M/S. SHAH CONSTRUCTION CO. LTD, MUMBAI V. THE DY. CIT CIR 8(3),

ITA 1503/MUM/2006

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4224 (ITAT-MUMBAI)
• Duration Of Justice: 9 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-04-2015
• Assessment Year: misc
• Appeal Filed On: 03-03-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 145

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . . , ! , ' , # BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I.T.A. NO.1502/M/06 & I.T.A. NO. 1503/M/06 ( ' $ %$ / ASSESSMENT YEAR: 1991-92 & 1990-91) M/S. SHAH CONSTRUCTION CO. LTD. 11, SHAH INDUSTRIAL ESTATE, NEW LINK ROAD, ANDHERI (W) MUMBAI - 400053 / VS. THE DY. COMMISSIONER OF INCOME TAX CIRCLE 8(3) SPL. RANGE 23, MUMBAI ./ ./ PAN/GIR NO. : AAACS5207N ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 31.12.2015 !' /DATE OF PRONOUNCEMENT: 10.02.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THIS ORDER SHALL DISPOSED OFF ABOVE MENTIONED APPEA LS WHEREIN THE ASSESSEE HAS CHALLENGED THE ORDER OF LEARNED COMMIS SIONER OF INCOME TAX (APPEALS)-33, MUMBAI [HEREINAFTER REFERRED TO A S THE LEARNED CIT(A)] DATED 31.08.2005 RELEVANT TO THE ASSESSM ENT YEAR 1990-91 & 1991-92 CHALLENGING THE CONFIRMATION OF PENALTY BY THE CIT(A) BY VIRTUE ASSESSEE BY: SHRI M. SUBRAMANIAN DEPARTMENT BY: MRS. RADHA K. NARANG ITA NO.1502/MUM/06 &1503/MUM/06 A.Y. 1990-91 & 1991-92 2 OF IMPUGNED ORDER DATED 23.12.2005. SINCE THE MATT ER OF CONTROVERSY IN THE ABOVE MENTIONED APPEALS ARE THE SAME AND THE PA RTIES ARE THE SAME THEREFORE, THESE APPEALS ARE BEING TAKEN UP TOGETHE R FOR ADJUDICATION FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSING COMPANY HAS FILED THE RETURN OF IN COME FOR A.Y. 1990-91 ON 26.12.1990 DECLARING TOTAL LOSS OF RS.6, 07,02,250/- AND FILED THE RETURN OF INCOME ON 30.12.1991, FOR THE A.Y.199 1-92 DECLARING TOTAL LOSS OF RS.1,69,83,300/-. THE ASSESSMENT FOR THE A .Y. 1990-91 WAS COMPLETED ON 19.03.1993 WHEREAS THE ASSESSMENT FOR A.Y. 1991-92 WAS COMPLETED ON 07.03.1994 DETERMINING THE TOTAL LOSS TO THE TUNE OF RS.5,43,34,247/- & RS.1,43,11,044/- RESPECTIVELY. THE ABOVE SAID ASSESSMENTS WERE COMPLETED AFTER SOME DISALLOWANCE THEREFORE THE ASSESSEE FILED AN APPEAL BEFORE LEARNED CIT(A) IN B OTH THE CASES AND MATTER WENT UP TO THE INCOME TAX APPELLATE TRIBUNAL WHICH WERE SUBSEQUENTLY REMANDED BEFORE THE ASSESSING OFFICER. THEREAFTER, THE ASSESSING OFFICER IN BOTH THE CASES REASSESSED THE MATTER AND INITIATED THE PENALTY U/S. 271(1)(C) WHICH WERE CONFIRMED BY THE LEARNED CIT(A) THEREFORE, IN BOTH THE CASES THE ASSESSEE IS NOW UN DER APPEAL BEFORE US. 3. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR D. THE ONLY POINT WHICH HAS BEEN ARGUED BY THE ASSESSEE IS THAT INITI ALLY IN THE ORDER DATED 19.03.1993 FOR THE ASSESSMENT YEAR 1990-91 AND ORDE R DATED 07.03.1994 FOR THE ASSESSMENT YEAR 1991-92, THE ASSESSING OFFI CER NOWHERE ORDERED ITA NO.1502/MUM/06 &1503/MUM/06 A.Y. 1990-91 & 1991-92 3 TO LEVY THE PENALTY THEREFORE IN THE SAID CIRCUMSTA NCES THE PENALTY LEVIED BY THE ASSESSING OFFICER IN THE REASSESSMENT OF THE CASE IS WRONG AGAINST LAW AND FACTS AND IS NOT LIABLE TO BE SUSTAINABLE I N THE EYES OF LAW IN VIEW OF THE LAW SETTLED IN 2002 COMMISSIONER OF INC OME TAX VS. V.S.K.ADI CHETTY SURAVEL CHETTY OF MADRAS HIGH COUR T AND IN VIEW OF THE LAW SETTLED IN [2009] 310 ITR (AT) 270 (PUNE) I N CASE TITLED AS BHAGWANDAS ASSOCIATES VS. INCOME TAX OFFICER. ON T HE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE O RDER OF LEARNED CIT(A) IN QUESTIONS. ON APPRAISAL OF ORDER DATED 1 9.03.1993 FOR THE ASSESSMENT YEAR 1990-91 AND ORDER DATED 07.03.199 4 FOR THE ASSESSMENT YEAR 1991-92. IT IS OBSERVED THAT BOTH THE ORDERS WERE PASSED INITIALLY BY THE ASSESSING OFFICER BY COMPLETING THE ASSESSME NT OF RELEVANT YEARS BUT NOWHERE INITIATED THE PENALTY IN THE SAID ORDER S. NO DOUBT SUBSEQUENTLY THE MATTER WENT UP IN THE APPEAL ON DI FFERENT ISSUES AND AFTER THE REMAND OF THE CASE REASSESSMENT OF THE RE LEVANT ASSESSMENT YEARS WERE COMPLETED AND ASSESSING OFFICER INITIATE D THE PENALTY IN QUESTION WHICH HAS BEEN UPHELD BY THE LEARNED CIT(A ) IN VIEW OF THE ORDER UNDER CHALLENGE. THE ONLY QUESTION WHICH HA S BEEN AROSE BEFORE US IS THAT WHEN THE ASSESSING OFFICER DID NOT INITI ATED THE PENALTY AT THE TIME OF INITIAL ASSESSMENT THEN IN THE SAID CIRCUMS TANCES AT THE TIME REASSESSMENT OF THE CASES ON DIFFERENT ISSUES, THE PENALTY CAN BE INITIATED IN ACCORDANCE WITH THE LAW OR NOT. FACT AND CIRCUM STANCES OF BOTH THE CASES ARE SAME. IN BOTH THE CASES THE ASSESSING OF FICER HAS DISALLOWED THE CERTAIN EXPENDITURE UNDER RULE 6D AND U/S. 145 OF THE ACT. ITA NO.1502/MUM/06 &1503/MUM/06 A.Y. 1990-91 & 1991-92 4 THEREAFTER, ASSESSEE CHALLENGED BOTH THE ORDERS. S UBSEQUENTLY MATTER WENT UP TO THE INCOME TAX APPELLATE TRIBUNAL. AFTE R THE DIRECTIONS OF THE ITAT, THE MATTER WAS REASSESSED AND IN BOTH THE CASES THE ASSESSING OFFICER INITIATED THE PENALTY U/S. 271(1)(C) OF THE ACT WHICH WERE UPHELD THE LEARNED CIT(A) AND NOW IS UNDER CHALLENGE. 4. THE FACTS AND CIRCUMSTANCES OF BOTH THE CASES AR E SAME. AFTER THE COMPLETION OF ASSESSMENT THE ASSESSEE FILED AN APPE AL BEFORE LEARNED CIT(A) CHALLENGING THE DISALLOWANCE BY THE ASSESSIN G OFFICER UNDER RULE 6D AND U/S. 145 OF THE ACT. NO DOUBT THEREAFT ER THE MATTER WAS REMANDED BACK TO THE CONCERNED ASSESSING OFFICER ON THE BASIS OF CERTAIN DIRECTIONS PASSED BY THE INCOME TAX APPELLA TE TRIBUNAL, MUMBAI. THERE IS NO NEED TO GO WITH THE MERIT OF T HE CASE SINCE THE MATTER ON LEGAL ISSUES HAS BEEN ALREADY DECIDED BY THE HONBLE MADRAS HIGH COURT IN CASE TITLED AS COMMISSIONER OF INCOME TAX VS. V.S.K.ADI CHETTY SURAVEL CHETTY. THE ONLY DIFFERENCE IN THIS CASE IS THAT IN THE INSTANT CASE PENALTY WAS NOT INITIATED INITIALLY WH EREAS IN THE SAID CASE PENALTY WAS DELETED BY AUTHORITY SUBSEQUENTLY. SIN CE INITIALLY THE ORDER DATED 19.03.1993 FOR THE YEAR 1990-91 AND ORDER DA TED 07.03.1994 FOR THE YEAR 1991-92 NOWHERE RECOMMENDED THE PENALTY AG AINST THE ASSESSEE THEREFORE, IN THE SAID CIRCUMSTANCES, NO PENALTY PR OCEEDING CAN BE INITIATED AT THE TIME OF REMAND ASSESSMENT. IN VIE W OF THE SAID LAW, WE ARE OF THE VIEW THAT PENALTY INITIATED DURING REMAN D PROCEEDING IS WRONG AGAINST LAW AND FACTS AND IS NOT LIABLE TO BE SUSTA INABLE IN THE EYES OF ITA NO.1502/MUM/06 &1503/MUM/06 A.Y. 1990-91 & 1991-92 5 LAW. ACCORDINGLY, WE SET ASIDE THE PENALTY ORDER I N QUESTION AND DELETE THE PENALTY. IN BRIEF THE APPEALS OF THE ASSESSEE ARE HEREBY ALLOWED. 5. ACCORDINGLY BOTH THE APPEALS FILED BY THE ASSESS EE ARE HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY , 2016. SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 10 TH FEBRUARY, 2016 MP MP MP MP ' ( )' * +*% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// ,/! (DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI