HANIL ERA TEXTILES LTD, MUMBAI V. ASST CIT CIR 6(3), MUMBAI

ITA 11/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2198 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 02-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K MOHANDA S
• Section: 143(3); 115JB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , , BEFORE SHRI JASON P. BOAZ, A M AND SHRI AMIT SHUKLA , J M ./ ITA NO. 11 /MUM/2013 ( / ASSESSMENT YEAR: 2006 - 07 ) M/S. HANIL ERA TEXTILES LTD. /APPELLANT C/O. NATHANI ASSOCIATES A - 1, MANGAL PRABHA BLDG. NO.2 PRABHAT COLONY ROAD NO1 SANTA CRUZ (E), MUMBAI 400055 / VS. ACIT, CIRCLE - 6(3) AAYAKAR BHAVAN, M.K. ROAD / RESPONDENT MUMBAI 400020 ./ PAN - AAAFH0882R / APPELLANT BY: NONE / RESPONDENT BY : SHRI K. MOHANDAS / DATE OF HEARING : 02.12 . 2015 / DATE OF PRONOUNCEMENT : 09 . 12 .2015 / O R D E R PER JASON P. BOAZ , A.M. THIS APPEAL BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER OF CIT(A) - 1 2 , MUMBAI DATED 13 . 09.2012 FOR A.Y. 2006 - 07 IN RESPECT OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . 2 . THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE, A COMPANY E NGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF TEXTILES, FILED ITS RETURN OF INCOME FOR A.Y. 2 ITA NO. 11 /MUM/201 3 M/S. HANIL ERA TEXTILES LTD. 2006 - 07 ON 30.11.2006 DECLARING TOTAL LOSS OF ` 2,29,87,339/ - UNDER THE NORMAL PROVISIONS OF THE ACT. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AN D THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. THE ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 22.12.2008 WHEREIN THE INCOME OF ASSESSEE WAS DETERMINED AT ` 6,97,20,380/ - UNDER NORMAL PROVISIONS OF THE ACT AND BOOK PROFITS WERE COMPUTED AT ` 12,73,90,592/ - UNDER SECTION 115JB OF THE ACT. ON APPEAL, THE CIT(A) - 12, MUMBAI DISPOSED OFF THE APPEAL VIDE ORDER DATED 06.11.2009 ALLOWING PARTIAL RELIEF TO ASSESSEE . 2.2 IN THE ORDER OF ASSESSMENT DATED 22.12.2008 FOR A.Y. 2006 - 07, ASSESSING OFFICER (AO) SIMULTANEOUSLY INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WITH RESPECT TO THE DISALLOWANCE OF ` 55,43,091/ - UNDER SECTION 36(1)(III) OF THE ACT; WITHDRAWAL/DISALLOWANCE OF DEDUCTION UNDER SECTION 10B(1) OF THE ACT AMOUNTING TO ` 8,69,14,631/ - AND DISALLOWANCE OF ` 2,50,000/ - UNDER SECTION 94(7) OF THE ACT. SUBSEQUENT TO THE ORDER OF THE CIT(A) - 12, MUMB AI DATED 06.11.2009, THE AO TOOK UP THE PENALTY PROCEEDINGS AND AFTER CONSIDERING ASSESSEES SUBMISSION IN THIS REGARD, PROCEED TO LEVY THE MINIMUM PENALTY OF ` 2,60,74,389/ - UNDER SECTION 271(1)(C) OF THE ACT ON ASSESSEE FOR FURNISHING OF INACCURATE PARTIC ULARS OF INCOME. 2.3 ON APPEAL THE LEARNED CIT(A) - 12, MUMBAI ALLOWED PARTIAL RELIEF TO ASSESSEE IN THE IMPUGNED ORDER DATED 13.09.2012. THE LEARNED CIT(A) HELD AS UNDER: - I. SHE DELETED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT BY AO ON ACCO UNT OF DISALLOWANCE OF ` 55,43,091/ - MADE UNDER SECTION 36(1)(III) OF THE ACT; 3 ITA NO. 11 /MUM/201 3 M/S. HANIL ERA TEXTILES LTD. II. THE LEARNED CIT(A) UPHELD THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF WITHDRAWAL/DISALLOWANCE OF DEDUCTION UNDER SECTION 10B(1) OF THE ACT AMOUNTING TO ` 8,69,14,631/ - , AND III. THE LEARNED CIT(A) UPHELD THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF THE DISALLOWANCE UNDER SECTION 9 4(7) OF THE ACT AMOUNTING TO ` 2,50,000/ - . 3 . THIS APPEAL WAS EARLIER FIXED FOR HEARING ON VARIOUS DATES ON 14 OCCASIONS. ON THREE OCCASIONS, THE CASE WAS ADJOURNED AS THE BENCH WAS NOT FUNCTIONING AND THE MATTER WAS ADJOURNED THROUGH THE NOTICE BOARD. THE LEARNED A.R. FOR THE ASSESSEE APPEARED ONCE ON 17.04.2014 AND ON HIS REQUEST THE CASE WAS ADJOURNED TO 16.06.2014. IN SUBSEQUENT HEARINGS ON 22.09.2014, 11.12.2014, 15.01.2015, 23.02.2015, 15.04.2015, 21.05.2015, 25.06.2015 AND 10.09.2015 NONE APPEARED ON BEHALF OF ASSESSEE AND THE CASE WAS FINALLY FIXED FOR HEARING TODAY, I.E. 02.12.2015. HOWEVER, TODAY ALSO NONE WAS PRESENT ON BEHALF OF ASSESSEE, BUT THE LEARNED D.R. FOR REVENUE WAS PRESENT. WE, THEREFORE, DISPOSE OFF THIS APPEAL WITH THE ASSISTANCE OF THE LEARNED D.R. 3.1 ASSESSEE HAS RAISED THE FOLLOWING GROUNDS BEFORE US: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, HON. COMMISSIONER OF INCOME TAX APPEALS - 12, MUMBAI ERRED IN CONFIRMING THE PENALTY BY HOLDING THAT THE APPELLANTS HAD FURNISHED INACCURATE PARTICULARS OF THEIR INCOME . 2 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, HON. COM MISSIONER OF INCOME TAX APPEALS - 12, MUMBAI ERRED IN CONFIRMING THE PENALTY FOR ALLEGED FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE APPELLANTS IN RESPECT OF THE WITHDRAWAL OF DEDUCTION U/S 10B OF THE ACT. 4 ITA NO. 11 /MUM/201 3 M/S. HANIL ERA TEXTILES LTD. 3. ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, HON. COMMISSIONER OF INCOME TAX APPEALS - 12, MUMBAI ERRED IN CONFIRMING THE PENALTY FOR ALLEGED FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE APPELLANTS IN RESPECT OF DISALLOWANCE 94(7) OF THE ACT. 3.2 AFTER CONSIDERING THE SUBMISSIONS PUT FORTH BY THE LEARNED D.R. SUPPORTING THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND CAREFULLY PERUSING THE FINDINGS THEREIN, WE FIND THAT ASSESSEE HAS BEEN UNABLE TO REBUT THE FINDINGS OF THE LEARNED CIT(A) IN UPHOLDING THE LEVY OF PENALTY U NDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME IN THE CASE ON HAND FOR A.Y. 2006 - 07 IN RESPECT OF BOTH THE ISSUES LISTED HEREUNDER: - I. THE CONFIRMATION OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF WITHDRAWAL/DISALLOWANCE OF DEDUCTION UNDER SECTION 10B(1) OF THE ACT AMOUNTING TO ` 8,69,14,631/ - , AND II. THE CONFIRMATION OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF DISALLOWANCE UNDER SECTION 94(7) OF THE ACT AMOUNTING TO ` 2,50,0 00/ - . IN THE ABSENCE OF ANY SUCH EXPLANATION, WE DO NOT FIND ANY REASON TO DEVIATE FROM OR INTERFERE IN THE FINDINGS RENDERED BY THE LEARNED CIT(A) AND ACCORDINGLY CONFIRM THE SAME. 4 . IN THE RESULT, ASSESSEES APPEAL FOR A.Y. 2008 - 09 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DECEMBER , 2015. 09.12.2015 SD/ - SD/ - ( AMIT SHUKLA ) ( JASON P. BOAZ ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI , DATED 9 TH DECEMBER , 2015 5 ITA NO. 11 /MUM/201 3 M/S. HANIL ERA TEXTILES LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) - 1 2 , MUMBAI 4. / THE CIT - 6 , MUMBAI 5. , , / DR, H BENCH ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER //TRUE COPY// /ASSTT. REGISTRAR) , /ITAT, MUMBAI N.P.