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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH, AHMEDABAD
ITA No. 1517/Ahd/2013 Hytaisun Magnetics Ltd vs. ITO Assessment Year : 1994-95 Page 1 of 2 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH, AHMEDABAD [Coram: Pramod Kumar AM and S S Godara JM] ITA No. 1517/Ahd/2013 Assessment Year: 1994-95
Hytaisun Magnetics Ltd .......…………......Appellant 3rd Floor, Maruti House, Nr. Toran dining Hall, Ahmedabad-09 [PAN : AAACH 3873 P] Vs. Income-Tax Officer .......................Respondent Ward-4(3), Ahmedabad Appearances by: SV Agrawal for the assessee RP Maurya for the Revenue Date of concluding the hearing : 12.09.2017 Date of pronouncing the order : 08.12.2017 O R D E R Per Pramod Kumar AM: 1. By way of this appeal, the assessee appellant has challenged correctness of the order dated 22nd March 2013 upholding the penalty of Rs.14,40,157/- imposed on the assessee under section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 1994-95. 2. Grievance of the appellant is as follows:- “The learned Commissioner of Income-tax (Appeals)-VIII has erred in confirming the penalty of Rs.14,40,157/- levied by AO u/s 271(1)(c) of the I.T. Act on disallowance of deposits u/s 68 Rs.29,93,500 and interest thereon Rs.1,37,277. In as much as, complete details of deposits were furnished & as per clause (c) of Explanation 4 to section 271(1)(c), no penalty is leviable.” 3. The relevant material facts are like this. During the course of assessment proceedings, the Assessing Officer made an addition of Rs.29,93,500/- on account of unexplained credit, and interest of Rs.1,37,277/- thereon. While CIT(A) deleted these additions, Tribunal remitted the matter to the file of the Assessing Officer for deciding the matter afresh after obtaining details of the creditors, who were not even taxpayers. In this round of proceedings, the assessee did not co-operate at all. The additions of Rs.29,93,500/- and Rs.1,37,277/- were thus reiterated. The matter did not rest there. As there was no explanation about these credits, either in quantum or in penalty proceedings, the Assessing Officer also imposed a penalty of Rs.14,40,157 being 100% of the tax sought to be evaded by the assessee.
ITA No. 1517/Ahd/2013 Hytaisun Magnetics Ltd vs. ITO Assessment Year : 1994-95 Page 2 of 2 Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. The assessee is not satisfied and is in further appeal before us.
We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position.
We have noted that the quantum additions have received finality in the second round of proceedings as the assessee has not even challenged, before us, CIT(A)’s order confirming the additions in the second round. As for the merits of the additions, we have noted that the assessee has borrowed small amounts of Rs.10,000 – Rs.30,000 from 221 individuals, and given stereo typed confirmation, without any further evidences about their financial means, from many of them. This explanation, in our considered view, is insufficient and it does not inspire any confidence. The relief was given by the CIT(A) on a hyper technical plea unrelated with the merits, and, the assessee’s case does not derive support from the same. In any case, this relief is vacated by a co-ordinate bench. As for learned counsel’s reliance on Hon’ble Supreme Court’s judgment in the case of JCIT vs. Classic Industries Ltd [(2017) 393 ITR 20 (SC)] holding that penalty under section 271(1)(c) cannot be imposed when assessed and returned income is NIL, we can only point out that a larger bench of Hon’ble Supreme Court in the case of CIT vs. Gold Coin Health Food Pvt Ltd [(2008) 304 ITR 308 (SC)], has negated this plea and has held that Explanation 4 to section 271(1)(c) is retrospective in effect, and, accordingly, penalty can also be levied when related addition reduces the loss. It is only elementary that the judicial precedent by a smaller bench has to make way for the binding effect of a judicial precedent from larger bench. We must, therefore, follow Hon’ble Supreme Court’s decision in the case of Gold Coin (supra).
In view of the above discussions, and bearing in mind entirety of the case, we approve the orders of the authorities below and decline to interfere in the matter.
In the result, the appeal is dismissed. Pronounced in the open court today on the 8th day of December, 2017.
Sd/- Sd/-
S S Godara Pramod Kumar (Judicial Member) (Accountant Member) *bt Ahmedabad, the 8th day of December, 2017 Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad