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Applitech Solution Ltd. Versus ACIT (OSD) , Range-1 Ahmedabad.

2015 (11) TMI 1385 - ITAT AHMEDABAD

Penalty u/s 271(1)(c) - Held that:- A perusal of sub-clause (iii) of section 271(1)(c) would indicate that in case an addition is being made to the income of an assessee, and it is established that the assessee has concealed or furnished inaccurate particulars qua that addition, then apart from tax to be payable by the assessee, he would pay an amount equivalent to the tax or three times of the tax as penalty under section 271(1)(c) of the Act. Meaning thereby, the penalty would be computed equi .....

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hed inaccurate particulars on the additions which made to his income. In the set aside assessment order, it is yet to be decided whether any addition is to be made to the income of the assessee or not. It will be in the discretion of the AO to initiate or not initiate penalty proceedings after passing the fresh assessment order. Therefore, in the present proceedings penalty is not sustainable upon the assessee. We set aside both the orders and quash the imposition of penalty. It will be in discr .....

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.4.2011 passed for the Asstt.Year 2003-04. 2. Though the assessee has taken six grounds of appeal, but its grievance revolves around a single issue, whereby, it has challenged confirmation of penalty amounting to ₹ 3,23,11,350/- imposed under section 271(1)(c) of the Income Tax Act, 1961. 3. Brief facts of the case are that the assessee has filed its return of income on 1.12.2003 declaring loss of ₹ 1,74,56,039/-. The assessment order was passed under section 143(3) of the Act on 27. .....

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e not imposed for the additions made to the income of the assessee. After hearing the assessee, the ld.AO has imposed penalty of ₹ 3,23,11,350/-. 4. Appeal to the CIT(A) did not bring any relief to the assessee, 5. Ld.counsel for the assessee at the very outset submitted that dissatisfied with the additions to the income of the assessee, the dispute was taken to the CIT(A) and thereafter to the Tribunal. The Tribunal has set aside these additions vide order dated 14.10.2011 in ITA No.954/A .....

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.2011 in ITA No.954/Ahd/2009 (supra) reads as under: 6. We have considered the rival submissions and material on record. It is not in disputed fact that the assessee went in liquidation at the initial stage because of the order passed by the Hon ble Gujarat High Court and the Official Liquidator was appointed in the matter. The AO framed the assessment in the name of the Official Liquidator attached to the assessee company and ultimately after various rounds of litigations and taking steps in th .....

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on record, we have to take pragmatic and liberal approach while condoning the delay in the matter. Further, the assessee explained that in the earlier years the matter is restored to the file of the learned AO for reconsideration. The assessee further explained that in assessment year 2000-01 in the case of the same assessee, the Tribunal in ITA No.1507/Ahd/2005 and 1681/Ahd/2005 (supra) restored the matter to the file of the AO for reconsideration. The findings of the Tribunal in Para 6 are re .....

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company. No doubt the assessee has shown purchases from RIPL and VCPL, therefore, to support these purchases onus is on the assessee to produce these parties before the AO who has already recorded the statement of these two persons and who have denied to have made any sale to the assessee company. Thus primarily it is for the assessee to produce these persons before the AO so as to enable him to confront these two parties. It will be a stage of re-examination. The revenue authorities should als .....

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commission to the other officer of the department where the assessee can also go and confront the two persons. Accordingly, both the appeals are restored to the file of AO for deciding afresh. 7. On consideration of the above discussions, we are of the view since the majority additions were based on the findings given in assessment year 2000-01 in which the matter is restored to the file of the AO for reconsideration by the Tribunal, therefore, the totality of the circumstances would prove that .....

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ment year 2000-01. The AO also made addition on the basis of findings given in assessment year 2000-01. In assessment year 2000-01, the Tribunal decided the cross appeals of the assessee and the revenue vide order dated 15-10-2010 and in Para 6 allowed the appeal of the assessee by restoring the matter to the file of the AO. The parties involved in this year were M/s. Rahul Infotech Pvt. Ltd. (RIFL) and M/s. Vandana Computers Pvt. Ltd. (VCPL). Therefore, the facts being identical, the matter req .....

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ng in litigations and further that the assessee has later on revived from winding up and further that assessment order was framed in the name of the Official Liquidator would prove that the assessee did not get fair opportunity of being heard in the matter. Considering the totality of the facts and circumstance in the light of the order of the Tribunal for assessment year 2000-01 dated 15-10-2010 (supra), we set aside the orders of the authorities below and restore all the grounds of appeal to t .....

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s under this Act, is satisfied that any person (a) and (b) ** ** ** (c) has concealed the particulars of his income or furnished inaccurate particulars of such income. He may direct that such person shall pay by way of penalty. (i)and (Income-tax Officer,)** ** ** (iii) in the cases referred to in Clause (c) or Clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the .....

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and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income or such person as a result thereof shall, for the purposes of Clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." 8. A perusal of sub-clause (iii) of section 271(1)(c) would indicat .....

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