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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SHAILENDRA KUMAR YADAV, JM & SHRI RAJESH KUMAR, AM
O R D E R PER RAJESH KUMAR, A. M: This is an appeal filed by the revenue challenging the order dated 29.10.2013 passed by ld.CIT(A)-41, Mumbai, for assessment year 2008-09 by which the revenue is challenging the deletion of penalty levied by the AO.
None appeared on behalf of the assessee despite service of notice to the assessee. However, a letter dated 21.6.2016 has been filed on behalf of the assessee seeking adjournment on the ground that the person who is handling the case is out of station. In the earlier occasion vide letter dated 30.6.2015
2 599/Mum/2014 filed on behalf of the assessee has sought adjournment on the same ground. After giving careful consideration to the adjournment application, we reject the same and decide the appeal ex-parte without the presence of assessee.
The facts in brief are that the return of income filed by the assessee on 12.8.2008 declaring total income at Rs.404/-. The search and seizure action was conducted on 5.3.2009 in the cases of Jai Corp Group of cases and following due process of law and procedure under section 153C, 143(2) and 142(1), the AO made assessment at an income of Rs.65,77,404/- by making an addition u/s 69C of the Act in respect of unexplained expenditure of Rs.65,77,000/-. Thereafter the AO also initiated penalty proceedings u/s 271(1)( c) of the Act and finally levied penalty at the rate of 100% of the tax sought to be evaded. Aggrieved by the order of AO, the assessee filed an appeal before the ld.CIT(A).
During the course of appellate proceedings before ld.CIT(A), the assessee submitted that the quantum addition made by the AO in the order passed u/s 143(3) r.w.s. 153C has been deleted by the Mumbai Bench of the Tribunal vide order dated 22.3.2013 and accepting the contentions of the assessee, the ld.CIT(A) deleted the penalty. Aggrieved by the order of ld.CIT(A), the revenue is in further appeal before us taking following grounds :
“1. "Whether on the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in deleting penalty levied u/s.271 (1 )(c) stating that 3 599/Mum/2014 the addition under section 69C does not survive since the issue of action u/s.153C and the quantum addition made under section 69C of the I.T. Act, 1969 has been deleted by the Hon'ble ITAT, Mumbai without appreciating the fact that department has preferred an appeal against the order of the Hon'ble ITAT, Mumbai before the Hon'ble Bombay High Court and the issues have not attained finality."
The ld.DR submitted before us that the Mumbai Bench has deleted the addition made by the AO u/s 143(3) r.w.s 153C of the Act and the revenue has filed appeal challenging the decision of the Tribunal and the matter is still subjudice before the Hon’ble Jurisdictional High Court and no final outcome has reached. Therefore, he submitted that it will two early to confirm the decision of ld.CIT(A) deleting the penalty.
We find from the record that the penalty was levied by the AO u/s 271(1)(c) of the Act for concealment of particulars of income and furnishing inaccurate particulars of income. In the appellate proceedings, the ld.CIT(A) deleted the penalty by observing and holding as under : “3.3 I have considered the submissions made on behalf of the appellant and also perused the materials on record. As held by the Hon'ble Supreme Court in the case of Union of India & ors. v, Dharmendra Textile Processors & ors. 306 ITR 277(SC), the objective behind enactment of Section 271(1)(c) is to provide remedy for loss of revenue and such a penalty is a civil rather than a quasi-criminal liability, as contended by the appellant. Mens rea is no longer an essential ingredient for the levy of penalty u/s 271(1)(c) and no burden lies on the A.O. any longer to prove deliberate or conscious concealment. It is observed from the record that pursuant to assessment u/s, 153C, penalty u/s, 271(1)(c) was imposed by the AO on the appellant for concealment of particulars of its income by virtue of having incurred unexplained expenditure of Rs.65,77,000/- towards purchase consideration of lands. It is observed that the Hon'ble
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ITAT, Mumbai Bench vide its consolidated order dated 22.03.2013 has not only held the action taken u/s.153C in case of land companies including the appellant to be bad in law (for want of necessary 'satisfaction) but. also deleted the additions made u/s 69C on merits. The relevant extracts of the said order are reproduced below.- "18. .. In the present case, impugned documents were not found from the possession of the assessee but was found from the possession of a third person i.e. Shri Dilip Dherai. Mere mention of the names of the villages where the companies may have purchased lands would not give any basis to assume/presume/surmise that the name of the companies are mentioned . impugned documents. The .very foundation of Sec. 153C has been shaken by not fulfilling the condition precedent far the issue of notice .
Considering the entire facts and circumstances in the light of the impugned seized documents, we have no hesitation to hold that action taken u/s. 153C of the Act is bad in law . 22. ... The entire dispute revolves around the alleged cash payment amounting to Rs.43 crores approx. and which has been added u/s. 69C of the Act….. . 23. .. the assessee must have been found to have incurred any expenditure 'to invoke the provisions of Sec. 69C of the Act.However, the allegations made by the lower authorities are not supported by actual cash passing hands. The entire additions are based on the seized documents and no other material has been adverted to and which could conclusively show that the huge amount of the magnitude mentioned in the seized documents travelled from one side to the other. The Revenue authorities have not brought a single statement on record of the vendors of land in different villages. None of the seller has been examined to substantiate the claim of the Revenue that extra cash actually changed hands. 24. .. in the present case, none of the sellers have been examined by the A.O. to strengthen his views that cash has been paid over and above the registered amount. There is not even a single document/evidence of parties involved in the sale of land at 5 599/Mum/2014
different villages brought on record to show that an amount other than the payment of consideration has changed hands. No confession from the sellers have been brought on record … 25. .. In our considerate view (sic), there being no evidence to support the Revenue's case that a huge figure, whatever be its quantum, over and above the figure booked in the records and accounts changed hands between the parties, no addition could therefore be made u/s. 69C of the Act to the income of the assessee considering the entire facts brought on record, we have no hesitation to hold that even on merits no addition could be sustained 26. Since we have allowed the issue in the case of the present assessee on both counts i.e. on legal issue and on merit and the issue involved in all other appeals of other assesses are similar and identical, though quantum may differ, for similar reasons, we quash the assessments and delete the additions on merit as well as on point of law in all other cases also".
From perusal of the aforesaid order, it is very clear that the Hon'ble Tribunal has not only quashed the assessments framed u/s, 153C but also deleted the additions made u/s.69C on merits in case of land companies including the appellant. Once the assessment proceeding giving rise to penalty u/s. 271(1)(c) is itself quashed, the very 'foundation for imposition of penalty becomes non-existent and hence the impugned penalty order in respect of such assessment would not survive. Similarly, there would be no justification for sustaining the penalty levied u/s, 271(1)(c) of the Act, once the quantum addition on basis of which penalty was levied by the A.O. has already been deleted by the Hon'ble Tribunal. Therefore, in view of the above position, the penalty of Rs.20,32,293/- levied on the appellant u/s, 271(1)(c) of the Act is hereby deleted. Thus, the appeal raised by the appellant are hereby allowed”
We find from the facts before us that the quantum addition has been deleted by the Tribunal and since the ld.CIT(A) has deleted the penalty by a reasoned order on the ground that quantum having been deleted by the Tribunal. We also do
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