Rhishi Steel & Alloyes Pvt. Ltd., Jalna V. Assistant Commissioner of Income-tax,

ITA 100/PUN/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7172 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 30-01-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 21-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: PANKAJ AGARWAL
• Keywords: Reopening of assessment; Condonation of delay
• Section: 143(3); 147; 145; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , ! ' # , $% &' #' , ' # '( BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWAS THY, JM '%. / ITA NO. 100/PUN/2015 * +* / ASSESSMENT YEAR : 2005-06 RHISHI STEEL & ALLOYS PVT. LTD., D-52/7, ADDL. MIDC AREA, JALNA - 431203 PAN : AABCR3131P ....... / APPELLANT /VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1, AURANGABAD / RESPONDENT ASSESSEE BY : SHRI PANKAJ AGARWAL REVENUE BY : SHRI NARESH KUMAR / DATE OF HEARING : 30-01-2017 / DATE OF PRONOUNCEMENT : 01-02-2017 , / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS), AURANGABAD DATED 25 -08-2014 FOR THE ASSESSMENT YEAR 2005-06. 2 ITA NO. 100/PUN/2015, A.Y. 2005-06 2. THE ASSESSEE IN APPEAL HAS RAISED FOLLOWING GROUNDS : 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN CONFIRMING THE RE-OPENING OF THE ASSESSMENT U/S 147 OF THE INC OME TAX ACT, 1961. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE ALLEGED SUPPRESSION OF SALES OF RS.1 5,72,51,198/-. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE ALLEGED SUPPRESSION OF SALES MERELY ON THE BASIS OF THE ORDER PASSED BY THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, AURANGABAD AND ON THE BASIS OF EVASION OF EXCISE DU TY BY STEEL MANUFACTURERS IN JALNA CLUSTER, FOUND BY DIRECTORAT E GENERAL OF CENTRAL EXCISE AND CUSTOMS (DGCEI). 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE SUPPRESSION OF SALES OF RS.15,72,51, 198/- ON THE BASIS OF THE ORDER OF THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, AURANGABAD WHEREIN THEY HAVE RELIED ON THE CONSUMPT ION OF ELECTRICITY VIS-A-VIS PRODUCTION ON THE BASIS OF AN ARTICLE WRI TTEN BY DR. N. K. BATRA, PROFESSOR OF IIT, KANPUR I.E. ON PRESUMPTION AND AS SUMPTION AND WITHOUT ANY EVIDENCE OF PURCHASE OF RAW MATERIAL OR SALES O F FINISHED PRODUCTS OUT OF BOOKS. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE ALLEGED SUPPRESSION OF PRODUCTION ON THE GROUNDS OF MONTHLY VARIATION IN CONSUMPTION OF ELECTRICITY VIS -A-VIS PRODUCTION. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN H OLDING THAT THE BOOKS OF ACCOUNTS OF THE APPELLANT COMPANY ARE CORRECTLY REJ ECTED U/S. 145 OF THE INCOME TAX ACT WITHOUT ANY EVIDENCE OR FINDING AS T O HOW THE PROVISIONS OF SECTION 145(3) ARE SATISFIED. 7. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE ADDITION OF RS.62,90,048/- ON ACCOUN T OF GROSS PROFIT @ 4% ON THE ALLEGED SUPPRESSION OF SALE OF RS.15,72,5 1,198/-. 8. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE RE-OPENING OF THE ASSESSMENT THOUGH NO APPROVAL OF THE JOINT CIT OR ADDL. CIT WAS TAKEN FOR ISSUE OF THE N OTICE FOR RE-OPENING OF THE ASSESSMENT AS REQUIRED U/S. 151(1). 3 ITA NO. 100/PUN/2015, A.Y. 2005-06 9. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN NOT FOLLOWING THE ORDER OF THE HON. INCOME TAX APPELLAT E TRIBUNAL IN THE CASE OF M/ S. THE SRJ PEETY STEELS PVT. LTD. FOR ASSESSM ENT YEARS 2000-01 TO 2006-07 REPORTED IN 137 TTJ (PUNE) 627, WHEREIN THE SIMILAR ADDITION WAS DELETED. 10. THE APPELLANT COMPANY CRAVES TO ADD TO, ALTER OR AM END THE FOREGOING GROUNDS, WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER , AT THE TIME OF HEARING. 3. SHRI PANKAJ AGARWAL APPEARING ON BEHALF OF THE ASSESS EE SUBMITTED THAT THE PRESENT APPEAL BY THE ASSESSEE IS T IME BARRED BY 68 DAYS. REFERRING TO THE AFFIDAVIT SEEKING CONDONATION OF DELAY IN FILING OF APPEAL, THE LD. AR SUBMITTED THAT THE DELAY HAS OCCURRED ON ACCOUNT OF ILL-HEALTH OF SHRI RADHESHYAM RATANLAL AGARWAL, DIRECTOR OF TH E COMPANY WHO WAS HANDLING INCOME TAX MATTERS. HE WAS A DMITTED TO THE HOSPITAL ON 09-11-2014 AS HE WAS SUFFERING FROM CIRRHO SIS WITH PHT WITH ASCITIS AND WAS DISCHARGED ON 13-11-2014. HE W AS ADVISED BED REST FOR TWO MONTHS. THEREAFTER, HE WAS AGAIN ADMITT ED TO HOSPITAL ON 28-12-2014 AND WAS DISCHARGED ON 01-01-2015. HE R ESUMED THE OFFICE ON 13-01-2015 AND THEREAFTER SUBMITTED PAPERS TO THE CHARTERED ACCOUNTANT TO FILE APPEAL BEFORE THE TRIBUNAL. THE APPEAL WAS FILED ON 21-01-2015. IN THE MEANTIME DELAY OF 68 DAYS OCCURRED IN FILING OF APPEAL. 3.1 THE LD. AR SUBMITTED THAT AGAINST THE IMPUGNED ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), A CROSS APPEAL WAS FILE D BY THE DEPARTMENT IN ITA NO. 2067/PUN/2014. THE SAME WAS DEC IDED BY THE TRIBUNAL VIDE ORDER DATED 13-01-2017. THE TRIBUNAL IN THE ABSENCE OF ASSESSEE OR ITS AR DISMISSED THE APPEAL OF THE DEPARTME NT BY FOLLOWING 4 ITA NO. 100/PUN/2015, A.Y. 2005-06 THE DECISION OF CO-ORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO. 1467/PN/2012 FOR THE ASSESSMENT YEAR 2009-10 DECIDED ON 15-07-2015. 3.2 THE LD. AR SUBMITTED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BENCH OF THE TRIBU NAL IN ASSESSEES OWN CASE IN ITA NOS. 219 TO 221/PN/2012 FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09 DECIDED ON 05-08 -2015. THE TRIBUNAL VIDE COMMON ORDER IN CASE OF SEVERAL SIMILARLY SITU ATED APPELLANTS/ASSESSEES DELETED THE ADDITION. THE LD. AR FURNIS HED A COPY OF THE ORDER OF TRIBUNAL IN ITA NOS. 219 TO 221/PN/2012 D ECIDED ON 05-08-2015. THE LD. AR SUBMITTED THAT HE IS NOT PRESSING GROUND NO. 1 RELATING TO RE-OPENING OF ASSESSMENT. 4. SHRI NARESH KUMAR REPRESENTING THE DEPARTMENT FAIRLY ADMITTED THAT THE ISSUE RAISED IN THE PRESENT APPEAL BY THE ASSE SSEE HAS ALREADY BEEN ADJUDICATED BY THE CO-ORDINATE BENCH OF THE TRIBUN AL IN THE CASE OF ASSESSEE IN EARLIER ASSESSMENT YEARS. THE LD. DR CONTE NDED THAT THE APPEAL OF THE DEPARTMENT AGAINST THE SAME ORDER OF COMM ISSIONER OF INCOME TAX (APPEALS) WAS LISTED FOR HEARING BEFORE THE TRIBU NAL ON 12- 01-2017. THE LD. DR REPRESENTING THE DEPARTMENT WAS NO T AWARE OF THE CROSS APPEAL FILED BY THE ASSESSEE AND THUS FAILED TO MENT ION ABOUT THE CROSS APPEAL BY THE ASSESSEE AT THE TIME OF HEARING OF D EPARTMENTS APPEAL. 5 ITA NO. 100/PUN/2015, A.Y. 2005-06 5. THE APPEAL OF THE ASSESSEE IS TIME BARRED BY 68 DAYS . THE ASSESSEE HAS FILED AN AFFIDAVIT OF DIRECTOR CITING REASONS FOR DELAY IN FILING OF APPEAL. THE DELAY IN FILING OF APPEAL HAS BEEN ATTRIBUTE D TO MEDICAL EXIGENCIES. AFTER PERUSING THE AFFIDAVIT, WE ARE SATISFIE D THAT THE DELAY IN FILING OF APPEAL IS NOT WILLFUL/DELIBERATE. ACCORDINGL Y, THE DELAY IN FILING OF THE APPEAL IS CONDONED AND THE APPEAL OF TH E ASSESSEE IS ADMITTED TO HEARD AND DISPOSED OF ON MERITS. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS ENGAGED IN T HE BUSINESS OF MANUFACTURING M.S. STEEL INGOTS. ON THE BASIS OF INFORMAT ION RECEIVED FROM THE OFFICE OF COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WERE INVOKED AND T HE ASSESSMENTS FOR ASSESSMENT YEARS 2005-06 TO 2008-09 WERE REOPENE D. AS PER INFORMATION RECEIVED BY THE DEPARTMENT FROM THE OFFICE OF COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, IT WAS ALLEGED T HAT THE ASSESSEE HAD INDULGED IN SUPPRESSION OF PRODUCTION AND C LANDESTINE REMOVAL OF FINISHED PRODUCTS WITHOUT PAYMENT OF EXCISE DUTY . INFORMATION WAS ALSO RECEIVED THAT THE ASSESSEE, IN AN AN OTHER MATTER IN CONNECTION WITH AN ACTION CONDUCTED BY THE DIRECTORAT E GENERAL OF CENTRAL EXCISE INTELLIGENCE CONFESSED AND ADMITTED TO CLAND ESTINE REMOVAL OF FINISHED PRODUCTS WITHOUT EXCISE COVER. ON THE BASIS OF SAID INFORMATION THE DEPARTMENT TOOK RE-COURSE TO RE-ASSESS MENT PROCEEDINGS. THE ASSESSING OFFICER VIDE ORDER DATED 04-03-2013 P ASSED U/S. 143(3) R.W.S. 147 OF THE ACT MADE ADDITION OF ` 7,11,76,880/- ON ACCOUNT OF INCOME FROM SUPPRESSED SALE. AGGRIEVED BY TH E SAID 6 ITA NO. 100/PUN/2015, A.Y. 2005-06 ASSESSMENT ORDER, THE ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER ESTIMATED THE GROSS PROFIT @ 4% ON SUPPRESSED PRODUCTION. 7. WE FIND THAT THE ASSESSEE HAS ASSAILED THE ORDER OF C OMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEARS 2006-07 TO 2008-09 BY RAISING IDENTICAL GROUNDS OF APPEAL BEFORE THE TRIBUNAL IN ITA NOS. 219 TO 221/PN/2012 (SUPRA). THE CO-ORDINATE BENCH BY FOLLOWIN G THE DECISION RENDERED IN THE CASE OF BHAGYALAXMI STEEL ALLOYS P VT. LTD. VS. ADDL. CIT IN ITA NOS. 284 TO 286/PN/2012 AND OTHER GR OUP OF CASES WHERE IDENTICAL ISSUE WAS INVOLVED HELD AS UNDER : 11. FOLLOWING OUR DECISION IN THE CASE OF BHAGYALA XMI STEEL ALLOYS PVT. LTD. (SUPRA) WE HOLD THAT NO ADDITION CAN BE MADE O N ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY AND THERE IS NO ALLEGED INVESTMENT IN THE PURCHASE FOR EFFECTING SUCH SALES WHICH GOODS HAVE BEEN CLANDESTINELY REMOVED. IN VIEW OF OUR DELETING THE ADDITION IN TH E HANDS OF THE ASSESSEE, THE GROUNDS OF APPEAL RAISED BY THE REVEN UE, I.E. AGAINST APPLICATION OF GP RATE AND ALLOWANCE OF EXPENSES AR E ALSO DISMISSED. HOWEVER, THE AO IS DIRECTED TO INCLUDE ADDITIONAL I NCOME IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF CLANDESTINE REMOVAL OF G OODS WITHOUT PAYMENT OF EXCISE DUTY AS ADMITTED BY THE ASSESSEE BEFORE THE DGCEI, AURANGABAD. 12. THE GROUND OF APPEAL CHALLENGING THE REOPENING OF ASSESSMENT U/S.147 WAS NOT PRESSED FOR WHICH THE SAME IS DISMI SSED AS NOT PRESSED. HOWEVER, SINCE WE ARE ALLOWING THE APPEAL OF THE ASSESSEE ON MERIT THE GROUNDS RAISED BY THE ASSESSEE CHALLENGIN G THE NON ISSUE OF NOTICE U/S.143(2) ARE NOT BEING ADJUDICATED BEING A CADEMIC IN NATURE. THERE HAS BEEN NO CHANGE IN THE FACTS AND CIRCUMSTANCE S IN THE ASSESSMENT YEAR UNDER APPEAL. SINCE, CO-ORDINATE BENCH OF THE TRIBUNAL HAS DISPOSED OFF THE APPEALS OF THE ASSESSEE FOR SUBSEQUENT 7 ITA NO. 100/PUN/2015, A.Y. 2005-06 ASSESSMENT YEARS UNDER SIMILAR CIRCUMSTANCES, THE PRESEN T APPEAL OF THE ASSESSEE IS DISPOSED OF WITH IDENTICAL DIRECTIONS. SINCE, GROUND NO. 1 IN APPEAL CHALLENGING RE-OPENING OF ASSESSMENT U/S. 147 OF THE ACT HAS NOT BEEN PRESSED, T HE SAME IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON WEDNESDAY, THE 01 ST DAY OF FEBRUARY, 2017. SD/- SD/- ( / ANIL CHATURVEDI) ( ! / VIKAS AWASTHY) ' ! / ACCOUNTANT MEMBER # ! / JUDICIAL MEMBER ' / PUNE; $% / DATED : 01 ST FEBRUARY, 2017 RK , - ./& 0&+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. & & ' () / THE CIT(A), AURANGABAD 4. & & ' / THE CIT, AURANGABAD 5. *+ ,- , & ,- , . ./ , ' / DR, ITAT, B BENCH, PUNE. 6. +01 23 / GUARD FILE. // // TRUE COPY// &'4 / BY ORDER, 5 %6 / ASSISTANT REGISTRAR, & ,- , ' / ITAT, PUNE