Indo Polycoats P. Ltd., New Delhi V. ACIT, New Delhi

ITA 1241/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61688 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 13-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Keywords: Retrospective amendment
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.1241/DEL/2012 ASSESSMENT YEAR :2003-04 INDO POLYCOATS P. LTD., ACIT, B-11/78, MOHAN CO-OP., INDL. AREA, CIRCLE-11 (1), BADARPUR, NEW DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GURJEET SINGH. RESPONDENT BY : SMT. ANUSHA KHURANA, SR. DR. (APPELLANT) (RESPONDENT) ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD CIT(A)-XV, NEW DELHI DATED 5,1.2012 FOR ASSESSMENT YEAR 2003-004. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- 1. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LA W SINCE HAVING DISMISSED APPEAL SUMMARILY, IN VIOLATION TO THE PROVISIONS OF SECTION 250(6) WITHOUT STATING THE ORDER DISPOSING SH ALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION WHEREAS THE PR AYER FOR ADJOURNMENT BY COUNSEL PERSONALLY AND ADJOURNMENT LET TER DATED 5.1.2012 BY SPEED POST NO.ED4363171341N STANDS OVER- LOOKED AND IGNORED. ITA NO../DEL/ 2 2. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LA W UPHOLDING THE LEVY OF PENALTY U/S 271(1)( C) BY ON T HE GROUND OF CASE SELECTED FOR SECURITY THE LEVY IS IN MANDATORY WIT HOUT EXAMINING THE QUESTION RAISED WHEREAS THE LEVY IS UNSUS TAINABLE IN ACCORDANCE WITH THE CBDT CIRCULAR NO.2 OF 2006 D ATED 17.1.2006. 3. BECAUSE THE ACTION IS UNDER CHALLENGE ON FACTS AND LAW SINCE THE IMPUGNED ORDER WITHOUT EXAMINING AND APPRECIATING T HE MATERIAL FACTS CONTAINING MATERIAL PARTICULARS FOR A DECISION IN ACCORDANCE WITH LAW. 4. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LA W FOR UPHOLDING THE LEVY OF PENALTY OF ` .403329/- WHICH IS ATTRIBUTABLE TO A HIGHLY DATABLE ISSUE WHEREIN EVEN THE VIRUS OF TH E PROVISIONS INSERTED BY THE TAXATION LAWS (AMENDMENT) ACT, 2005 W .E.F. 1.4.1988 ARE UNDER CHALLENGE AND WERE IN INTRODUCED AFTER RETURN FILING DATED 2.12.2003. PRAYER I) FOR A DECISION IN POURSUANCE TO THE RATIO OF CIT V. VIKAS CHEM GUM INDIA (2005) 276 ITR 32 (P&H), RELEVANT PG. 36, WOOL COMBER OF INDIA LTD. V. WOOLCOMBERS AIR 1973 SC 2758. II) FOR ANY CONSEQUENTIAL RELIEF AND OR LEGAL CLAIM ARISING OUT OF THIS APPEAL BEFORE THE DISPOSAL OF THE SAME AND FOR ANY A DDITION, DELETION, AMENDMENT AND MODIFICATION IN THE INTEREST OF SUBSTANTIAL JUSTICE.. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMP ANY FILED ITS RETURN OF INCOME ON 2.12.2003 DECLARING NIL INCO ME. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COM PLETED AT AN AMOUNT OF ` .17,54,140/- AFTER MAKING CERTAIN ADDITIONS. THE LD ITA NO../DEL/ 3 CIT(A) UPHELD THE ADDITIONS VIDE ORDER DATED 28.9.20 07. THE ASSESSEE THEN FILED APPEAL BEFORE ITAT AND THE TRIBUNAL VIDE ITS ORDER 19.11.2008 RESTORED THE MATTER TO THE FILE OF THE ASSE SSING OFFICER IN RESPECT OF FOLLOWING POINTS:- 1. WITH RESPECT TO VALIDITY OF RETROSPECTIVE AMENDMENT M ADE IN SECTION 80HHC BY TAXATION LAWS AMENDMENT ACT, 2005 W. E.F. 1.4.1998 IN VIEW OF THE FACT THAT MATTER WAS PENDING BEFORE VARIOUS COURTS. 2. WITH RESPECT TO INTEREST EARNED INCOME TO VERIFY IF A NY EXPENDITURE WAS INCURRED FOR EARNING INTEREST. 3. THE ASSESSING OFFICER THEN VIDE ORDER DATED 12.11.20 09 RECOMPUTED THE TAXABLE INCOME OF THE ASSESSEE AT THE SAM E FIGURE OF ` .17,54,140/- AS WAS COMPUTED VIDE ORIGINAL ORDER DATE D 27.1.2006. 4. SIMULTANEOUSLY PENALTY U/S 271(1)( C) OF THE ACT W AS INITIATED FOR CONCEALING AND FURNISHING INACCURATE PARTICULARS OF I NCOME. SHOW CAUSE NOTICE WAS ISSUED ON 28.4.2010 ASKING THE ASSESSEE TO EXPLAIN AS TO WHY AN ORDER IMPOSING A PENALTY SHOULD NOT BE PA SSED. IN RESPONSE THERETO, THE ASSESSEE FILED REPLY ONLY ON 7.5.20 10. HOWEVER, THE ASSESSING OFFICER DID NOT AGREE WITH THE CONTENTION S OF ASSESSEE AND IMPOSED PENALTY U/S 271(1)( C) OF THE ACT VIDE OR DER DATED 26.5.2010. 5. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LD CIT(A) . THE LD CIT(A) VIDE HIS ORDER DA6ED 5.1.2012 DISMISSED THE APPE AL OF THE ASSESSEE IN VIEW OF NON PROSECUTION BY THE ASSESSEE. THE REL EVANT PORTION OF CIT(A)S ORDER IS REPRODUCED BELOW:- ITA NO../DEL/ 4 NOTICE U/S 250 WAS ISSUED ON 11.11.2011 BY THIS OFFICE AND THE HEARING WAS FIXED FOR 8.12.2011. ON THE SAID DATE THE APPELLANTS COUNSEL APPEARED AND SOUGHT ADJOURNMENT ON THE GROUND S THAT THE MATTER BEING OLD THEY ARE IN THE PROCESS OF TRACI NG DOCUMENTS. THIS REQUEST OF THE APPELLANTS COUNSEL WAS AC CEDED AND THE HEARING WAS FIXED FOR 5.1.2012 AT 11.15 AM. ON THE SAID DATE NO SUBMISSIONS HAVE RECEIVED, HENCE I H OLD THAT APPELLANT HAS NOTHING TO SAY IN THE MATTER. ACCORDIN GLY, I UPHOLD THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND IN CON FIRMING THE PENALTY I WOULD LIKE TO MENTION THAT HON'BLE DE LHI HIGH COURT IN THE CASE OF ZOOM COMMUNICATIONS PVT. LTD. (2010) 327 ITR 510 (DEL.) HAVE CLEARLY STATED THAT IN THE PRESENT DA Y WHEN ONLY FRACTION OF CASES ARE PICKED UP FOR SCRUTINY, THE UNSC RUPULOUS ASSESSEE SHOULDNT GET AWAY BY MERELY PAYING THE TAX. 6. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THIS TRIB UNAL. 7. THE LD AR ARGUED BEFORE US THAT THE SUBJECT MATTER WHICH RESULTED INTO IMPOSITION OF PENALTY HAS NOT YET BEEN D ECIDED BY VARIOUS COURTS. THE PENALTY U/S 271(1)( C) SHOULD BE KEPT IN A BEYANCE. 8. THE LD DR HAD NO OBJECTION IF THE MATTER IS REMI TTED BACK. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE ARE OF THE OPINION THAT SINCE THE RETROSPECTIVE APPLICATION OF P ROVISO (IV) TO SECTION 80HHC IS STILL PENDING WITH VARIOUS COURTS, THE PENALTY ISSUE ARISING OUT OF NON IMPLEMENTATION OF THIS SECTION CANN OT BE IMPOSED TILL THE FINAL DECISION OF COURT RELATING TO APPLICABILIT Y OF PROVISO (IV) TO ITA NO../DEL/ 5 SECTION 80HHC. IN VIEW OF THE APPEAL, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. ORDER PRONOUNCED IN THE OPEN COURT ON THE IST DA Y OF JUNE, 2012. SD/- SD/- (R.P. TOLANI) (T.S. KAP OOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 1.6.2012. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 14.5.2012 DATE OF DICTATION 30.5.2012 DATE OF TYPING 31.5.2012 DATE OF ORDER SIGNED BY 1.6.2012 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER SENT TO THE BENCH CONCERNED. 1.6.2012