INCOME TAX OFFICER, SURAT vs. AMITKUMAR MATHURDAS KANERIA, SURAT

Assessee represented by Ms. Himali Mistry, C.A. Department represented by Shri Vinod Kumar, Sr. DR Date of Institution of Appeal 07/07/2023 Date of hearing 26/09/2023 Date of pronouncement 26/09/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER:

1. 1. This appeal by the Revenue is directed against the order of learned National Faceless Appeal Centre, Delhi (NFAC)/Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 12/05/2023 in deleting the penalty of Rs. 65,40,420/- levied under Section 271(1)(c) of the Income Tax Act, 1961 (in short, the Act) for the Assessment Year (AY) 2010-11.

2. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that the addition, on the basis of which the penalty was initiated by the Assessing Officer, has been restored back to the file of Assessing Officer by the Tribunal in assessee’s appeal in ITO Vs Amitkumar Mathuradas Kaneria. quantum assessment in for the A.Y. 2010-11 dated 26/09/2018. Thus, the penalty order has become infructuous. Though, at this stage, the order is in favour of assessee. The ld. AR of the assessee submits that the Assessing Officer, after passing the order giving effect has further initiated penalty under Section 271(1)(c) of the Act, therefore, the earlier penalty levied under Section 271(1)(c) of the Act would not otherwise survive.

3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that the Bench may take decision as per law.

4. We have considered the submissions of both the parties and find merit in the submission of ld. AR of the assessee that the addition on the basis of which the Assessing Officer initiated and levied penalty under Section 271(1)(c) has been restored back to the file of Assessing Officer in assessee’s appeal against the addition in quantum addition in ITA No. 2031 for the A.Y. 2010-11 dated 26/09/2018. The relevant part of this order is extracted below: “8. We have heard the rival submissions and perused the material available on record. We find that the similar addition was made in assessment year 2009- 10 in the case of assessee, his wife Julie Kaneria and his mother Jayaben Kaneria on the basis of unexplained cash deposits in the bank accounts of the concerned assessee’s. After considering the facts on record, the Tribunal has accepted the concept of peak credit in respect of cash deposits in the ITO Vs Amitkumar Mathuradas Kaneria. bank account of assessee as per para 17 of ITAT no.1613 & 1692/Ahd/2013 dated 16.05.2014 wherein the Tribunal has observed as under : “………………….. We therefore for similar reasons while deciding the appeals in the case of Jayaben Kaneria (ITA Nos.1605 & 1739/A/2013) remit the entire issue to the file of AO to examine the evidence and submission of the Assessee and with respect to the cash deposits, to work out the peak credit on the basis of settled practice and thereafter decide the issue as per law. Needless to state that AO shall grant adequate opportunity of hearing to the Assessee. We also direct the Assessee to submit promptly all the required details called for by the Assessing Officer. Thus the grounds of Assessee and Revenue are allowed for statistical purposes.”

is dismissed. This ground is therefore disposed off accordingly.” In view of the aforesaid factual narration, we also find merit that once the basis of initiation of penalty has been restored back to the Assessing ITO Vs Amitkumar Mathuradas Kaneria. Officer, the penalty order will not survive. Hence, the appeal filed by revenue become infructuous and dismiss as such.

5. In the result, this appeal of revenue is dismissed. Order announced in open court on 26th September, 2023.