of Remission or Cession thereof does not arise. 5. That the ld. AO has wrongly confirmed the penalty on addition made on brought forward balance and there is no mensrea. 6. That the ld. AO, as well as, ld. CIT(A) has wrongly confirmed the penalty u/s 271(1)(c) on estimated GP rate, as calculated by ld. A.O in quantum order. 7. That the order of Ld. A.O is bad in law, as well as, on facts. That appellant craves to add or amend any ground 8. of appeal before the appeal is finally heard or disposed off. 9. That the order may kindly be modified or another consequential relief be allowed.”
In addition to the aforesaid grounds, the assessee has also raised an additional ground of appeal which is reproduced herein below. “That no penalty can be imposed/confirmed u/s 271(1) (c), when the additions on which the penalty is imposed are already deleted by Hon’ble ITAT vide order dated 30.08.2017 in the case of appellant, in quantum order.”
ITA No.361/Asr/2017 (A.Y.2006-07) 3 M/s. PMS Diesels, Phagwara vs. ACIT
The basic contention of the ld. AR is that although the penalty was imposed by the Assessing Officer, which was partly confirmed under the head of unclaimed fictitious/bogus liabilities of Rs.5,44,568/- (Rs/.11,59,663-6,15,095) and secondly addition made on account of low gross profit rate (Rs.4,73,392/), by reducing the penalty amount to Rs.3,63,255/- out of total penalty of Rs.4,99,720/- imposed by the AO u/s 271(1) (c) of the I.T. Act. The Ld. AR has drawn our attention to the order passed by the Co-ordinate Bench at Amritsar, in which the addition of Rs.11,59,663/- qua unclaimed/fictitious liabilities and addition of Rs.4,73,392/- on account of low gross profit rate has already been deleted vide its order dated 30th August, 2017. We have perused the order passed in ITA No.114(Asr)/2014 along with other ITAs by the Co-ordinate Bench at Amritsar, the Co-ordinate Bench vide para No.15 of its order dated 30.08.2017 deleted the addition of Rs.11,58,963/- made by the Assessing Officer u/s 41(1) of the Act and in para No.20 deleted the addition of Rs.4,73,392/-. The said order passed by the Co-ordination Bench at Amritsar is not under challenge before any other Higher Courts and even otherwise, the ld. DR has refuted the said claim of the assessee, therefore, we are of the view that once the quantum order has been quashed and/or the addition has been deleted, in that
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eventuality no penalty can be levied and/or survive, hence, we order for deletion of the penalty.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 22 .03.2018.
Sd/- Sd/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:22.03.2018 /PK/ Ps. Copy of the order forwarded to: (1) M/s PMS Diesels, Phagwara (2) The Asst. CIT, Phagwara (3) The CIT(A)-2, Jalandhar (4) The CIT concerned (5) The SR DR, I.T.A.T., Amritsar True copy By order