Appeal details
Counselvise Citation
[2021] 107 COUNSELVISE.COM (IT) 6768 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 7 month(s) 22 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
07-09-2021
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
02-09-2021
Assessment Year
2009-2010
Appeal Filed On
16-01-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / ITA NO . 708 /PUN/20 15 / ASSESSMENT YEAR : 20 0 9 - 10 DY. COMMISSIONER OF INCOME TAX, CIRCLE 8, PUNE ...... / APPELLANT / V/S. SHRI ASHOK NARAYAN BHOSLE, (PROP. : M/S. ULTRA ENGINEERS), PLOT NO. 59 & 68, SECTOR 10, PCNTDA, BHOSARI, PUNE - 411026 PAN : AASPB3588Q / RESPONDENT . / CO NO.0 4 /PUN/20 18 / ASSESSMENT YEAR : 2009 - 10 SHRI ASHOK NARAYAN BHOSLE, (PROP. : M/S. ULTRA ENGINEERS), PLOT NO. 59 & 68, SECTOR 10, PCNTDA, BHOSARI, PUNE - 411026 PAN : AASPB3588Q ....... / APPELLANT / V/S. DY. COMMISSIONER OF INCOME TAX, CIRCLE 8, PUNE / RESPONDENT ASSESSEE BY : SHRI VIJAY KENDHE REVENUE BY : S HRI SUDHENDU DAS / DATE OF HEARING : 02 - 0 9 - 2021 / DATE OF PRONOUNCEMENT : 07 - 0 9 - 2021 2 ITA NO.708/PUN/2015 & CO NO. 04/PUN/2018, A.Y. 2009 - 10 / ORDER PER S.S. VISWANETHRA RAVI, JM : ABOVE SAID APPEAL AND CROSS OBJECTION BY THE REVENUE AND ASSESSEE, RESPECTIVELY AGAINST THE COMMON ORDER DATED 23 - 02 - 2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 6, PUNE [CIT(A)] FOR ASSESSMENT YEAR 20 0 9 - 10. 2. UPON HEARING, WE NOTE THAT THE ISSUES RAISED IN APPEAL AND CROSS OBJECTION ARE SIMILAR BASING ON THE SAME IDENTICAL FACTS. THE LD. AR REQUESTED US TO TAKE UP CROSS OBJECTION FIRST, T HEREFORE, WITH THE CONSENT OF BOTH THE PARTIES, WE PROCEED TO HEAR CROSS OBJECTION AND APPEAL TOGETHER A ND TO PASS A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. FIRST, WE SHALL TAKE UP THE CROSS O BJECTION BY THE ASSESSEE IN CO NO. 04/PUN/2018 FOR THE A.Y. 200 9 - 10. 4. WE NOT E THAT THIS APPEAL WAS FILED WITH A DELAY OF 304 DAYS. THE ASSESSEE FILED A N AFFIDAVIT EXPLAINING THE REASONS FOR DELAY. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE REASONS STATED BY THE ASSESSEE ARE BONAFIDE WHICH REALLY PREVENTED THE ASSESSEE TO FILE THE PRESENT APPEAL IN TIME. THEREFORE, THE DELAY OF 304 DAYS ARE CONDON ED. 5. THE ASSESSEE RAISED 3 GROUNDS OF APPEAL AMONGST WHICH THE ONLY ISSUE EMANATES FOR OUR CONSIDERATION IS AS TO WHETHER THE PENALTY IMPOSED BY THE AO IS BAD UNDER LAW, PATENTLY ILLEGAL AND WITHOUT JURISDICTION IN THE FACTS AND CIRCUMSTANCES OF THE CAS E. 3 ITA NO.708/PUN/2015 & CO NO. 04/PUN/2018, A.Y. 2009 - 10 6. THE CONTENTION OF LD. AR, SHRI VIJAY KENDHE IS THAT THE AO, IN THE REASSESSMENT PROCEEDINGS HELD THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.4,54,13,359/ - ON ACCOUNT OF HAWALA PURCHASES. IN ACCORDANCE WITH THE SAID FINDING THE AO ISSUED NOTICE U/S. 274 R.W.S. 271(1)(C) OF THE ACT FOR BOTH THE LIMBS I.E. CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. AR ARGUED HAVING SATISFIED THE AO ON CONCEALMENT OF INCOME IN THE REASSESSMENT PR OCEEDINGS ISSUED PENALTY NOTICE FOR BOTH THE LIMBS AND ALSO IMPOSED PENALTY ON BOTH THE CHARGES I.E. FURNISHING OF INACCURATE PARTICULARS OF INCOME / CONCEALMENT OF INCOME AND REFERRED TO PARA NO. 6 OF THE PENALTY ORDER. THE LD. AR PLACED ON RECORD THE MANY DECISIONS IN ITS LEGAL PAPER BOOK - 3 AND HEAVILY RELIED ON THE DECISION OF THIRD MEMBER BENCH IN THE CASE OF HPCL MITTAL ENERGY LTD. IN ITA NOS. 554 & 555/ASR/2014 FOR A.YS. 2008 - 09 AND 2009 - 10 VIDE ORDER DATED 07 - 05 - 2018 WHICH IS AT PAGE NO. 5 OF THE PAPER BOOK AND PRAYED TO ALLOW GROUNDS RAISED BY THE ASSESSEE IN CROSS OBJECTION AND TO DECLARE THE PENALTY AS IMPOSED BY THE AO IS PATENTLY ILLEGAL WITHOUT JURISDICTION. 7. THE LD. DR, SHRI SUDHENDU DAS SUBMITS THAT THE ASSESSEE HAS TAKEN ACCOMMODATIO N ENTRY WHICH WAS NOT DECLARED IN THE RETURN OF INCOME. HAVING NOTICED THE AO REOPENED THE ASSESSMENT RELATING TO THE YEAR UNDER CONSIDERATION AND ADDED THE SAID AMOUNT IN THE ASSESSMENT PROCEEDINGS AND INITIATED PENALTY PROCEEDINGS HAVING SATISFIED THAT THE ASSESSEE FURNISHING INACCURATE PARTICULARS OF INCOME. HE ARGUED THAT THE DECISION IN THE CASE OF SAMSON PERNCHERY REPORTED IN 98 CCH 39 (BOM.) IS DISTINGUISHABLE ON FACTS AND HEAVILY RELIED ON THE DECISION OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF SNITA TRANSPORT (P.) LTD. REPORTED IN 42 TAXMANN.COM 54 (GUKJARAT) AND PRAYED TO DISMISS THE GROUNDS RAISED BY THE ASSESSEE IN CROSS OBJECTION. 4 ITA NO.708/PUN/2015 & CO NO. 04/PUN/2018, A.Y. 2009 - 10 8. HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IN THIS CASE IS AN IN DIVIDUAL ENGAGED IN THE BUSINESS OF MANUFACTURING AND JOB WORKS OF PRESS TOOLS, JIGS FIXTURES, WINDMILL PARTS AND LABOUR JOB AND ALSO TRADING IN SHARES. THE ASSESSEE CONDUCTS HIS BUSINESS UNDER THE NAME AND STYLE OF M/S. ULTRA ENGINEERING. THE ASSESSEE F ILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2009 - 10 DECLARING A TOTAL INCOME OF RS.17,78,06,186/ - AND THE AO DETERMINED THE SAME AT RS.19,15,86,490/ - WHICH WAS FURTHER REVISED IN CONSEQUENCE OF SECTION 154 PROCEEDINGS TO RS.18,75,8 0,110/ - . 9. THE AO, DURING THE PROCEEDINGS FOR A.Y. 2010 - 11 FOUND THAT THE ASSESSEE HAD CLAIMED PURCHASES TO AN EXTENT OF RS.4,54,13,359/ - FOR T HE YEAR UNDER CONSIDERATION I.E. A.Y. 2009 - 10 FROM TWO PARTIES I.E. K.G. SALES CORPORATION AND K.B. STEELS. THE AO FOUND THESE TWO PARTIES WERE INTO BOGUS PURCHASES/HAWALA PARTIES AS PUBLISHED BY SALES TAX DEPARTMENT OF GOVT. OF MAHARASHTRA . AS MATTER STOOD THUS, THE ASSESSEE FILED RETURN OF INCOME FOR THE YEAR UNDER I.E. A.Y. 2009 - 10 AGAIN U/S. 139(5) OF THE A CT WHEREIN THE ASSESSEE OFFERED ADDITIONAL INCOME OF RS.4,54,08,359/ - . THE AO DID NOT PROCESS THE SAID RETURN AS IT WAS TIME BARRED BUT HOWEVER REOPENED THE ASSESSMENT ALREADY COMPLETED U/S. 143(3) OF THE ACT FOR A.Y. 2009 - 10. THE ASSESSEE SUBMITTED THAT THE RETURN OF INCOME FILED U/S. 139(5) OF THE ACT MAY BE TREATED IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THE AO HELD THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE CLAIM OF BOGUS PURCHASES/HAWALA PARTIES RELEVANT PURCHASES BY PRODUCING RELEVANT DOCUMENT S. HE TREATED THE ABOVE SAID AMOUNT AS UNEXPLAINED PURCHASES AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. FURTHER, HE RECORDED THAT THE ASSESSEE HAD FILED INACCURATE PARTICULARS OF INCOME TO AN EXTENT OF THE ABOVE SAID AMOUNT AND INITIATED PENALTY PROC EEDINGS U/S. 271(1)(C) OF THE ACT. WE NOTE THAT IN REASSESSMENT ORDER AT PARA NO. 10 THE AO RECORDED 5 ITA NO.708/PUN/2015 & CO NO. 04/PUN/2018, A.Y. 2009 - 10 SATISFACTION THAT THE ASSESSEE HAD FILED INACCURATE PARTICULARS OF INCOME BUT THE NOTICE WAS ISSUED U/S. 274 R.W.S. 271(1)(C) OF THE ACT FOR BOTH THE CHAR GES. THE CONTENTION OF THE LD. AR IS THAT WHEN THE AO SATISFIED ON ONE CHARGE AND ISSUANCE OF NOTICE FOR BOTH THE CHARGES IS PATENTLY WRONG. HE RELIED ON THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF SAMSON PERNCHERY (SUPRA) AND THIRD MEMBE R BENCH DECISION IN THE CASE OF HPCL MITTAL ENERGY LTD. (SUPRA). 10. IN THE CASE OF SAMSON PERNCHERY (SUPRA) , WE NOTE THAT THE TRIBUNAL DELETED THE PENALTY IMPOSED U/S. 271(1)(C) OF THE ACT FOR INITIATING PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME , WHILE , THE ORDER IMPOSING PENALTY FOR CONCEALMENT OF INCOME. THE HONBLE HIGH COURT OF BOMBAY HELD THE AO SHOULD BE CLEAR AS TO WHICH THE TWO LIMBS UNDER WHICH PENALTY IS IMPOSED AND THE PENALTY CANNOT BE INITIATED ON ONE LIMB FOR FURNISHING OF I NACCURATE PARTICULARS OF INCOME AND IMPOSITION OF PENALTY ON THE OTHER LIMB I.E. CONCEALMENT OF INCOME, BY HOLDING SO , THE HONBLE HIGH COURT OF BOMBAY BY PLACING RELIANCE IN THE CASE OF MANJUNATH COTTON AND GINNING FACTORY REPORTED IN 359 ITR 565 (KAR.) D ISMISSED THE SUBSTANTIAL QUESTION OF LAW RAISED BY THE REVENUE. WE NOTE THAT IN THE CASE OF SAMSON PERNCHERY (SUPRA) THE AO RECORDED SATISFACTION HOLDING THE ASSESSEE FURNISHING OF INACCURATE PARTICULARS OF INCOME AND IMPOSED PENALTY ON CONCEALMENT OF INC OME, WHEREAS, IN THE PRESENT CASE, THE AO RECORDED SATISFACTION THAT THE ASSESSEE FILED INACCURATE PARTICULARS OF INCOME AND INITIATED PENALTY BY ISSUING A NOTICE U/S. 148 OF THE ACT ON BOTH THE CHARGES AND IMPOSED THE PENALTY ON BOTH THE CHARGES . 11. FUR THER, IN THE CASE OF HPCL MITTAL ENERGY LTD. (SUPRA) THE THIRD MEMBER BENCH HELD THE PENALTY INITIATED BY THE AO FOR CONCEALMENT OF INCOME AND IMPOSITION OF PENALTY IS FOR CONCEALMENT/FURNISHING INACCURATE 6 ITA NO.708/PUN/2015 & CO NO. 04/PUN/2018, A.Y. 2009 - 10 PARTICULARS OF INCOME IS NOT SUSTAINABLE. IN THE PRESENT CASE, AS WE NO TICE THE AO IN PARA NO. 10 OF THE ASSESSMENT ORDER CLEARLY RECORDED THAT THE ASSESSEE FILED INACCURATE PARTICULARS OF INCOME VIDE ITS ORDER DATED 31 - 03 - 2013 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT. IN CONSEQUENCE OF WHICH THE AO ISS UED NOTICE U/S. 274 R.W.S. 271(1)(C) OF THE ACT DATED 31 - 03 - 2013 FOR BOTH THE CHARGES THAT ARE CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN PENALTY ORDER DATED 27 - 09 - 2013 IMPOSED PENALTY OF RS.1,36,22,508/ - BY RECORDING HIS SATISFACTION THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS/CONCEALED PARTICULARS OF INCOME. THEREFORE, IN OUR OPINION THE RATIO OF THIRD MEMBER BENCH IN THE CASE OF HPCL MITTAL ENERGY LTD. (SUPRA) IS CLEARLY APPLICABLE TO THE FACTS AND CIRCUMSTA NCES OF THE PRESENT CASE. THUS, THE PENALTY IMPOSED BY THE AO VIDE ITS ORDER DATED 27 - 09 - 2013 FAILS AND IS QUASHED , GROUNDS RAISED BY THE ASSESSEE IN CROSS OBJECTION ARE ALLOWED. IN VIEW OF OUR DECISION IN QUASHING THE PENALTY ORDER, THE APPEAL OF THE RE VENUE BECOMES INFRUCTUOUS AND HENCE, THE SAME IS DISMISSED . 12. IN THE RESULT, THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED AND THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH SEPTEMBER, 202 1 . SD/ - SD/ - ( R.S. SYAL ) ( S.S. VISWANETHRA RAVI ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 07 TH SEPTEMBER, 202 1 . RK 7 ITA NO.708/PUN/2015 & CO NO. 04/PUN/2018, A.Y. 2009 - 10 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A) - 6, PUNE 4. THE PR. CIT - 5, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE
