M/s Friends Filling Station, Ludhiana V. ITO, Ludhiana

ITA 136/CHANDI/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86189 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-02-2015
• Assessment Year: 1999-2000
• Appeal Filed On: 03-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Section: 142(1); 27; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 136 & 137/CHD/2012 ASSESSMENT YEAR: 1999-2000 M/S FRIENDS FILLING STATION, VS THE ITO, G.T.ROAD, WARD III (2), SAHNEWAL, LUDHIANA. DISTT. LUDHIANA. PAN: AAAFF7726L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMA R RESPONDENT BY : DR. AMARVEER SINGH DATE OF HEARING : 03.02.2015 DATE OF PRONOUNCEMENT : 06.02.2015 O R D E R PER BHAVNESH SAINI,JM THIS ORDER SHALL DISPOSE OF BOTH THE APPEALS FILED BY THE SAME ASSESSEE CHALLENGING THE LEVY OF PENALTY UNDER DIFF ERENT PROVISIONS. 2. IN ITA NO. 136/CHD/2012, ASSESSEE CHALLENGED THE LEVY OF PENALTY UNDER SECTION 271(1)(B) OF THE INCOME TAX A CT FOR ASSESSMENT YEAR 1999-2000 BY CHALLENGING THE ORDER OF LD. CIT(APPEALS)-II LUDHIANA DATED 16.12.2011. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER IN PENALTY ORDER NOTED THAT THE CASE WAS REOPENED U NDER SECTION 148 OF THE ACT. NO RETURN WAS FILED IN RESPONSE TO THE SAID NOTICE. THE NOTICES UNDER SECTION 142(1) AND 143(2 ) OF THE ACT WERE ISSUED AND DULY SERVED UPON THE ASSESSEE THROU GH SPEED POST BUT THERE WERE NO RESPONSE TO THESE NOTICES AN D EVEN NO PROCEEDINGS HAVE BEEN ATTENDED BEFORE ASSESSING OFF ICER. 2 FURTHER OPPORTUNITIES WERE GIVEN BUT AGAIN NOBODY A TTENDED. THE ASSESSING OFFICER, THEREFORE, PASSED EX-PARTE A SSESSMENT ORDER UNDER SECTION 144 OF THE ACT AND PENALTY NOTI CE UNDER SECTION 271(1)(B) OF THE ACT WAS ALSO ISSUED TO SHO W CAUSE TO WHY NO COMPLIANCE OF THE NOTICE ISSUED UNDER SECTIO N 142(1) OF THE INCOME TAX ACT FROM TIME TO TIME, PENALTY BE NO T IMPOSED. IN RESPONSE TO SHOW CAUSE NOTICE ALSO, NOBODY ATTENDED PROCEEDINGS BEFORE ASSESSING OFFICER. FURTHER OPPO RTUNITY WAS ALSO GIVEN AT THE PENALTY STAGE AND THEN, COUNSEL F OR THE ASSESSEE APPEARED AND STATED THAT ASSESSEE FIRM HAS NOT RECEIVED THE ASSESSMENT ORDER. THE COUNSEL FOR ASS ESSEE WAS DULY SHOWN THE DEMAND NOTICE DULY SERVED UPON SHRI ANIL JAIN, PARTNER OF THE ASSESSEE FIRM ON 31.12.2007 ALONGWIT H ASSESSMENT ORDER AND VIDE ORDER-SHEET DATED 23.06.2 008 WAS REQUESTED TO FURNISH REPLY TO THE PENALTY NOTICE. THE LD. COUNSEL FOR THE ASSESSEE LATER ON NARRATED A DIFFERENT STOR Y. IT WAS CONTENDED THAT THE ASSESSEE FIRM ON WHICH THE NOTIC E WAS SERVED IS A FIRM WITH DIFFERENT CONSTITUTION AND PAN AND N OTICE SERVED WAS NOT VALID. THE ASSESSING OFFICER, IN ORDER TO FIND OUT THE FACTS HAVE GONE THROUGH THE RECORDS AND NOTICES THA T SHRI ANIL KUMAR JAIN ALONGWITH SMT. REKHA SHARMA CONSTITUTED A FIRM UNDER THE NAME AND STYLE OF M/S FRIENDS FILLING STA TION AT VILLAGE NANDPUR, SAHNEWAL, LUDHIANA. AS PER AFFIDA VIT EXECUTED BY SHRI ANIL JAIN ON 05.05.2000, THE BUILDING STRUC TURE AND EQUIPMENTS WERE HANDED OVER TO SHRI BHAGWAN DASS GU PTA FOR RUNNING THE SAID PETROL PUMP WITHOUT ANY CONSIDERAT ION. SHRI BHAGWAN DASS ALONGWITH HIS WIFE SMT. SUSHILA GUPTA CONSTITUTED ANOTHER FIRM UNDER THE SAME NAME AND ST YLE AT THE 3 SAME PREMISES. THERE IS NO MENTION OF DISSOLUTION OF EARLIER FIRM CONSTITUTED BY SHRI ANIL KUMAR JAIN OR MENTION OF ANY CONSIDERATION FOR HANDING OVER OF BUILDING AND EQUI PMENTS TO SHRI BHAGWAN DASS. THE NOTICE WAS SERVED AT THE LAS T KNOWN ADDRESS AND WAS, THEREFORE HELD TO BE VALID SERVICE . THE ASSESSING OFFICER, THEREFORE, FOUND THAT SINCE THE STATUTORY NOTICES WERE NOT COMPLIED WITH, THEREFORE ASSESSEE WAS LIABLE FOR PENALTY UNDER SECTION 271(1)(B) OF THE ACT AND LEVI ED THE PENALTY OF RS. 10,000/-. 4. THE LD. CIT(APPEALS) CONFIRMED THE LEVY OF PENAL TY FOR FAILING TO COMPLY WITH THE STATUTORY NOTICES AT THE ASSESSMENT STAGE. 5. IN ITA 137/CHD/2012, ASSESSEE CHALLENGED THE ORD ER OF THE LD. CIT(APPEALS)-II LUDHIANA DATED 19.12.2011 FOR A SSESSMENT YEAR 1999-2000 CHALLENGING THE LEVY OF PENALTY UNDE R SECTION 271(1)(C) OF THE ACT. 6. BRIEFLY THE FACTS OF THE CASE ARE THAT DURING SE ARCH OPERATION AT BUSINESS PREMISES OF M/S STEAMLINE ENT ERPRISES, SOME DOCUMENTS PERTAINING TO THE ASSESSEE FIRM WERE SEIZED. THE ASSESSING OFFICER REVEALED FROM THESE DOCUMENTS THAT ASSESSEE FIRM SOLD GOODS AMOUNTING TO RS. 5,17,516/ - TO THE SAID FIRM. THE ASSESSMENT WAS MADE EX-PARTE. DURI NG PENALTY PROCEEDINGS ALSO, THE ASSESSEE DID NOT FILE ANY SUB MISSION. AS IS NOTED ABOVE IN THE OTHER PENALTY APPEAL, THE ASS ESSEE'S COUNSEL TAKEN THE SAME PLEA OF HAVING A DIFFERENT A SSESSEE. THE ASSESSING OFFICER IN THE PENALTY ORDER, REITERATED THE FACTS ALREADY NOTED IN THE PENALTY ORDER UNDER SECTION 27 1(1)(B) OF THE 4 ACT AND LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT BECAUSE ASSESSEE DID NOT COMPLY WITH THE NOTICE AND NO EXPLANATION IS FILED, THEREFORE, ASSESSEE WAS FOUND TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AND ACCO RDINGLY LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE A CT. THE LD. CIT(APPEALS) ALSO CONFIRMED THE LEVY OF THE PENALTY . 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND REFERRED TO DEED OF PARTNERSHIP DATED 04.04.2000 BETWEEN SHR I BHAGWAN DASS GUPTA AND SMT. SHEELA GUPTA IN RESPECT OF THE FIRM M/S FRIENDS FILLING STATION (PB-5) AND SUBMITTED THAT A SSESSEE FIRM ALSO APPLIED FOR NEW PAN NUMBER (PB- 8) AND DIFFERE NT PAN NUMBER WAS NOTED IN THE NOTICE UNDER SECTION 148 OF THE ACT. HE HAS, THEREFORE, SUBMITTED THAT ASSESSEE FIRM IN APPEAL IS NOT THE FIRM ON WHICH THE PENALTY IS TO BE LEVIED BECAU SE IT IS A DIFFERENT ENTITY. 8. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW AND REFERRED TO SELLING LICENSE D ATED 01.07.1981 ISSUED BY BHARAT PETROLEUM CORPORATION L TD. AND M/S FRIENDS FILLING STATION AT NANDPUR HAVING PARTN ERS SHRI KAILASH SHARMA AND RS. REKHA SHARMA (PB- 1). PB-2 IS THE LETTER DATED 17.09.2007 FILED BY SHRI ANIL JAIN, EX -PARTNER OF ASSESSEE FIRM ADDRESSED TO ITO, WARD-5, LUDHIANA IN RESPONSE TO THE NOTICE ISSUED FOR ASSESSMENT UNDER APPEAL I. E. 1999-2000 CLAIMING THAT ASSESSEE FIRM IS CLOSED ON 14.05.1998 . THE LD. DR BY REFERRING TO THE AFFIDAVIT OF SHRI ANIL JAIN (PB - 3) DATED 5 05.05.2000 SUBMITTED THAT IN THE SAME AFFIDAVIT, HE HAS CLAIMED THAT HE REMAINED PARTNER IN THE ASSESSEE FIRM TILL 31.02.2000. THE LD. DR ALSO REFERRED TO THE SELLING LICENSE DAT ED 10.04.2000 WHICH IS ISSUED BY BHARAT PETROLEUM CORPORATION LTD . IN FAVOUR OF THE ASSESSEE FIRM M/S FRIENDS FILLING STATION, N ANDPUR HAVING PARTNERS SHRI BHAGWAN DASS GUPTA AND SMT. REKHA SHA RMA. THE LD. DR ALSO REFERRED TO PB-5 WHICH IS REGISTER OF FIRMS SHOWING ASSESSEE FIRM AND SHRI BHAGWAN DASS AND SMT . REKHA SHARMA AS PARTNERS. PB-6 IS THE LETTER ADDRESSED T O THE ASSESSING OFFICER CLAIMING THAT DIFFERENT FIRM IS C ONSTITUTED IN A NEW PAN NUMBER. THE LD. DR BY REFERRING TO THESE D OCUMENTS SUBMITTED THAT THE PARTNERS OF THE ASSESSEE FIRM HA VE BEEN PLAYING FRAUD WITH THE REVENUE AUTHORITY AND CHANGI NG THE STAND TIME TO TIME. HOWEVER, IN FACT THE ASSESSEE FIRM I S SAME WHICH EXIST EARLIER AND THEREFORE, NO NEW FIRM IS EXISTED MERELY BECAUSE SAME PARTNERS HAVE CHANGED WITHOUT ANY DISS OLUTION OF THE ASSESSEE FIRM WOULD PROVE THAT THE SAME FIRM IS CONTINUING WITH THE SAME BUSINESS AT THE SAME PLACE AND SINCE NO NOTICES HAVE BEEN COMPLIED WITH, THEREFORE LEVY OF PENALTY MAY BE CONFIRMED. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSING OFFICER FOUND FROM THE RECORD THAT SHRI ANIL KUMAR JAIN ALONGWITH SMT. REKHA SHARMA CONSTITUTED A FIRM UNDE R THE NAME AND STYLE OF M/S FRIENDS FILLING STATION AT VI LLAGE NANDPUR, SAHNEWAL, LUDHIANA. THE ASSESSMENT ORDER UNDER APPEAL IS 1999-2000. EARLIER SELLING LICENSE WAS G RANTED IN THE NAME OF THE ASSESSEE FIRM THROUGH THE PARTNER SHRI KAILASH 6 SHARMA AND SMT. REKHA SHARMA. SHRI ANIL JAIN FILED A LETTER BEFORE ASSESSING OFFICER IN CONNECTION WITH THE ASS ESSMENT PROCEEDINGS UNDER APPEAL (PB- 2) IN WHICH HE HAS CL AIMED THAT HE WAS A PARTNER IN THE ASSESSEE FIRM WHICH WAS CLO SED ON 14.05.1998. HOWEVER, HIS AFFIDAVIT DATED 05.05.200 0 DISCLOSES THAT HE REMAINED PARTNER IN THE ASSESSEE FIRM TILL 31.02.2000. HE HAS HANDED OVER AND TRANSFERRED THE BUSINESS OF THE ASSESSEE FIRM TO ONE SHRI BHAGWAN DASS. IT WOULD, THEREFORE , SHOW THAT ASSESSEE FIRM WAS CONTINUING LEGALLY WITHOUT DISSOL UTION OF THE ASSESSEE FIRM. NO DISSOLUTION DEED IS BROUGHT ON R ECORD TO PROVE IF ASSESSEE FIRM, AT ANY POINT OF TIME WAS DI SSOLVED. 10. IT APPEARS FROM THE RECORD PRODUCED BEFORE US T HAT CERTAIN PERSONS HAVE BEEN CLAIMING TO BE PARTNER IN THE ASS ESSEE FIRM AT DIFFERENT PERIODS WITHOUT HAVING ANY DISSOLUTION OF THE ASSESSEE FIRM IN PAST. IT IS A FACT THAT THE ORIGINAL PARTN ER SMT. REKHA SHARMA CONTINUED AS PARTNER IN THE ASSESSEE FIRM EV EN TILL DATE. THE ASSESSEE HAS NOW PRODUCED A DEED OF PARTNERSHIP DATED 04.04.2000 BETWEEN SHRI BHAGWAN DASS GUPTA AND SMT. SUSHILA GUPTA AND (PB- 5) IN WHICH IN PARA 2, IT IS CLEARLY STATED THAT THE PRINCIPAL PLACE OF ASSESSEE'S FIRM SHALL BE VIL LAGE NANDPUR, SAHNEWAL, LUDHIANA AND THE PLACE CANNOT BE EXTENDED TO ANY OTHER PLACE WITHOUT FORMAL APPROVAL OF THE CORPORAT ION IN WRITING. AS PER SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE, IF THERE IS ANY NEW FIRM EXISTED, THERE SHOULD HAVE BE EN A CHANGE IN THE PLACE OF THE ASSESSEE FIRM BUT IT IS NOT SO. THE ASSESSEE FIRM IS CONTINUING TO DO THE BUSINESS IN THE SAME N AME AND STYLE AND SAME BUSINESS ACTIVITY AND IS CONTINUING AT THE SAME PLACE. THEREFORE, THERE IS NO QUESTION OF EXISTENCE OF ANY NEW FIRM 7 CREATED AT ANY POINT OF TIME AS IS ARGUED BY LD. CO UNSEL FOR THE ASSESSEE. SINCE THERE IS NO DISSOLUTION OF THE ASSE SSEE FIRM AND EVEN AS PER AFFIDAVIT OF SHRI ANIL JAIN DATED 05.05 .2000, HE CONTINUED TO REMAIN PARTNER IN THE ASSESSEE FIRM UP TO 31.02.2000 WOULD PROVE THAT THE ASSESSEE FIRM CONTI NUOUSLY EXISTED IN THE ASSESSMENT YEAR UNDER APPEAL I.E. 19 99-2000 WITH THE SAME PARTNER SHRI ANIL KUMAR JAIN ALONGWITH SMT . REKHA SHARMA. THE DEMAND NOTICE ALONGWITH ASSESSMENT ORD ER WAS ALSO SERVED UPON SHRI ANIL JAIN, PARTNER OF THE ASS ESSEE FIRM AND NOTICE FOR HEARING OF THE PENALTY MATTER WAS ALSO S ERVED UPON THE SAME ASSESSEE FIRM AND THE COUNSEL FOR ASSESSEE ALSO APPEARED BEFORE ASSESSING OFFICER WITHOUT EXPLAININ G ANYTHING ON MERITS. THESE FACTS WOULD CLEARLY PROVE THAT CO NTENTION OF LD. COUNSEL FOR THE ASSESSEE HAS NO FORCE THAT A NEW FI RM CAME INTO EXISTENCE. HIS ARGUMENT IS, THEREFORE, REJECTED. WHATEVER CONTENTIONS WERE RAISED FOR CREATING TWO ENTITIES, HAVE NO RELEVANCE TO THE MATTER IN ISSUE AND IS WHOLLY CONC OCTED STORY MADE UP TO AVOID LEVY OF PENALTY. WE FAIL TO UNDER STAND IF A NEW FIRM IS CREATED AS PER SUBMISSION OF LD. COUNSEL FO R THE ASSESSEE, WHAT WAS THE NEED FOR SHRI BHAGWAN DASS GUPTA TO FI LE THESE APPEALS ON BEHALF OF THE ASSESSEE FIRM BEFORE THE T RIBUNAL AS WELL AS BEFORE LD. CIT(APPEALS). CONSIDERING THE T OTALITY OF THE FACTS AND CIRCUMSTANCES, THE CONTENTION RAISED BY L D. COUNSEL FOR THE ASSESSEE IS DEVOID OF MERIT AND ACCORDINGLY REJ ECTED. 11. MERELY BECAUSE THE SAME PERSONS HAVE APPLIED FO R NEW PAN NUMBER, WOULD NOT ABSOLVE THE ASSESSEE FROM LEVY OF PENALTY. THESE FACTS SHOULD HAVE BEEN TAKEN CARE BY THE ASSE SSING OFFICER WHILE FRAMING ASSESSMENTS OR THE LEVY OF PENALTY IN THE MATTER. 8 THEREFORE, IT IS CLEAR THAT THERE WERE NO COMPLIANC E TO THE STATUTORY NOTICES AT ANY POINT OF TIME. EVEN THE P ENALTY NOTICES REMAINED UN-COMPLIED WITH. THEREFORE, ASSESSEE HAS NO EXPLANATION WHAT-SO-EVER TO EXPLAIN THE SHOW CAUSE NOTICE ISSUED FOR LEVY OF THE PENALTY. IT IS WELL SETTLED LAW THAT WHEN NO EXPLANATION IS MADE AT THE PENALTY STAGE, LEVY OF T HE PENALTY WOULD BE JUSTIFIED. WE RELY UPON DECISION OF THE M ADHYA PRADESH HIGH COURT IN THE CASE OF VIMAL GINNING & P RESSING FACTORY V CIT 279 ITR 100 AND RUKMINI BAI V CIT 276 ITR 650 AND DECISION OF THE DELHI HIGH COURT IN THE CASE OF KAMAL CHAND JAIN V ITO 277 ITR 429. 12. CONSIDERING THE ABOVE DISCUSSION, WE DO NOT FIN D ANY MERIT IN BOTH THE APPEALS OF THE ASSESSEE AND SAME ARE AC CORDINGLY, DISMISSED. 13. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH FEBRUARY,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH FEBRUARY,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH