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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: S/SHRI B.R.BASKARAN & AMARJIT SINGH
आदेश / O R D E R PER AMARJIT SINGH, JM:
The appeal in 2004-05 has been filed by the assessee against the order dated 17.02.2012 of the learned Commissioner of Income Tax (Appeals)-36, Mumbai [hereinafter referred to as the learned “CIT(A)] passed in appeal No.CIT(A)-36/AP.159/10-11. The assessee has challenged the CIT(A)’s order on the following grounds of appeal:-
Assessment Year: 2004-05 “1. The Commissioner of Income-tax (Appeals) - 36 , Mumbai (hereinafter referred to as the CIT(A)) erred in upholding the action of the Assistant Commissioner of Income-tax, Central Circle 40, Mumbai (hereinafter referred to as the Assessing Officer) in levying penalty of Rs.2,75,000 under section 271(1)(c) of the Act. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have confirmed the levy of the impugned penalty under section 271(1)(c) of the Act.
The CIT(A) erred in upholding the action of the Assessing Officer in levying penalty on the basis of income-tax, including surcharge. The appellants contend that surcharge on income-tax cannot be considered in levying the penalty as the same is not part of "tax".
The appellants contend that the impugned order of penalty is bad in law and requires to be quashed.
2. The facts of the case are that the AO disallowed certain amount on account of share trading loss in the assessment u/s. 143(3) and this disallowance was confirmed by the CIT(A). Subsequently, the AO issued show cause for levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961. The appellant did not reply to the notice, therefore the AO levied the penalty as the appellant had concealed the particulars of his income and there was absence of material to rebut the presumption raised by Explanation 1 to section 271(1)(c). The AO levied the penalty @ 100% of the tax sought to be evaded. At the very outset the counsel of the assessee has argued that the quantum order which has been confirmed by the CIT(A) has been set aside and remanded by the Tribunal vide order dated 02.08.2013, therefore, in the said circumstances the penalty order does not survive in the eyes of law in view of the law settled in the case of CIT Vs. Kelvinator of India Ltd. (2010) 187 Taxman 312(SC), Garware Wall Ropes Limited Vs. Addl.CIT, dated 15.01.2014 in ITA 5408/M/12 & M/s. J. M. Financial Limited Vs. Addl. CIT 4(3), Mumbai dated 26.03.2014 in ITA No. 4521/M/12. Assessment Year: 2004-05 3. On the other hand the learned Departmental representative (DR) no doubt strongly supported the judgement of CIT(A) under challenge but nowhere produce any distinguished facts on record. In the light of above said submission and record, we observed that the order of quantum on the basis of which the penalty has been levied as already been set aside by the Tribunal in ITA 2784/M/08 A.Y. 2003-04 & ITA 2785/M/08 A.Y. 2004-05, Mumbai vide order dated 02.08.2013. Since the quantum order dated 12.08.2013 is nowhere in existence, therefore, in the said circumstance the penalty order under challenged does not survive in the eyes of law.
In this regard we also find support of law settled in case of CIT Vs. Kelvinator of India Ltd. (2010) 187 Taxman 312, (SC), Garware Wall Ropes Limited Vs. Addl.CIT, dated 15.01.2014 in ITA 5408/M/12 & M/s. J. M. Financial Limited Vs. Addl. CIT 4(3), Mumbai dated 26.03.2014 in ITA No. 4521/M/12. Therefore, we set aside the order dated 17.02.2012 passed by CIT(A) under challenged as the penalty is not leviable under law.
In the result, the appeal of the assessee is hereby allowed accordingly.