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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI G. MANJUNATHA
Date of Hearing – 09.11.2017 Date of Order – 23.11.2017
O R D E R PER SAKTIJIT DEY, J.M.
This is an appeal by the Department against the order dated 25th August 2016, passed by the learned Commissioner (Appeals)–10, Mumbai, for the assessment year 2008–09.
Brief facts are, the assessee a company is engaged in polishing and sale of diamond. For the assessment year under dispute, the assessee filed its return of income on 29th September 2008, declaring total income of ` 13,33,04,550. The assessment in case of assessee
2 M/s. Kalsaria Diamonds Pvt. Ltd. was originally completed under section 143(3) r/w section 144 of the Act on 21st December 2010, determining total income of ` 82,59,74,200. As it appears, against the original assessment order, the assessee preferred appeal before the first appellate authority and thereafter before the Tribunal. Subsequently, on the basis of information received to the effect that the assessee has indulged in bogus purchases by availing accommodation entries from six parties to the tune of ` 57,43,04,135, the Assessing Officer re–opened the assessment under section 147 of the Act and ultimately completed the assessment vide order dated 30th March 2015, adding the amount of ` 57,43,04,135 under section 69C of the Act. On the basis of addition made of the aforesaid amount in the order passed under section 143(3) r/w section 147 of the Act, the Assessing Officer initiated proceedings for imposition of penalty under section 271(1)(c) of the Act and ultimately passed an order on 23rd September 2015, imposing penalty of ` 19,52,05,975. Against the penalty order so passed, the assessee preferred an appeal before the learned Commissioner (Appeals).
The learned Commissioner (Appeals) accepting the submissions of the assessee that the assessment order passed by the Assessing Officer was restored back to him by the Tribunal, deleted the penalty imposed.
3 M/s. Kalsaria Diamonds Pvt. Ltd.
When the appeal was called for hearing none appeared for the assessee in spite of issuance of notice of hearing through RPAD. Therefore, we proceed to decide the appeal ex–parte qua the assessee after hearing the Learned Departmental Representative.
Learned Departmental Representative submitted, penalty imposed under section 271(1)(c) of the Act was imposed on the basis of addition made in the assessment order passed under section 143(3) r/w section 147 of the Act. Whereas, the Tribunal has set aside the issues arising out of original assessment order passed under section 143(3) of the Act. He submitted, under a wrong impression that the Tribunal has set aside the assessment order passed under section 143(3) r/w section 147 of the Act, the learned Commissioner (Appeals) has deleted the penalty. Therefore, he submitted, the matter may be restored back to the file of the learned Commissioner (Appeals) for fresh adjudication on merit.
We have heard rival contentions and perused the material available on record. As could be seen from the material placed before us, the original assessment in case of the assessee was completed on 21st December 2010, determining the total income at ` 82,59,74,200. As it appears from facts on record, against the said assessment order, the assessee preferred appeal before the learned Commissioner
4 M/s. Kalsaria Diamonds Pvt. Ltd.
(Appeals) and thereafter before the Tribunal. Subsequently, the Assessing Officer on receiving information that purchases worth ` 57,43,04,135, were bogus in nature, reopened the assessment under section 147 of the Act and ultimately passed an assessment order on 30th March 2015, making addition of ` 57,43,04,135. Perusal of the assessment order passed under section 143(3) r/w section 147 of the Act makes it clear that the Assessing Officer has begun his computation from the income determined in the original assessment order dated 21st December 2010, at ` 82,59,74,200 and the only addition made in the re–assessment order is of ` 57,43,04,135, representing the bogus purchase. Undisputedly, the penalty imposed under section 271(1)(c) of the Act which is the subject matter of dispute in the present appeal is on the addition made of ` 57,43,04,135 in the re–assessment proceedings. The Tribunal while deciding assessee’s appeal arising out of original assessment order dated 21st December 2010, has restored the issue back to the Assessing Officer for fresh adjudication which is evident from the order dated 15th December 2015, passed in ITA no.1783/Mum./2012. Thus, from the aforesaid facts, it is very much clear that under a factual misconception that the Tribunal has set aside the assessment order passed under section 143(3) r/w section 147 of the Act the learned Commissioner (Appeals) has deleted the penalty imposed under 5 M/s. Kalsaria Diamonds Pvt. Ltd. section 271(1)(c). The impugned order passed by the learned Commissioner (Appeals) being contrary to the facts on record deserves to be restored back to him for denovo adjudication on merit. Accordingly, we set aside the impugned order of the learned Commissioner (Appeals) and restore the matter back to his file for denovo adjudication after providing due opportunity of being heard to the assessee.
In the result, Revenue’s appeal is allowed for statistical purposes. Order pronounced in the open Court on 23.11.2017