Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI SHAMIM YAHYA (AM) &SHRI PAWAN SINGH (JM)
O R D E R PER PAWAN SINGH, JM : 1. This appeal filed by the assessee is directed against the order of CIT(A)-53, Mumbai dated 28-08-2018 for assessment year 2008-09, which in turn arises out of the order u/s 271(1)(c) dated 28-03-2014.
The assessee has raised the following grounds of appeal:-
“1) On the facts and Circumstances of the case and in law, the Learned CIT (A)-53 erred in confirming the learned Assessing Officer ("the AO") action in invoking provisions of the section 271(1) (c) of the Income Tax, 1961 ("the Act"). On facts and Circumstances of the case and in law the learned CIT (A)-53 erred in confirming penalty U/s. 271 (1) (c) of the Act without any additional concrete independent evidence against the assessee for having concealed his income. 2) On facts and Circumstances of the case and in law learned CIT (A)-53 erred in confirming that appellant has concealed income and 2 ITA 6119/Mum/2018 Diwaliben Lakshamshi Shah levied penalty of 200% of tax evaded by concealment of income of Rs 2,87,349/- 3) On facts and Circumstances of the case and in law learned CIT (A) -53 erred in confirming that the Assessee has concealed the particulars of the income based on the purported inspectors report which was never given to Assessee nor allowed to confront the same.
Facts in brief as gathered from the order of lower authorities are that assessee is an individual, filed her return of income for AY 2008-09 on 17-09-2008 declaring total income at Rs.1,68,282. In the return of income the assessee offered income from house property and income from other sources being interest on bank deposits. During the assessment, the AO noted that an amount of Rs.10,43,000/- had been deposited in cash in the savings bank account of the assessee maintained with Cosmos Co-operative Bank Ltd, Vile Parle (E), Mumbai. The AO, after issuing show cause notice to the assessee and considering the submission of assessee treated the deposits in bank as unexplained cash credit and made addition u/s 68 of the I.T. Act, 1961.
On appeal before CIT(A), the action of AO was sustained. The AO issued show cause notice for levying penalty vide notice dated 12-03- 2014. The assessee filed its reply dated 21-03-2014. In the reply, the assessee stated that she has filed appeal before the Tribunal and, therefore, the penalty proceedings may be kept in abeyance till the 3 ITA 6119/Mum/2018 Diwaliben Lakshamshi Shah decision in quantum appeal. The contention of the assessee was not accepted by AO. The AO levied the penalty @200% of tax sought to be levied on addition u/s 68 of Rs.10,43,000/-. The AO worked out the penalty at Rs.7,09,032/- in his order dated 28-03-2014 passed u/s 271(1)(c) of the I.T. Act, 1961. On appeal, the Ld. CIT(A) the assessee submitted that the disallowances under section 68 has been restricted to 30% of the additions made by the AO. The ld CIT(A) upheld the order of penalty. However, the AO was directed to re- compute the penalty based on quantum upheld by the Tribunal in quantum appeal. Thus, further aggrieved by the order of CIT(A), the assessee has filed present appeal before this Tribunal.
We have heard the submissions of the Ld.AR of the assessee and the Ld. DR for the revenue and perused the material available on record.
The Ld.AR of the assessee submits that against the additions in quantum assessment, the assessee filed appeal before Tribunal vide 06-04-2016. The Tribunal, while deciding the appeal of the assessee directed the AO to accept the source to the extent of 70% of deposits (in the bank account of the assessee) and accordingly 30% of Rs.10.43 lakhs was treated as income of the assessee. The Ld.AR further
4 ITA 6119/Mum/2018 Diwaliben Lakshamshi Shah submits that in the order giving effect dated 28-12-2016, the AO accepted the order of Tribunal. The Ld.AR further submits that admittedly, the addition was restricted on estimate basis and penalty is not sustainable if the addition is based on estimation. The Ld.AR further submits that the finding of Ld.CIT(A) are contrary to the settled legal position that no penalty is leviable on estimated addition.
On the other hand, the Ld. DR for the revenue supported the order of lower authorities. The Ld. DR further submits that the Ld.CIT(A) in his reasonable finding has categorically directed the AO to re-compute the penalty on the basis of quantum upheld by Tribunal in ITA No.4451/Mum/2013.
We have considered the rival submissions of the parties and have gone through the orders of lower authorities carefully including the assessment order under section 143(3) dated 28-12-2010, penalty order under section 271(1)(c) dated 28-03-2014, order impugned before us, dated 28-08-2018 and the order passed by co-ordinate bench of Tribunal in ITA No.4451/Mum/2013. In our considered view, a very short point for our adjudication is that once the addition on the basis of which the AO levied penalty has been reduced to 30%, that too, on estimate basis, would, still the penalty levied by AO u/s 271(1)(c)
5 ITA 6119/Mum/2018 Diwaliben Lakshamshi Shah subsists or not? We have further noted that addition estimated by Tribunal in its order dated 06-04-2016 is accepted by AO and order giving effect dated 28-12-2016 is also passed restricting the addition to 30% of Rs.10.43 lakhs. Therefore, in our view, once the addition is restricted on estimate basis, the penalty levied under section 271(1)(c) will no more survive. Considering the facts and circumstances of the case, we directed the AO to delete the entire penalty levied u/s 271(1)(c) of the I.T. Act, 1961.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 04-12-2019.