The Commissioner Of Income Tax, Chennai v. M/S Original Kerala Jewellers T.nagar, Chennai

In the High Court of Judicature at Madras Dated : 18.12.2018 Coram : The Honourable Mr.Justice T.S.SIVAGNANAMand The Honourable Mr.Justice N.SATHISH KUMAR Tax Case (Appeal) No.717 of 2018 The Commissioner of Income Tax, Chennai ...AppellantVsM/s Original Kerala JewellersT.Nagar, Chennai. ...Respondent ...AppellantVs APPEAL under Section 260-A of the Income Tax Act, 1961against the order dated 05.03.2018 passed by the Income TaxAppellate Tribunal, Madras “C” Bench in I.T.A.No.2987/MDS/2017for the assessment years 2008-09, against the order dated29/09/2017 made in ITA No.204, 205 & 206/CIT(A)-2/2016-17,passed by the Commissioner of Income Tax (Appeals-2) Chennai andagainst the order dated 09/01/2017 passed by the DeputyCommissioner of Income Tax Non-Corporate Circle (2), Chennai forthe Assessment Year 2008-2009. For Appellant :Ms. R.Hemalatha, SSCFor Respondent :Mr.Vikram Vijayaraghavan Judgment was delivered by T.S.SIVAGNANAM,J This appeal filed by the Revenue under Section 260-A of theIncome Tax Act, 1961 against the order dated 05.03.2018 passedby the Income Tax Appellate Tribunal, Madras “C” Bench inI.T.A.No.2987/MDS/2017 for the assessment years 2008-09, raisingthe following substantial questions of law: “i. Whether the Tribunal was right insetting aside the order of penalty issuedunder Section 271(1)(c) especially when theassessee has not offered any explanation tothe satisfactorily to AO? https://hcservices.ecourts.gov.in/hcservices/ ii. Whether Explanation 1 would come into play once no explanation is offered bythe asessee and penalty become leviable?” 2. Heard Ms.R.Hemalatha, learned Senior Standing Counselappearing for the appellant and Mr.Vikram Vijayaraghavan,learned counsel appearing for the assessee. 3. The Tribunal by the impugned order set aside the penaltyimposed on the assessee on the ground that the notice issued tothe assessee at the very commencement of the penalty proceedingsis vitiated and not sustainable in the eye of law. 4. The Tribunal referred to and relied upon the decision ofthe Division Bench of the High Court of Karnataka in C.I.T. Vs.Manjunatha Cotton and Ginning Factory [reported in (2013)359 ITR565]. The Division Bench after analysing the subject in anelaborate manner and relating to several decisions of theHon'ble Supreme Court held that merely because the assesseeagreed for addition and accordingly, assessment order was passedon the basis of addition and when the assessee paid the tax andthe interest thereof in the absence of any material on record toshow the concealment of income, it cannot be inferred that thesaid addition is on account of concealment, so as to levypenalty under Section 271(1)(c) of the Act. 5. We find no error in the order passed by the Tribunalespecially when it is admitted that the decision in C.I.T. Vs.Manjunatha Cotton and Ginning Factory has attained finality.Thus, for the above reasons, the appeal filed by the Revenue isdismissed and the substantial substantial questions of law areanswered against the Revenue and in favour of the assessee. Sd/- Assistant Registrar(CS V) //True Copy// Sub Assistant Registrar To, 1.The Commissioner of Income Tax (Appeals-2), Chennai. Chennai. 2.The Deputy Commissioner of Income Tax, Non-Corporate Circle(2), Chennai. Non-Corporate Circle(2), Chennai. https://hcservices.ecourts.gov.in/hcservices/ 3.The Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai. +1cc to Mr.T.Ravikumar, Advocate Sr.88632 +1cc to M/S.Subbaraya Aiyar, Advocate Sr.88237 Tax Case Appeal No.717 of 2018sai[co]srg 24/01/2019