2012 (10) TMI 284

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e-tax Act, 1961 imposed by AO. 2. The appellant craves leave to add, alter or amend any ground of the appeal raised above at the time of hearing." 2 Facts, in brief, as per relevant orders are that assessment in this case was completed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act) vide order dated 29.12.2006,determining loss of Rs.310,44,80,700/- in pursuance to return declaring loss of Rs.384,18,05,410/- filed on 30.10.2006 by the assessee, manufacturing non alcoholic beverages. Inter alia, disallowance of Rs.37,83,02,343/- on account of non compete fee, Rs.29,94,15,920/- on account of depreciation on goodwill, Rs.14,64,622/- on account of depreciation on amount paid for acquisition of distributor list; ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ndra Textiles Processors,306 ITR 277(SC) and CIT vs. Gurbachan Lal,250 ITR 157(Del.). 4. On appeal, the ld. CIT(A) cancelled the penalty, holding as under:- ""6. I have considered the submissions of the appellant and findings of the AO and facts on records and 1 am of the view that proceedings initiated under Section 143(3) of the Act consequent to the CIT's order under Section 263 dated 25th March 2009 are null and void as the parent proceedings were held not tenable in law. Therefore, penalty under section 271(1)(c) of the Act cannot be levied as penalty proceedings under Section 271(1)(c) of the Act are not independent proceedings and are in the nature of simultaneous proceedings. 6.1 In coming to the above conclusion, I also ta....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... High Court's order is liable to be set aside in view of the errors apparent on record.   While deciding on the above questions Hon'ble Court has observed as under: "Where the additions made in the assessment order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment and, therefore, in such a case no such penalty can survive and the same is liable to be cancelled as in the instant case. Ordinarily, penalty cannot stand if the assessment itself is set aside. Where an order of assessment or reassessment on the basis of which penalty has been levied on the assessee has itself been finally set aside or cancelled by the Tribunal or otherwise, the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f income arrived at on the basis of the finding of the Assessing Officer. If the Tribunal has set aside the order of concealment and penalties, there is no concealment in the eyes of law and, therefore the prosecution cannot be proceeded with by the complaint and further proceedings will be illegal and without jurisdiction. The Assistant Commissioner of Income Tax cannot proceed with the prosecution even after the order of concealment has been set aside by the Tribunal when the Tribunal has set aside the levy of penalty, the criminal proceedings against the appellants cannot survive for further consideration. 6.2 In addition to the above, reliance can also be placed on the following judgments of the various High Courts including jurisdic....