SVG FASHION LTD, MUMBAI vs. ASST CIT RG 4(3), MUMBAI

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ITA 343/MUM/2014Status: DisposedITAT Mumbai23 June 2016AY 2010-113 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the quantum addition related to capital gains had been restored to the AO for fresh assessment. Consequently, the penalty levied would not survive. However, the AO was permitted to re-initiate penalty proceedings if warranted after the fresh assessment.

What were the facts?

The Revenue appealed an order of the CIT(A) concerning penalty proceedings under Section 271(1)(c) for AY 2004-05. The penalty was levied following an assessment under Section 153A read with Section 143(3).

What were the issues?

Whether a penalty under Section 271(1)(c) can survive when the underlying assessment order, which formed the basis for the penalty, has been set aside and remanded for fresh assessment.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 271(1)(c),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

For Respondent: Shri B. V. Jhaveri, AR

O R D E R PER MAHAVIR SINGH, JM:

This appeal by the Revenue is arising out of the order of CIT (A)-37, Mumbai passed in appeal No.CIT (A)-37/I.T-18/DCCC-12/12-13 dated 01.11.2013. Assessment was framed by the ACIT, Central Circle-12, Mumbai for assessment year 2004-05 vide his order dated 30-12-2008 u/s 153A read with Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). The penalty under dispute was levied by the DCIT, Central Circle-12, Mumbai u/s 271 (1) (c) of the Act vide his order dated 30-03- 2012.

2.

At the outset, the learned Counsel for the assessee stated that the penalty in respect of issue of Capital Gains and quantum addition on this issue has been set aside by the Tribunal in vide order dated 17-02-2016 and the relevant observation in Para 12 of the order reads as under: “12 Therefore, we also dim (sic) deem it appropriate to restore the issue to the file of the AO to avoid the conflicting assessment order in respect of same AY and direct the AO to verify and examine

2 the actual date of purchase in both the cases and thereby to determine the short term capital gains or long term capital gains, or it may be added in income of the assessee u/s 68 on the basis of the alleged incriminating material found during the search as the case may be, and pass fresh assessment order after giving opportunity of being heard to the assessee and decide the same in accordance with law”. In view of the above, the learned Counsel for the assessee stated that the penalty will not survive.

3.

On query from the Bench, the learned Sr. DR fairly conceded to the position but only requested for direction that in case the AO comes to a conclusion during the set aside proceedings that this is a case for levy of penalty u/s 271 (1) (c) of the Act, he should be free to initiate penalty proceedings u/s 271 (1) (c) of the Act.

4.

After hearing both the sides and going through the facts of the case, we are of the view that since the quantum is remanded back to the file of the AO for framing fresh assessment, the penalty levied by the AO but cancelled by the CIT (A) will not survive. However, the AO is free to re-initiate penalty proceedings u/s 271 (1) (c) of the Act in case during the set aside proceedings he comes to a satisfaction that this is a fit case for levy of penalty either for concealment of income or for furnishing of inaccurate particulars of income. In terms of the above, the appeal of the Revenue is dismissed.

5.

In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 23/06/2016.

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