DCIT, Pune V. Prima Paper & Engg. Pvt.Ltd, Pune

ITA 1005/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56588 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 12-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEERA MALHOTRA
• Assessee Lawyers: SHARAD A SHAH
• Section: 147; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 1004 TO 1007/PN/2010 A.Y. 2000-01 TO 2003-04 DY. CIT CIR. 10, PUNE APPELLANT VS. PRIMA PAPER & ENGG. PVT. LTD., T-73 MIDC, BHOSARI, PUNE-411 026 PAN AABCP 1938 J RESPONDENT APPELLANT BY: MS. NEERA MALHOTRA RESPONDENT BY: SHRI SHARAD A. SHAH DATE OF HEARING: 4-11-2011 DATE OF PRONOUNCEMENT : 29-11-2011 ORDER PER SHAILENDRA KUMAR YADAV, JM ALL THESE APPEALS PERTAIN TO THE SAME ASSESSEE ON T HE POINT OF DELETION OF PENALTY LEVIED BY THE ASSESSIN G OFFICER U/S 271(1)(C) OF THE ACT FOR A.Y. 200-01 TO 2003-04 . SO THEY ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. ITA NO. 1004/PN/2010 FOR A.Y. 2000-01 2. IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE O RDER OF CIT(A)-V PUNE DATED 19-3-2010 IN DELETING THE PENAL TY OF RS. 40,06,000/- LEVIED U/S 271(1)(C) OF THE ACT. I N THIS CASE, THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 31 -3- 2003 ACCEPTING THE RETURNED INCOME OF RS. 86,81,798 /-. 2 ITA NO. 1004 TO 1007/PN/2010 PRIMA PAPER & ENGG. A.Y. 2000-01 TO 2003-04 THEREAFTER, THE CASE WAS REOPENED U/S 147 OF THE AC T AS ACCORDING TO THE ASSESSING OFFICER, THE CLAIM OF DE DUCTION U/S 80-IA OF THE ACT HAD TO BE WITHDRAWN. IN APPEAL , THE CIT(A) ALLOWED PARTIAL RELIEF AGAINST WHICH THE ASS ESSEE WENT IN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL REJECTED THE CLAIM OF THE ASSESSEE. WHILE COMPLETI NG THE RE-ASSESSMENT, THE ASSESSING OFFICER INITIATED PENA LTY PROCEEDINGS AND LEVIED PENALTY OF RS. 40,06,600/ U/ S 271(1)(C) OF THE ACT WHICH WAS DELETED BY THE CIT(A ) IN APPEAL. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE MATTER WITH RE SPECT TO QUANTUM ADDITION AGAINST WHICH THE IMPUGNED PENALTY HAS BEEN LEVIED, WAS THE SUBJECT MATTER OF APPEAL BEFOR E THE TRIBUNAL IN ITA NO. 519/PN/2008 WHERE IN VIDE ITS O RDER DATED 27-8-2010 THE TRIBUNAL HAS SET ASIDE THE ISSU E TO THE FILE OF THE CIT(A) FOR DECIDING THE ISSUE AFRESH, B Y OBSERVING AS UNDER: 5. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT(A) N OT ONLY FAILED TO ADJUDICATE THE ISSUE ON MERITS, BUT ALSO FAILED TO REALIZE HIS OWN POWERS CONFERRED ON HIM B Y THE STATUTE. HE FAILED TO REALIZE THAT EVERY GROUND IN CONNECTION WITH THE ORDERS PASSED U/S 147 IS COVERE D BY CLAUSE (B) OF SECTION 246A OF THE ACT. IN OUR OPINION, THE CIT(A) IS GROSSLY ERRED IN DECLINING T O ENTERTAIN THE APPEAL AND PASS A WELL REASONED ORDER AS PER THE PROVISION OF SECTION 250(6) OF THE ACT. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT TH E CIT(A) HAS POWER TO DEAL WITH THE IMPUGNED GROUND I N APPEAL RELATING TO THE ISSUE OF VALIDITY OF THE RE- OPENING OF THE CASE U/S 147 OF THE ACT. HE IS ALSO DIRECTED TO PASS THE SPEAKING ORDER ON EVERY P\GROUNDS RAISED BY THE ASSESSEE IN FORM NO. 35 FIL ED BEFORE HIM. IT GOES WITHOUT MENTIONING IN DETAIL, THAT THE CT(A) SHALL GRANT REASONABLE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. ACCORDINGLY, THE GROUNDS AR E SET ASIDE TO THE FILE OF THE CIT(A). 3 ITA NO. 1004 TO 1007/PN/2010 PRIMA PAPER & ENGG. A.Y. 2000-01 TO 2003-04 4. IN VIEW OF THE FACT THAT THE MATTER WITH RESPECT TO QUANTUM ADDITION AGAINST WHICH THE PRESENT PENALTY HAS BEEN LEVIED BY THE ASSESSING OFFICER, HAS BEEN SET ASIDE TO THE FILE OF THE CIT(A), THE ISSUE WITH RESPECT TO P ENALTY LEVIED U/S 271(1)(C) SHOULD ALSO GO BACK TO THE FIL E OF THE CIT(A) TO BE DECIDED IN ACCORDANCE WITH LAW AND FAC T. WE THEREFORE, SET ASIDE THIS MATTER TO THE FILE OF THE CIT(A) WITH DIRECTIONS TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW AND FACT, AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1005/PN/2010FOR A.Y. 2001-02 5. IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE A CTION OF THE CIT(A) IN DELETING THE PENALTY OF RS. 13,61, 300/- LEVIED U/S 271(1)(C) OF THE ACT. IN THIS CASE ALSO, ON SIMILAR SET OF FACTS AS FOR THE A.Y. 2000-01, THE ASSESSING OFFICER HAS LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT, WH ICH WAS DELETED BY THE CIT(A) IN APPEAL. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE WITH RES PECT TO QUANTUM ADDITION AGAINST WHICH THE IMPUGNED PENALTY HAS BEEN LEVIED, WAS THE SUBJECT MATTER OF APPEAL BEFOR E THE TRIBUNAL IN ITA NO. 1754/PN/2007 WHERE IN VIDE ITS ORDER DATED 8-10-2010 THE TRIBUNAL HAS DELETED THE ADDITI ON MADE BY THE ASSESSING OFFICER, IN RESPECT OF WHICH THE IMPUGNED PENALTY HAS BEEN LEVIED BY THE ASSESSING O FFICER. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL READ AS U NDER: WE HEARD BOTH THE PARTIES ON THIS ISSUE RELATING T O VALIDITY OF THE IMPUGNED NOTICE ISSUED U/S 147 OF T HE ACT. IN THE LIGHT OF THE PLETHORA OF EVIDENCES MENT IONED ABOVE, WE FIND NO DIFFICULTY IN COMING TO THE CONCLUSION THAT THE ISSUE OF DEDUCTION U/S 80-IA WA S 4 ITA NO. 1004 TO 1007/PN/2010 PRIMA PAPER & ENGG. A.Y. 2000-01 TO 2003-04 SUBJECT MATTER OF SPECIFIC ENQUIRY BY THE AO DURING THE REGULAR ASSESSMENT PROCEEDINGS. CONSIDERING THE FAC T THAT THE ASSESSEE FURNISHED THE REQUISITE INFORMATI ON ON 29-4-2003 AND THERE IS ENTRY IN THE ORDER SHEET TO THAT EXTENT, IT IS REASONABLE TO INFER THAT THERE E XISTS AN OPINION ON THE SUBJECT WHILE MAKING THE SAID REGULAR ASSESSMENT. IN THIS FACTUAL MATRIX OF THE CASE, WE ARE OF THE OPINION THAT THE REASONS RECORDED AND THE NOTICE ISSUED U/S 147 FOR REOPENING OF THE ASSESSMENT IS NOT VALID, THUS, IT IS A CASE OF CHA NGE OF OPINION. THERE IS PLETHORA OF JUDGMENT ON SUBJECT TO SUPPORT THE ASSESSEE. ACCORDINGLY GROUND NO. 1 IS ALLOWED. 7. IN VIEW OF THE FACT THAT THE MATTER WITH RESPECT TO QUANTUM ADDITION AGAINST WHICH THE PRESENT PENALTY HAS BEEN LEVIED BY THE ASSESSING OFFICER, HAS BEEN DECI DED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ITS APPEA L IN ITA NO. 1754/PN/2007 VIDE ITS ORDER DATED 8-10-2010, TH E IMPUGNED PENALTY LEVIED BY THE ASSESSING OFFICER, H AS ALSO TO BE DECIDED IN FAVOUR OF THE ASSESSEE. WE THEREF ORE, HOLD THAT THE ORDER OF THE CIT(A) IN DELETING THE IMPUGN ED PENALTY DOES NOT CALL FOR ANY INTERFERENCE AT OUR H AND. THE SAME IS UPHELD. IN THE RESULT, THIS APPEAL OF THE R EVENUE IS DISMISSED. ITA NO. 1006 AND 1007/PN/2010 FOR A.Y. 2002-03 AND 2003-04 8. IN BOTH THESE APPEALS, THE REVENUE HAS CHALLENGE D THE ACTION OF CIT(A) IN DELETING THE PENALTY OF RS. 17, 99,700/- AND RS. 20,34,550/- LEVIED U/S 271(1)(C) OF THE ACT FOR A.Y. 2002-03 AND 2003-04 RESPECTIVELY. ON SIMILAR SET OF FACTS, FOR A.Y. 2000-01 AND 2001-02 THE ASSESSING OFFICER IMPOSED PENALTY U/S 271(1)(C) OF THE ACT WHICH WAS CONFIRMED BY THE CIT(A) IN APPEAL. 9. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE RESPECTIVE QUA NTUM ADDITIONS AGAINST WHICH THE IMPUGNED PENALTY HAS BE EN 5 ITA NO. 1004 TO 1007/PN/2010 PRIMA PAPER & ENGG. A.Y. 2000-01 TO 2003-04 LEVIED, WERE DELETED BY THE CIT(A). MOREOVER, THE ISSUE WITH RESPECT TO ADDITION ON WHICH IMPUGNED PENALTY HAS BEEN LEVIED, IS A DEBATABLE ONE. WHEN THE ISSUE IS DEBATABLE, PENALTY IS NOT EXIGIBLE AS HELD BY THE M ADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING M ILLS (P) LTD. VS. ACIT (2010) 231 CTR (MAD) 368. IN THI S VIEW OF THE MATTER, THE ORDER OF THE CIT(A) IN DELETING THE PENALTY FOR THE YEARS UNDER CONSIDERATION DOES NOT CALL FOR ANY INTERFERENCE AT OUR HAND. THE SAME IS UPHELD. IN TH E RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. 10. TO SUM UP, THE APPEAL OF THE REVENUE FOR A.Y. 2 000-01 IS ALLOWED FOR STATISTICAL PURPOSES, WHILE APPEALS FOR A.Y. 2001-02 TO 2003-04 ARE DISMISSED. PRONOUNCED IN THE OPEN ON 29 TH NOVEMBER 2011. SD/- SD/- G.S. PANNU) ACCOUNTANT MEMBER SHAILENDRA KUMAR YADAV JUDICIAL MEMBER PUNE DATED THE 29 TH NOVEMBER 2011. ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT V PUNE 4. CIT(A)-V PUNE 5. THE D.R, ITAT PUNE BENCH, PUNE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES, PUNE.