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Income Tax Appellate Tribunal, “D” BENCH: KOLKATA
Before: Shri Waseem Ahmed & Shri S.S. Viswanethra Ravi
ORDER Shri S.S.Viswanethra Ravi, JM:
This appeal by the Assessee is directed against the order of the Commissioner of Income Tax (Appeals), Durgapur dt. 08-09-2016, wherein he confirmed the penalty of Rs. 11,70,102/- imposed u/s. 271(1)(c) of the Act.
At the time of hearing before us the ld.AR of the assessee submits that the assessee received dividend of Rs.37,86,744/- from M/s. Subir Engineering Works Pvt.Ltd, in short as M/s. SEWPL and claimed exemption u/s. 10(34) of the Act. The AO added the said dividend of Rs.37,86,744/- on the ground that the said M/s. SEWPL did not deposit the tax on distributed profits within stipulated time. The CIT-A confirmed the said addition made by the AO and directed the AO to initiate the penalty proceedings for furnishing inaccurate particulars of income. Accordingly, the AO initiated penalty proceedings and imposed penalty of Rs.11,70,102/-. He further submits that the assessee challenged the addition made by the AO for non compliance of statutory provisions u/s. 115-O of the Act before Tribunal and the Tribunal remanded the matter to the file of AO in terms of submissions made by the assessee that M/s. SEWPL has paid the tax on distributed profits vide its order dt. 15-12-2017 in assessee’s own case in A.Y 2010-11 and referred to para 4 of the said order and argued that in view of above the penalty is not maintainable in the eye of law.
On the other hand, the ld.DR did not controvert the same and relied on the order of the CIT-A on this issue.
4. Heard rival submissions and perused the material available on record. On perusal of assessment order dt. 26-03-2013, it is noticed that the AO made addition of Rs.37,86,744/- for non compliance of provisions of section 115-O of the Act by M/s. SEWPL from whom the assessee received dividend. The said order of the AO was challenged by the assessee before the CIT-A, who confirmed the said addition made by the AO. The Co-ordinate Bench of this Tribunal in assessee’s own case found satisfied that M/s. SEPL has deposited an amount of Rs. 8,34,978/- by a challan of SBI under the head ‘tax on distributed profit for the A.Y 2010-11’ and remanded the matter to the file of AO. The relevant portion of which is reproduced herein below:-
We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee is a Director of M/s. SEPL and was in receipt of the dividend income to the tune of Rs.37,86,744/- and claimed exemption u/s. 10(34) of the Act. The AO noted that M/s. SEPL has not deposited the tax on the distributed profit within the stipulated time i.e. within 14 days from the date of declaration of dividend or distribution or payment of dividend, whichever is earlier. According to the assessee, the fact as of now is that M/s. SEPL have already remitted the amount along with interest and drew our attention to page 3 of the paper book, wherein we note that an amount of Rs.8,34,978/- has been remitted by challan drawn on State Bank of India under the head "tax on distributed profit from M/s. SEPL for AY 2010-11". If the tax has been deposited on the dividend distributed to the assessee along with interest, then the dividend distributed to the assessee should not be disallowed and the said amount should be granted exemption u/s. 10(34) of the Act. In order to verify this fact, we deem it fit and proper to set aside the order of Ld. CIT(A) and remand the issue back to AO, to verify as to whether M/s. SEPL has deposited tax on dividend along with interest. If the tax along with interest on the dividend distributed to assessee has been deposited as per law by the assessee as discerned from page 3 of challan (supra), then the amount of dividend earned by the assessee should be exempt as per sec. 10(34) of the Act. With the aforesaid direction, we set aside the order of Ld. CIT(A) and restore the matter to the file of AO to adjudicate the issue. Thus, the appeal of assessee is allowed for statistical purposes.”
In the aforementioned finding, the Co-ordinate Bench set aside the order of CIT-A and remanded the matter to the file of AO for adjudication of the issue. Therefore, the assessment on which penalty was imposed is no more in existence and the penalty imposed therein is not maintainable. Thus, the penalty imposed by the AO U/Sec. 271(1)(c) and confirmed by the CIT-A is cancelled.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 14-02-2018 Sd/- Sd/- Waseem Ahmed S.S. Viswanethra Ravi Accountant Member Judicial Member Dated : 14-02-2018 PP(Sr.P.S.) Copy of the order forwarded to: 1. Appellant/Assessee: Shri Sankar Sarkar 2/9 Sunity Chatterjee Path, City Centre, Durgapur-713216. Respondent :The DCIT, Cir-2, Durgapur. 2 3. The CIT(A), Kolkata 4. CIT , Kolkata 5. DR, Kolkata Benches, Kolkata /True Copy, By order,
Sr.PS/H.O.O ITAT Kolkata