M/s Pushpak Products Pvt Ltd , Bangalore V. Income Tax Officer Wra-5(1)(3), Bangalore

ITA 1531/BANG/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9691 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K R SUBASH J
• Assessee Lawyers: S SRIDHAR
• Keywords: Principle of natural justice; Corroborative evidences
• Section: 271(1)(c); 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, BENGALURU BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.1531/BANG/2018 (ASSESSMENT YEAR: 2013-14) M/S.PUSHPAK PRODUCTS PVT. LTD. NO.303, PUSHPAK MES RING ROAD, JALAHALLI, BENGALURU-560 013. PAN:AADCP 2169 H VS. APPELLANT INCOME-TAX OFFICER, WARD 5(1)(3), BENGALURU. RESPONDENT APPELLANT BY : SHRI S.SRIDHAR, ADVOCATE. RESPONDENT BY : SHRI K.R.SUBASH, JCIT(DR) DATE OF HEARING: 06/06/2019 DATE OF PRONOUNCEMENT: 26/06/2019 O R D E R PER PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDER OF THE CIT(A)-5, BENGALURU, PASSED U/S 271(1)(C) OF THE INCOME- TAX ACT,1961 ['THE ACT' FOR SHORT]. THE ASSESSEE HAS RAISED GROUNDS OF APPEAL CHALLENGING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND FILED THE RETURN OF INCOME ITA NO.1531/BANG/2018 PAGE 2 OF 5 FOR THE ASSESSMENT YEAR 2013-14 ON 1/10/2013 WITH TOTAL INCOME OF RS.1,19,220/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED. IN COMPLIANCE, THE LEARNED AR APPEARED FROM TIME TO TIME AND FURNISHED DETAILS. WHEREAS THE AO ON PERUSAL OF FINANCIAL STATEMENTS FOUND THAT THE ASSESSEE HAS CLAIMED CERTAIN DEDUCTIONS WITHOUT PROPER APPROVAL AND CERTIFICATE IN RESPECT OF DEDUCTION U/S 35(2AB) OF THE ACT WAS OBTAINED, AND THE ASSESSEE ALSO DEBITED LOSS ON SALE OF ASSET WHICH IS NOT REFLECTED IN THE FIXED ASSETS SCHEDULE AND FURTHER DONATION OF RS.21,580 IS NOT PROPERLY SUPPORTED WITH EVIDENCE AND ASSESSED THE TOTAL INCOME OF RS.55,37,216/- AND PASSED THE ORDER U/S 143(3) DATED 28/3/2016. SUBSEQUENTLY, AO INITIATED PENALTY PROCEEDINGS BY ISSUE OF NOTICE U/S 274 R.W.S. 271(1))(C) OF THE ACT DATED 28/3/2016 AND POSTED THE CASE FOR HEARING WHEREAS AO INITIATED PENALTY PROCEEDINGS ON ACCOUNT OF FILING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSEE, IN THE COURSE OF HEARING SUBMITTED THAT THE CLAIM COULD NOT BE SUPPORTED OUT OF IGNORANCE AND THE ASSESSEE IS RECOGNIZED BY ISRO. THE AO IN ASSESSMENT PROCEEDINGS FOUND THAT NO INFORMATION OF CLAIMING DEDUCTION U/S 35(2AB) OF THE ACT WAS SUPPORTED AND ALSO LOSS ON SALE OF ASSET. HENCE THE CLAIM WAS DISALLOWED. FURTHER, AO IN PENALTY PROCEEDINGS NOT CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE ON 29/9/2016 REFERRED ITA NO.1531/BANG/2018 PAGE 3 OF 5 AT PARA 6 OF THE PENALTY ORDER AND LEVIED PENALTY U/S 271(1)(C) OF THE ACT OF RS.16,25,398/- VIDE ORDER DATED 29/9/2016. 3. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS, IN SPITE OF PROVIDING THE OPPORTUNITY OF HEARING ON 7/3/2018 NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ADJOURNMENT APPLICATION WAS FILED. THEREFORE, THE CIT(A) APPLYING THE PRINCIPLE EMBODIED IN THE CASE OF CIT VS. MULTIPLAN (38 ITD 320) DECIDED EX-PARTE ON MERITS. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED APPEAL WITH THE TRIBUNAL. AT THE TIME OF HEARING, THE LEARNED AR SUBMITTED THAT THE CIT(A) HAS ERRED IN DISMISSING THE APPEAL FOR NON- PROSECUTION AND THE ASSESSEE COULD NOT ATTEND THE CASE FOR VARIOUS REASONS AND CIT(A) ERRED IN ADJUDICATION OF CASE ON MERITS EX-PARTE AND PRAYED FOR ONE MORE OPPORTUNITY BEFORE THE CIT(A) TO SUBSTANTIATE THE CASE AND ALLOW THE ASSESSEE APPEAL. CONTRA, THE LEARNED DR OBJECTED TO THE SUBMISSIONS OF THE LEARNED AR AND SUPPORTED THE ORDER OF THE CIT(A) ORDER AND PRAYED FOR DISMISSAL OF ASSESSEES APPEAL. ITA NO.1531/BANG/2018 PAGE 4 OF 5 5. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE GOING INTO MERITS, WE CONSIDER IT APPROPRIATE TO DEAL ON THE DISMISSAL BY THE CIT(A) FOR NON-PROSECUTION OF APPEAL. THE LEARNED AR SUBMITTED THAT THE ASSESSEE COULD NOT APPEAR FOR VARIOUS REASONS AND THE SUBMISSIONS ARE WITHOUT ANY SUPPORTING EVIDENCE AND REASONS FOR NON-PROSECUTION OF CASE BEFORE THE CIT(A). WHEREAS THE LEARNED DR HAS VEHEMENTLY OBJECTED MENTIONING THAT THE ASSESSEE WAS PROVIDED WITH SUFFICIENT OPPORTUNITY. WE FOUND CIT (APPEALS) HAS GRANTED ONE DATE OF HEARING ON 7.3.2018 AND DISMISSED THE APPEAL. WE, CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE AND THE REASONS ENVISAGED BY LEARNED AR CONSIDER IT APPROPRIATE TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE. ACCORDINGLY, WE RESTORE THE ENTIRE DISPUTED ISSUE TO THE FILE OF THE CIT(A) TO CONSIDER THE MATTER AFRESH AND ADJUDICATE ON MERITS. IT IS NEVERTHELESS TO MENTION THAT THE CIT(A) SHOULD PROVIDE ADEQUATE OPPORTUNITY TO SUBSTANTIATE AND FILE THE EVIDENCES AND DOCUMENTS IN SUPPORT OF CASE AND THE ASSESSEE SHALL CO- OPERATE IN SUBMITTING THE INFORMATION EXPEDITIOUSLY FOR EARLY DISPOSAL OF THE APPEAL AND WE ORDER ACCORDINGLY. ITA NO.1531/BANG/2018 PAGE 5 OF 5 6. IN THE RESULT, THE ASSESSEE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26TH JUNE, 2019. SD/-SDS/- SD/- SD/- (A.K.GARODIA) SD/- (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BENGALURU DATED : 26/06/2019 SRINIVASULU, SPS/REDDY GP COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)- 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE