SKM STEELS LTD,MUMBAI vs. DCIT RG 5(3), MUMBAI

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ITA 6904/MUM/2014Status: DisposedITAT Mumbai11 January 2017AY 2005-062 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the quantum appeal for the same assessment year had been restored to the AO for fresh adjudication. Therefore, the penalty order could not survive and the AO was free to decide on the penalty after the fresh adjudication.

What were the facts?

The assessee's income was assessed at Rs. 6.09 crores, with an addition of Rs. 1.05 crores under Section 68 for unexplained cash credit. A penalty was later levied under Section 271(1)(c) for furnishing inaccurate particulars.

What were the issues?

Whether a penalty under Section 271(1)(c) can be sustained when the primary addition leading to the penalty is subject to fresh adjudication by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद�य लेखा लेखा सद�य सद�य, राजे�� सद�य राजे�� राजे�� केकेकेके अनुसार राजे�� अनुसार अनुसार/ PER Rajendra A.M.- अनुसार Challenging the order,dated 11/08/2014,of the CIT (A)-9,Mumbai the assessee has filed the present appeal.Assessee-company,engaged in the business of trading and dealing in ferrous metals,filed its return of income on 24/10/2005,declaring total income at Rs. 5.04 Crores.The Assessing Officer (AO) completed the assessment u/s.143 (3)r.w.s. 147 of the Act,on 13/12/ 2010,determining its income at Rs. 6.09 crores.While finalising the assessment, the AO made addition of Rs. 1.05 Crores under the head unexplained cash credit, invoking the provisions of section 68 of the Act.Aggrieved by the order of the AO, the assessee filed an appeal before the First Appellate Authority (FAA)who confirmed the addition made by the AO.

2.The AO issued a notice to the assessee for living penalty u/s. 271(1)(c) of the Act.After consid -ering the submission of the assessee,he levied a penalty of Rs. 38.42 lakhs,invoking the provisions of section 271(1)(c) of the Act, for furnishing inaccurate particulars of income for the year under consideration.The assessee challenged the penalty order before the FAA,who confirmed the order of the AO.

3.During the course of hearing before us,the Authorised Representative (AR) brought over notice that the Tribunal,vide its order dated 07/08/2015(ITA/6918/Mum/2011,AY.2005- 06)had restored back the issue to the file of the AO for fresh adjudication, while deciding the 6904/M/14-SKM Steels quantum appeal. The Departmental Representative (DR)left the issue to the discretion of the Bench. 3.1.We find that in his order dated 07/08/2015 (supra),the Tribunal had directed the AO to decide the matter afresh after providing an opportunity of hearing to the assessee. In these circumstances, we are of the opinion that penalty order passed by the AO and confirmed by the FAA would not survive.We hold that the AO would be free to decide the issue of levying/not levying penalty, while passing the order in pursuance of the directions of the Tribunal.Effective ground of appeal is decided in favour of the assessee, in part.

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