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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI MANOJ KUMAR AGGARWALShri Vishal Kalyanji Gala
Aforesaid appeal has been filed by the assessee challenging the order dated 30th November 2016, passed by the learned Commissioner (Appeals)–2, Mumbai, confirming penalty imposed of ` 15,94,236, under section 271(1)(c) of the Income Tax Act, 1961 (for short “the Act”) for assessment year 2011–12.
2 Shri Vishal Kalyanji Gala
Brief facts are, the assessee an individual filed his return of income for the impugned assessment year on 27th September 2011, declaring total income of ` 11,80,190. The return of income filed by the assessee was selected for scrutiny and in course of the assessment proceeding Assessing Officer after calling for necessary information and examining them added an amount of ` 46,586 towards interest on loans advanced to family members and made a further addition of ` 51,59,347 on account of short term capital gain on sale of land by treating such land as non–agricultural. Assessee challenged the addition before the Commissioner (Appeals) and thereafter before the Tribunal. In the meanwhile, on the basis of additions made in the assessment order, the Assessing Officer initiated proceedings for imposition of penalty under section 271(1)(c) of the Act and ultimately passed an order on 17th March 2016, imposing penalty of ` 15,94,236 under section 271(1)(c) of the Act alleging concealment of income. Though, the assessee challenge the penalty imposed by filing an appeal before the learned Commissioner (Appeals), however, learned Commissioner (Appeals) confirmed the penalty imposed.
At the outset, the learned Authorised Representative submitted, the issue relating to the addition of short term capital gain on the basis of which penalty under section 271(1)(c) of the Act was imposed has been restored back to the first appellate authority by the Tribunal
3 Shri Vishal Kalyanji Gala while deciding assessee’s appeal arising out of the additions made in the assessment order. A copy of the order passed by the Tribunal in ITA no.1528/Mum./2015, dated 13th September 2017, was also placed before the Bench. Thus, the learned Authorised Representative submitted, the issue relating to imposition of penalty should be restored to the Assessing Officer for deciding afresh keeping in view the decision to be taken by the first appellate authority on the issue of addition of short term capital gain.
The learned Departmental Representative agreed that addition of short term capital gain on the basis of which penalty has been imposed under section 271(1)(c) of the Act has been restored back to the Commissioner (Appeals).
Having considered the rival submissions and perused material on record, we find that one of the additions viz. amount of ` 51,59,347, on the basis of which the Assessing Officer has imposed penalty under section 271(1)(c) of the Act has been restored back by the Tribunal to the learned Commissioner (Appeals) for fresh adjudication. In view of the fact that the issue relating to such addition is pending before the learned Commissioner (Appeals), we deem it appropriate to set aside the impugned order of the learned Commissioner (Appeals) confirming imposition of penalty under section 271(1)(c) of the Act pending
4 Shri Vishal Kalyanji Gala decision of the Commissioner (Appeals). However, the Assessing Officer is free to initiate proceedings under section 271(1)(c) of the Act afresh, if warranted, keeping in view the decision to be taken by the learned Commissioner (Appeals) on the issue of addition of short term capital gain on sale of land. Needless to say, the Assessing Officer must comply to the requirement of rules of natural justice before imposing penalty under section 271(1)(c) of the Act.
In the result, assessee’s appeal is allowed for statistical purposes. Order pronounced in the open Court on 08.08.2018