The DCIT, Central Circle-1(1), Ahmedabad V. Nirma Chemical Works Ltd., Ahmedabad

ITA 1515/AHD/2009

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68039 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 13-12-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 13-05-2009
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: S N SOPARKAR

Judgement Text

, , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.1515/AHD/2009 A.Y. 2002-03 DCIT, CENTRAL CIRCLE 1(1) AHMEDABAD. VS. NIRMA CHEMICAL WORKS LTD., AHMEDABAD PAN: AAACN5353L (APPELLANT) (RESPONDENT) REVENUE BY : SH. O.P. BATHEJA, SR. D.R., ASSESSEE(S) BY : SH. S.N. SOPARKAR, AR / // / DATE OF HEARING : 13/12/2013 !' / DATE OF PRONOUNCEMENT : 13/12/2013 #$/ O R D E R PER SHRI A. K. GARODIA, ACCOUNTANT MEMBER: 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF THE LEARNED CIT(A)-II, AHMEDABAD DATED 27.02.2009 FOR A Y 2002-03. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 2.1 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT FULL FACTS WERE DISCLOSED BY THE ASSESSEE IN CONTRA DICTION OF REALITY THAT ACCRUED INTEREST ASSESSED BY THE A.O. ON OFCPNS AND DDBS WERE NOT SHOWN BY THE ASSESSEE AT A LL. 2.2 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY WITHOUT CONSIDERING THE FACTS THAT THE ASSE SSEE HAD FAILED TO OFFER A BONAFIDE EXPLANATION FOR NOT DISC LOSING INTEREST INCOME IN VIEW OF EXPLANATION-I BELOW SECT ION 271(1)(C) OF THE I.T. ACT. ITA NO.1515/AHD/2009 DCIT CENTRAL CIRCLE 1(1) AHD VS. NIRMA CHEMICAL W ORKS PVT LTD FOR A.Y. 2002-03 - 2 - 2.3 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS 2,51,11,000/- BY IGNORING THE PROVISI ONS OF EXPLANATION 1 BELOW SECTION 271(1)(C) AND ALSO WITH OUT RECORDING ANY FINDING THAT THE EXPLANATION OF THE A SSESSEE FOR NOT DISCLOSING THE INCOME WAS BONAFIDE. 2.4 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CANCELING THE PENALTY IN COMPLETE DISREGARD TO THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN A RECENT LANDMARK JUDG MENT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTIL E PROCESSORS, 306 ITR 277 (SC) WHEREBY PENALTY IS HEL D TO BE A CIVIL LIABILITY AS A REMEDY FOR LOSS OF REVENUE A ND MENS-REA IS NOT CONSIDERED AN ESSENTIAL INGREDIENT OF SECTIO N 271(1)(C) OF THE I.T. ACT. 3. THE LD. DR OF THE REVENUE SUPPORTED THE PENALTY ORDER PASSED BY THE A.O. WHEREAS IT IS SUBMITTED BY THE LD. AR OF T HE ASSESSEE THAT THE PENALTY WAS IMPOSED BY THE A.O. IN RESPECT OF F IVE DIFFERENT ADDITIONS TOTALING RS 7,03,38,701/- AND ALL THESE A DDITIONS WERE DELETED BY THE TRIBUNAL IN QUANTUM APPEAL IN ITA NO . 1244/AHD/2006 DATED 15.12.2013. HE SUBMITTED A COP Y OF THIS TRIBUNAL ORDER IN QUANTUM APPEAL. OUR ATTENTION WA S DRAWN TO PAGES 25 TO 30 OF THIS TRIBUNAL ORDER WHERE THESE A DDITIONS WERE DELETED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL PLACED ON RECORD. WE FIND THAT IT IS THE SUBMISSION OF THE LD. AR OF THE ASSESSEE THAT ALL THESE ADDITIONS, ON WHICH PENALTY WAS IMPOSED, WERE DELETED BY THE TRIBUNAL IN QUANTU M PROCEEDINGS ITA NO.1515/AHD/2009 DCIT CENTRAL CIRCLE 1(1) AHD VS. NIRMA CHEMICAL W ORKS PVT LTD FOR A.Y. 2002-03 - 3 - AND THE LD. DR OF THE REVENUE COULD NOT CONTROVERT THESE ASSERTIONS OF THE LD. AR OF THE ASSESSEE. SINCE QU ANTUM ADDITION ITSELF IS DELETED, THE PENALTY CANNOT SURVIVE AND H ENCE, WE DONT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CI T(A) AND WE CONFIRM THE SAME. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF H EARING ITSELF AFTER CONCLUSION OF HEARING. SD/- SD/- (D.K. TYAGI) JUDICIAL MEMBER ( A.K. GARODIA) ACCOUNTANT MEMBER AHMEDABAD; DATED 13/12/2013 GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA, SR. P , SR. P , SR. P , SR. P. .. .S SS S. .. . TRUE COPY #$ %& '#&' #$ %& '#&' #$ %& '#&' #$ %& '#&'/ COPY OF THE ORDER FORWARDED TO : 1. () / THE APPELLANT 2. %*() / THE RESPONDENT. 3. ++ , / CONCERNED CIT 4. ,() / THE CIT(A)-III, AHMEDABAD 5. &/0 % , , / DR, ITAT, AHMEDABAD 6. 012 3 / GUARD FILE. #$ #$ #$ #$ / BY ORDER, 4 44 4/ // / +5 +5 +5 +5 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD