Itta/147/2013 Of The Commissioner Of Income Tax Iv v. Shri Raaj Kumar Jain

IN THE HIGH COURT OF JUDICATURE, ANDHRAPRADESH AT HYDERABAD FRIDAY, THE TWENTY EIGHTH DAY OF JUNETWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICESRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE MS. JUSTICE G.ROHINI I.T.T.A. No.147 OF 2013 Between: Commissioner of Income Tax-IVHyderabad. ..... Appellant AND Shri Raaj Kumar Jain .....Respondent The Court made the following : JUDGMENT:(per the Hon’ble the Chief Justice Sri K.J. Sengupta) This appeal is sought to be admitted on the following suggested questions of law: a.Whether in the facts and circumstances of thecase and in law, Hon’ble ITAT is justified in holdingthat the order passed by the AO is not erroneous andprejudicial to the interest of Revenue without appreciating that the Assessing Officer passed a non-speaking order? b. Whether in the facts and circumstances of thecase and in law, Hon’ble ITAT has erred in notapplying the decision of the coordinate Bench in thecase of Shabbir T.Chass on the similar set of factsand thereby allowing the appeal of the Assessee? This appeal is preferred against the judgment andorder of the learned Tribunal dated 7.9.2012 in relation tothe assessment year 2004-2005. Shorn of details, facts of the case are that there was asearch and seizure proceeding in case of one Sri Gopal LalBadruka and M/s. Ahura Holdings and in sequel to that anotice under Sec. 148 of the Income Tax Act was issued tothe respondent. The assessee admitted the additionalincome and thereafter, reassessment was made by theAssessing Officer. Then notice to initiate penaltyproceedings was issued to the assessee. The assesseereplied to the notice explaining his position that there was nobusiness activity and income. Being satisfied with theexplanation of the assessee, the Assessing Officer droppedthe penalty proceedings and the Commissioner of IncomeTax (Appeals) however, recording his dissatisfaction,reopened the penalty proceedings. When the assesseepreferred appeal against the aforesaid order passed by theCommissioner, Income Tax (Appeals), the learned Tribunalcorrectly held that basing on the earlier judgment and order,when the Assessing Officer has reached satisfaction on a possible view, such views cannot be substituted by theCommissioner of Income Tax (Appeals). We are in fullagreement with the finding of the learned Tribunal, which isbased on legal principle laid sown by the Supreme Court aswell as Gujarat High Court. If the pre-conditions for theinitiation of penalty proceedings are factually not satisfied,such proceedings cannot be initiated. The AssessingOfficer, in this case, after considering the explanation, foundthat the preconditions are not satisfied and thus dropped theproceedings. The Tribunal has correctly held that it is notopen for the Commissioner of Income Tax (Appeals) tosubstitute another view. The finding of the Assessing Officeris not absurd one. We are of the opinion that the Tribunalhas correctly held that when a possible view is taken,another possible view cannot be substituted. Therefore, wehold that the Tribunal has reached a correct conclusion andwe do not see any grounds warranting interference. Accordingly, the appeal is dismissed. No orderas to costs. ______________________ Kalyan Jyoti Sengupta, CJ. June 28, 2013MAS __________ G.Rohini, J.