TaxTMI 
TaxTMI 
2018 (9) TMI 1787
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....e Assessing Officer to levy penalty on the enhanced amount of Rs. 4,04,27,000/- is bad in law and without jurisdiction." The Honble ITAT, 'E' Bench, Mumbai has decided appeal filed by the assessee vide ITA.5289/ Mum/2011 dated 28.07.2015. Gist of the case: For A.Y.2001-02, assessee filed ROI declaring loss of Rs. 3,69,63,900/-. During the course of the assessment proceedings, the AO noticed that assessee is showing major part of its expenses in the form of opening stock and purchases. The assessee was given ample opportunity to submit details of purchases made during the year, but assessee willfully choose not to submit the details called for. Accordingly, the trading results were rejected and the net profit was estimated at 10% of the sale value and accordingly the total income of the assessee was determined at Rs. 34,63,100/-. The order of the AO u/s. 143(3) was confirmed and upheld by the Ld. CIT(A). The assessee preferred further appeal before the HonTDle ITAT. The Hon'ble ITAT determined the income of the assessee for the A.Y.2001-02 at NIL vide the order No.ITA No.2366/Mum/2005 date 22/08/2008. The order of the Honble ITAT negates the positive income but at the....
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....ing Officer ('A.O.' for short) determined the income of the assessee at Rs. 34.63 lacs. The ld. CIT(A) confirmed the order of the A.O. when the matter travelled to the ITAT. The ITAT vide its order dated 22.08.2008 has decided the issue as under: "3. We have considered the rival submissions and perused the relevant material on record. The learned A.R. has vehemently argued before us that it had furnished complete details of purchase and sale before the Assessing Officer and hence the action of the A. O. in rejecting the books of account was not as per law. It was further stated that due to illness of the Managing Director of the company,the business operations were closed in this year and the stock was sold at throwaway price.He still further submitted that the company has been declared as defunct thereafter.In the opposition the ld. DR relied on the impugned order. We are not convinced with the submission advanced on behalf of the assessee for the obvious reason that the party-wise details of purchase required by the Assessing Officer was not furnished as has been noted in the assessment year. Now the learned A.R. has relied on page 115 of the paper book to contend that the deta....
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....ng the same, the ld. CIT(A) referred to Hon'ble Apex Court decision in the case of Virtual Soft Systems Ltd. vs. CIT [2007] 289 ITR 83 (SC) and referred as under: "Further, the plain reading of clause (a) of Explanation 4 to section 271 as it stood prior to the 2002 amendment, shows that this clause applied to a situation where an assessee has returned a loss which by reason of the addition of the concealed income thereto by the Assessing Officer, is converted into a positive figure of the assessed income on which the assessee is required to pay tax. In contrast, clause (c) of the said Explanation 4 applies only to a situation where the assessee has returned a positive income, which stands enhanced by reason of the concealed income added thereto by the Assessing Officer in the assessment order. Consequently, both under clause (a) and clause (c) of the said Explanation 4, the assessee can be penalized only if he has a positive assessed income on which tax is payable. The only difference between clause (a) and clause (c) is that clause (a) applied to an assessee who had filed a loss return, and clause (c) to an assessee who has filed a positive return. However, The end result in bo....
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....nal concluded that "As the addition made by the AO have been deleted by the Tribunal in the quantum appeal, so in our opinion the penalty imposed by the AO/enhanced by the FAA would not survive." From the above order, it is evident that the Tribunal has gone on the premise that when the income determined of the assessee is Nil, there is no justification for levying/enhancing the penalty. 12. Against the above order, the Revenue has filed a Miscellaneous Application. 13. The ld. Departmental Representative ('ld. DR' for short) referred to the MA and submitted that the Tribunal had not considered the order of the ld. CIT(A) in the penalty proceedings and she relied upon the submission made in the miscellaneous application as above. 14. Per contra, the ld. Counsel of the assessee submitted that there is no mistake apparent from the record. He in this regard referred to the decision of the Hon'ble Bombay High Court decision in the case of CIT vs. Ramesh Electric And Trading Co. [1993] 203 ITR 497 (Bom) for the proposition that only mistake apparent from the record can be rectified that failure of the tribunal to consider the arguments is not an error apparent from the ....
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....ction of the loss to nil by the ITAT would also result in non levy of penalty. 17. In this regard, we note that the Hon'ble Apex Court in the case of Asst. CIT vs. Saurashtra Kutch Stock Exchange Securities Ltd. [2013] 33 taxmann.com 118 (Gujarat) has expounded that non consideration of Hon'ble Apex Court decision even if it is not cited before the Tribunal would result in the order of the Tribunal suffering from mistake apparent from the record. In this regard, we may gainfully refer to the exposition by the Hon'ble Apex Court in this case in brief as under: Where the Tribunal had dismissed the appeal filed by the assessee by holding that it was not entitled to exemption u/s 11 and subsequently, on an application filed by the assessee u/s 254(2), recalled the said order on the ground that it had not considered a judgement of the jurisdictional High Court and that there was a mistake apparent from the record and the question arose whether such recall was justified, HELD, upholding the order of the Tribunal: (i) A mistake apparent from the record is one that is patent, manifest and selfevident and which does not require elaborate discussion of evidence or argument to establish ....