NARAYAN J THADANI,NAVI MUMBAI vs. ITO 14(2)(4), MUMBAI

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ITA 2882/MUM/2015Status: DisposedITAT Mumbai17 January 2017AY 2004-054 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since the quantum addition/disallowance was remanded to the Assessing Officer, the penalty levied on that disallowance would not stand at this stage. The penalty proceedings were restored to the Assessing Officer for a fresh decision after the quantum proceedings.

What were the facts?

The assessee appealed against a penalty levied under Section 271(1)(c) for the assessment year 2004-05. The original disallowance of commission had been set aside by a coordinate bench of the Tribunal.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the underlying addition/disallowance has been remanded for fresh consideration. The validity of the penalty in light of the remand of the quantum appeal.

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, “J” BENCH, MUMBAI

Before: SHRI C.N. PRASAD, JM, & SHRI N.K. PRADHAN, AM

For Appellant: Shri. Sanjay R. Parikh, Shri. Rajesh Ojha

आदेश / O R D E R PER C.N. PRASAD, JM:

1.

This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-29, Mumbai dated 06/12/2015 in sustaining the penalty levied u/s 271(1)(c) of the Act for the assessment year 2004-2005.

(A.Y: 2004-05) M/s. Narayan J Thadani Vs.ITO 2. At the outside the Ld. Counsel for the assessee submits that the appeal filed by the assessee against the disallowance of commission in the quantum proceedings has been set aside to the file of Assessing Officer by the coordinate bench of the Tribunal in dated 16.10.2015 with the directions to consider the additional evidences filed by the assessee and to decide the issues on merits afresh. Copy of the order is placed on record.

3.

We have heard the Ld. Authorized Representative and the Ld. Departmental Representative and also perused the order of the coordinate bench in the quantum proceedings and find that the issue of disallowance made by the Assessing Officer in respect of commission paid has been remanded to the file of the Assessing Officer to consider additional evidences which was brought on record by the assessee during the hearing before the Tribunal and decide issue afresh observing as under :-

“6. We have heard the rival submissions of both the parties and perused the material available on record and we are of the view that before deciding the case on merits, it is necessary to dispose off the application moved by the assessee for leading the additional evidence.

7.

We have also considered the background of the case and noticed that contradictory statements by Mrs Meenaben M. Parikh and those contradictions are apparent from the face of record which has now been placed by the assessee before us by way of additional evidence before us.

8.

After analyzing the entire facts, we are of the view that all the documents now placed on record by way of additional evidence are of importance and would go to the roots of the case and would unable the AO to decide the controversy between the parties more effectively which would meet the ends of justice. In case the documents now placed on record by way of additional evidence are considered by the AO then in that eventuality it will serve the substantial cause of justice and in case those documents are not considered than in that eventuality the rights of the assessee would be prejudiced, whereas on the contrary, on consideration of the additional evidence, the rights of the revenue would not prejudice, therefore, we remand the (A.Y: 2004-05) M/s. Narayan J Thadani Vs.ITO papers to the file of the AO for fresh decision on merits after considering the documents by way of additional evidence.”

4.

In view of the coordinate bench remanding the quantum addition/disallowance to the Assessing Officer to decide the issue afresh, the penalty levied on the disallowance made by the Assessing Officer in respect of the commission paid by the assessee will not stand at this stage. Thus, we restore the penalty proceedings to the file of the Assessing Officer who shall decide the same after the quantum proceedings in accordance with law after providing adequate opportunity of hearing to the assessee. Grounds raised by the assesse are allowed for statistical purpose.

5.

In the result, the appeal of assessee is allowed for statistical purpose.

Order pronounced in the open court on 17th January, 2017.

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