Nilesh R.Pandya, Ahmedabad vs Assessee

आयकर अपील सं./I.T.A. No.2593/Ahd/2012 ( नधा रण वष / Assessment Year : 2000-01) Nilesh R.Pandya बनाम/ The JCIT (OSD) 22, Dutt Society Vs. Circle-11 Anand Nagar Ahmedabad Paldi, Ahmedabad-380 007 थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAYPP 7274 P (अपीलाथ% /Appellant) .. (&'यथ% / Respondent) अपीलाथ% ओर से / Appellant by : Shri S.N. Divatia, AR &'यथ% क) ओर से/Respondent by : Shri M.K. Singh, Sr.DR

ु वाई क) तार ख / सन Date of Hearing 22/01/2015 घोषणा क) तार ख /Date of Pronounce ment 12/02/2015

आदे श / O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER :

This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-XVI, Ahmedabad ('CIT(A)' in short) dated 16/07/2012 pertaining to Assessment Year (AY) 2000-01. The Assessee has raised the following grounds of appeal:-

1) The order of the learned Commissioner of Income Tax (Appeals) is erroneous and bad in law and on the facts of the case.

ITA No.2593/Ahd/2012 Nilesh R. Pandya vs. JCIT (OSD) Asst.Year - 2000-01 -2-

2) The learned Commissioner of Income Tax (Appeals) has wrongly confirmed penalty levied by the Assessing officer on account of addition made for Gift received by the assessee from NRI of Rs.14,55,772/-, addition on account of notional rent on Self Occupied property of Rs.45,000/- and disallowance of Interest Exp. Of Rs.13,50,260/- from Short Term Capital Gain.

3) The appellant graves to add, alter or modify the aforesaid grounds.

2. The assessee has also filed additional grounds of appeal which read as under:-

3.1. The Ld.CIT(A) ought to have appreciated that the order imposing penalty u/s.271(1)(c) was wholly illegal and unlawful for the reason that the order giving effect to the order of Hon'ble Tribunal and the penalty order arising from/initiated from the same order both were passed simultaneously on 30/03/2011.

3.2. The Ld.CIT(A) ought not to have appreciated that in case the penalty proceedings and consequential order imposing penalty on 31/3- 2011 were considered as arising out of the original order of assessment passed on 28.03.2003, the same were time barred u/s.275(1).

3.3. It is therefore prayed that the penalty imposed by AO and confirmed by CIT(A) may please be deleted.

3. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 28/02/2003, thereby the Assessing Officer (AO in short) made various additions and initiated penalty proceedings u/s.271(1)(c) of the Act. In the quantum proceedings, the matter travelled upto the stage of Tribunal and the Tribunal (ITAT 'A' Bench Ahmedabad) in ITA ITA No.2593/Ahd/2012 Nilesh R. Pandya vs. JCIT (OSD) Asst.Year - 2000-01 -3-

No.894/Ahd/2004 for AY 2000-01 vide its order dated 13/10/2010 partly allowed the appeal for statistical purposes. However, while allowing the assessee's appeal, the Tribunal confirmed the addition made on account of gifts of Rs.14,55,772/-. In respect of the addition made on account of the interest payment of Rs.13,76,660/-, the issue was restored to the file of AO to calculate the interest on a sum of Rs.7,54,800/-. The AO passed an order dated 31/03/2011 in pursuance to the order of the Tribunal in quantum proceedings. Simultaneously, the AO also passed an order dated 31/03/2011 u/s.271(1)(c) of the Act, thereby the AO levied a penalty of Rs.13,36,758/- on the concealed income of Rs.13,50,260/-.

4. During the course of hearing, the ld.counsel for the assessee filed an additional ground and submitted that imposing penalty is not only bad in law but also barred by time. The ld.counsel for the assessee submitted that this ground was not taken before the ld.CIT(A). He submitted that this being the legal ground may be admitted for adjudication. The ld.counsel for the assessee further submitted that the orders of the authorities below vitiated by arbitraryness. He pointed out that the assessment order was passed on 28/03/2003 and on 16/01/2004, the ld.CIT(A) confirmed the additions. On 13/10/2010 in quantum proceedings, the Tribunal passed an order in assessee's appeal bearing ITA No.894/Ahd/2004 for AY 2000-01. He submitted that on ITA No.2593/Ahd/2012 Nilesh R. Pandya vs. JCIT (OSD) Asst.Year - 2000-01 -4-

31/03/2011, the AO passed an order giving effect to the order passed by the Tribunal. He submitted that on 31/03/2011, the order levying penalty was passed and the same order was confirmed by ld.CIT(A) on 16/07/2012. He submitted that the penalty were initiated and concluded even before the order giving effect to the order of the Tribunal. He submitted that the penalty proceedings were initiated in respect of the assessment order dated 28/03/2003. This order was confirmed by CIT(A) on 16/01/2004. From these facts, ld.counsel for the assessee submitted that the penalty as imposed is not only barred by time also vitiated by non-affording the opportunity to the assessee. He submitted that it is settled principle of law that the penalty proceedings and the assessment proceedings are two different and distinct proceedings. The penalty cannot be levied in a mechanical manner.

4.1. On the contrary, ld.Sr.DR supported the orders of the authorities below and adopted the arguments of the AO. He submitted that there is no illegality into the orders of the authorities below.

5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. During the course of hearing, the ld.counsel for the assessee has raised additional grounds (reproduced above). Admittedly, the above additional grounds were not raised before the ld.CIT(A). Since the ground is ITA No.2593/Ahd/2012 Nilesh R. Pandya vs. JCIT (OSD) Asst.Year - 2000-01 -5-

related to the question of limitation, therefore the same being legal ground is hereby admitted for adjudication. For adjudication of this ground, verification from records of Revenue is needed. Therefore, the issue is restored back to the file of ld.CIT(A). Accordingly, the additional ground raised by the assessee is restored to the file of ld.CIT(A) for deciding the issue after verifying the record and giving an opportunity of hearing to concerned parties. The ld.CIT(A) would decide the issue of limitation within two months from the receipt of this order. In case, the assessee succeeds on this ground, ld.CIT(A) would delete penalty being time-barred. It is clarified that we have not expressed our opinion about the merit of the case. Therefore, other grounds are not being adjudicated.

6. In the result, Assessee's appeal is allowed for statistical purposes as discussed above.

Order pronounced in the Court on Thursday, the 12th day of February, 2015 at Ahmedabad.

Sd/- Sd/- (अ नल चतव ु द ) (कुल भारत) लेखा सद य या यक सद य ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 12/ 02 /2015 ट .सी.नायर, व. न.स./T.C. NAIR, Sr. PS ITA No.2593/Ahd/2012 Nilesh R. Pandya vs. JCIT (OSD) Asst.Year - 2000-01 -6-

आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ% / The Appellant

2. &'यथ% / The Respondent.

3. संबं4धत आयकर आयु6त / Concerned CIT

4. आयकर आय6 ु त(अपील) / The CIT(A)-XVI, Ahmedabad

5. 7वभागीय & त न4ध, आयकर अपील य अ4धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड; फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स'या7पत & त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation .. 4.2.15 (dictation-pad 10- pages attached at the end of this File)

2. Date on which the typed draft is placed before the Dictating Member ...5.2.15

3. Other Member...

4. Date on which the approved draft comes to the Sr.P.S./P.S.................

5. Date on which the fair order is placed before the Dictating Member for pronouncement......

6. Date on which the fair order comes back to the Sr.P.S./P.S.......12.2.15

7. Date on which the file goes to the Bench Clerk.....................12.2.15

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................