M/s Central Roller Flour Mills Pvt. Ltd., Kolkata V. DCIT, Kolkata

ITA 1587/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3074 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 01-11-2012
• Court: TRIBUNAL
• Department Lawyers: LEENA RACHH
• Assessee Lawyers: TANUJ KR NEOGI
• Keywords: Reasonable cause
• Section: 143(3); 147; 144

Judgement Text

` , , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , !' #! $'# #! $'# #! $'# #! $'#, ,, , ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI MAHAVIR SINGH, JM] '& '& '& '& /ITA NOS.1587-1590/KOL/2012 $'( !)*/ ASSESSMENT YEARS : 1987-88, 1998-99, 1993-94 & 1996-97 (,- / APPELLANT ) - !' - ( /0,- /RESPONDENT) M/S.CENTRAL ROLLER FOUR MILLS (P)LTD. D.C.I.T., CENTRAL CIRCLE-XXI, KOLKATA . -VERSUS- KOLKATA (PAN:AABCC 8240 N) ,- 1 2 / FOR THE DEPARTMENT SMT.LEENA RACHH, FCA /0,- 1 2 / FOR THE ASSESSEE SHRI TANUJ KR.NEOGI, SR.DR '!3 1 4 /DATE OF HEARING : 11.04.2013 5) 1 4 /DATE OF PRONOUNCEMENT : 19.04.2013. 6 / ORDER PER BENCH THESE FOUR APPEALS ARE FILED BY THE SAME ASSESSEE. FOR A.YRS 1987-88 AND 1988-89 THE ASSESSEE IS IN APPEAL ON THE PENALTY LE VIED U/S 273(1)(B) OF THE IT ACT AND THE REMAINING TWO APPEALS ARE FOR A.YRS. 1993-94 AN D 1996-97 WHEN PENALTY U/S 271B HAS BEEN LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT(A). 2. FIRST WE TAKE UP THE APPEALS WITH RESPECT TO PEN ALTY LEVIED U/S 273(1)(B) OF THE IT ACT WHEREIN THE BRIEF FACTS ARE THAT THE ASSESSE E FILED RETURN OF INCOME DECLARING LOSS WHEN THE LOSS ASSESSED WAS LESS THAN THE RETUR NED LOSS. THE AO WHILE INITIATING THE PENALTY U/S 273(1)(B) OF THE ACT HELD THAT THE ASSESSEE WAS TO PAY ADVANCE TAX, IN SO FAR AS, THE ASSESSEE HAD FILED THE LOSS RETURN W HEN HE WAS SUBJECTED TO SCRUTINY ON ACCOUNT OF PARTICIPATING IN THE ANIMAL HUSBANDRY DE PARTMENT SCAM. FOR A.YR. 1987- 88 HE LEVIED PENALTY OF RS.2,40,808/- AND FOR A.YEA R 1988-89 HE LEVIED PENALTY OF RS.89,086/-. AGGRIEVED THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHO CONFIRMED THE PENALTY SO LEVIED BY W AY OF SEPARATE ORDERS IN THE ITA NOS.158 7-1590/KOL/2012 2 IMPUGNED ASSESSMENT YEARS THAT THE PENALTY WAS RIGH T FOR LEVYING U/S 273(1)(B) OF THE ACT AS WAS DONE BY THE AO BY OBSERVING AS UNDER :- 5. I HAVE CONSIDERED THE SUBMISSION OF THE APPELL ANT AND PERUSED THE PENALTY ORDER. ON CAREFUL CONSIDERATION OF THE FACTS, I AM OF THE OPI NION THAT THE AO WAS JUSTIFIED IN IMPOSING THE PENALTY U/S 273(1)(B). IN THE COURSE O F APPELLATE PROCEEDINGS THE APPELLANT RELIED ON THE DECISION OF ALLAHABAD HIGH COURT IN T HE CASE OF KULDEEP SINGH (SUPRA). ON GOING THROUGH THE SAID DECISION IT IS OBSERVED THAT IT SUPPORTS THE ACTION OF THE AO IMPOSING THE PENALTY U/S 273(1)(B) OF THE ACT AND I T IS AGAINST THE ASSESSEE. IN THE CASE OF KASHIRAM TEA INDUSTRIES LTD. VS ITO REPORTED IN 132 ITR 283 (CAL), IT IS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT THAT THE REASSESS MENT U/S 147 COULD BE REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSE OF IMPOSING PENA LTY U/S 273 OF THE ACT. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF CALCUTTA HIG H COURT, THE PENALTY IMPOSED BY THE AO U/S 273(1)(B) AMOUNTING TO RS.2,40,808/- IS CONF IRMED. THE GROUND NOS. 1 TO 4 ARE DISMISSED. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. IT HAS BEEN SUBMITTED BY THE L D. COUNSEL FOR THE ASSESSEE THAT THE AO INITIATED THE PENALTY PROCEEDINGS EVEN AFTER CON SIDERING THE CASE OF ASSESSEES RETURNED LOSS ON THE BASIS OF THE FACTS, INITIATED PROCEEDINGS U/S 147 OF THE ACT. WHEN THE MATTER RELATING TO NON PAYMENT OF ADVANCE TAX H AD BEEN ADJUDICATED UPON BY FOLLOWING THE JUDICIAL PRONOUNCEMENTS AND ALSO THAT REGULAR ASSESSMENT HAVING BEEN MADE U/S 143(3) AND 144 OF THE ACT AND NOT RE-ASSE SSMENT MADE U/S 147 OF THE ACT. THEREFORE THE LD. CIT(A) AFTER OBSERVING THE FINDIN GS THAT NO INCOME HAD ESCAPED ASSESSMENT AND THE ASSESSEE WAS NOT TO PAY ANY ADVA NCE TAX, CONFIRMED THE IMPOSITION OF PENALTY U/S 273(1)(B) OF THE IT ACT ON THE GROUN D THAT NON FILING OF ESTIMATION OF ADVANCE TAX BUT NEGLECTED TO TAKE INTO ACCOUNT THE FACT THAT THE ASSESSEE APPELLANT HAD RETURNED LOSS AND THE ULTIMATE ASSESSMENT WAS ALSO A NEGATIVE FIGURE ON ESTIMATION AS REASSESSMENT CLINCHING THE ISSUE IN FAVOUR OF THE A SSESSEE THAT NO INCOME WAS ASSESSED FOR PAYMENT OF ADVANCE TAX AND WAS NOT WORTHY OF A VISIT BY THE PENAL PROCEEDINGS U/S 273(1)(B) OF THE IT ACT HEREAFTER. THE LD. DR, AS O F NOW, HAS NOT BEEN ABLE TO CONTROVERT THESE UNDISPUTED FACTS, IN SO FAR AS, HE HAS SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AS HIS SUBMISSIONS. 4. WE DO NOT FIND ANY MERIT IN THE CONFIRMATION TH EREOF AS NOT IN ACCORDANCE WITH THE SETTLED PRINCIPLE THAT THE ASSESSEE HAVING FILE D RETURN OF LOSS WAS REGULARLY ASSESSED WHEN UNDER THE PROVISION OF SECTION 147 FOR THE IMP UGNED ASSESSMENT YEAR THE LOSS ITA NOS.158 7-1590/KOL/2012 3 WAS REDUCED ONLY, WAS NOT TO BE CONSIDERED FOR LEVY ING OF PENALTY U/S 273(1)(B) OF THE IT ACT, BECAUSE THE PROTECTIVE ADDITIONS MADE BY WA Y OF REGULAR ASSESSMENT HAVE BEEN REDUCED IN THE IMPUGNED PROCEEDINGS/ASSESSMENT PROC EEDINGS HAD ONLY RESULTED IN MECHANICAL LEVY OF PENALTY AND WE THEREFORE DIRECT THE AO TO DELETE THE PENALTY LEVIED U/S 273(1)(B) OF THE IT ACT. 5. NOW COMING TO THE PENALTY IMPOSED U/S 271B OF TH E IT ACT. AFTER HEARING THE RIVAL PARTIES WE ARE OF THE CONSIDERED VIEW THAT FO R A.Y 1993-9, OBTAINING OF THE AUDITORS REPORT BEFORE THE DUE DATE OF FILING OF T HE RETURN WAS COMPLIED WITH BY THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS SUB MITTED THE AUDIT STATEMENTS DULY CERTIFIED BY THE AUDITOR FOR BOTH THE YEARS. FOR TH E ASSESSMENT YEAR 1993-94 THE AUDIT REPORT HAD BEEN OBTAINED BY THE ASSESSEE ON 30.08. 1993 WHEREAS FOR A.YEAR 1996-97 THE AUDIT REPORT WAS OBTAINED BELATEDLY ON 21 ST JULY, 1998. IT WAS SUBMITTED TO THE AO AND THE LD. CIT(A) WHO AFTER CONSIDERING THE CASE O F THE ASSESSEE THAT THE BOOKS OF ACCOUNTS WERE SEIZED BY THE CBI AND ON THE BASIS OF THE ASSESSEE BEING INVOLVED WITH THE ANIMAL HUSBANDRY SCAM, IT WAS TO GET A PROPER R EDRESS OF INDICATING THAT THE RECEIPTS WERE NOT ON ACCOUNT OF THE SCAM WAS ALSO B ROUGHT ON RECORD BY THE AUDITORS IN THEIR REPORT DATED 21 ST JULY, 1998. IN THIS VIEW OF THE MATTER WE ARE OF T HE CONSIDERED VIEW THAT FOR A.YEAR 1996-97 THE AUDIT REPORT WAS O BTAINED BELATEDLY BEYOND THE CONTROL OF THE ASSESSEE AND HAD REASONABLE CAUSE FO R FURNISHING THE SAME, IN SO FAR AS, THE AO HAS IN FACT PASSED THE ORDER U/S 144 OF THE IT ACT WAS TO CONSIDER THE FACTS AND FIGURES WHICH WAS SUBMITTED IN THE AUDIT FINANCIAL STATEMENTS. THEREFORE THESE CIRCUMSTANCES CANNOT BE CONSIDERED FOR LEVYING OF P ENALTY U/S 271B OF THE IT ACT AS AN AFTER THOUGHT. THE LD. CIT(A), HOWEVER, NOTED TH E UNDISPUTED FACTS OF THE REASONABLE CAUSE AND COUNTERED BY THE ASSESSEE WHO PURPORTEDLY CONFIRMED THE PENALTY BY DISTINGUISHING THE CASE LAWS CITED BY TH E ASSESSEE APPELLANT BEFORE IT WITHOUT INDICATING THE MANNER IN WHICH THEY ARE DIS TINGUISHABLE. ON OUR PERUSAL OF THE FACTS AND SUBMISSIONS, WE ARE INCLINED TO HOLD THAT THE PENALTY OUGHT NOT TO HAVE BEEN IMPOSED IN THE CASE OF ASSESSEE, IN SO FAR AS, THE ASSESSEE WAS ABLE TO ESTABLISH THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAILURE. THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THIS FINDING AS SUBMITTED BY THE ASSESSE E APPELLANT AS HAVE BEEN PERUSED BY ITA NOS.158 7-1590/KOL/2012 4 US. WE SET ASIDE THE ORDER OF THE LD. CIT(A) FOR BO TH THE YEARS AS AUDIT REPORT WAS OBTAINED ON TIME FOR A.Y.1993-94 AND THE AUDIT REPO RT WAS BELATED DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE FO R A.Y. 1996-97 AND DIRECT THE DELETION OF PENALTY SO LEVIED U/S 271B OF THE IT AC T FOR BOTH THE YEARS. 6. IN THE RESULT THE APPEALS FILED BY THE ASSESSEE FOR A.YEARS 1987-88 AND 1988-89 ON THE ISSUE OF PENALTY LEVIED U/S 273(1)(B) OF THE ACT AND THE APPEALS FOR A.YEARS 1993-94 AND 1996-97 ON THE ISSUE OF PENALTY LEVIED U/S 271B OF THE ACT ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 19.04.2013. SD/- SD/- [ .#! $'# , ] [ .., ,, , ] [MAHAVIR SINGH ] [K.K.GUPTA] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (4 4 4 4) )) ) DATE: 19.04.2013. R.G.(.P.S.) 6 1 /$$7 87)9- COPY OF THE ORDER FORWARDED TO: 1. M/S. CENTRAL ROLLER FLOUR MILLS PVT. LTD., FMC FORT UNA, 5 TH FLOOR, 234/3A, A.J.C.BOSE ROAD, KOLKATA-700020. 2 D.C.I.T., CENTRAL CIRCLE-XXI, KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-CENTRAL-II, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 07 /$/ TRUE COPY, 6'/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA NOS.158 7-1590/KOL/2012 5