KUBER BUILDERS,MUMBAI vs. ITO WD 29(1), MUMBAI

These three appeals by the Assessee are arising out of the common order of Commissioner of Income Tax (Appeals)-10, Mumbai, [‘CIT(A)’] in appeal No. CIT(A)-10/ITO-12(3)(1)/IT-131,130,132/11-12 dated 28-07-2014. The Assessment was framed by the Assistant Commissioner of Income Tax, Investigation Circle 29(1), Mumbai (‘ACIT’) for the AY 1987-88 vide order dated 29-06-1990 under section 143(3) of the Income Tax Act, 1961(hereinafter ‘the Act’). The penalties under dispute were levied by Income Tax Officer, Ward 29(1), Bombay (‘ÍTO’), under sections 271(1)(c), 271(1)(a) & 273(1)(b) of the Act vide his orders of even date 23-12-1991. ,7002 & 7003/Mum/2014 Kuber Builders (A.Y. 1987-88) 2. At the outset, learned Counsel for the assessee stated that all these three penalties were levied by the AO without considering the submissions of the assessee and by cryptic orders and further, she stated that in view of the Writ Petition filed before the Hon’ble Bombay High Court, the Tribunal in earlier round has set aside these penalties and remanded these penalties back to the file of the AO and directed to decide these penalties in term of the order of Hon’ble Bombay High Court in Writ Petition No. 2005 of 2001, wherein under dispute is Kar Vivad Samadhan Scheme-1998 (‘KVSS’). For these penalties, the assessee has raised identically worded grounds and the grounds from the appeal for penalty under section 271(1)(c) of the Act reads as under: - “1. (a) The learned CIT(A) erred in upholding the Penalty Order passed by the AO u/s 271 (1) (c) of Income Tax Act 1961.

(b) The learned CIT(A) passed cryptic Order & confirmed the Order of I. T. 0. levying penalty without appreciating the facts and submissions of the case.

(b) The CIT(A) failed to appreciate that in view of Writ Petition filed by appellant in Bombay High Court, Hon'ble Tribunal had categorically held that case Writ Petition is decided ,7002 & 7003/Mum/2014 Kuber Builders (A.Y. 1987-88) against the assessee, then the penalties have to considered only on merits after considering the explanation of the assesse.

(c) The CIT(A) erred in not accepting the appellants request that in view Tribunal's directions matter may be kept pending.

(d) Without prejudice to the above, the learned CIT (A) ought to have appreciate that the appellant did not file any inaccurate particulars of income n concealed any particulars of its income and hence no penalty for conceal me is leviable u/s 271 (1) (c) of the Income Tax Act, 1961.

(e) The learned CIT(A) ought to have dealt with the merits of the case and the should have passed the Order after application of his mind.

3) The appellant craves, leave to add, alter or modify any ground of appeal before or at time of hearing of appeal.”

3. In view of the above, the Tribunal in 7893 & 7894/Mum/1994 for AY 1987-88 order dated 29-07-2005 has remanded these penalties by observing para 6 as under: - “6. We have heard the rival submissions. The main issue, here, is ,7002 & 7003/Mum/2014 Kuber Builders (A.Y. 1987-88) as to whether disposal of these appeals depend upon the disposal of W.P. no. 2005 of 2001 by Hon'ble High Court. Presuming for the sake of argument that W.P. is decided in favour of the assessee and his petition for KVSS is admitted in his favour, then whether penalties are deemed to have been cancelled. In our view, the effect of the decision of the W.P. in favour of the assessee would be that his KVSS petition is admitted and he will have to pay as per KVSS and as per his petition filed there under in respect of arrears demand including penalty and interest. In case, the assessee fails in the W.P., then he has to pay full amount of penalty levied. We, therefore, restore the matter back to the file of CIT(A) with a direction that if W.P. is decided in favour of assessee, then matter will be considered in accordance with decision of Hon'ble High Court. And in case, W.P. is decided against the assessee, then the penalties have to be considered only on merits after considering the explanation of the assessee. We also find that the penalty has been sustained by CIT(A) merely on the basis of the addition made in the assessment order and confirmation there by CIT(A). However, the orders of the Tribunal in quantum ,7002 & 7003/Mum/2014 Kuber Builders (A.Y. 1987-88) paused in 2001, has not been taken into consideration. On these two accounts also, the matter is recorded to rest in the file of CIT(A).”

Order pronounced in the open court on 20-11-2017.