The Asstt. Commissioner of Income-tax, Srinagar V. M/s. Star Constructions, Srinagar

ITA 148/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0786 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-05-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 10-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL DR SH UPENDRA BHAT
• Assessee Lawyers: E PASS SRINAGAR PANAATFSA
• Section: 246; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER [ I.T.A NO.148 (ASR)/2014 ASSESSMENT YEAR: 2004-05 ACIT, CIRCLE-3, SRINAGAR. VS. M/S STAR CONSTRUCTIONS, ALNOOR COMPLEX, HYDERPORA BYE PASS, SRINAGAR. PAN:AATFS0796A (RESPONDENT) APPELLANT BY: SH. S. S. KANWAL (DR) RESPONDENT BY: SH. UPENDRA BHAT (CA) DATE OF HEARING: 05.05. 2016 DATE OF PRONO UNCEMENT: 06.05.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORD ER OF LEARNED CIT(A) DATED 20.12.2013 FOR ASST. YEAR 2004-05. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL. (I) ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE PENALTY WITHOUT CONSIDERING THE ORIGIN AL PENALTY ORDER U/S 271(1)(C) OF THE I.T. ACT, 1961. (II) ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE PENALTY WHEN THE HONBLE ITAT HAS ALLO WED THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE FOR RECALLING THE ORDER OF THE HONBLE ITAT WHEREIN THE HONBLE ITAT HAS CONFIRMED THE ASSESSME NT ORDER OF THE ASSESSING OFFICER BUT NO FURTHER INFORMATION REGARD ING FILING OF APPEAL IS ON RECORD. [ ITA NO.148 (ASR)/2014 ASST. YEAR: 2004-0 5 2 3. THE LEARNED DR, AT THE OUTSET, HEAVILY PLACED HI S RELIANCE ON THE ORDER OF ASSESSING OFFICER. 4. THE LEARNED AR, ON THE OTHER HAND, SUBMITTED THA T PENALTY WAS IMPOSED ON THE BASIS OF ADDITION WHICH WAS MADE BY ASSESSING OFFICER ON THE BASIS OF ESTIMATION AND IN THIS RESPECT THE LEA RNED AR INVITED OUR ATTENTION TO THE PENALTY ORDER WHEREIN THE FACT THA T THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED @ 5% OF GROSS RECEIPTS WAS M ENTIONED. THE LEARNED AR SUBMITTED THAT VARIOUS COURTS AND TRIBUN AL HAS HELD THAT WHERE THE INCOME OF THE ASSESSEE ASSESSED ON THE BA SIS OF ESTIMATION, NO PENALTY U/S 271(1)(C) WAS IMPOSABLE. THE LEARNED AR , IN THIS RESPECT RELIED UPON THE FOLLOWING JUDGMENTS. (I) CIT VS. SANGRUR VANASPATI MILLS LTD. 303 ITR 53 (P&H) (II) CIT VS. P ROJES 90 DTR 399 (MADRAS HC) (II) CIT VS. SHRI SINDHUJA FOODS (P) LTD. (RAJSTHAN HIGH COURT) IN VIEW OF THE ABOVE JUDGMENTS IT WAS SUBMITTED THA T PENALTY WAS NOT IMPOSABLE. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE LEARNED CIT(A) HAS DELETED THE PENALTY HOLDING THAT THE PENALTY IMPOSED BY ASS ESSING OFFICER EARLIER IN THE SAME YEAR HAD ALREADY BEEN DELETED BY HONBL E ITAT IN ITA NO.33 (ASR)/2010 VIDE ORDER DATED 31 ST MAY, 2010. THE LEARNED CIT(A) ALSO HELD THAT THE ORDER OF PENALTY WAS TIME BARRED. FOR THE SAKE OF CONVENIENCE THE RELEVANT FINDINGS OF LEARNED CIT(A) ARE REPRODU CED BELOW. ITA NO.148 (ASR)/2014 ASST. YEAR: 2004-0 5 3 4.2 PRESENT APPEAL RELATES TO PENALTY U/S 271(L)( C) IMPOSED BY THE AO ON THE ADDITIONS MADE IN THE ASSESSMENT ORDER DA TED 30.06.2008 BY ESTIMATING THE INCOME OF THE APPELLAN T BY APPLYING NET PROFIT RATE OF 5%. I HAVE GONE THROUGH THE SUBM ISSIONS OF THE APPELLANT, ASSESSMENT ORDER AND OTHER DOCUMENTS ON RECORD. IT IS OBSERVED THAT A PENALTY ORDER IMPOSING PENALTY OF 1 00% OF TAX SOUGHT TO BE EVADED IN RESPECT OF THIS INCOME WAS A LREADY MADE ON 30.12.2008. ON APPEAL BEFORE THE CIT(APPEALS), JAMM U , THE THEN CIT(APPEAL) PASSED ORDER IN APPEAL NO 754/08-09 DAT ED 16.10.2009 DELETING THE SAID PENALTY AND THE ORDER OF CIT(A), JAMMU WAS FURTHER UPHELD BY THE HON'BLE ITAT, AMRITSAR VIDE O RDER NO. ITA 33(ASR)/2010. THE AO WAS ASKED TO COMMENT VIDE LETT ER DATED 13.11.2013 ON APPELLANT'S SUBMISSION AS TO HOW THE PENALTY WAS AGAIN IMPOSED. HOWEVER, NO REPLY RECEIVED FROM AO T ILL PASSING OF THIS ORDER. ONCE THE PENALTY IMPOSED BY THE AO AND LATER ON DELETED BY THE CIT (APPEAL) AND HON'BLE TRIBUNAL, THE ORDER OF RE- IMPOSING THE PENALTY ON SAME ASSESSED INCOME FOR THE ASSESSM ENT YEAR, IS ILLEGAL AND ACCORDINGLY CANNOT BE SUSTAINED. 4.3. IT IS ALSO OBSERVED THAT THE APPELLATE ORDER U /S 250(6) OF THE ACT WAS PASSED BY CIT(A), BATHINDA WHO UPHELD THE ADDIT IONS MADE IN THE RELEVANT ASSESSMENT ORDER ON 30.06.2008. AS PER THE PROVISO OF SECTION 275(L)(A), THE PENALTY COULD BE IMPOSED WIT HIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OF CIT(A) IN RESPECT OF RELEVANT ASSESSMENT ORDER IS RECEIVED. THE PENAL TY ORDER IN THIS CASE COULD BE IMPOSED ON OR BEFORE 31.03.2010. THE ORIGINAL PENALTY ORDER AS DISCUSSED ABOVE WAS MADE ON 30.12.2008 I.E WITHIN THE TIME PRESCRIBED U/S 275(1) OF THE ACT, HOWEVER THE PENALTY ORDER UNDER QUESTION WAS MADE ON 18.01.2013 WHICH IS BARR ED BY TIME. THE PROVISION OF SECTION 275(1)(A) OF THE ACT ARE A S UNDER. 275. [(1)] NO ORDER IMPOSING A PENALTY UNDER THIS C HAPTER SHALL BE PASSED [(A) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTH ER ORDER IS THE SUBJECT-MATTER OF AN APPEAL TO THE COMMISSIONER (AP PEALS) UNDER ITA NO.148 (ASR)/2014 ASST. YEAR: 2004-0 5 4 SECTION 246 [OR SECTION 246A] OR AN APPEAL TO THE A PPELLATE TRIBUNAL UNDER SECTION 253, AFTER THE EXPIRY OF THE FINANCIA L YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR SIX M ONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE COMMISSI ONER (APPEALS) OR, AS THE CASE MAY BE, THE APPELLATE TRIBUNAL IS R ECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER, WHICHEVER PERIO D EXPIRES LATER: [PROVIDED THAT IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTHER ORDER IS THE SUBJECT-MATTER OF AN APPEAL TO T HE COMMISSIONER (APPEALS) UNDER SECTION 246 OR SECTION 246A, AND TH E COMMISSIONER (APPEALS) PASSES THE ORDER ON OR AFTER THE 1ST DAY OF JUNE, 2003 DISPOSING OF SUCH APPEAL, AN ORDER IMPOSING PENALTY SHALL BE PASSED BEFORE THE EXPIRY OF THE FINANCIAL YEAR IN WHICH TH E PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR IMPOSITION OF PENALT Y HAS BEEN INITIATED, ARE COMPLETED, OR WITHIN ONE YEAR FROM T HE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OF THE COMMISSION ER (APPEALS) IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER, WHICHEVER IS LATER;] THUS, THE PENALTY ORDER UNDER QUESTION IS BARRED BY LIMITATION AND ACCORDINGLY CANNOT BE SUSTAINED. WE FIND THAT IN ITA NO.33(ASR)/2010 FOR ASST. YEAR 2004-05, THE SIMILAR PENALTY IMPOSED BY ASSESSING OFFICER WAS DELETED BY HONBLE ITAT. THE RELEVANT FINDINGS OF THE TRIBUNAL AS CONTAINED IN P ARA 11 ARE REPRODUCED BELOW. 11. AFTER GOING THROUGH THE IMPUGNED ORDER DATED 1 6-10-2009, WHICH IS SUPPORTED BY VARIOUS DECISIONS RENDERED BY THE HON BLE JURISDICTIONAL HIGH COURT AND HONBLE PUNJAB AND HARYANA HIGH COURT, WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY IN DISPUTE HAS BEEN IMPOSED ON AN ESTIMATED BASIS BY APPLYING THE NET PROFIT RATE AND ON THE BASIS OF ORDER PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY IN THE QUANTUM MATTER BUT THE A.O. HAS NO WHERE GIVEN AN FINDING THAT THERE A RE ANY CONCEALMENT OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E IN THE RETURN FILED BY THE ASSESSEE. IN THESE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE PENALTY IN DISPUTE HAS RIGHTLY BEEN DELETED BY THE LEARNED FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER, WHICH IS ALSO SUPPORTED BY V ARIOUS DECISIONS OF THE HONBLE HIGH COURTS INCLUDING THE JURISDICTIONAL HI GH COURT IN THE CASE OF ITA NO.148 (ASR)/2014 ASST. YEAR: 2004-0 5 5 FAIRDEAL MOTORS, 117 ITR 137 (J*K). IN OUR CONSIDER ED OPINION, NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORD ER PASSED BY THE LEARNED CIT(A). THEREFORE, THE SAME IS UPHELD BY DISMISSING THE APPEAL FILED BY THE DEPARTMENT. WE FURTHER FIND THAT THE ASSESSMENT WAS COMPLETED B Y APPLYING 5% AS NET PROFIT OF GROSS RECEIPTS WHICH WAS ESTIMATION B ASIS AND THE JUDGMENT RELIED UPON BY LEARNED AR CLEARLY STATES THAT IN TH E CASE OF ESTIMATION OF PROFIT PENALTY U/S 271(1) (C ) WAS NOT IMPOSABLE. 6. THE GRIEVANCE OF REVENUE THAT QUANTUM WAS DECIDE D AGAINST ASSESSEE BY HONBLE TRIBUNAL AND M.A FILED BY ASSES SEE AGAINST SUCH ORDER HAS ALSO BEEN DISMISSED AND THEREFORE, PENALT Y WAS IMPOSABLE DOES NOT HOLD ANY FORCE IN VIEW OF THE FACT THAT ASSESSM ENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS. 7. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE RE VENUE IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER AC COUNTANT MEMBER DATED:06.05.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER