M/s. VAMA APPARELS (I) P. LTD., MUMBAI V. THE ACIT 5(3), MUMBAI

ITA 1351/MUM/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8312 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 16-12-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 25-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Opportunity of being heard
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI D.K. AGARWAL (J.M.) AND SHRI J. SUDHAKA R REDDY (A.M.) ITA NO. 1351/MUM /2008 ASSESSMENT YEAR : 2001-02 M/S VAMA APPARELS (INDIA) PVT. LTD., KANCHANJUNGA, 72 PEDDAR ROAD, MUMBAI 400 031. PAN : AAACV 3456 A VS. ASST. COMMISSIONER OF INCOME TAX, RANGE 5(3), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : SMT. ASHIMA GUPTA O R D E R PER D.K. AGARWAL, J.M. THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 27.12.2007 PASSED BY THE LD. CIT (A) FOR THE A.Y 2001-02. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING IN READYMADE GAR MENTS AND OTHER ITEMS. THE RETURN WAS FILED DECLARING AN INCOME OF ` 32,98,820/-. HOWEVER, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF ` 4,91,00,416/- INCLUDING ADDITIONAL INCOME DISCLOSED AS PER THE ST ATEMENT OF THE DIRECTOR ` 90,00,000/-, UNACCOUNTED RENT AND SERVICE CHARGES ` 90,68,011/- AND ADDITION ON ACCOUNT OF G.P. ` 2,77,33,585/- VIDE ORDER DATED 30.03.2004 ITA NO.1351/ MUM/2008 M/S VAMA APPARELS (IN DIA) PVT. LTD. 2 PASSED U/S 143(3) OF THE I.T. ACT, 1961 (THE ACT). ON APPEAL, THE LD. CIT(A) HAS DELETED THE ADDITION MADE BY THE A.O. ON ACCOUN T OF ADDITIONAL INCOME DISCLOSED AT ` 90,00,000/- AND CONFIRMED THE ADDITIONS MADE ON ACCOUNT OF UNACCOUNTED RENT AND SERVICE CHARGES AT ` 90,68,011/- AND ON ACCOUNT OF G.P. AT ` 2,77,33,585/-. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE A.O. ALSO INITIATED PENALTY PROCEED ING U/S 271(1)(C) OF THE ACT. ACCORDINGLY, THE A.O. ISSUED NOTICE TO SHOW C AUSE AS TO WHY PENALTY U/S 271(1)(C) SHOULD NOT BE IMPOSED. IN THE ABSENC E OF ANY EXPLANATION, THE A.O. AFTER CONSIDERING THE ORDER PASSED BY THE LD. CIT(A) IN QUANTUM APPEAL HELD THAT THE ASSESSEE HAS DELIBERATELY AND WILFULLY CONCEALED ITS TRUE AND CORRECT INCOME IN VIEW OF EXPLANATION 1 OF SECTION 271(1)(C) AND ACCORDINGLY IMPOSED A PENALTY OF ` 1,45,55,032/- VIDE ORDER DATED 31.3.06 PASSED U/S 271(1)(C) OF THE ACT. ON APPEAL , THE LD. CIT(A) PROVIDED VARIOUS OPPORTUNITIES TO THE ASSESSEE, HOW EVER, IN THE ABSENCE OF ANY COMPLIANCE, CONFIRMED THE PENALTY IMPOSED BY THE A.O. AND DISMISSED THE APPEAL VIDE EX PARTE ORDER DATED 27.1 2.07. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE VALIDITY OF THE ORDER PASSED BY THE LD. CIT(A) WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND SUSTENANCE OF PENALTY IMP OSED BY THE A.O. ITA NO.1351/ MUM/2008 M/S VAMA APPARELS (IN DIA) PVT. LTD. 3 4. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT IN THIS CASE, IN THE QUANTUM APPEAL FI LED BY THE ASSESSEE BEFORE THE TRIBUNAL, THE TRIBUNAL HAS PASSED ORDER AGAINST WHICH THE ASSESSEE HAS FILED MISC. APPLICATIONS. THE TRIBUNAL AFTER CONSIDERING THE SAME HAS PASSED THREE ORDERS U/S 254(2) DTD. 3.1.07 , 29.8.08 & 9.1.09 APPEARING AT PAGE 23 TO 139 OF THE ASSESSEES PAPER BOOK. HE FURTHER SUBMITS THAT, ON FURTHER APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT, THE HONBLE JURISDICTIONAL HIGH COURT HAS SE T ASIDE ALL THE ORDERS PASSED BY THE TRIBUNAL INCLUDING THE ORIGINAL ASSES SMENT ORDER PASSED BY THE A.O. AND DIRECTED THE A.O. TO PASS FRESH ORD ER IN ACCORDANCE WITH LAW. IN THE LIGHT OF THE ABOVE HE SUBMITS THAT SIN CE THE ASSESSMENT HAS BEEN SET ASIDE TO THE FILE OF THE A.O., THEREFORE, THERE IS NO CONCEALMENT ON THE PART OF THE ASSESSEE AND, THEREFORE, THE PEN ALTY IMPOSED BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) BE DELETED. 5. ON THE OTHER HAND, THE LD. D.R. SUPPORTS THE ORD ER OF THE A.O. AND THE LD. CIT(A). 6. AFTER CAREFULLY HEARING THE RIVAL PARTIES AND PE RUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE FACTS ARE NOT IN DISPUTE IN AS MUCH AS IT IS ALSO NOT IN DISPUTE THAT THE HONBLE JURIS DICTIONAL HIGH COURT IN INCOME TAX APPEAL NO. 215 OF 2006 WITH INCOME TAX A PPEAL NO. 216 OF ITA NO.1351/ MUM/2008 M/S VAMA APPARELS (IN DIA) PVT. LTD. 4 2006 IN M/S VAMA APPARELS (INDIA) P. LTD. V/S C.I.T . & ANR. VIDE JUDGMENT DATED 15 TH NOVEMBER, 2010 HAS HELD AS UNDER:- ............AFTER THE MATTER WAS ARGUED FOR SOME TI ME, COUNSEL ON BOTH THE SIDES AGREED THAT IT WILL BE IN THE INTEREST OF JUS TICE TO SET ASIDE ALL THE ORDERS PASSED BY THE TRIBUNAL, INCLUDING THE ORIGIN AL ASSESSMENT ORDERS AND ORDERS OF THE ASSESSING OFFICER DATED 27/10/200 9 AND DIRECT THE ASSESSING OFFICER TO PASS FRESH ORDERS IN ACCORDANC E WITH LAW. ACCORDINGLY, THE ORIGINAL ASSESSMENT ORDERS AS WELL AS THE ORDERS PASSED BY THE TRIBUNAL AND THE ORDERS PASSED BY THE ASSESS ING OFFICER ON 27/10/2009 ARE QUASHED AND SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO PASS FRESH ASSESSM ENT ORDERS IN ACCORDANCE WITH LAW ON ALL THE ISSUES AS THE ASSESS ING OFFICER DEEMS IT RELEVANT. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HO NBLE JURISDICTIONAL HIGH COURT (SUPRA), WE ARE OF THE VIEW THAT SINCE T HE ORIGINAL ASSESSMENT ORDER AS WELL AS ORDERS PASSED BY THE TRIBUNAL HAVE BEEN QUASHED AND RESTORED TO THE FILE OF THE A.O. TO PASS FRESH ASSE SSMENT ORDER IN ACCORDANCE WITH LAW, VIRTUALLY THE BASIS FOR IMPOSI TION AND LEVY OF PENALTY U/S 271(1)(C) IS NOT AVAILABLE. WHEN, SUCH IS THE POSITION, THE IMPOSITION OF PENALTY IS NOT IN ACCORDANCE WITH LAW, HENCE, TH E PENALTY IMPOSED BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) IS DELETED . GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, ALLOWED. 7. IN THE RESULT, ASSESSEES APPEALS STANDS ALLOWED . ORDER PRONOUNCED ON THIS 9 TH OF MARCH, 2011. SD/- (J. SUDHAKAR REDDY) ACCOUNTANT MEMBER SD/- (D.K. AGARWAL) JUDICIAL MEMBER MUMBAI, DATED 9 TH MARCH, 2011. ITA NO.1351/ MUM/2008 M/S VAMA APPARELS (IN DIA) PVT. LTD. 5 RK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- 16, MUMBA I 4. COMMISSIONER OF INCOME TAX, VIII, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH F, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.1351/ MUM/2008 M/S VAMA APPARELS (IN DIA) PVT. LTD. 6 1 DRAFT DICTATED ON 2 .3.11 , SR PS 2 D RAFT PLACED BEFORE AUTHOR ON 3.3.11 SR PS 3 DRAFT PROPOSED & PLACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR PS 7 FILE SENT TO THE BENCH CLERK SR PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DESPATCH SR PS