RR Industries Limited, CHENNAI V. ACIT, CHENNAI

ITA 1237/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7140 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 1999-2000
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DURGESH SUMROTT
• Assessee Lawyers: R VENKATESH
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , ' $ % , & ' BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NOS.1237 & 1238/MDS/2014 ( / ASSESSMENT YEARS: 1999-2000 & 2000-01) M/S. R.R. INDUSTRIES LTD. RR TOWER-III, THIRU VI KA INDUSTRIAL ESTATE, GUINDY, CHENNAI-600 032. VS ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-V(4), CHENNAI-600 034. PAN: AAACR3594H ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. R.VENKATESH, FCA /RESPONDENT BY : MR.DURGESH SUMROTT, CIT DR / DATE OF HEARING : 24 TH JULY, 2014 /DATE OF PRONOUNCEMENT : 22 ND AUGUST, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD , JM: THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAIN ST THE ORDERS OF THE COMMISSIONER OF INCOME TAX, CENTR AL-I CHENNAI DATED 31.03.2014 AND 28.03.2014 PASSED UNDE R SECTION 263 OF THE ACT FOR THE ASSESSMENT YEARS 199 9-2000 AND 2000-01 RESPECTIVELY. THE GRIEVANCE OF THE ASS ESSEE IN BOTH THESE APPEALS IS THAT COMMISSIONER OF INCOME T AX, CENTRAL-I ERRED IN ASSUMING JURISDICTION UNDER SECT ION 263 OF THE ACT IN SETTING ASIDE THE PENALTY ORDER WHICH HA D ALREADY BEEN ADJUDICATED IN APPELLATE JURISDICTION. 2 ITA NOS. 1237 & 1238/MDS/2014 2. COUNSEL FOR THE ASSESSEE SUBMITS THAT FOR BOTH THESE ASSESSMENT YEARS, THE COMMISSIONER OF INCOME TAX IS SUED SHOW CAUSE NOTICE UNDER SECTION 263 STATING THAT AS SESSING OFFICER WHILE PASSING PENALTY ORDER UNDER SECTION 2 71(1)(C) OF THE ACT HAS WRONGLY TAKEN THE CONCEALED INCOME AS T AX SOUGHT TO BE EVADED AND LEVIED PENALTY EQUAL TO THE INCOME, THEREFORE, PENALTY ORDER IS ERRONEOUS AND PREJUDICI AL TO THE INTERESTS OF THE REVENUE. COUNSEL SUBMITS THAT IN R ESPONSE TO THE NOTICE ISSUED BY COMMISSIONER OF INCOME TAX, TH E ASSESSEE FILED REPLY DATED 18.03.2014 STATING THAT PENALTY ORDERS PASSED UNDER SECTION 271(1)(C) OF THE ACT FO R BOTH THE ASSESSMENT YEARS WERE TAKEN UP IN APPEAL BY THE ASS ESSEE AND THE COMMISSIONER OF INCOME TAX (APPEALS)-V CHEN NAI BY COMMON ORDER DATED 1.11.2013 DELETED PENALTY LEV IED BY THE ASSESSING OFFICER. THEREFORE, SINCE THE MATTER HAVING BEEN DECIDED BY THE APPELLATE AUTHORITY ON MERITS, ASSESSEE REQUESTED TO DROP PROCEEDINGS INITIATED UNDER SECTI ON 263 OF THE ACT. COUNSEL SUBMITS THAT WITHOUT CONSIDERING THE SUBMISSIONS, THE COMMISSIONER OF INCOME TAX, (CENT RAL)-I SET ASIDE THE PENALTY ORDER AND PASSING FRESH PENAL TY ORDER TAKING QUANTUM OF TAX SOUGHT TO BE EVADED TO LEVY PENALTY 3 ITA NOS. 1237 & 1238/MDS/2014 UNDER SECTION 271(1)(C) OF THE ACT OBSERVING THAT N ONE HAS APPEARED ON 18.03.2014 AND NO WRITTEN EXPLANATION H AS BEEN FILED BY THE ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 263 OF THE ACT. COUNSEL SUBM ITS THAT OBSERVATIONS OF THE COMMISSIONER OF INCOME TAX ARE NOT CORRECT AS THE ASSESSEE FILED ITS OBJECTIONS FOR IN VOKING PROVISIONS UNDER SECTION 263 OF THE ACT AS THE PENA LTY WAS ALREADY A SUBJECT MATTER OF APPEAL BEFORE THE COMMI SSIONER OF INCOME TAX (APPEALS). THEREFORE, HE PRAYS THAT ORDER PASSED BY THE COMMISSIONER OF INCOME TAX UNDER SECT ION 263 OF THE ACT IS WITHOUT JURISDICTION AND MAY BE Q UASHED. 3. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF COMMISSIONER OF INCOME TAX. 4. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES ON GOING THROUGH THE SUBMISSIONS OF THE ASSESSEE AN D THE COPY OF REPLY FURNISHED BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX REQUESTING TO DROP THE PROCEEDINGS UNDER SECTION 263 OF THE ACT AND COPY O F THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) DATED 4 ITA NOS. 1237 & 1238/MDS/2014 1.11.2013 WHEREIN PENALTY LEVIED UNDER SECTION 271( 1)(C) OF THE ACT FOR ASSESSMENT YEARS 1999-2000 AND 2000-01 WERE DELETED, WE FIND THAT THE COMMISSIONER OF INCOME TA X ACTED BEYOND HIS JURISDICTION BY SETTING ASIDE THE PENALT Y ORDERS FOR BOTH THESE ASSESSMENT YEARS TO RE-QUANTIFY THE PENA LTY WHICH WERE ALREADY SUBJECT MATTER OF APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), WHO DELETED T HE PENALTIES. CLAUSE (C) OF EXPLANATION TO SECTION 263 (1) MAKES IT VERY CLEAR THAT POWERS OF THE COMMISSIONER OF IN COME TAX UNDER SECTION 263 SHALL EXTEND TO SUCH MATTERS WHIC H HAD NOT BEEN CONSIDERED AND DECIDED IN THE APPEAL PROCEEDIN GS. HERE BOTH THE PENALTY ORDERS ARE SUBJECT MATTER OF APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AN D THE COMMISSIONER OF INCOME TAX (APPEALS) BY ORDER DATED 1.11.2013 DELETED THE PENALTIES LEVIED UNDER SECTIO N 271(1)(C) OF THE ACT. IN SUCH CIRCUMSTANCES, SETTI NG ASIDE PENALTY ORDERS FOR RE-QUANTIFYING THE PENALTY TO BE LEVIED IS CLEARLY BEYOND THE PROVISIONS OF SECTION 263(1) OF THE ACT. IN THE CIRCUMSTANCES, WE SET ASIDE THE ORDERS OF COMMI SSIONER OF INCOME TAX PASSED UNDER SECTION 263 OF THE ACT F OR BOTH THESE ASSESSMENT YEARS. 5 ITA NOS. 1237 & 1238/MDS/2014 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 22 ND DAY OF AUGUST, 2014 AT CHENNAI. SD/- SD/- ( A.MOHAN ALANKAMONY ) ( CHALLA NAGEND RA PRASAD ) . ( ' )* ) ACCOUNTANT MEMBER / , JUDICIAL MEMBER/ ) , ) /CHENNAI, - /DATED, 22 ND AUGUST, 2014 SOMU /0 10 /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 2 () /CIT(A) 4. 2 /CIT 5. 0 6 /DR 6. /GF .