JAIN PROMOTER AND BUILDERS,PUNE vs. INCOME-TAX OFFICER, WARD - 7(1), PUNE

We notice at the outset that the assessees’ identical sole substantive grievance raised in these respective appeals challenges correctness of both the lower authorities’ action levying Section 271(1)(c) penalty(ies) involving varying sums. We find from the “lead” appeal that the impugned penal action has arises on account of various quantitative additions under Sections 40(a)(ia) and 40A(3) as well as those made under Sections 68, 69G, lower withdrawals, TDRS brokerage and interest expenses, etc. And that the department had made the impugned disallowances/ additions as per the common search action herein dated 10.08.2006 in all these cases.

It next emerges that this tribunal’s common quantum order dated 30th November, 2017 in all these assessees’ appeals has already deleted majority of the disallowances/additions, ie partners’ capital contribution, Section 40(a)(ia), Section 40(3) etc. Learned coordinate bench has further directed the Assessing Officer to verify the specified amounts of unexplained income addition afresh. And it has further ordered afresh recomputation of entire income. The impugned penalty(ies) have hardly any legs to stand therefore. Coupled with this, we find that the assessees have also filed its petition dated

Mr. Walimbe vehemently argued that the assesse(s) are estopped from raising the instant legal ground at this belated stage. We find no merit in the Revenue’s instant technical objection in the case in light of NTPC vs. CIT (1998) 229 ITR 383 (SC) as considered in All Cargo Global Logistics vs. DCIT (2012) 137 ITD 287 (Mum) (SB), holds that the instant case very well entertain a pure legal question at any stage provided all facts are part of record. Coming to the Assessing Officer’s penalty show cause notice, there is hardly any dispute that he has not even specified any particular expression as to in what manner these assessees’ deserve to be penalised under Section 271(1)(c) of the Act which goes against the tenor of the hon’ble jurisdictional high court’s recent Full Bench decision in Mohammed Farhan A. Shaik A Shah vs. ACIT (2021) 434 ITR 1 (Bom) taking into consideration all judicial pronouncements till date. Apart from the foregoing merits of the disallowances/additions wherein majority of them stand deleted in light of the quantum proceedings, we hold that the impugned penal proceedings are also liable to be quashed on this legal aspect. The same are accordingly annuled for this precise reason. All these assessees succeed in their corresponding legal ground(s) as well.