ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -2, NASHIK vs. M/S. VIJAY CONSTRUCTION, NASHIK

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ITA 994/PUN/2018Status: DisposedITAT Pune08 December 2021AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that penalty proceedings under Section 271D are independent of assessment proceedings, including those revised under Section 263. Therefore, the quashing of the Section 263 order does not automatically invalidate the penalty.

What were the facts?

The Revenue appealed against the deletion of penalty under Section 271D by the CIT(A). The penalty was levied for violation of Section 269SS during assessment proceedings that were later revised under Section 263. The CIT(A) deleted the penalty relying on the ITAT quashing the Section 263 order.

What were the issues?

Whether penalty proceedings under Section 271D are sustainable when the revision order under Section 263, which led to the penalty, is quashed. The independence of penalty proceedings from assessment and revision proceedings.

Which sections of the Income-tax Act were involved?

Section 271D,Section 269SS,Section 263,Section 133A,Section 132,Section 143(3),Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI INTURI RAMA RAO, AM & SHRI S. S. VISWANETHRA RAVI, JM

Hearing: 07.12.2021Pronounced: 08.12.2021

ORDER

PER INTURI RAMA RAO, AM:

1.

This is an appeal filed by the Revenue directed against the order of ld. Commissioner of Income Tax (Appeals)- 12, Pune (‘CIT(A)’ for short) dated 28.02.2018 for the assessment year 2009-10 deleting levy of penalty u/s 271D of the Income Tax Act, 1961 (‘the Act’).

2.

The brief facts of the case are as under :- The appellant is a partnership firm. The return of income for the assessment year 2009-10 was filed on 29.09.2009 declaring total income of Rs.5,69,048/-. The survey operations u/s 133A were conducted in the business premises of the appellant on 04.10.2010 consequent to the search action u/s 132 in the case of M/s. Anant Technocrats Pvt. Ltd..

Subsequently, the assessment came to be completed u/s 143(3) r.w.s. 153C at a total income of Rs.8,12,936/-. Subsequently, the Commissioner of Income Tax (Central), Nagpur in exercise of power vested with him u/s 263 set-aside the assessment order vide order dated 19.03.2015 directing the Assessing Officer to make a fresh assessment and consequential order u/s 143(3) r.w.s. 263 was passed vide order dated 24.11.2015 at a total income of Rs.18,77,558/-. During the course of consequential assessment proceedings, the Assessing Officer initiated penalty proceedings u/s 271D for violation of provisions of section 269SS of the Act. The Assessing Officer levied a penalty of Rs.1.05 crores u/s 271D vide order dated 27.07.2016.

3.

Being aggrieved, an appeal was filed before the ld. CIT(A), who vide impugned order directed the Assessing Officer to delete the penalty in the light of order passed by the ITAT quashing the 263 order.

4.

Being aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us in the present appeal.

5.

It is contended that the ld. CIT(A) ought not to have quashed the penalty order taking into consideration the fact that the 263 order was quashed by the Tribunal as the penalty proceeding u/s 271D are independent of the assessment proceedings.

6.

On the other hand, ld. AR vehemently argued that the penalty proceedings were initiated as consequence of order passed u/s 263 of the Act. Once the order passed u/s 263 is cancelled, the penalty proceedings u/s 271D have no legs to stand.

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