ASST CIT 11(3)(1), MUMBAI vs. TOTAL LUBRICANT INDIA LTD, MUMBAI

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ITA 894/MUM/2015Status: DisposedITAT Mumbai30 July 2018AY 2004-053 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the reassessment order for the relevant assessment year had indeed been quashed by the ITAT. Consequently, the additions made in that reassessment did not survive, and the penalty levied with reference to those additions also became unsustainable.

What were the facts?

The Revenue appealed the deletion of a penalty under section 271(1)(c). The assessee argued that the penalty was invalid because the reassessment order, on which the addition was based, had been quashed by the ITAT.

What were the issues?

Whether a penalty under Section 271(1)(c) can survive when the reassessment order leading to the addition has been quashed by the Tribunal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA, AM & SHRI RAM LAL NEGI, JM

For Appellant: Shri V. Justin, Shri Niraj Sheth
Hearing: 01.05.2018Pronounced: 30.07.2018

O R D E R Per Shamim Yahya, A. M.: This appeal by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals) dated 10.11.2014 and pertains to assessment year 2004-05.

2.

The grounds of appeal relate to the deletion of penalty under section 271(1)(c) of the Act amounting to Rs.21,52,500/- by the ld. Commissioner of Income Tax (Appeals).

3. At the outset in this case learned counsel of the assessee submitted that this ITAT on merits of the case has quashed the reassessment for the concerned assessment year. Hence learned counsel of the assessee pleaded that penalty levied with reference to the addition in the said assessment does not survive.

M/s. Total Lubricants India Ltd. 4. Per Contra, the learned departmental representative did not disputed the proposition that for the concerned assessment year the reassessment has been quashed by this ITAT.

5.

Upon careful consideration we note that this ITAT with respect to the appeal for the concerned assessment year in for the assessment year 2004- 05 vide order dated 24.01.2018 has concluded as under:

9.

In this view of the matter and considering the ratios of the case laws discussed above, we are of the view that re-assessment order passed by the AO is bad in law as reopening of assessment was based on mere change of opinion without any tangible material in his possession suggesting escapement of income. Therefore, we quash the re-assessment order passed by the AO.

10.

Insofar as merits of the case under appeal, since we have already held that the reopening of assessment is bad in law, we are not inclined to go into the merits of disallowance of provision for energy expenses as it becomes academic in nature. 10A. In the result, appeal filed by the assessee in is allowed.

6.

From the above, it is clear that since the reopening has been quashed by the ITAT the additions do not survive and consequently the penalty levied with reference to the said additions also do not survive.

7.

Accordingly, we do not find any merit in this appeal filed by the Revenue.

8.

In the result, the Revenue’s appeal stands dismissed. Order pronounced in the open court on 30.07.2018

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