ITO, WARD 1(3)(1), SURAT, SURAT vs. AMITBHAI VASANTLAL SHAH, SURAT

िनधा�रती की ओर से /Assessee by Ms. Pinaz R. Bhagat, CA राज� की ओर से /Revenue by Shri SM Keshkamat, CIT-DR अपील पंजीकरण/Appeal instituted on 14.07.2023 सुनवाई की तारीख/Date of hearing 13.09.2023 उद्घोषणा की तारीख/Date of 13.09.2023 pronouncement Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of Ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad [for short to as “Ld. CIT(A)”] dated 28.04.2023 in confirming the penalty levied by Assessing Officer under section 271(1)(c) of Income Tax Act, 1961 (‘the Act’) on 29.03.2018 for the assessment year 2009-10. The Revenue has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the penalty imposed by the Assessing Officer u/s 271(1)(c) of the I.T. Act in respect of LTG of Rs.3,94,66,218/- treated as business income by disallowing the exemption claimed u/s 10(38) of the Act.

2. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in deleting the penalty imposed by the Assessing Officer (A.Y 09-10) Amitbhai V Shah amounting to Rs.1,32,46,900/- for furnishing inaccurate particulars of income by showing income earned from business trading activity under the head LTCG and claimed huge non eligible exemption u/s 10(38) of the Act and thereby avoid the tax liability.

3. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in deleting the penalty without considering the original facts and merits of the case.

4. It is, therefore, prayed that the order of the Ld. CIT(A) may kindly be set aside and that of the Assessing Officer be restored.”

2. At the outset of hearing, Ld. Authorized Representative (Ld.AR) for the assessee submits that addition of Long Term Capital Gains, which was treated as ‘business income’ by disallowing exempt under section 10(38) in the assessment order, has been deleted by Tribunal in 200/AHD/2017 for assessment years 2009-10, 2011-12 to 2013-14 dated 27.09.2021. The Ld. CIT(A) relying upon the decision of Tribunal deleted the penalty. Therefore, grounds of appeal raised by Revenue are covered in favour of assessee and against the Revenue. The Ld. CIT(A) while granting relief to assessee has referred the decision of Tribunal (supra) in his order.

3. On the other hand, Ld. Commissioner of Income Tax Departmental Representative (Ld. CIT-DR) for the Revenue supported the order of Assessing Officer.

4. We have considered the rival submission of both the parties and have gone through the order of lower authorities carefully. We find that Assessing Officer levied penalty of Rs.1.32 crores under section 271(1)(c) of the Act by disallowing Long Term Capital Gains of Rs.3.94 crores and treated the same as business income. We also find that (A.Y 09-10) Amitbhai V Shah appeal against quantum assessment, the assessee was allowed full relief in ITA No(s)197-200/AHD/2017 dated 27.09.2021 (supra). We further find that Ld. CIT(A) while granting relief to assessee considered and followed the order of this Tribunal dated 27.09.2021 (supra). Considering the fact that addition in the quantum assessment, on the basis of which, the penalty was levied has already been deleted / quashed. Therefore, the penalty order dated 29.03.2018 will not survive.