DCIT Vs Indrani Patnaik (ITAT Cuttack)
Reopening based solely on MB Shah Commission report fails; penalty u/s 271(1)(c) also collapses — ITAT Cuttack
Cuttack Tribunal dismissed Revenue appeals & upheld order of CIT(A) quashing reassessment u/s 147/148 & consequential penalties u/s 271(1)(c). Tribunal held that reopening was initiated solely on basis of Justice M.B. Shah Commission report on alleged illegal mining, without any independent application of mind or tangible material, despite SC having already cast serious doubts on evidentiary value of said report. Tribunal further noted that original assessments were completed u/s 143(3) after detailed scrutiny, all material facts were fully disclosed & reopening beyond four years was barred by proviso to s.147. Once reopening itself was held to be null & void, additions on account of alleged suppressed production & illegal mining were rightly deleted by CIT(A). Tribunal reiterated that when quantum proceedings fail, penalty being a mere consequence cannot survive, & therefore deletion of penalties u/s 271(1)(c) was fully justified. Revenue appeals were accordingly dismissed
FULL TEXT OF THE ORDER OF ITAT CUTTACK
These are appeals preferred by the Revenue against the orders of the Commissioner of Income-tax (Appeals) [the learned CIT (A)](hereinafter referred to as the “ld. CIT (A)”] dated 20.03.2020, for the AY 2009-10 & 2010-11. The penalties were levied by the ACIT, Rourkela Circle u/s 271(1)(c) of the Act vide even dated 30.09.2016 for A.Ys. 2009-10 & 2010-11.
