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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: Shri Pawan Singh & Shri G Manjunatha
O R D E R Per Pawan Singh, JM : This appeal by revenue is directed against the order of Commissioner of Income-tax(Appeals)-6, Mumbai dated 17-12-2012 for AY 2004-05. The revenue has raised the following grounds of appeal:-
“On the facts and in the circumstances of the case and in law, the learned C1T(A) has erred in allowing relief to the assessee to the extent impugned in the grounds enumerated below:
1. 1. The order of the CIT(A) is opposed to law and facts of the case.
2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty imposed by the AO u/s, 27I(l)(c) amounting to Rs. 73,91,60,858/-, ignoring the fact that the Assessing Officer had not levied
2 ITA 1423/Mum/2013 penalty on all the additions confirmed by the CIT(A), but only in respect of false claims made by the assessee in respect of expenses of provision for payment to employees which was not a statutory obligation, premium paid as penalty for failure to come out with public issue of shares and prior period expenses, which were claimed by furnishing inaccurate particulars of income.
3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty u/s.271(l)(c) without appreciating the fact that the quantum addition in respect of which penalty imposed has been upheld by the Ld. CIT(A).
4. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty u/s.271(l)(c) ignoring the provisions of section 271(l)(c) of the I.T. Act, read with explanation which indicate the element of strict liability on the part of the assessee that while filing the return of income, the assessee has to disclose the true and correct particulars of income.
5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty u/s.271(l)(c) by holding that it is only a case of inadmissible claim, when the claim was itself false and in the process, overlooked the crucial fact that the ratio of Hon'ble Supreme Court's decision in the case of CIT vs. Reliance Petro Products (P) Ltd. 322 1TR 118 was not applicable.”
The brief facts of the case are that assessee is a company engaged in the business of export of software, filed its return of income for AY 2004-05 ON 29- 10-2004 declaring total income at Rs.21,99,34,573. The return was selected for scrutiny. The assessment order was passed on 27-12-2006 wherein the AO made various additions and disallowance. The AO, while passing the assessment order, initiated penalty proceedings on various disallowance. The AO, after serving the show cause notice levied penalty of Rs.73,91,60,858 being 100% of tax sought to be evaded on the total disallowance of Rs.206,03,73,698.
However, on appeal before CIT(A), the entire penalty was deleted. Thus, aggrieved by the order of CIT(A), the revenue has filed the present appeal before this Tribunal.
3 ITA 1423/Mum/2013
At the outset of hearing, the Ld.AR of the assessee submits that the assessment order dated 27-12-2006 on the basis of which the penalty was initiated has been set aside by Tribunal in dated 11- 03-2019. The Ld.AR further submits that the assessment order was set aside by the Tribunal holding that the AO has no power to pass the assessment order in absence of order u/s 120(4)(b) as well as u/s 127(1). Therefore, the penalty on such assessment order would not survive. The Ld.AR, on merit, otherwise supported supported the order of CIT(A).
On the other hand, the Ld.DR relied upon the order of assessing officer.
We have considered the submissions of the parties and perused order of lower authorities. We have also gone through the order of Tribunal dated 11- 03-2019 in wherein the assessment order dated 27- 12-2006 passed by Addl.CIT, Range-2(3) u/s 143(3) has been quashed / annulled. Therefore, no penalty order would survive.
In the result the appeal of the revenue dismissed.
Order pronounced in the open court on 11-07-2019.