Jaswant H. Bhatia, Mumbai vs Assessee

Mr. Jaswant H Bhatia, बनाम/ Asstt Commissioner of Income 61-A,Mittal Towers, Vs. Tax 19(3),Room No.305, Nariman Point, 3rd floor,Piramal Chambers, Mumbai-400005 Mumbai-400012. (अपीलाथ /Appellant) .. ( यथ / Respondent)

थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. : AACPB0225E

अपीलाथ ओर से /: Appellant by: Shri Bharat Patel यथ क ओर से/Respondent by: Shri Love Kumar

सुनवाई क तार ख / Date of Hearing :29.6.2015 घोषणा क तार ख /Date of Pronouncement : 29.6.2015

आदे श / O R D E R

Per B.R.BASKARAN, Accountant Member:

The assessee has filed this appeal challenging the order dated 28.11.2013 passed by the ld.CIT(A)-30, Mumbai confirming the penalty of Rs.26,27,600/- levied by the AO u/s 271(1)( c ) of the Income Tax Act, 1961 for the assessment year 2006-07.

2. The ld. Counsel appearing for the assessee submitted that the penalty under section 271(1)(c) of the Act was imposed on a sum of Rs.79,65,599/-, which consisted of following two items :

a) The disallowance of interest income of Rs.52.51 lakhs; and

b) The addition made under section 68 of the Act of Rs.25 lakhs .

ITA No.502/M/14 2 The ld. Counsel submitted that the Tribunal has already passed the order in the quantum appeal preferred by the assessee. The ld. Counsel furnished a copy of the order dated 7.5.2014 passed in the quantum appeal of the assessee in ITA No.2989/Mum/2011 (AY-2006-07) and submitted that the Tribunal has restored the above said issues to the file of the AO, since the Tribunal felt that there was no clarity on facts relating to the details of the additions contested. The ld. AR submitted that the present penalty order is liable to be set aside, since the additions made in respect of two issues, referred above, have been restored back to the file of the AO.

3. The ld. DR did not dispute the factual aspects that were present by the ld. AR.

4. We heard the rival contentions and perused the record. We notice that the assessee had contested the disallowance of interest expenses of Rs.52.51 lakhs and also the addition made u/s 68 of the Act amounting to Rs.25 lakhs in the quantum appeal filed before the Tribunal. From the copy of order passed by the co-ordinate bench of Tribunal, we notice that the Tribunal has restored both the issues referred above to the file of the AO. The relevant observations made by the co-ordinate Bench of the Tribunal in the quantum appeal are extracted below :

"7. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. On hearing both the parties, we are of the opinion that there is no clarity on facts relating to the details of the additions made in the substantive assessment either of the assessee or of others, if any. However, it is an undisputed fact that the impugned assessment is a protective assessment. In the remand proceedings, AO shall examine all the above contentions of the assessee and examine afresh the applicability of the provisions of section 145(3) and consequent best judgment assessment, if any. So far as the additional grounds are concerned, we find it necessary the same should be remanded to the files of the AO and adjudicate them ITA No.502/M/14 3

afresh after granting a reasonable opportunity of being heard to the assessee. Accordingly, all the issues raised in the grounds as well as the additional grounds are remanded. Accordingly, grounds raised by the assessee are allowed for statistical purposes."

Since, the additions on which the impugned penalty has been levied has been restored to the file of the AO, the impugned penalty order does not survive. Hence, we set aside the order of ld. CIT(A) and restore the issue of penalty to the file of the AO, who may initiate penalty proceedings afresh, if it was considered necessary, in accordance with law at the time of finalizing the assessment in the setting aside proceedings.

5. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.

The above order was pronounced in the open court on 29th June, 2015.

घोषणा खुले यायालय म दनांकः 29th June, 2015 को क गई ।

Sd sd

(आय.पी. बंसल/I.P. BANSAL) (बी.आर.बा करन/ B.R. BASKARAN) या यक सद य / Judicial Member लेखा सद य/Accountant Member मुंबई Mumbai: 29th June, 2015.

व. न.स./ SRL , Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु त(अपील) / The CIT(A)- concerned

4. आयकर आयु त / CIT concerned

5. वभागीय त न ध, आयकर अपील य अ धकरण, मुंबई / DR, ITAT, Mumbai concerned गाड फाईल / Guard file.

6.

आदे शानुसार/ BY ORDER, True copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai