M/S. QUANTAM SUPPLIERS PVT LTD.,KOLKATA vs ITO, WARD-4(4), KOLKATA, KARNATAKA

Income Tax Appellate Tribunal, BENCH ‘A’ KOLKATA

Before: Hon’ble Shri S.S. Godara, JM & Shri M.Balaganesh, AM ]

ORDER PER S.S. GODARA, JM:

This assessee’s appeal for A.Y.2012-13 emanates from the Principal C.I.T.-2, Kolkata’s order dated 27.07.2016, imposing penalty of Rs.19,46,17,000/-, in proceedings u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act).

Heard both parties. Case file perused.

We notice at the outset that the Principal CIT has imposed impugned penalty in assessee’s case qua share premium amounting to Rs.58.,80,00,000/- after exercising his revisionary jurisdiction u/s 263 of the Act in his order dated 28.01.2016. It is evident from the case file that the assessee had preferred its appeal against the said quantum order. A coordinate bench has partly accepted assessee’s said quantum appeal with the following directions :-

“10. We have considered his submissions and are of the view that as was done in the similar group of cases which was considered by this Tribunal and in which the lead order was passed in the case of Subhlakshmi Vanijya Pvt. Ltd. (supra), the CIT ought to have set aside the order of AO and direct the AO to make fresh enquiry with regard to the receipt of share capital and share premium by the assessee during the previous year. As rightly pointed out by the ld. Counsel for the assessee, since the proceedings u/s 263 of the Act were concluded ex-parte, M/s Quantam Suppliers Pvt. Ltd. A.Y.2012-13 the Assessee had no occasion to place material to satisfactorily explain the receipt of share capital and share premium by the Assessee. There was however no material on the basis of which the CIT could have come to the conclusion that the receipt of share capital and share premium was not satisfactorily explained by the assessee. As rightly contended by the ld. Counsel for the assessee, the CIT ought to have set aside the order of the AO and directed the AO to conduct fresh enquiry on the lines indicated in the order of this Tribunal in the case of Subhlakshmi Vanijya Pvt. Ltd. (supra). We therefore modify the order of CIT and direct the AO to make fresh enquiry with regard to the receipt of share capital and share premium during the previous year after affording Assessee opportunity of being heard. With these observations the appeal of the assessee is treated as partly allowed.”

All this makes it sufficiently clear that the Principal CIT’s quantum order exercising revisionary jurisdiction itself stands reversed to the above extent. Both parties are therefore ad idem during the course of hearing that the impugned penalty has no legs to stand as on date since the main issue has been restored to the Assessing Officer. We therefore delete the impugned penalty at this stage with liberty to the Assessing Officer to initiate the same afresh in furtherance of consequential proceedings to be finalised as per co-ordinate bench’s remand order. The assessee’s sole substantive grievance is accepted in the above terms. Thus assessee’s appeal is allowed.

Order pronounced in the open Court on 09.05.2018.

M/S. QUANTAM SUPPLIERS PVT LTD.,KOLKATA vs. ITO, WARD-4(4), KOLKATA, KARNATAKA