ACIT 16(3), MUMBAI vs. BHALCHANDRA LOBORATORY, PUNE

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ITA 5985/MUM/2013Status: DisposedITAT Mumbai08 December 2016AY 2005-062 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the revenue is precluded from pursuing the appeal as the penalty amount, after partial relief, worked out to less than Rs. 10.00 lakhs. This decision was based on CBDT Circular No. 21/2015.

What were the facts?

The Assessing Officer (AO) levied a penalty under Section 271(1)(c) on the assessee for capital gains arising from property sale. The AO disagreed with the assessee's declared fair market value as of 1.4.1981, leading to an addition and penalty. The CIT(A) deleted the penalty entirely.

What were the issues?

Whether the revenue can pursue an appeal when the penalty amount is below the threshold stipulated by CBDT circulars for departmental appeals.

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, “H” Bench, Mumbai

Before: Shri B.R. Baskaran (AM) & Shri Amit Shukla (JM)

For Appellant: Ms. Apeksha Gala
For Respondent: Shri M.C.Omi Ningshen
Hearing: 8.12.2016Pronounced: 8.12.2016

O R D E R Per B.R. Baskaran (AM) :-

The appeal filed by the revenue is directed against the order dated 31.07.2013 passed by Ld CIT(A)-27, Mumbai deleting the penalty levied by the AO u/s 271(1)(c) of the Act for the assessment year 2005-06.

2.

At the time of hearing, the ld A.R submitted that the assessee had declared capital gain on sale of a property. The AO did not accept the fair market value as on 1.4.1981 declared by the assessee and reduced the same, which resulted in the addition. The AO levied penalty of Rs. 19,11,000/- on the addition so made. He submitted that the Ld CIT(A) gave partial relief in the first round of the order. Since the Tribunal set aside the matter to the file of Ld CIT(A), the first appellate authority gave further relief in the second round. He submitted that the penalty amount works out to Rs.6,67,198/- only on the amount of addition sustained by Ld CIT(A). He submitted that the revenue has preferred

2 M/s. Bhalchandra Laboratory appeal, since the first appellate authority has deleted the penalty in entirety. Since the penalty, upon giving effect to the second order of Ld CIT(A), works out to Rs.6,67,198/- (less than Rs.10.00 lakhs), the revenue is precluded from pursuing this appeal as per the Circular No.21/2015 dated 10-12-2015 issued by CBDT.

3.

The Ld D.R did not dispute the factual aspects presented by Ld A.R.

4.

Since the penalty amount works out to less than Rs.10.00 lakhs, there is merit in the submission made by the Ld A.R. Accordingly by following the circular of CBDT, referred above, we dismiss the appeal of the revenue.

5.

In the result, the appeal filed by the revenue is dismissed.

Order has been pronounced in the Court on 8.12.2016

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