ACIT 10(1), MUMBAI V. INDIAN OIL CORPORATION LTD, MUMBAI

ITA 1360/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8371 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 27-11-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 18-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Assessee Lawyers: K K VED
• Keywords: Revised return
• Section: 143(3); 115JB; 11

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,M UMBAI - I BENCH. , , BEFORE S/SH. RAJENDRA, ACCOUNTANT MEMB ER & VIVEK VARMA, JUDICIAL MEMBER /. ITA NO.1360/MUM/2013, ! ! ! ! ' ' ' ' / ASSESSMENT YEAR-2001-02 DCIT 10(1), 455, 4TH FLOOR, AAYAKAR BHAVAN, M.K.MARG, MUMBAI -400020 V/S. M/S INDIAL OIL CORPORATION LTD. G-9 INDIAN OIL BHAVAN, ALI YAVAR JUNG MARG, BANDRA(E), MUMBAI-400051. # # # # . . . /PAN:AAACI1681G ( #$ / APPELLANT) ( %&#$ / RESPONDENT) ' ( / REVENUE BY : SHRI KISHAN VYAS !)* !)* !)* !)* ( ( ( ( / ASSESSEE BY : SHRI K.K.VED ! ! ! ! ' '' ' *+ *+ *+ *+ / DATE OF HEARING : 27-11-2014 ,-' ' *+ / DATE OF PRONOUNCEMENT : 27-11-2014 ! ! ! ! , 1961 ' '' ' 254 )1 ( *.* *.* *.* *.* / / / / ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM ! ! ! ! : CHALLENGING THE ORDER DATED 15.11.2012 OF THE CIT(A )-21,MUMBAI THE ASSESSING OFFICER (AO) HAS FILED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A)'S ERRED IN DELETING THE PENALTY U/S. 271(1)(C) WHICH WAS LEVIE D ON ACCOUNT OF UNEXPLAINED ADDITION TO THE TOTAL INCOME BY A.O. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A)'S ON THE ABOVE GROUND BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, VARY, OMI T OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF APPEAL. BRIEF FACTS: 2. ASSESSEE HAD FILED ORIGINAL RETURN OF INCOME ON 31 .10.2001 DECLARING TOTAL INCOME OF RS.134, 99, 48,724 UNDER THE NORMAL PROVISIONS AND RS.2835, 47,06, 132/ - UNDER SECTION 115JB OF THE ACT. LATER ON IT FILED A REVISED RETURN ON 02.11.2001. I N THE REVISED RETURN OF INCOME, THE APPELLANT DECLARED THE SAME INCOME AS DECLARED IN THE ORIGINA L RETURN.ON 28.03.2008 SECOND REVISED RETURN OF INCOME,DECLARING THE SAME INCOME AS ORIGINAL RET URN WAS FILED.THE RETURN WAS REVISED TO CLAIM FURTHER CREDIT FOR TDS OF RS.11,03,160/-.IN THE ASS ESSMENT ORDER DTD.26.03.2004 PASSED UNDER SECTION 143(3) OF THE ACT, THE AO ASSESSED ASSESSEE 'S INCOME AT RS.3,81,11,25,059/- UNDER THEN NORMAL PROVISIONS OF THE ACT AND AT RS.28,50,32,06, 132/- U/S.115JB OF THE ACT.THE AO SUBSEQUENTLY REOPENED THE ASSESSMENT AND PASSED AN ORDER DTD.24.11.2008 U/S.143(3)(II) R.W.S. 147 AND MADE ADDITION FOR INTEREST ON INCOME TAX RE FUND OF RS.11. 78 CRORES TO THE TOTAL INCOME UNDER THE NORMAL PROVISIONS OF THE ACT. SINCE TAX P AYABLE ON THE BOOK PROFIT COMPUTED UNDER THE PROVISIONS OF SEC.115JB WAS MORE THAN THE TAX PAYAB LE ON THE TOTAL INCOME COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT, THE AO CONSIDERED BOO K PROFIT AS THE TOTAL INCOME OF THE ASSESSEE. THE INCOME ASSESSED AS PER THE PROVISIONS OF SECTIO N 115JB WAS THE SAME AS DECLARED BY THE APPELLANT IN THE RETURN.THE ASSESSEE PREFRRRED AN A PPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA) AGAINST THE ASSESSMENT ORDER DTD.24.11.20 11 PASSED U/S.143(3) R.W.S.147 OF THE ACT. 3. MEANWHILE THE AO PASSED AN ORDER,DTD.30.11.2012,U/S . 271(1)(C) OF THE ACT WHEREIN A PENALTY OF RS.4,65,69,751/- WAS LEVIED FOR FURNISHING INACC URATE PARTICULARS OF INCOME.THE ASSESSEE 2 ITA NO. 1360/M/2013 M/S INDIAN OIL CORPORATION LTD. CHALLENGED THE PENALTY ORDER BEFORE THE FAA.IT WAS ARGUED BEFORE THE FAA THAT THE AO HAD PASSED AN ORDER DT. 26.02.2001 THE A.Y.1994-95, THA T PURSUANT TO THE SAID ORDER,HE DETERMINED A REFUND OF RS.42,97,69,793/- PAYABLE TO THE ASSESSEE , THAT REFUND INCLUDED TAX REFUND OF RS.31, 20, 20,740/- AND INTEREST,U/S.244A,OF RS.11,77,49,053/- , THAT THE AO HAD REOPENED THE ASSESSMENT FOR THE A.Y.2001-02 TO INCLUDE THE AFORESAID INTEREST U /S.244A OF RS.11,77,49,053/- IN ASSESSEE'S TOTAL INCOME COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT,THAT TAX PAYABLE ON THE BOOK PROFIT COMPUTED UNDER THE PROVISIONS OF SEC.115JB OF THE A CT WAS MORE THAN THE TAX PAYABLE ON THE INCOME COMPUTED UNDER THE NORMAL PROVISIONS, THAT H E ASSESSED BOOK PROFIT AS THE TOTAL INCOME OF THE ASSESSEE,THAT BOOK PROFIT WAS SAME AS INCOME DE CLARED IN THE RETURN,THAT NO INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT,THAT PENALTY U/S.271( 1)(C) COULD NOT BE LEVIED. 4. FAA,AFTER CONSIDERING THE ASSESSMENT ORDER,PENALTY ORDER AND THE SUBMISSIONS OF THE ASSESSEE,HELD THAT ISSUE BEFORE HER WAS WHETHER PE NALTY COULD BE LEVIED UNDER NORMAL PROVISIONS WHEN THE ASSESSEE WAS ASSESSED UNDER MAT PROVISIONS .THE FAA RELYING UPON THE CASES OF SHANTIVIJAY JEWLES LTD.(ITA/ 7485/MUM/2010),WIMCO S EEDLING LTD.(114TTJ 986),RUCHI STRIPS & ALLOYS LTD.(6940/MUM/ 2008),HELD THAT NO PENALTY CO ULD HAVE BEEN IMPOSED ON THE ASSESSEE,THAT THERE WAS NO TAX SOUGHT TO BE EVADED,THAT ULTIMATEL Y TOTAL INCOME OF THE ASSESSEE WAS DETERMINED ON THE BASIS OF BOOK PROFITS U/S.115 JB OF THE ACT. FINALLY,THE FAA DELETED THE PENALTY IMPOSED BY THE AO. 5. DEPARTMENTAL REPRESENTATIVE(DR)LEFT THE ISSUE TO TH E DISCRETION OF THE BENCH.AUTHORISED REPRESENTATIVE(AR) SUPPORTED THE ORDER OF THE FAA.W E HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL.WE FIND THAT THE ISSUE OF LEVY OF PENALTY IN MAT MATTERS HAD BEEN DECIDED BY THE HONBLE DELHI HIGH COURT,IN THE CASE OF NALW A SONS INVESTMENTS LTD.(327 ITR 543),IN FOLLOWING MANNER: UNDER THE SCHEME OF THE INCOME-TAX ACT, 1961, THE T OTAL INCOME OF THE ASSESSEE IS FIRST COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT AND TAX PAYA BLE ON SUCH TOTAL INCOME IS COMPARED WITH THE PRESCRIBED PERCENTAGE OF THE BOOK PROFITS COMPUTED UNDER SECTION 115JB OF THE ACT. THE HIGHER OF THE TWO AMOUNTS IS REGARDED AS TOTAL INCOME AND TAX IS PAYABLE WITH REFERENCE TO SUCH TOTAL INCOME. IF THE TAX PAYABLE UNDER THE NORMAL PROVISI ONS IS HIGHER, SUCH AMOUNT IS THE TOTAL INCOME OF THE ASSESSEE, OTHERWISE, THE BOOK PROFITS ARE DE EMED AS THE TOTAL INCOME OF THE ASSESSEE IN TERMS OF SECTION 115JB OF THE ACT. WHERE THE INCOME COMPU TED IN ACCORDANCE WITH THE NORMAL PROCEDURE IS LESS THAN THE INCOME DETERMINED BY LEGAL FICTION , NAMELY, THE BOOK PROFITS UNDER SECTION 115JB OF THE ACT AND THE INCOME OF THE ASSESSEE IS ASSESSED UNDER SECTION 115JB AND NOT UNDER THE NORMAL PROVISIONS, THE TAX IS PAID ON THE INCOME ASSESSED UNDER SECTION 115JB OF THE ACT. CONCEALMENT OF INCOME WOULD HAVE NO ROLE TO PLAY AND WOULD NOT LEA D TO TAX EVASION. THEREFORE, PENALTY CANNOT BE IMPOSED ON THE BASIS OF DISALLOWANCES OR ADDITIONS MADE UNDER THE REGULAR PROVISIONS. SLP FILED BY THE DEPARTMENT IN THE CASE OF NALWA SO NS INVESTMENTS LTD.(SUPRA)WAS DISMISSED BY THE HONBLE APEX COURT.THUS,THE ISSUE HAS ATTAINED FINALITY.RESPECTFULLY,FOLLOWING THE DECISION OF NALWA SONS,WE DECIDE GROUND NO.1 AGAINST THE AO AND CONFIRM THE ORDER OF THE FAA. AS A RESULT,THE APPEAL FILED BY THE AO STANDS DISMI SSED. 1*2 !)* + 3 4 !5 ' * 67 . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH ,NOVEMBER 2014 . / ' ,-' 8 9! 27 ! , 201 4 - ' . : SD/- SD/- ( / VIVEK VARMA) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 9! /DATE: 27.11 . 2014. / / / / ' '' ' %* %* %* %* ; '* ; '* ; '* ; '* / COPY OF THE ORDER FORWARDED TO : 3 ITA NO. 1360/M/2013 M/S INDIAN OIL CORPORATION LTD. 1. ASSESSEE / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT(A)/ < = , 4. THE CONCERNED CIT / < = 5. DR I BENCH, ITAT, MUMBAI / >. %*! , . . . 6. GUARD FILE/ . 1 & * & * & * & * %* %*%* %* //TRUE COPY// /! / BY ORDER, ? / 6 DY./ASST. REGISTRAR , /ITAT, MUMBAI