NARGIS MAMDANI,MUMBAI vs. ITO 20(2)(3), MUMBAI

The facts of the case for the A.Y.2005-06 are that the assessee filed his return of income on 03.04.2006 declaring total income to the tune of Rs.1,86,366/- which was processed u/ 143(1) of the Income Tax Act, 1961 ( in short “the Act”). Notice u/s.148 of the Act was issued on 18.03.2008 and served upon the assessee on 19.03.2008. The case was reopened on receipt of the AIR data wherein the assessee has sold the property and purchased the property for consideration of Rs.39,00,000/-. The assessee has also deposited an amount of Rs.13,38,900/- in the saving bank account. Thereafter the assessment of the assessee was completed by assessing the income of the assessee to the tune of Rs.27,00,266/- .After passing the said order the Assessing Officer levied the penalty to the tune of Rs.8,46,178/- which was upheld by the learned CIT(A). Therefore the assessee has filed the present appeals before us.

The brief facts of the case for the A.Y.2006-07 are that the assessee filed the return of income on 01.02.2008 declaring total income of Rs.1,21,241/- which was processed u/s.143(1) of the Act and the notice was issued to the assessee as per the information of CASS. Accordingly notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee. As per the information of AIR &7320/M/13 A.Y.2005-06&2006-07 the assessee deposited sum of Rs.12,49,300/- in his saving bank account. Thereafter an opportunity was given to the assessee as the income of the assessee was assessed to the tune of Rs.14,54,627/-. Subsequently, the Assessing Officer levied the penalty to the tune of Rs.4,20,514/- which was upheld by the learned CIT(A). Therefore, the assessee has filed the present appeal before us.

We have heard the arguments advanced by the learned representative of the parties and perused the record carefully. The assessee in both the assessment years 2005-06 and 2006-07 challenged the penalty to the tune of Rs.8,46,178/- and Rs.4,20,514/-. At the very outset the learned representative of the assessee has argued that the assessment for the year 2005-06 and 2006-07 has been set aside by the Income Tax Appellate Tribunal, Mumbai bench in & 2098/Mum/ 2010 for the A.Y.2005-06 and 2006-07 therefore, in the said circumstances the penalty is liable to be set aside however the same may face consequential result of further assessment. Copy of order dated 30.09.2015 is on the file which speaks about the reassessment on certain guidelines given by the Income Tax Appellate Tribunal in assessee’s own case. Apparently the matter is required to be reassessed and re-examined in accordance with law. Since the quantum of assessment of the relevant year has been ordered to be set aside therefore, in the said circumstances we set aside the penalty order dated 30.03.3011 in question for the &7320/M/13 A.Y.2005-06&2006-07 A.Y.2005-06 and 2006-07. Accordingly the order of learned CIT(A) under challenged are hereby set aside. Accordingly, the above mentioned appeals filed by the assessee are allowed.