Cine Payal, Jalandhar v. The Income-tax Officer, Jalandhar

ITA 74/ASR/2013 | misc
Pronouncement Date: 31-10-2013 | Result: Allowed

Appeal Details

RSA Number 7420914 RSA 2013
Assessee PAN ABFPL2148E
Bench Amritsar
Appeal Number ITA 74/ASR/2013
Duration Of Justice 8 month(s) 29 day(s)
Appellant Cine Payal, Jalandhar
Respondent The Income-tax Officer, Jalandhar
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 31-10-2013
Date Of Final Hearing 10-10-2013
Next Hearing Date 10-10-2013
Assessment Year misc
Appeal Filed On 01-02-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU JUDICIAL MEMBER AND SH. B.P.JAIN ACCOUNTANT MEMBER I.T.A. NOS.72 73 & 74(ASR)/2013 ASSESSMENT YEARS:1985-86 86-87 & 87-88 PAN :ABFPL2148E M/S. CINE PAYAL VS. INCOME TAX OFFICER NAKODAR ROAD WARD 1(3) JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.Y.K.SUD CA RESPONDENT BY:SH. TARSEM LAL DR DATE OF HEARING:10/10/2013 DATE OF PRONOUNCEMENT:31/10/2013 ORDER PER BENCH ; THESE THREE APPEALS OF THE ASSESSEE ARISE FROM THE CONSOLIDATED ORDER OF CIT(A) JALANDHAR DATED 15.11.2012 FOR THE AS SESSMENT YEARS 1985-86 1986-87 & 1987-88. THE ASSESSEE HAS RAISED IDENTICA L GROUNDS IN ALL THE THREE APPEALS MENTIONED HEREINABOVE EXCEPT THE QUAN TUM OF PENALTY WHICH IS DIFFERENT IN ALL THE YEARS. FOR THE SAKE OF CONVENI ENCE WE REPRODUCE GROUNDS RAISED BY THE ASSESSEE FOR THE ASSESSMENT Y EAR 1985-86 IN ITA NO.72(ASR)/2013 AS UNDER: ITA NO.S 72 73 & 74(ASR)/2013 2 1. THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAININ G THE PENALTY OF RS.67 289/- IMPOSED BY THE ITO U/S 271(1)(C). 2. THAT THE CIT(A) WHILE SUSTAINING THE PENALTY FAILED TO APPRECIATE THAT RECORDING OF SATISFACTION IN THE IN ITIAL YEAR I.E. ASSTT. YEAR 82-83 WHICH AS NOT RECORDED BY THE ITO WAS ESSENTIAL AND ALL THE SUBSEQUENT ASSESSMENT ORDERS HAVE BEEN PASSED ON THE BASIS OF THE ASSESSMENT ORDER OF ASST T. YEAR 1982- 83 THEREFORE NO PENALTY COULD HAVE BEEN LEVIED IN THIS YEAR. 3. THAT THE CIT(A) FAILED TO APPRECIATE THAT THE DEPAR TMENT HAD NO RECORDS AVAILABLE WITH THEM WHICH WERE ESSENTIAL TO DETERMINE THE BASIS OF THE PENALTY AND WITHOUT THOSE RECORDS PENALTY COULD NOT HAVE BEEN SUSTAINED. 4. THAT THE CIT(A) FURTHER FAILED TO APPRECIATE THAT I T WAS CLEARLY A CASE OF CHANGE OF OPINION BY THE VARIOUS AUTHORITIE S IN QUANTUM PROCEEDINGS AND THUS NO PENALTY COULD HAVE BEEN LEV IED ON THE SAME. 5. THAT THE CIT EVEN FAILED TO APPRECIATE HAT ONCE ALL THE FACTS OF THE CASE WERE ALREADY IN THE KNOWLEDGE OF THE ITO F ROM A.Y. 82-83 WHERE NO PENALTY HAS BEEN LEVIED BY HIM THUS IT CANNOT BE SAID THAT THE ASSESSEE HAD CONCEALED THE PARTICU LARS OF THE INCOME. 6. THAT THE ORDER OF THE ITO IS AGAINST THE LAW AND FA CTS OF THE CASE. 2. THE BRIEF FACTS OF THE CASE AS PER CIT(A)S ORDER AT PAGES 1 TO 4 ARE REPRODUCED HEREUNDER FOR THE SAKE OF CONVENIENC E: BRIEF HISTORY OF THE CASE IS THAT STARTING FROM A.Y. 1982-83 A DISPUTE AROSE REGARDING TREATING THE INCOME ALLEGE DLY BELONGING TO ONE M/S S.P. ENTERPRISES AS THE INCOME OF ASSESSEE BY A.O. THE ORIGINAL ASSESSMENT WAS SET-ASIDE VIDE ORDER DATED 26.02.19 85 BY APPELLATE ASSISTANT COMMISSIONER AND FRESH ASSESSMENT WAS MA DE ON 07.03.1988. THE RELEVANT PART OF THE ORDER OF A.O. IS REPRODUCED FOR THE SAKE OF CLARITY: 5. REGARDING INCLUSION OF CANTEEN INCOME OF C.P. E NTERPRISES TO THE TUNE OF RS. 49 238/- TO THE ASSESSEES INCOME THE ASSESSEES COUNSEL HAS REITERATED ALMOST THE SAME CONTENTIONS WHICH W ERE EARLIER TAKEN BY HIM AT THE TIME OF FRAMING ORIGINAL ASSESSMENT. IN FRESH ITA NO.S 72 73 & 74(ASR)/2013 3 PROCEEDINGS BEFORE ME THE ASSESSEE HAS MADE AN ATT EMPT TO PROVE THAT C.P. ENTERPRISES IS A DIFFERENCE CONCERN HAVING DI FFERENT ENTITY BUT HAS NOT BEEN ABLE TO DO SO. THE COUNSEL OF THE ASSESSE E COULD NOT DENY THE FACT THAT ALL THE THREE LADY PARTNERS ARE CLOSE RE LATIONS OF THE PARTNERS OF M/S CINE PAYAL. THE ASSESSEE HAS ALSO MADE A FU TILE ATTEMPT TO ESTABLISH THAT IT IS NOT NECESSARY THAT THE PARTNE RS MUST INVEST IN THE FIRM WHEN IT COMES INTO EXISTENCE WHEREAS AS PER SERVICES RENDERED BY C.P. ENTERPRISES I.E. RUNNING OF CANTEEN AND CY CLE STAND FUNDS IN THE SHAPE OF INITIAL INVESTMENT IS THE PRIME REQUI REMENT AND INVESTMENT BY THE PARTNERS IN THE PRESENT CASES HA VING NOT BEEN ESTABLISHED BY THE ASSESSEE AND NO FRESH EVIDENCE HAVING BEEN FURNISHED BY THE ASSESSEE TO ESTABLISH THE PURCHAS E OF POTATOES FOR EDIBLE OIL OR SUCH OTHER THINGS FROM WHERE C.P. EN TERPRISES COULD AFFECT SALES IN ABSENCE OF ANY CAPITAL CONTRIBUTIO N. I CANNOT GIVE THE FINDINGS CONTRARY TO THE FINDINGS GIVEN BY MY PRED ECESSOR WHILE FRAMING ORIGINAL ASSESSMENT. AS IS APPARENT FROM T HE ASSESSEES REPLY ON OTHER POINTS ALSO THERE IS NOTHING WHICH IMPELS ME TO INTERFERE IN THE CONCLUSION DRAWN BY THE THEN INCOME TAX OFFICE R DISTT. II(1) JALANDHAR WHO RIGHTLY HELD THAT C.P. ENTERPRISES I S A SHOW CONCERN AND A TOOL OF THE ASSESSEE FIRM AND THAT ITS INCOM E WOULD BE ADDED IN THE HANDS OF THE ASSESSEE FIRM. IT IS AN UNDISPUTED FACT THAT FINALLY THIS ADDITIO N IN QUANTUM HAS BECOME FINAL AGAINST THE ASSESSEE AS THE HON'BLE I .T.A.T. HAS CONFIRMED THE ADDITION AFTER THE ASSESSMENT ORDER WAS SUBJECTED TO BE SET-ASIDE BY THE HON'BLE HIGH COURT TO HON'BLE I.T .A.T. THE SEQUENT OF EVENTS LEADING TO THIS ORDER ARE AS UNDER (IN R ESPECT OF A.Y. 1985- 86): CHRONOLOGY OF EVENTS DATE PROCEEDINGS REMARKS 31/07/1985 RETURN FILED 19-08- 1987 ORIGINAL ASSESSMENT FRAMED AT RS. 1 40 590/- ORDER NOT TRACEABLE 28-02- 1989 ORDER CANCELLED U/S 263 ORDER NOT TRACEABLE 23-03- 1989 REASSESSMENT FRAMED AT RS. 1 94 340/- AFTER ADDITION OF RS. 1 10 460/- ON ACCOUNT OF INCOME OF CP ENTERPRISES CERTIFIED COPY AVAILABLE 23-01- PENALTY OF RS. 67 289/- LEVIED CERTIFIED COPY ITA NO.S 72 73 & 74(ASR)/2013 4 1991 AVAILABLE 15-05- 1992 I.T.A.T. DELETED THE ADDITION CONFIRMED IN FIRST APPEAL COPY OF THE ORDER NOT TRACEABLE. GATHERED AS NOTED IN ORDER OF CIT(A) DT. 24/02/1994 24-02-94 CIT(A) CANCELS THE PENALTY AS ADDITIONS DELETED BY I.T.A.T. CERTIFIED COPY AVAILABLE. 10-04- 1995 I.T.A.T. CONFIRMS THE ORDER OF CIT(A) CERTIFIED COP Y AVAILABLE 07-03- 1996 I.T.A.T. REJECTDSS RA CERTIFIED COPY AVAILABLE 22/4/97 HC DIRECTS FOR SOF. CERTIFIED COPY AVAILABLE 01-11- 2006 HC REMANDS THE MATTER TO I.T.A.T. MATTER OF QUANTUM ADDITIONS WAS ALSO REMANDED IN ITR 17 OF 1993 TO I.T.A.T. AS NOTED IN HC ORDER. 28-09-07 I.T.A.T. RESTORES THE ADDITIONS CERTIFIED COPY AVAILABLE 05-10- 2007 I.T.A.T. CANCELS THE PENALTY HOLDING THAT THERE IS NO PROPER SATISFACTION RECORDED BY THE A.O. CERTIFIED COPY AVAILABLE. 22/12/2007 HC RESTORES THE MATTER OF PENALTY TO CIT(A) CERTIFIED COPY AVAILABLE 4. IT IS ALSO NOT DISPUTED THAT NO PENALTY WAS INI TIATED IN A.Y. 1982-83. THE PENALTY WAS FIRST LEVIED IN A.Y. 1983 -84 WHICH WAS CONFIRMED BY THE LD. CIT(A) VIDE ORDER IN APPEAL N O. 173-J/88- 89/CIT(A)-I DATED 29-08-1988 BUT THE ORDER DID NO T SURVIVE AS THE HON'BLE I.T.A.T. DELETED THE QUANTUM ADDITIONS IN THE FIRST ROUND. PENALTIES FOR IMPUGNED ASSESSMENT YEARS 1985-86 TO 1987-88 HAD BEEN DELETED BY HON'BLE I.T.A.T. ON THE GROUND THA T NO PROPER SATISFACTION WAS REQUIRED BY A CONSOLIDATED ORDER DATED 05.10.2007 IN ITA NO.S 72 73 & 74(ASR)/2013 5 I.T.A. NO. 508(ASR)/1989 FOR A.Y. 1983-84 AND 1985 -86 TO 1987-88 WHERE THE ASSESSEES APPEAL FOR A.Y. 1983-84 WAS A LLOWED AND THE APPEALS OF THE DEPARTMENT WERE DISMISSED. THE SAID ORDER OF HON'BLE I.T.A.T. IS SET ASIDE BY THE HON'BLE HIGH COURT IN I.T.A. NO. 327 OF 2008 DATED 22.12.2010 AS REFERRED IN THE VERY BEGI NNING OF THIS ORDER WITH FOLLOWING OBSERVATIONS TO BE DECIDED AFRESH ON MERITS: 3 RETURN OF THE ASSESSEE FOR THE YEAR IN QUESTION WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. HOWEVER THE SAME WAS CANCELLED UNDER SECTION 263 OF THE ACT AND DIRECTION FOR FRE SH ASSESSMENT WAS ISSUED. ACCORDINGLY ASSESSMENT WAS MADE UNDER SEC TION 143(3) OF THE ACT RESULTING IN ADDITION TO THE DECLARED INCOME O N A FINDING THAT THE ASSESSEE REDUCED ITS TAX LIABILITY BY DIVERTING IN COME TO A NON-EXISTENT CONCERN. PENALTY PROCEEDINGS WERE ALSO DIRECTED TO BE INITIATED. IN QUANTUM PROCEEDINGS THE ADDITION HAS BECOME FINAL . THE PENALTY WAS HOWEVER SET ASIDE BY THE CIT(A) ON THE ONLY GROUN D THAT SATISFACTION WAS NOT RECORDED IN THE MANNER IT WAS REQUIRED FO LLOWING AN EARLIER ORDER OF THE TRIBUNAL TAKING THE VIEW THAT SATISFA CTION TO INITIATE PENALTY PROCEEDINGS SHOULD BE DISCERNIBLE FROM THE ORDER OF THE ASSESSING OFFICER. THE APPEAL OF THE REVENUE WAS D ISMISSED BY THE TRIBUNAL. 4. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. 5. LEARNED COUNSEL FOR THE REVENUE SUBMITS THAT IN THE ORDER OF ASSESSMENT A FINDING HAS BEEN RECORDED THAT THE AS SESSEE FURNISHED INACCURATE PARTICULARS OF INCOME AND AT THE END TH EREOF DIRECTION TO INITIATE PENALTY PROCEEDINGS HAD BEEN ISSUED. IN T HESE CIRCUMSTANCES IT COULD NOT BE HELD THAT NO SATISFACTION WAS RECO RDED AS REQUIRED UNDER THE LAW. RELIANCE HAS BEEN PLACED ON THE JUD GMENT OF THIS COURT IN COMMISSIONER OF INCOME TAX VS. PEAREY LAL AND S ONS (EP) LTD. (2009) 308 ITR 438 (P&H) HOLDING THAT IF SATISFACT ION FOR INITIATING PENALTY WAS REFLECTED IN THE ORDER OF ASSESSMENT INITIATION OF PENALTY PROCEEDINGS WAS VALID. 6. LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE IMPUGNED FINDING BUT COULD NOT DISPUTE THE APPLICABILITY OF THE JUDGMENT RELIED ON BEHALF OF THE REVENUE TO THE PRESENT CASE. 7. IN VIEW OF THE JUDGMENT OF THIS COURT RELIED UP ON ON BEHALF OF THE REVENUE THE QUESTION OF LAW HAS TO BE ANSWERE D IN FAVOUR OF THE REVENUE. ACCORDINGLY WE ALLOW THESE APPEALS SET ASIDE THE IMPUGNED ORDERS AND REMAND THE MATTER TO THE CIT(A) FOR FRE SH DECISION ON MERITS IN ACCORDANCE WITH LAW. ITA NO.S 72 73 & 74(ASR)/2013 6 3. BEFORE THE LD. CIT(A) THE LD. COUNSEL FOR THE ASSE SSEE MADE HIS SUBMISSIONS WHICH WERE FORWARDED TO AO FOR COMMENTS . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE COMMENTS OF THE A.O. THE LD. CIT(A) CONFIRMED THE LEVY OF PENALTY FOR ALL THE T HREE ASSESSMENT YEARS. 4. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT TH E DISPUTE AROSE DURING THE ASSESSMENT YEAR 1982-83 REGARDING THE TREATMENT OF INCOME BELONGING TO M/S. C.P. ENTERPRISES AS THE INCOME OF THE ASSESSEE BY THE A.O. IT IS A FACT THAT THE IMPUGNED PENALTY WAS LEVIED BY THE AO WHIC H WAS CONFORMED BY THE LD. CIT(A). THE ITAT REVERSED THE ORDER OF THE CIT(A) AND THE HONBLE HIGH COURT RESTORED THE MATTER TO THE LD. CIT(A) F OR FRESH DECISION ON MERIT IN ACCORDANCE WITH LAW. 4.1. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSE E MR. Y.K.SUD CA ARGUED THAT THIS IS A DIFFERENCE OF OPINION OF DIFF ERENT AUTHORITIES AND IN SUCH A CASE NO PENALTY CAN BE LEVIED. IN THIS REGARD H E RELIED UPON THE DECISIONS OF VARIOUS COURTS OF LAW AS UNDER: I) CIT VS. MEHTA ENGINEERS LTD. 300 ITR 308 (P&H) II) BALAJI VEGETABLE PRODUCTS (P) LTD. VS. CIT 290 ITR 172 (KAR) III) ASHOK GRIH UDYOG KENDRA (P) LTD. VS. ACIT 120 ITD 151 (LKN). IV) DURGA KAMAL RICE MILLS VS. CIT 265 ITR 25 (CAL ) V) CIT VS. MAHAVIR IRRIGATION (P) LTD. 347 ITR 241 (DELHI) ITA NO.S 72 73 & 74(ASR)/2013 7 4.2. THE LD. COUNSEL FOR THE ASSESSEE FURTHER ARGUE D THAT THE VERY BASIS OF LEVY OF PENALTY DURING THE IMPUGNED YEARS IS THE QU ANTUM ADDITION MADE FOR THE ASSESSMENT YEAR 1982-83 WHERE THE AO EVEN DID N OT INITIATE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND NOT TO TAL K OF LEVY OF PENALTY. A COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEA R 1982-83 HAS BEEN PLACED ON RECORD. AS REGARDS THE ASSESSMENT YEAR 19 83-84 THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT BUT BE ING SATISFIED WITH THE ASSESSEES EXPLANATION NO PENALTY WAS LEVIED. AS R EGARDS THE ASSESSMENT YEAR 1984-85 THE AO AFTER MAKING IDENTICAL ADDITIO NS DID NOT EVEN INITIATE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THERE FORE NO PENALTY WAS LEVIED FOR THE INITIAL THREE ASSESSMENT YEARS I.E. 1982-83 83-84 & 84-85. 4.3. HE FURTHER ARGUED THAT NO INDEPENDENT INQUIRY OR INVESTIGATION WAS MADE IN THE SUBSEQUENT YEAR OR YEARS AND THERE WAS NO CASE OF INITIATION OF PROCEEDINGS U/S 271(1)(C) OF THE ACT BY THE SUCCESS OR AO IN THE SUBSEQUENT YEAR. THE AO INITIATED PENALTY PROCEEDINGS DURING T HE IMPUGNED YEARS IN A ROUTINE MATTER WITHOUT SPECIFYING THE INCOME TO WHI CH THESE PERTAINED. THEREFORE ON IDENTICAL FACTS WHEN NO PENALTY LEV IED FOR ASSTT. YEARS 82-83 TO 84-85 AS A RULE OF CONSISTENCY NO PENALTY CAN BE LEVIED FOR THE IMPUGNED YEARS IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE EVEN THE INCOME ITA NO.S 72 73 & 74(ASR)/2013 8 TAX PROCEEDINGS ARE INDEPENDENT PROCEEDINGS IN EAC H YEAR. IN SUPPORT OF HIS ARGUMENTS HE RELIED UPON THE DECISIONS OF ITAT OF TWO DIFFERENT BENCHES AS UNDER: I) DR. VELAYUDHAN NAIL VS. ITO BANGALORE BENCH 84 ITD 227 II) ACIT VS. A.H. WHEELERS & CO. (P) LTD. ALLAHABA D BENCH 132 ITD 34 4.4. HE FURTHER ARGUED THAT THE ASSESSEE HAS NOT C ONCEALED ANY PARTICULARS OF INCOME OR HAS NOT CONCEALED ANY INCOME AND SUCH EXPLANATION HAS BEEN GIVEN IN EACH OF THE IMPUGNED YEAR AND MOREOVER ALL THE FACTS OF THE ASSESSMENT YEAR 1982-83 WERE AVAILABLE ON RECORD BE FORE THE A.O. IN THE IMPUGNED YEARS. THEREFORE NO PENALTY CAN BE LEVIED U/S 271(1)(C) OF THE ACT. HE RELIED UPON THE DECISIONS OF VARIOUS COURTS OF LAW IN THIS REGARD AS UNDER: I) DCIT VS. B.J.D. PAPER PRODUCTS 134 ITD 552 (LKN ) II) ACIT VS. GRAND ORGANICS (P) LTD. 137 ITD 252 P ANAJI III) NEW SORATHIA ENGINEERING CO. VS. CIT 282 ITR 642 (GUJRAT) IV) DINESH KUMAR DHIR VS. ITO KAPURTHALA ITA NO.13 1(ASR)/2011 AMRITSAR BENCH. 4.5. HE FURTHER ARGUED THAT INSPITE OF THE FACT THA T THE ADDITIONS HAVE BEEN CONFIRMED IN QUANTUM AND SIMPLY THE AO CANNOT LEVY PENALTY U/S 271(1)(C) OF THE ACT AS HAS BEEN DONE IN THE PRESENT CASE. I NSPITE OF THE FACT THAT THE ITA NO.S 72 73 & 74(ASR)/2013 9 EXPLANATION HAS BEEN GIVEN AND WAS AVAILABLE ON REC ORD BEFORE THE AO. IN THIS REGARD HE RELIED UPON THE DECISIONS OF VARIOU S COURTS OF LAW AS UNDER: I) DURGA KAMAL RICE MILLS VS. CIT 265 ITR 25 (CAL) II) CIT VS. MAHAVIR IRRIGATION (P) LTD. 347 ITR 24 1 (DELHI) III) CIT VS. VIMAL KUMAR DHAMANI 261 ITR 87 (CAL.) 5. ON THE OTHER HAND LD. DR MR. TARSEM LAL ARGUED THAT THERE IS NO DIFFERENCE OF OPINION AS THE HONBLE HIGH COURT HAS REVERSED THE ORDER OF THE ITAT. HE FURTHER ARGUED THAT THE ASSESSEE CANNO T GO SCOT FREE IF HE HAS NOT BEEN PENALIZED IN THE FIRST YEAR AND THEREFORE RULE OF CONSISTENCY CANNOT BE FOLLOWED SINCE EACH YEAR IS AN INDEPENDENT YEAR IN THE INCOME TAX PROCEEDINGS. HE ARGUED THAT EXPLANATION 1 TO SECTIO N 271(1)(C) CREATES A DEEMING FICTION AND THEREFORE THE LD. CIT(A) HAS RIGHTLY CONFIRMED THE PENALTY FOR ALL THE IMPUGNED YEARS. HE FURTHER ARG UED THAT THE CASES RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT AP PLICABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LD. COUNSEL FOR THE ASSESSEE MR. Y.K.SUD C A IN THE REJOINDER ARGUED THAT THERE IS NO CHANGE IN THE FACTS AS COMP ARED TO ASSESSMENT YEARS 1982-83 83-84 & 84-85 AND EXPLANATION HAVING BEEN GIVEN IN THE PENALTY PROCEEDINGS WHICH ARE INDEPENDENT PROCEEDINGS. THE PENALTY WAS LEVIED AND THE AO DID NOT WAIT EVEN FOR ITATS ORDER. THEREFOR E ASSESSEE CANNOT BE ITA NO.S 72 73 & 74(ASR)/2013 10 SUBJECTED TO PENALTY AND THAT TOO IN THE ABSENCE OF ASSESSMENT RECORD FOR THE PRECEDING ASSESSMENT YEARS FROM 82-83 TO 84-85. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AT THE OUTSET IT IS EVIDENT THAT THE VERY BASIS F OR WHICH THE PENALTY WAS LEVIED IS THE ASSESSMENT YEAR 1982-83 WHERE THE QUA NTUM ADDITIONS HAVE BEEN MADE. IT IS ALSO PERTINENT TO MENTION THAT THE AO DID NOT EVEN INITIATE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR TH E ASSESSMENT YEAR 1982- 83. NO PENALTY WAS LEVIED DURING THE ASSESSMENT YEA R 1983-84 BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. AFT ER INITIATING PENALTY PROCEEDINGS FOR THE ASSESSMENT YEAR 1984-85 AGAIN NO PENALTY PROCEEDINGS WERE INITIATED AND NO PENALTY ACCORDINGLY WAS LEVIE D DURING THAT YEAR. IT IS ALSO PERTINENT TO MENTION THAT IDENTICAL ADDITIONS HAVE BEEN MADE DURING THE ASSESSMENT YEAR 1984-85 & 85-86 AS IN THE ASSESSMEN T YEAR 1982-83 WHERE NO PENALTY IN ALL THE THREE ASSESSMENT YEARS HAS BE EN LEVIED BY THE AO. ALSO THE AO IN THE PRESENT PROCEEDINGS HAS SIMPLY FOLLOW ED THE QUANTUM ORDER OF ASSESSMENT YEAR 1982-83 AND HAS PROCEEDED TO INITIA TE PENALTY PROCEEDINGS FOR THE IMPUGNED YEARS I.E. HE HAS FOLLOWED THE ORD ER IN WHICH NO PENALTY PROCEEDINGS HAVE BEEN LEVIED OR EVEN INITIATED. INS PITE OF DEMANDING ASSESSMENT RECORD FOR THE ASSESSMENT YEARS 1982-83 TO 84-85 BY THE ASSESSEE NO RECORDS WERE GIVEN TO THE ASSESSEE. NO W WHETHER A PENALTY CAN ITA NO.S 72 73 & 74(ASR)/2013 11 BE LEVIED IN THE ABSENCE OF ASSESSMENT RECORD SIMPL Y ON THE BASIS OF AN ORDER IN THE IMPUGNED YEARS. SIMPLY THE ADDITION WAS MADE IN THE ASSESSMENT YEAR 1982-83 THE ANSWER ACCORDING TO US IS NO PENALTY CAN BE LEVIED SINCE THERE IS NOTHING BROUGHT ON RECORD BY THE AO OR BY THE LD . CIT(A) THAT THE ASSESSEE HAS CONCEALED THE INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING THE ASSESSMENT OR PENALTY PROCEEDINGS IN THE IMPUGNED YEARS. THE ASSESSEE IN THE PRESENT PROCEEDINGS BEFORE THE LD. CIT(A) AND THE AO HAS SUBMITTED THE EXPLANATION WHICH IS ON RECORD. T HE LD. CIT(A) HAS NOT CONSIDERED SUCH EXPLANATION. THE PENALTY PROCEEDING S ARE INDEPENDENT OF ASSESSMENT PROCEEDINGS IS A SETTLED ISSUE. THEREFOR E ON THIS ACCOUNT ONLY THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE P ENALTY. 7.1. THE CASES RELIED UPON BY THE LD. COUNSEL FOR T HE ASSESSEE HAVE BEEN CONSIDERED AND ARE APPLICABLE IN THE PRESENT SET OF CIRCUMSTANCES AND FACTS. 7.2. THERE IS A DIFFERENCE OF OPINION BETWEEN THE V ARIOUS AUTHORITIES FROM AO TO ITAT AND THEREFORE ON THIS ACCOUNT ALSO NO PENALTY CAN BE LEVIED AND THE CASES RELIED UPON BY THE LD. COUNSEL FOR TH E ASSESSEE ARE APPLICABLE AND SUPPORT THE CASE OF THE ASSESSEE.THEREFORE THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY. ACCORDINGLY THE EXPLANA TION (1) TO SECTION 271(1)(C) IS NOT APPLICABLE. IN SUCH FACTS AND CIRC UMSTANCES THE ORDER OF THE ITA NO.S 72 73 & 74(ASR)/2013 12 LD. CIT(A) IS DIRECTED TO BE REVERSED AND A.O. IS DIRECTED TO CANCEL THE PENALTY SO LEVIED IN ALL THE THREE ASSESSMENT YEARS 1985-86 86-87 & 87-88. 8. IN THE RESULT ALL THE THREE APPEALS FILED BY TH E ASSESSEE IN ITA NOS.72 73 & 74(ASR)/2013 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST OCTOBER. 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31ST OCTOBER 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. CINE PAYAL JALANDHAR. 2. THE I.T.O. WARD 1(3) 3. THE CIT(A) JLR 4. THE CIT JLR 5. THE SR DR ITAT AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.