M/s Diamond Plastic Industries, Parwanoo V. ITO, Parwanoo

ITA 1072/CHANDI/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68477 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-08-2013
• Assessment Year: 1999-2000
• Appeal Filed On: 12-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Wrong claim
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, JM ITA NO. 1072/CHD/2010 ASSESSMENT YEAR : 1999-2000 DIAMOND PLASTIC INDUSTRIES VS. I.T.O 55, SECTOR 1 PARWANOO PARWANOO AAFFD 9487 C (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY: SHRI J.S. NAGAR DATE OF HEARING 27.8.2013 DATE OF PRONOUNCEMENT 6.9.2013 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS FILED AGAINST THE ORDER DATED 1.6.2010 OF THE LD. CIT(A), SHIMLA. 2 IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUNDS 1 THAT THE ORDER OF THE LD. CIT(A), SHIMLA IS DEFE CTIVE BOTH IN LAW AND FACTS OF THE CASE. 2 THAT THE LD. CIT(A), SHIMLA IS NOT JUSTIFIED IN UPHOLDING THE PENALTY OF RS. 2,40,468/- U/S 271(1)( C) OF IT ACT LEVIED BY THE ASSESSING OFFICER AS 8IT IS UNCAL LED FOR AND DESERVES TO BE DECIDED. 3 THE ASSESSEE HAS MOVED AN ADJOURNMENT APPLICATION THROUGH WHICH IT WAS STATED THAT THE LD. COUNSEL OF THE ASSESSEE HAS NOT YET RECEIVED THE RELEVANT DOCUMENT S AND THEREFORE, THE CASE SHOULD BE ADJOURNED. ON PERUSAL OF THE RECORD, IT WAS NOTICED THAT APPEAL WAS FIRST FIXED FOR HEARING ON 29.9.2010 AFTER WHICH CONTINUOUS ADJOURNMENTS WERE SOUGHT ON BEHALF OF THE ASSESSEE. SOMETIMES THE BENCH ALSO D ID NOT FUNCTION. IN ANY CASE MORE THAN SIX ADJOURNMENTS W ERE GRANTED ON THE REQUEST OF THE LD. COUNSEL OF THE ASSESSEE, THEREFORE, THE LD. COUNSEL OF THE ASSESSEE WAS INFORMED THAT H IS APPLICATION WAS BEING REJECTED AND HE SHOULD ARGUE THE CASE. 2 HE WAS ASKED TO WAIT FOR HIS TURN. WHEN THE MATTER CAME UP FOR HEARING, THE LD. COUNSEL OF THE ASSESSEE BY THA T TIME HAS DISAPPEARED. ALL THE ADVOCATES AND THE CHARTERED A CCOUNTANTS ARE OFFICERS OF THE COURT AND ONE OF THEIR PRIME DU TY IS TO ASSIST THE COURT TO SETTLE THE DISPUTES. THEREFORE, WE DO NOT APPRECIATE THE BEHAVIOR OF THE LD. COUNSEL OF THE A SSESSEE IN THIS CASE AND CONVEY OUR ANGUISH. WE ALSO DECIDED TO PROCEED WITH THE MATTER ON EX-PARTE BASIS. 4 THE LD. DR FOR THE REVENUE WAS HEARD. 5 AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR F OR THE REVENUE AND RELEVANT MATERIAL ON RECORD, WE FIND T HAT IN THIS CASE THE RETURN WAS FILED DECLARING NIL INCOME AFTE R CLAIMING DEDUCTION U/S 80IA OF IT ACT AMOUNTING TO RS. 6,87, 050/-. MANY NOTICES WERE ISSUED WHICH REMAINED UNCOMPLIED WITH. ULTIMATELY SHOW CAUSE NOTICE WAS GIVEN THROUGH WHIC H ASSESSEE WAS ASKED TO SUPPLY THE DETAILS OF PLANT A ND MACHINERY AND OTHER ASSETS PARTICULARLY BECAUSE BUS INESS ACTIVITY WAS MENTIONED AS MELTING OF WASTE PLASTIC PROCURED FROM KABARIES. THE ASSESSEE WAS ASKED TO GIVE POWE R CONSUMPTION AND OTHER DETAILS. NO COMPLIANCE WAS M ADE TO THIS NOTICE. ULTIMATELY IN RESPONSE TO FINAL OPPOR TUNITY GIVEN BY THE ASSESSING OFFICER AN APPLICATION WAS SUBMITTED STATING THAT THE ASSESSEE HAD FILED AN APPLICATION BEFORE THE IN COME TAX SETTLEMENT COMMISSION, NEW DELHI AND THEREFORE, TH E PROCEEDINGS SHOULD BE KEPT ABEYANCE. HOWEVER, THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT ON EXP ARTE BASIS BECAUSE NO STAY WAS GRANTED BY THE SETTLEMENT COMMI SSION, NEW DELHI. 6 IN THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFIC ER OBSERVED THAT POWER WAS NOT CONSUMED COMMENSURATE T O THE PRODUCTION. THE ASSESSEE DID NOT HAVE SUFFICIENT MA CHINERY WHICH COULD PROVE THAT THE ASSESSEE WAS REALLY ENGA GED IN THE MANUFACTURING ACTIVITIES. FURTHER IT WAS ALSO NOTI CED THAT THE ASSESSEE WAS HAVING A TURNOVER AMOUNTING TO MORE TH AN RS. 30 LAKHS BUT THE ASSESSEE WAS NEITHER REGISTERED UNDER EXCISE DEPARTMENT NOR ANY EXCIDE DUTY WAS PAID BY THE ASSE SSEE. THEREFORE, THE ASSESSEE COULD NOT BE CALLED TO BE A MANUFACTURER. IN THIS BACK GROUND DEDUCTION U/S 80 IA WAS 3 REJECTED AND PENALTY PROCEEDINGS U/S 271(1)(C) OF T HE ACT WAS INITIATED. IN RESPONSE TO THE SHOW CAUSE NOTICE FO R LEVY OF PENALTY IT WAS SUBMITTED AS UNDER: ` IT IS RESPECTFULLY SUBMITTED THAT IN THIS CASE ASS ESSMENT FOR ASSESSMENT YEAR 1999-2000 WAS MADE UNDER SECTION 14 4 OF THE INCOME TAX ACT, 1961. THE ASSESSEE PREFERRED TO FILE APPLICATION UNDER SECTION 245C OF INCOME TAX ACT, 1 961 TO THE SETTLEMENT COMMISSION AGAINST THE ORDER PASSED BY Y OUR GOOD SELF. THE APPLICATION WAS FILED TO THE SECRETARY, INCOME TAX SETTLEMENT COMMISSION, PRINCIPAL BENCH LOK NAYAK BHAWAN, NEW DELHI ON 5 TH DAY OF DECEMBER 2006. THE PROOF OF THE SAME IS ENCLOSED HEREWITH FOR YOUR KIND PERUSAL. THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) IS QUERI JUDICIAL PROCEEDINGS AND ENTIRELY RELATED TO THE OR DERS OF THE SETTLEMENT COMMISSION. THEREFORE, IT IS PRAYED THAT TILL THE DECISION OF SETTLEMENT COMMISSION, THE PENALTY PROC EEDINGS INITIATED UNDER SECTION 271(1) (C) MAY KINDLY BE KE PT IN ABEYANCE. NO OTHER REPLY ON MERIT WAS GIVEN AND THEREFORE, TH E ASSESSING OFFICER LEVIED PENALTY AT THE MINIMUM RATE OF 100% BECAME OF THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER. 7. ON APPEAL NO SUBMISSIONS WERE MADE ON MERITS. I N FACT WHATEVER SUBMISSIONS HAVE BEEN MADE, ARE SUMMARIZED BY THE LD. CIT(A) VIDE PARA 5 WHICH ARE AS UNDER: 5 DURING THE HEARING OF THE APPEAL, THE APPELLANT F ILED WRITTEN SUBMISSION STATING THAT HUGE DEMANDS WERE C REATED BY THE LD. A.O FOR THE ASSESSMENT YEARS 1999-2000, 200 0-01 AND 2001-02. THE ASSESSEE APPELLANT APPROACHED THE SETT LEMENT COMMISSION BUT NO ORDER COULD BE PASSED DUE TO AMEN DMENT IN THE PROVISIONS. THE ASSESSEE APPELLANT FILED WRI T PETITION BEFORE THE HONBLE H.P. HIGH COURT CHALLENGING THE ISSUE OF NOTICE U/S 148. THE WRIT PETITION WAS DISMISSED BY THE HONBLE H.P. HIGH COURT VIDE ORDER DATED 18/09/2009. FURTHE R, ON THE REVIEW PETITION FILED BY THE ASSESSEE APPELLANT, A NOTICE OF MOTION STANDS ISSUED AND THE REVENUE HAD TO FILE RE PLY ON THE WRIT PETITION. THIS HAS NOT YET BEEN FILED. IN VIEW OF THE FACTS THAT ASSESSEES WRIT PETITION OR APPEAL IS PENDING BEFORE THE HONBLE HIGH COURT THE LD. A.O. SHOULD NOT HAVE IMP OSED THE PENALTY. 8 THE LD. CIT(A) CONFIRMED THE LEVY OF PENALTY VIDE PARA 6 WHICH READS AS UNDER: 6. THE RIVAL PLEAS HAVE BEEN CONSIDERED BY THE UNDERSIGNED. THE PENALTY U/S 271(1)(C) HAS BEEN IMP OSED 4 UPON THE APPELLANT FOR WRONG CLAIM U/S 80IA OF THE ACT. THE APPELLANT IS ENGAGED IN THE ACTIVITY OF CONVERTING PLASTIC SCRAP INTO PLASTIC GRANULES. THE4 ACTIVITY WAS HELD AS NO T AMOUNTING TO MANUFACTURE. THE QUANTUM APPEAL OF THE ASSESSEE HAS BEEN DISMISSED UP TO HIGH COURT LEVEL. THE APPELLANTS P LEA TO KEEP THE PROCEEDINGS PENDING TILL THE DECISION ON THE RE VIEW PETITION BEFORE THE HONBLE HONBLE HIGH COURT IS NOT ACCEPT ABLE SINCE THE ORIGINAL WRIT PETITION OF THE APPELLANT HAS ALR EADY BEEN DISMISSED BY THE HONBLE COURT VIDE ORDER DATED 18/ 09/2009 AS PER SUBMISSION OF THE ASSESSEE DATED 05/04/2010. THE APPELLANT IS HELD LIABLE FOR PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961 FOR FURNISHING INACCURATE PARTICULARS OF INCOM E. I SEE NO REASON TO INTERFERE WITH THE ORDER OF THE LD. A.O. IMPOSING THE PENALTY U/S 271(1)(C) OF THE ACT. HENCE THE ORDER O F THE LD. A.O IS CONFIRMED AND THE APPELLANT FAILS ON THIS GROUND OF APPEAL. 9 AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR F OR THE REVENUE AND RELEVANT MATERIAL ON RECORD, WE ARE OF THE OPINION THAT THE LD. CIT(A) HAS RIGHTLY ADJUDICATED THE ISS UE. THE ASSESSEE HAS NOT BEEN ABLE TO PROVE IN THE QUANTUM PROCEEDINGS THAT THE ASSESSEE WAS REALLY ENGAGED IN THE MANUFACTURING OF GRANULE. THE CLAIM FOR DEDUCTION U/S 80IA IS FALSE AND THEREFORE, PENALTY HAS BEEN RIGHTLY LEVIE D U/S 271(1)(C) OF THE I.T. ACT. WE FIND NOTHING WRONG I N THE ORDER OF THE LD. CIT(A) AND CONFIRM THE SAME. 10 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 6.9.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 6.9.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR