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Income Tax Appellate Tribunal, B Bench, Mumbai
Before: Shri Mahvir Singh & Shri Jason P. Boaz
This stay application and appeal for A.Y. 2007-08 were heard together and are disposed off by way of this common order. The appeal by the assessee is directed against the order of the CIT(A)-42, Mumbai dated 29.12.2015 wherein the assessee’s appeal against the levy of penalty of `12,86,689/- under section 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act') was dismissed in limine by not condoning the delay of about 18 months in filing the appeal. The stay application seeks stay of recovery of the demand raised by way of levy of the above penalty.
The facts of the case, briefly are as under: - 2.1 The assessee filed her return of income for A.Y. 2007-08 on 12.12.2008 declaring total income of `1,68,017/-. The case was taken up for scrutiny and the assessment was completed exparte under section 144 of 2 SA No. 149/Mum/2016 Mrs. Nayna Pradip Patel the Act vide order dated 29.12.2009, wherein the income of the assessee was determined at `40,16,403/- in view of the following additions: - (i) Unexplained cash credit `6,48,017/- `32,00,000/- (ii) Unexplained investment in flat Penalty proceedings under section 271(1)(c) of the Act were initiated simultaneously. On appeal, the learned CIT(A) dismissed the assessee’s appeal vide order dated 21.07.2011 and thereby upheld the order of assessment. The assessee then preferred an appeal before the Tribunal. 2.2. When the assessee’s appeal before the Tribunal was pending, the Assessing Officer (AO) took up penalty proceedings under section 271(1)(c) of the Act and proceeded to levy of `12,86,089/- thereunder vide order dated 28.03.2013. On appeal by the assessee, the CIT(A)-42 dismissed the assessee’s appeal in limine by not condoning the delay of about 18 months in filing the appeal before him.
3. At the outset of the hearing, the learned A.R. for the assessee brought to the notice of the Bench the fact, that the quantum appeal of the assessee before the Tribunal for A.Y. 2007-08 had been disposed off by the decision of a Coordinate Bench in dated 14.03.2016 (a copy has been placed on record) whereby the Coordinate Bench had set aside the order of the CIT(A)-34, Mumbai dated 21.07.2011 and restored all the issues to the file of the AO for fresh examination after affording necessary opportunity of being heard. The learned A.R. for the assessee contended that since the quantum issues had been set aside to the file of the AO for fresh examination and adjudication, the penalty of `12,86,689/- levied on the assessee under section 271(1)(c) of the Act based on the additions made in the quantum assessment, would not survive and therefore the penalty levied under section 271(1)(c) of the Act is to be cancelled.
4. We have heard both parties and perused and carefully considered the material on record, including the judicial pronouncement cited. We find, as submitted by the learned A.R. for the assessee, that a Coordinate Bench of this Tribunal in the quantum appeal in the assessee’s own case for A.Y. 2007-08 (i.e. the year under consideration) has set aside the order of the 3 SA No. 149/Mum/2016 Mrs. Nayna Pradip Patel learned CIT(A)-34, Mumbai dated 21.07.2011 and restored all the issues ot the file of the AO for fresh examination, after affording necessary opportunity of being heard to the assessee. In its order at paras 2 to 4 thereof, the Coordinate Bench has held as under: - “2. We heard the parties and perused the record. We notice that the AO has passed an assessment order to the best of his judgment u/s 144 of the Act. The ld. counsel submitted that the assessee did not receive the notice issued by the AO and hence it could not appear before the AO. The assessee also obtained a copy of assessment order upon receipt of the demand notice and thereafter filed the appeal before the ld.CIT(A) belatedly. However, the ld. CIT(A) has dismissed the appeal in-limine without appreciating the above said facts.
The ld. DR produced assessment record and on perusal of the same, we notice that the AO has issued notice to a wrong address and hence, there is merit in the contention of the assessee that she did not receive notice issued by the AO. Accordingly, in the interest natural justice, we are of the view that the issues urged in this appeal require fresh examination at the end of the AO. Accordingly, we set aside the order of the ld. CIT(A) and restore all the issues to the file of the AO for fresh examination of the same, after affording necessary opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.”
In view of the fact that the quantum appeal in the assessee’s own case for A.Y. 2007-08 (supra) has been set aside to the file of the AO for fresh examination and adjudication of all issues, the penalty of `12,86,689/- levied on the assessee under section 271(1)(c) of the Act for the same assessment year, based on the additions made in the quantum assessment, would not now survive for consideration. In this view of the matter we cancel the penalty of `12,86,689/- levied under section 271(1)(c) of the Act for A.Y. 2007-08.
Consequently, the assessee’s appeal for A.Y. 2007-08 is allowed as indicated above.
In view of our order in 271(1)(c) of the Act for A.Y. 2007-08, the stay application No. 149/Mum/2016 filed by the assessee seeking stay on recovery of the aforesaid penalty of `12,86,689/- is rendered infructuous and is accordingly dismissed.