DEEPAK BHOGILAL SHAH,MUMBAI vs. JT CIT 19(2), MUMBAI

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ITA 4655/MUM/2018Status: DisposedITAT Mumbai12 March 2020AY 2007-085 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 additions, which formed the basis for the penalty under Section 271(1)(c), were deleted by the Tribunal, the penalty was not sustainable. Similarly, for the penalty under Section 271(1)(b), the Tribunal found that the assessee had responded to the notice and denied ownership of the account, making the penalty unsustainable.

What were the facts?

The assessee contested penalties imposed under Section 271(1)(c) and 271(1)(b) of the Income Tax Act. The penalty under Section 271(1)(c) was for undisclosed income, while the penalty under Section 271(1)(b) was for alleged non-compliance in providing details of a bank account.

What were the issues?

Whether penalties under Section 271(1)(c) and 271(1)(b) are sustainable when the underlying additions are deleted or when the assessee denies ownership and provides a response.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 271(1)(b),Section 142(1),Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Ms. Aarti Vissanji & Shri Vijay
For Respondent: Ms. Jyoti Lakshmi Nayak -Ld. DR

Heard together (3 matters)

I.T.A. No.4647/Mum/2018
I.T.A. No.4655/Mum/2018
I.T.A. No.4648/Mum/2018

Read from the judgment's own cause title. This page is filed under one of them.

आयकरअपील सं./ (िनधा"रण वष" / Assessment Year: 2006-07) & आयकरअपील सं./ (िनधा"रण वष" / Assessment Year: 2007-08) & आयकरअपील सं./ I.T.A. No.4648/Mum/2018 (िनधा"रण वष" / Assessment Year: 2007-08) Deepak Bhogilal Shah JCIT-Range-16(2) 61-A, 6th Floor, Laxmi Vilas बनाम/ Mumbai. 87, Napean Sea Road Vs. Mumbai-400 006. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AACPS-0199-L (अपीलाथ"/Appellant) (""थ" / Respondent) : Assessee by : Ms. Aarti Vissanji & Shri Vijay Kumar Biyani-Ld.ARs Revenue by : Ms. Jyoti Lakshmi Nayak -Ld. DR सुनवाई की तारीख/ : 06/02/2020 Date of Hearing घोषणा की तारीख / : 12/03/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals by assessee for Assessment Years [in short referred to as ‘AY’] 2006-07 & 2007-08 contest separate orders of learned first appellate authority qua confirmation of penalty. Since facts were, more or less similar, the appeals were heard together and are now being disposed-off by way of this common order for the sake of convenience and brevity. First, we take up appeal AY 2007-08 ITA No. 4655/Mum/2018, AY 2007-08 2.1 The assessee contest the order of Ld. Commissioner of Income- Tax (Appeals)-4, Mumbai, [in short referred to as ‘CIT(A)’], order dated 17/05/2018 qua confirmation of penalty u/s 271(1)(c) for Rs.92,300/-. 2.2 Facts leading to imposition of penalty are that the assessee was assessed u/s143(3) r.w.s. 147 on 18/03/2014 wherein it was saddled with additions of Rs.599.75 Lacs u/s 69A on account of undisclosed income. However, upon further appeal to learned first appellate authority, the quantum additions were substantially reduced to Rs.2,74,007/-. Consequently, the assessee was saddled with penalty of Rs.92,300/- vide penalty order dated 12/06/2015. The same upon confirmation by Ld. CIT(A) vide impugned order dated 17/05/2018, is under appeal before us.

3.

The Ld. Counsel for Assessee, at the outset, submitted that quantum addition as sustained by Ld. CIT(A) was subject matter of appeal before this Tribunal vide ITA Nos.6065-66/Mum/2014 & others, common order dated 30/10/2018 wherein the quantum addition of Rs.2,74,007/- has been deleted by the Tribunal. The copy of the order has been placed on record. The Ld. DR could not controvert the same.

4.

Upon due consideration, we find that since quantum additions which form the very basis of levy of penalty are deleted, there remain no basis for imposition of penalty and the same is liable to be cancelled. Accordingly, by deleting the same, we allow the appeal.

ITA No.4647-48/Mum/2018, AYs 2006-07 & 2007-08 5. By way of appeal for AY 2006-07, the assessee contest penalty of Rs.10,000/- as imposed by Ld. AO u/s 271(1)(b). The perusal of penalty order u/s 271(1)(b) dated 18/07/2014, passed by Ld. AO, would reveal that the penalty has been levied since during assessment proceedings it was alleged that the assessee held certain bank account with HSBC, Geneva. A notice u/s 142(1) was issued to the assessee on 03/01/2014 wherein the assessee was requested to furnish the statement of said bank account since inception. Alternatively, the assessee was requested to fill up the consent waiver form enclosed with the letter and forward the same to Ld. AO. However, in response, the assessee denied ownership of the said bank account and also did not furnish the details as called for by Ld. AO. Consequently, the assessee was saddled with penalty u/s 271(1)(b) for Rs.10,000/-. Similar penalty of Rs.10,000/- was levied for AY 2007-08 also, under identical facts. The same upon confirmation by Ld. CIT(A) vide separate orders both dated 17/05/2018, is under further appeal before us.

6.

The Ld. AR submitted that the said bank account did not belong to the assessee and the information as called for by Ld. AO was not in the possession of the assessee. Our attention has been drawn to the documentary evidences wherein the assessee denied the ownership of the stated bank account. The Ld. AR supported the submissions on the strength of order of Tribunal for AYs 2006-07 & 2007-08, 66/Mum/2014 & others, common order dated 30/10/2018 wherein the quantum additions in both the years were deleted, finding merits in assessee’s submissions.

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