RATTAN PROPERTIES AND PROJECTS PVT. LTD.,MUMBAI vs. ACIT, - CIRCLE-1 , KALYAN

The assessee has challenged the impugned order passed by the Ld. CIT (A) on the following effective ground:- 1. “On facts and circumstances of the case and in law, the Commissioner of Income Tax- (Appeals)-2, Pune (hereinafter referred to as CIT (A) erred in upholding the penalty u/s 271 (1) (c) amounting to Rs. 6,08,945/- levied by the assessing officer (hereinafter referred to as the A.O.) in an arbitrary manner on the basis of guess work and without bringing on record any evidence Assessment Year: 2012-13 that the interest income voluntarily offered was detected/noticed by the A.O.

On the facts and in the circumstances of the case and in law the CIT (A) order is bad in law as the uphold the penalty of Rs. 6,08,945/- u/s 271 (1) (c) without bringing on record any material that income was not voluntarily offered.

On the facts and in the circumstances of the case and in law the CIT (A) erred in confirming the penalty u/s 271 (1) (c) by ignoring the fact that in the succeeding year the penalty proceedings was not initiated in respect of similar voluntarily declaration.

On the facts and in the circumstances of the case and in law the CIT (A) ought to have appreciated that it was bonafide mistake and same was voluntarily offered for taxation.

On the facts and in the circumstances of the case and in law the decision quoted by CIT (A) are not applicable in present case.

The reasons mentioned in the order are contrary to facts and law.”

This case was fixed for hearing on 17.11.2020. However, when the case was called for hearing, none appeared on behalf of the assessee. We notice that the Director of the assessee company has submitted an application dated 16.10.20, stating that the assessee has opted to settle the dispute under Vivad se Vishwas Act, 2020, therefore these appeals may be kept in abeyance.

The Ld. departmental representative did not oppose the assessee’s application. In the case of M/s. Nannusamy Mohan (HUF) vs. ACIT, the Hon’ble Madras High Court has dismissed the appeal of the assessee as withdrawn in which the counsel had made the similar submissions before the Hon’ble Court. The observations of the Hon’ble High Court are as under:- “3. The learned counsel for the appellant / assessee, on instructions, submitted that the appellant / assessee intends to avail the benefit of Vivad Se Vishwas Scheme („VVS Scheme‟ for brevity) and in this regard, the assessee is taking steps to file the application / declaration in Form No. I.

It may not be necessary for this Court to decide the Substantial Questions of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Act of the Parliament Assessment Year: 2012-13 received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020. 5. In terms of the said Act, the assessee has been given an option to put an end to the tax disputes, which may be pending at different levels either before the First Appellate Authority or before the Tribunal or before the High Court or before the Hon'ble Supreme Court of India. Under Section 2(j) “disputed tax” has been defined. In terms of Section 3, where a declarant means a person, who files a declaration under Section 4 on or before the last date files a declaration to the designated authority in accordance with the provisions of Section 4 in respect of tax arrears, then, notwithstanding anything contained in the Income Tax Act or any other law for the time being in force, the amount payable by the declarant shall be determined in terms of Section 3(a-c) thereunder.

The First Proviso to Section 3 states that in case, where an Appeal or Writ Petition or Special Leave Petition is filed by the Income Tax authority on any issue before the Appellate Forum, the amount payable shall be one-half of the amount in the table stipulated in Section 3 calculated on such issue, in such a manner as may be prescribed. The second proviso deals with the cases, where the matter is before the Commissioner (Appeals) or before the Dispute Resolution Panel. The third proviso deals with cases, where the issue is pending before the Income Tax Appellate Tribunal. The filing of the declaration is as per Section 4 of the Act and the particulars to be furnished are also mentioned in the Sub Sections of Section 4. Section 5 of the Act deals with the time and manner of the payment and Section 6 deals with Immunity from initiation of proceedings in respect of offence and imposition of penalty in certain cases. Section 9 of the Act deals with cases, where the Act 3 of 2020 will not be applicable.

As observed, the assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declaration to be filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain the prayer without insisting upon any application to be filed for condonation of delay in restoration of the appeal and on such request made by the assessee by filing a Miscellaneous Petition for Restoration, the Registry shall place such petition before the Division Bench for orders.

In the light of the above, We direct the appellant / assessee to file the Form No.I on or before 20.11.2020 and the competent Assessment Year: 2012-13 authority shall process the application / declaration in accordance with the Act and pass appropriate orders as expeditiously as possible preferably within a period of six (6) weeks from the date on which the declaration is filed in the proper form.”

Hence, respectfully following the decision of the Hon’ble Madras High Court in the case of M/s. Nannusamy Mohan (HUF) vs. ACIT (supra), we dismiss the present appeal as withdrawn. However, the appellant/assessee is at liberty to file miscellaneous application for restoration of appeal as discussed by the Hon’ble Madras High Court in paragraph 7 of the judgment. In the result, appeal filed by the assessee for assessment year 2012-2013 is dismissed. Order pronounced on 23rd November, 2020 under rule 34 (4) of the Income Tax Appellate Tribunal Rules, 1963. (SHAMIM YAHYA) JUDICIAL MEMBER म ुंबई Mumbai; दिन ुंक Dated: 23/11/2020 Alindra, PS आदेश प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त(अपील) / The CIT(A)- आयकर आय क्त / CIT 4. 5. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file.