2018 (1) TMI 1102 - AT - Income Tax

Tribunal Upholds CIT(A) Decision on Penalty Deletion for Assessment Year 2004-05

The Income Tax Officer, Ward-2, Jalna Versus M/s. Mauli Steel Pvt. Ltd., And The Asst. Commissioner of Income Tax, Jalna Circle, Jalna Versus M/s. Gajlaxmi Steel Pvt. Ltd.,

The Income Tax Officer, Ward-2, Jalna Versus M/s. Mauli Steel Pvt. Ltd., And The Asst. Commissioner of Income Tax, Jalna Circle, Jalna Versus M/s. ... Issues involved:Appeals by Revenue against deletion of penalty under section 271(1)(c) of the Income Tax Act 1961 relating to assessment years 2004-05, 2009-10 & 2009-10 for M/s. Mauli Steel Pvt. Ltd. and M/s. Gajlaxmi Steel Pvt. Ltd.Detailed Analysis:1. Grounds of Appeal - Assessment Year 2004-05:- The appellant contested the deletion of penalty imposed under section 271(1)(c) of the Income-tax Act, 1961 by the CIT(A).- The CIT(A) was criticized for not following his own orders regarding suppressed production and profit estimation.- The appellant sought to quash the CIT(A)'s order and restore the AO's decision.- Despite the absence of the assessee during the hearing, the Tribunal proceeded to decide the appeal based on existing orders.2. Issue of Penalty Deletion:- The core issue revolved around the deletion of penalty under section 271(1)(c) of the Act.- The assessee, engaged in manufacturing MS Ingots/Billets, faced additions in the assessment order due to alleged suppressed production.- The CIT(A) confirmed the addition of gross profit on the suppressed production, which led to the penalty imposition by the Assessing Officer.- However, the Tribunal later deleted the additions, including the penalty, as no evidence of unaccounted purchases or sales was found.3. Legal Precedents and Tribunal Decisions:- The CIT(A) referred to Tribunal orders where similar penalty issues were addressed.- The Tribunal's decisions in other cases supported the deletion of penalties related to estimated additions.- Specific cases like ACIT Vs. Bhagyalaxmi Steel Alloys Pvt. Ltd. and ACIT Vs. Shree Om Rolling Mills Pvt. Ltd. were cited, emphasizing the rejection of penalties for estimated additions.4. Final Decision and Rationale:- The Tribunal upheld the CIT(A)'s decision to delete the penalty under section 271(1)(c) based on the Tribunal's precedent and the deletion of additions in the present case.- The Tribunal dismissed the Revenue's appeals, stating that the penalty deletion was justified given the circumstances and the lack of concrete evidence supporting the additions.- The judgment for assessment year 2004-05 applied mutatis mutandis to other identical cases, resulting in the dismissal of all Revenue appeals.In conclusion, the judgment focused on the deletion of penalties under section 271(1)(c) for suppressed production and unaccounted sales, following the Tribunal's precedent and emphasizing the need for concrete evidence to support penalty imposition in such cases.