KIRLOSKAR FERROUS INDUSTRIES LIMITED,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 14, PUNE

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ITA 708/PUN/2018Status: DisposedITAT Pune12 April 2022AY 2012-134 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 since the quantum appeal for the same assessment year was remitted back to the Assessing Officer for fresh consideration based on additional evidence, the penalty proceedings under Section 271(1)(c) were not maintainable. Therefore, the penalty was set aside.

What were the facts?

The assessee company was assessed for AY 2011-12 and 2012-13, with the Assessing Officer disallowing depreciation on a Turbo Generator. Penalty proceedings were initiated under Section 271(1)(c) for alleged furnishing of inaccurate particulars.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying assessment issue has been remitted back to the Assessing Officer for fresh adjudication based on additional evidence.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH, ‘B’ PUNE

Before: SHRI S.S.VISWANETHRA RAVI & SHRI DR. DIPAK P. RIPOTE

For Appellant: Shri C. H. Naniwadeker
For Respondent: Shri Anurag Shivastava

ORDER PER DR. DIPAK P. RIPOTE, AM : Both these appeals are against Commissioner of Income Tax (Appeals)- 7, Pune’s two separate orders commonly dated 08.01.2018 for assessment years 2011-12 and 2012- 13 respectively.

2.

Since identical facts and issues are involved in both the appeals, therefore, 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 for the assessment year 2011-12 are stated herein. ITA No.707/PUN/2018, A.Y. 2011-12 : 4. The assessee raised the following grounds of appeal :

1.

1. Penalty Proceedings u/s 271(1)(c) 1.1 The learned CIT(A) erred on facts and in law in confirming penalty u/s 271(1)(c) without hearing the assessee on merits. 1.2 Without prejudice to the above, the learned CIT(A) erred on facts and in law in confirming penalty u/s 271(1)(c) for alleged furnishing of inaccurate particulars especially when the assessee has accurately furnished all material facts at the time of assessment. The learned CIT(A)

2 & 708/PUN/2018 also failed to appreciate that all the issues involved are purely legal in nature and are debatable ones. 2. The assessee craves leave to add, alter, delete or substitute all or any of the above grounds of appeal

.”

5. Briefly, the facts of the case are that the appellant is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing of Gray Iron Casting & Pig Iron. The return of income for the assessment year 2011-12 was filed on 28.09.2011 disclosing total income of Rs.52,47,29,279/-. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Circle-9, Pune (‘the Assessing Officer’) vide order dated 28.03.2014 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at total income of Rs.73,26,54,700/-. While doing so, the Assessing Officer disallowed the depreciation and additional depreciation on TG-III [Turbo Generato (TG-3)] @ 80% under entry no.III 8(ix)(D) of the Part A of Appendix I and the same was disallowed by the Assessing Officer on the ground that no documentary evidence was furnished.

6. The Assessing Officer also initiated penalty proceedings by issuing show-cause notice u/s 274 r.w.s. 271(1)(c) of the Act by alleging that the assessee furnished inaccurate particulars of income. Assessing Officer levied the penalty vide order dated 31.05.2017 after giving opportunity to the assessee.

7. Being aggrieved by the above decision of the Assessing Officer, the assessee preferred an appeal before the ld. CIT(A), who confirmed the action of the Assessing Officer.

8. Being aggrieved by the decision of the ld. CIT(A), the assessee is in appeal before us.

9. Before us, the ld. AR for the assessee submitted that the ITAT, Pune Bench in assessee’s own case vide ITA No.1166/PUN/2017 for the A.Y. 2011-12, ITA 3 & 708/PUN/2018 No.1167/PUN/2017 for A.Y. 2012-13 order dated 07.04.2022 (copy of the said order is placed on record) admitted the additional evidence filed by the assessee on the ground that the additional evidence is purely engineering and technical matter and it is relevant material to decide the issue in appeal and directed the Assessing Officer to decide the issue in the light of the additional evidence produced by the assessee. The ld. AR further submitted that this Tribunal in quantum appeal vide order dated 07.04.2022 (supra) remitted the matter to the file of the Assessing Officer. Therefore, ld. AR submitted that the penalty u/s 271(1)(c) is not maintainable.

10. On the other hand, ld. CIT-DR submitted that the penalty order may be set-aside to the file of the Assessing Officer to re-compute the penalty in terms of order passed by this Tribunal in quantum appeal vide order dated 07.04.2022 (supra).

11. We heard the rival submissions and perused the material on record. The only issue in the present appeal relates to the validity of the penalty levied u/s 271(1)(c) of the Act. From the evidence on record, it is clear that since in the quantum appeal, the Hon’ble ITAT remitted the matter to the file of the Assessing Officer for deciding the issue afresh in the light of the additional evidence filed by the assessee, the surviving of penalty u/s 271(1)(c) of the Act does not arise. Accordingly, the appeal filed by the assessee is allowed.

12.

In the result, the appeal in ITA No.707/PUN/2018 for the assessment year 2011-12 stands allowed.

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