Ita/185/2010 Of The Commissioner Of Income Tax, Tvm v. Jayaprakash N

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY WEDNESDAY, THE 12TH JANUARY 2011 / 22ND POUSHA 1932 ITA.No. 185 of 2010() --------------------- ITA.343/COCH/2009 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/APPELLANT ------------------------ JAYAPRAKASH N., PACAGE INDIA TIN FABRICATORS, BEACH ROAD, KOLLAM. ADV. SRI.S.ARUN RAJ THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12/01/2011, THE COURT ON 12/01/2011 DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &BHABANI PRASAD RAY, JJ. ....................................................................I.T. Appeal No.185 of 2010 ....................................................................Dated this the 12th day of January, 2011. JUDGMENT Ramachandran Nair, J. This is an appeal filed by the Revenue against the order of theTribunal cancelling penalty levied under Section 271(1)(c) that wasconfirmed in first appeal. After hearing both sides and after goingthrough the Tribunal's order, we are unable to sustain the order for thereason that they have not considered any of the facts or conclusionsdrawn by the original authority or the first appellate authority. TheTribunal has only laid down one principle of law on which there can beno controversy because penalty under Section 271(1)(c) is anindependent proceeding and it does not automatically follow from anassessment. However, unfortunately the Tribunal has not cared toconsider the nature of additions sustained in assessment and in ourview, it was the duty of the Tribunal to consider each and everycomponent of assessment and the way the assessee handled it. Theremay be suppression, omission or mistake or even deliberate attempt of I.T.A. 185/2010 evasion. Unless the income assessed is split identifying the concededpart, suppression detected and the way assessee behaved, it would notbe possible for the Tribunal to decide a penalty appeal. The Tribunalshould have realised that the lower authorities are also familiar with thestatutory provisions and when the penalty order is sustained by the firstappellate authority, it was the duty of the Tribunal to bestow attentionon the nature of addition sustained in assessment and to considerwhether there is concealment within the meaning of Section 271(1)(c)in respect of each and every component of the assessed income. Sincewe are dissatisfied with the order issued by the Tribunal, we have tonecessarily conclude the Tribunal did not exercise the jurisdiction fairlyor properly. We, therefore, allow the appeal by setting aside the orderof the Tribunal and restore the appeal back to the Tribunal for decidingthe matter afresh, particularly with specific reference to the facts andthe provisions of Section 271(1)(c) after giving opportunity to bothsides. The Tribunal is directed to repost and decide the matter afreshwithin a period of three months from the date of production of copy ofthis judgment. Even though we have restored the appeal by which the CIT (Appeal)'s order revives, we direct the Revenue not to proceedwith recovery until disposal of the appeal by the Tribunal and thereafterrecovery should be based on orders of the Tribunal. C.N.RAMACHANDRAN NAIRJudge BHABANI PRASAD RAYJudge pms