M/s. Jyothy Laboratories Ltd., Madurai V. DCIT, CHENNAI

CO 120/CHNY/2016

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3029 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 24-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M N MAURYA
• Assessee Lawyers: P RIYANKA JAIN
• Keywords: Wrong claim

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , ! , ! & BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2054/MDS/2016 /ASSESSMENT YEAR: 2010-11 THE DY. COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT-2, CHENNAI-600 101. VS. M/S.HENKEL INDIA LTD., (LATER JYOTHY CONSUMER PRODUCTS LTD. AND NOW MERGED WITH JYOTHY LABORATORIES LTD.) UJALA HOUSE, RAMAKRISHNA MANDIR ROAD, KONDIVITA, ANDHERI (E), MUMBAI. [PAN: AABCT 0167 F] ( ( /APPELLANT) ( )*( /RESPONDENT) CROSS-OBJECTION NO.120/MDS/2016 (IN ITA NO.2054/MDS/2016) /ASSESSMENT YEAR: 2010-11 M/S.JYOTHY LABORATORIES LTD. (AS TRANSFEREE COMPANY INTO WHICH M/S.HENKEL INDIA LTD. HAS MERGED) [PAN: AABCT 0167 F] THE DY. COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT-2, CHENNAI-600 101. ( ( /APPELLANT) ( )*( /RESPONDENT) ASSESSEE BY : MS.PRIYANKA JAIN, ADV. DEPARTMENT BY : MR. M.N.MAURYA, CIT , /DATE OF HEARING : 20 .0 6 .2017 , /DATE OF PRONOUNCEMENT : 20 .06 .2017 ITA NO.2054 & CO NO.120/MDS/2016 :- 2 -: / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO.2054/MDS/2016 IS AN APPEAL FILED BY THE REV ENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-17, C HENNAI, IN ITA NO.51/CIT(A)-17/14-15 DATED 30.03.2016 FOR THE AY 2 010-11. CO NO.120/MDS/2016 IS A CROSS-OBJECTION FILED BY THE A SSESSEE IN THE REVENUES APPEAL NO.2054/MDS/2016. 2. MR.M.N.MAURYA, CIT REPRESENTED ON BEHALF OF THE RESPONDENT AND MS.PRIYANKA JAIN, ADV., REPRESENTED ON BEHALF OF TH E APPELLANT. 3. IT WAS SUBMITTED BY THE LD.DR THAT M/S.HENKEL IN DIA LTD., (IN SHORT M/S.HIL) WAS ENGAGED IN THE BUSINESS OF MANUFACTU RING OF SYNTHETIC DETERGENTS, TOILETRIES, ETC. IT HAD FILED RETURN O F INCOME FOR THE RELEVANT AY DISCLOSING NIL INCOME. THE ASSESSMENT CAME TO BE COMPLETED U/S.143(3) R.W.S.144C(3) ON 28.05.2014 AFTER MAKING ADJUSTMENT S ON ACCOUNT OF THE TPO ADJUSTMENT, DISALLOWANCE OF THE LOSS ON SALE OF FIX ED ASSETS AND DISALLOWANCE OF THE WRONG CLAIM OF VRS COMPENSATION. AS A CONSEQUE NCE OF THE ASSESSMENT AND THE ASSESSEE HAVING NOT FILED ANY APPEAL AGAINST TH E ASSESSMENT ORDER PENALTY U/S.271(1)(C) WAS LEVIED TO AN AMOUNT OF RS.10.00 C R. IT WAS A SUBMISSION THAT AGAINST THE PENALTY LEVIED, THE ASSESSEE HAD PREFER RED AN APPEAL TO THE LD.CIT(A) WHO HAD HELD THAT THE PENALTY ORDER WAS NULL AND VO ID ON THE GROUND THAT THE PENALTY ORDER WAS PASSED ON A NON-EXISTENT ENTITY M /S.HIL. IT WAS A SUBMISSION THAT THE ASSESSEE HAD NOT INTIMATED THE AO REGARDIN G THE MERGER OF THE ITA NO.2054 & CO NO.120/MDS/2016 :- 3 -: ASSESSEE, M/S.HIL WITH M/S.JYOTHY LABORATORIES LTD. IT WAS A SUBMISSION THAT THE ORDER OF THE LD.CIT(A) WAS LIABLE TO BE REVERSE D. 4. IN REPLY, THE LD.AR SUBMITTED THAT THE ASSESSEE, M/S.HIL HAD FILED THE RETURN FOR THE RELEVANT AY ON 30.09.2010. M/S.HIL H AD SUBSEQUENTLY CHANGED ITS NAME TO M/S.JYOTHY CONSUMER PRODUCTS LTD. IT WAS A FURTHER SUBMISSION THAT ON THE BASIS OF THE ORDER OF THE HONBLE JURISDICTIONA L HIGH COURT AT MUMBAI DATED 12.04.2013, M/S.JYOTHY CONSUMER PRODUCTS LTD., FORM ERLY KNOWN AS M/S.HIL, WHICH WAS MERGED AS M/S.JYOTHY LABORATORIES LTD. (I N SHORT M/S.JLL) AND THE EFFECTIVE DATE WAS 01.04.2012. IT WAS A SUBMISSIO N THAT THE ASSESSMENT ORDER WAS COMPLETED ON 28.05.2014. THE PENALTY U/S.271(1 )(C) WAS INITIATED VIDE NOTICE DATED 28.05.2014 AND THE PENALTY ORDER WAS P ASSED ON 28.11.2014. THE LD.AR DREW OUR ATTENTION TO PAGE NO.253 & 254 OF PA PER BOOK WHICH WERE COPIES OF THE LETTERS ISSUED BY M/S.JYOTHY LABORATORIES LT D. TO THE DCIT, COMPANY CIRCLE-8(2), MUMBAI DATED 15.05.2013 AND TO THE ACI T, LARGE TAX PAYER UNIT, CHENNAI DATED 19.11.2013 INTIMATING THE MERGER OF M /S.JYOTHY CONSUMER PRODUCTS LTD., MUMBAI WITH M/S.JYOTHY LABORATORIES LTD., MUMBAI AND THE APPOINTED DATE WAS 01.04.2012. FURTHER, THE LD.AR DREW OUR ATTENTION TO PAGE NO.110 OF THE PAPER BOOK WHICH IS A COPY OF THE TPO S ORDER DATED 03.09.2013 WHEREIN HE HAS RECORDED AND ADDRESSED A LETTER TO T HE PRINCIPAL OFFICER, M/S.JYOTHY CONSUMER PRODUCTS LTD. (FORMERLY KNOWN A S M/S.HIL) AND NOW MERGED WITH M/S.JYOTHY LABORATORIES LTD. THE LD.AR SUBMITTED THAT THE FACT OF THE RE-NAME OF M/S.HIL AND ITS MERGER WITH M/S.JYOT HY LABORATORIES LTD. WAS VERY WELL KNOWN TO THE AO MUCH BEFORE THE COMPLETIO N OF THE ASSESSMENT ORDER. IT WAS A SUBMISSION THAT THE AO HAD HELD THAT THE P ENALTY ORDER U/S.271(1)(C) WAS NULL AND VOID BY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE ITA NO.2054 & CO NO.120/MDS/2016 :- 4 -: CASE OF SARASWATI INDUSTRIAL SYNDICATE LTD. V. CIT: 186 ITR 278 AND THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT- III V. DIMENSION APPARELS (P) LTD: [2015] 370 ITR 288 (DELHI) AND THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF MADRAS IN THE CASE OF CIT V. EXPRESS NEWSPAPERS LTD: [1960] 40 ITR 38 AND ALSO THE DECISION OF THE HONBLE JURISDI CTIONAL HIGH COURT OF MADRAS IN THE CASE OF P.S.KANDASWAMY MUDALIAR VS. CIT [1969] 72 ITR 212 TO HOLD THAT THE PENALTY ORDER PASSED WITHOUT LEVYING PENALTY ON NON -EXISTENCE PERSON. IT WAS A SUBMISSION THAT THE ORDER OF THE LD.CIT(A) WAS LIAB LE TO BE UPHELD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF PAGE NO.110 OF THE PAPER BOOK WHICH IS A COPY OF THE LETTER OF THE TPO WHICH CLEARLY SHOWS THAT THE TPO WAS WELL AWARE OF THE MERGER OF M/S.HIL WIT H M/S.JYOTHY LABORATORIES LTD. A PERUSAL OF THE LETTERS ADDRESSED BY M/S.JYOT HY LABORATORIES LTD. TO THE AO AT PAGE NO.254 ALSO CLEARLY SHOWS THAT THE AO WAS I NTIMATED MUCH BEFORE THE PASSING OF THE ASSESSMENT ORDER REGARDING THE MERGE R OF M/S.HIL HAVING CHANGED ITS NAME TO M/S.JYOTHY CONSUMER PRODUCTS L TD. AND THE SAME HAVING MERGED WITH M/S.JYOTHY LABORATORIES LTD. THIS BEIN G SO, THE ISSUANCE OF SHOW CAUSE NOTICE ON M/S.HIL RE-NAMED AS M/S.JYOTHY CONS UMER PRODUCTS LTD., WAS IN FACT, NOTICE ON A NON-EXISTENCE PERSON AS ON THE DA TE ON THE ISSUANCE OF NOTICE. CONSEQUENTLY, THE PENALTY ORDER PASSED IS ON NON-EX ISTENCE PERSON IS VOID AB INITIO. IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF SARASWATI INDUSTRIAL SYNDICATE LTD. V. CIT REFERRED TO SUPRA. 6. EVEN ASSUMING THAT THE PROVISIONS OF SEC.292B CO ULD BE CALLED TO THE RESCUE, STILL A PERUSAL OF THE PAN NUMBER RECORDED IN THE ASSESSMENT ORDER AND ALSO IN THE PENALTY ORDER AND THE DEMAND NOTICES SH OWS THAT THE PAN NUMBER ITA NO.2054 & CO NO.120/MDS/2016 :- 5 -: RECORDED IS THAT OF M/S.JYOTHY CONSUMER PRODUCTS LT D. FORMERLY KNOWN AS M/S.HIL AND NOT THE PAN NUMBER OF M/S.JYOTHY LABORA TORIES LTD. CONSEQUENTLY, THE PROVISIONS OF SEC.292B WILL ALSO NOT COME TO TH E RESCUE OF THE SAID PENALTY ORDER. IN THESE CIRCUMSTANCES, WE FIND NO ERROR IN THE ORDER OF THE LD.CIT(A) WHICH CALLS FOR ANY INTERFERENCE. CONSEQUENTLY, TH E ORDER OF THE LD.CIT(A) STANDS CONFIRMED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS STANDS DISMISSED AND THE CROSS-OBJECTION FILED BY THE ASSESSEE IN APPEAL NO. 2054/MDS/2016 IS STANDS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 20, 201 7, AT CHENNAI. SD/ - SD/ - ( ) (S. JAYARAMAN) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER /CHENNAI, 1 /DATED: JUNE 20, 2017. TLN , )23 43 /COPY TO: 1. ( /APPELLANT 4. 5 /CIT 2. )*( /RESPONDENT 5. 3 ) /DR 3. 5 ( ) /CIT(A) 6. /GF