ITO 2(2)(4), MUMBAI vs. MANISH AJAY DOSHI, MUMBAI

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ITA 445/MUM/2012Status: DisposedITAT Mumbai01 January 2016AY 2005-063 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the additions on which the penalty was levied were subsequently deleted by a co-ordinate bench, the penalty is no longer sustainable. Therefore, the penalty order is liable to be cancelled.

What were the facts?

The assessee's appeal challenges a penalty levied under Section 271(1)(c) of the Income Tax Act. The penalty was based on additions made during assessment proceedings initiated after a search operation. However, no incriminating material was found for the year under consideration.

What were the issues?

The primary issue was the validity of a penalty levied on additions that were later vacated due to the absence of incriminating material found during search operations for a concluded assessment year.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 153A,Section 132

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Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Hearing: 31.12.2015Pronounced: 1.1.2016

Per B R Baskaran, AM: The assessee has filed this appeal challenging the order dated 24.10.2011 passed by Ld CIT(A)-37, Mumbai confirming the penalty of Rs.33,13,895/- levied by the AO u/s 271 (1)( c ) of the Act.

2.

The ld.counsel appearing for the assessee submitted that the assessment relating to the impugned penalty was completed u/s 153A of the Act consequent to the search operations conducted u/s 132 on 17.1.2007. During the course of search proceedings, the search team did not unearth any incriminating material relating to the year under consideration. The assessment of the year under consideration did not abate by virtue of search operations. Hence the assessee raised a legal

2 issue challenging the validity of the additions made in respect of a concluded assessment without there being any incriminating material in the appeal filed against the quantum assessment proceedings before Tribunal. The assessee placed his reliance on the decision rendered by the Special Bench of the Tribunal in the case of All Cargo Global Logistics Ltd V/s DCIT reported in 137 ITD 237. The Co-ordinate Bench of the Tribunal accepted the contentions of the assessee and accordingly, held that the addition cannot be made for the year under consideration in the absence of any incriminating material. Accordingly, the ld. AR submitted that the addition on which the impugned penalty has been levied stood vacated by the order dated 30.11.2015 passed by the Co-ordinate Bench in assessee’s own case for the assessment year 2005-06 in ITA No.441/Mum/2010. Accordingly, the ld.AR submitted that the impugned penalty order is liable to be quashed.

3.

The ld. DR did not object to the factual aspects presented by the ld. AR.

4.

Since the addition, on which the impugned penalty has been levied, have since been deleted by the Tribunal, the impugned penalty is liable to be cancelled. Accordingly, we set aside the order of ld. CIT(A) and direct the AO to delete the impugned penalty.

5.

In the result, the appeal filed by the assessee is allowed.

Pronounced accordingly on 1st Jan,2016. घोषणध खुरे न्मधमधरम भें ददनधंकः 1st Jan, 2016 को की गई । (AMARJIT SINGH) ( B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER भुंफई Mumbai: 1st Jan, 2015. व.नन.स./ SRL , Sr. PS

3 आदेश की प्रतिलऱपप अग्रेपिि/Copy of the Order forwarded to : अऩीरधथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A)- concerned 3. आमकय आमुक्त / CIT concerned 4. ववबधगीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई /

5.

DR, ITAT, Mumbai concerned गधर्ा पधईर / Guard file. 6. आदेशधनुसधय/ BY ORDER,सहधमक ऩंजीकधय (Asstt.

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