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2015 (10) TMI 2040 - ITAT AHMEDABAD

2015 (10) TMI 2040 - ITAT AHMEDABAD - TMI - Penalty under sec. 271(1)(c) - Held that:- The additions have been confirmed upto to the stage of the Tribunal; however, the appeals against the quantum are pending for adjudication before the Hon’ble High Court of Gujarat. There is no dispute with regard to the fact that at both stages, i.e., quantum as well as penalty proceedings, the assessee remained absent. However, before the CIT(A), in penalty proceedings, the assessee had filed the evidences wh .....

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ment proceedings.

Therefore, under these facts, we hereby set aside the orders of the authorities below on the issue of levying penalty. The Assessing Officer is directed to decide the issue afresh after the outcome of the question Nos. 4 & 6 admitted by the Hon’ble jurisdictional High Court i.e.

(4) Whether in the facts and circumstances of the case, learned ITAT has erred in law in not appreciating the fact that, admittedly notice u/s 148 dated 29.05.2001 was served on di .....

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see : Shri K.H. Shah, AR For The Revenue : Shri Narendra Singh, Sr. DR. ORDER PER SHRI KUL BHARAT, JUDICIAL MEMBER:- These two appeals by the assessee pertaining to Assessment Years 1994-95 & 1995-96 are directed against the common order of the Commissioner of Income Tax (Appeals)-XVI ( CIT(A) in short ), Ahmedabad dated 25.01.2011, thereby the ld. CIT(A) confirmed the penalty imposed by the Assessing Officer. Since facts and grounds are identical, both these appeals were taken up together f .....

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appeal for the year in dispute. It is respectfully submitted that he ought to have condone the so called delay by following the rule of natural justice, and as such, it is prayed that the said delay may please be condoned and this appeal may pleased be decided on the merits of the case. 2. The Learned CIT (Appeals) has also erred in not appreciating the facts and submission as per our letter dated 21.01.2011 inter alia paper book page 1 to 68. It is respectfully submitted that the learned CIT (A .....

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onfirming the penalty by CIT (Appeals) as per his order in dispute page 43 to 45 para 5.2 to 5.3 and it is prayed that the penalty may please be deleted. 3. Briefly stated facts are that in quantum proceedings the additions made by the Assessing Officer in respect of cash credits travelled upto the stage of Tribunal which was set aside the issue to the file of the Assessing Officer and the same additions were again made by the Assessing Officer vide his order dated 26.12.2008. While doing so, th .....

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in imposing the penalty and confirming the same. The ld. Counsel for the assessee submitted that the additions were made on account of cash credits. He submitted that the details of the creditors were duly given; however, the Assessing Officer disregarded the evidences. He further submitted that the ld. CIT(A) has disregarded the evidences as submitted before him on flimsy grounds. He further submitted that under the facts of the present case the Assessing Officer ought not to have imposed the .....

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able u/s. 271(1)(c) of the Income-tax Act. He also submitted that even in quantum proceedings also, the order was passed at the back of the assessee. He submitted that in both the quantum as well as penalty proceedings, the assessee was not represented himself and could not give effective defense to the proposed additions. Under these facts, he submitted that penalty should not have been confirmed by the ld. CIT(A). The assessee has filed a paper-book though not certified; and from page Nos. 211 .....

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e set aside. 5. The ld. Sr. Departmental Representative, on the contrary, opposed the submissions of the ld. Counsel for the assessee and submitted that the assessee was not representing his case despite having been given sufficient opportunity. Even in the quantum proceedings, the Tribunal has set aside this issue to the file of the Assessing Officer and an undertaking was given by the ld. Counsel for the assessee before the Tribunal that the assessee would cooperate before the Assessing Office .....

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e material available on record and gone through the orders of the authorities below. There is no dispute with regard to the fact that in the quantum proceedings the assessee was given sufficient opportunity as is evident from the records. The Co-ordinate Bench of the Tribunal in ITA Nos. 574 & 575/Ahd/2007 dated 04.05.2007 had restored the issue to the file of the Assessing Officer for decision afresh. The assessee had given an undertaking to appear before the Assessing Officer and would coo .....

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-1996. We find that the learned counsel for the assessee at the outset submitted that he has not prepared on the merits of the additions made by the AO and confirmed by the CIT(A). In reply to the query from the Bench that why he was not submitting any arguments on the merits of the case or why he has not prepared, the learned counsel for the assessee could not give any reasons whatsoever. We find that it is third round of litigation before the Tribunal, and since no reason could be submitted on .....

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ness of the creditors and also genuineness of the transactions. In this case, the assessee has miserably failed to discharge its onus cast on it under the statute and could not establish the identity and credit worthiness of creditors and genuineness of the transaction, in spite of amble opportunity given by the AO and the CIT(A) in third round of litigation. We find that on merits of the case the CIT(A) has passed a well reasoned speaking order on the merits of the case, and the assessee could .....

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the CIT(A) confirming the additions on its merits is confirmed for both the Asstt. Years 1994-95 and 1995-96 and all the grounds of appeal of the assessee are dismissed for the both relevant assessment years 1994-95 and 1995-96. 7. The contention of the ld. Counsel for the assessee is that against the order of the Tribunal in quantum proceedings, the Tax Appeals filed before the Hon ble jurisdictional High Court has been admitted vide Tax Appeal Nos. 1062 of 2014 and 1063 of 2014. Ld. Counsel fo .....

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ore Iron and Steel Wroks ix. 212 CTR 42 (Delhi), CIT vs. Atul Jain x. 40 SOT 163 (Mum), Chempure Vs. ITO xi. 347 ITR 639 (All), Mehsons Exports vs. ITO xii. 47 DTR 178 (Chennai) (Trib.), A. Rajendran Vs. ACIT xiii. 48 DTR 298 (Ahd), ITO vs. Computer Force xiv. 24 SOT 393 (Delhi), Shri Vardhaman Overseas vs. ACIT 8. It is transpired from the records that in the quantum proceedings as well as in the penalty proceedings the assessee did not avail the opportunity to represent his case despite having .....

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Hon ble Gujarat High Court in Tax Appeal Nos. 1062 of 2014 and 1063 of 2014. We find that the Assessing Officer has recorded that fresh notice u/s 143(2) dated 20.10.2008 sought to finalise the proceedings initiated after issuing notices on various dates and show-cause notice to finalise assessment u/s 144 of the Act and a letter to new AR of the assessee Shri Ketan H Shah and after making telephonic conversation on his mobile phone 9825960331 on 22.12.2008, who in turn informed that the assesse .....

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We have given our thoughtful consideration to the totality of the facts. Before the Assessing Officer, no one remained present on behalf of the assessee; however, before the ld. CIT(A), Shri Ketan H. Shah, Advocate attended the proceedings. The ld. CIT(A) has decided the appeal against the assessee, both on the issue of delay and on merits. The ld. Counsel for the assessee has relied upon various case laws to rebut the arguments - mainly the judgment of Hon ble Supreme Court in the case of Reli .....

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Tribunal committed an error in imposing penalty u/s 271(1)(c ) of the Act and for the reasons stated hereinabove we answer the question in the negative i.e. in favour of the assessee and against the Revenue. In the case in hand, the assessee was given sufficient opportunity by the authorities below; therefore, the judgment of Hon ble jurisdictional High Court would not help the assessee. The Tribunal in quantum proceedings has observed that the Counsel for the assessee could not even controvert .....

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been considered at length in his order at page Nos. 19 to 42 and has given a finding that the appellant has failed to discharge its onus of proving the identity of these persons, genuineness of transactions and creditworthiness; therefore, on merit none of the creditors are allowable. We have given our thoughtful consideration to the facts of the case. One of the grounds admitted by the Hon ble Jurisdictional High Court is with regard to the service of notice u/s 148 which goes to the very root .....

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merits is tenable in absence of ground-wise disposal of appeal. (4) Whether in the facts and circumstances of the case, learned ITAT has erred in law in not appreciating the fact that, admittedly notice u/s 148 dated 29.05.2001 was served on different address than shown in the return and is not valid service? (6) Whether in the facts and circumstances of the case, learned ITAT has erred in law in not appreciating the facts that, there is no tangible material for AY 1994-95 vide notice dated 29. .....

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