The DCITBharuch Circle, Bharuch V. M/s. Padmawavi Engineers(India) Pvt.Ltd., Bharuch

ITA 1643/AHD/2009

• Counselvise Citation: 164320514 RSA 2009
• Duration Of Justice: 2 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-10-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 20-05-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEKRIWAL
• Assessee Lawyers: KIRAN P KAPADIA
• Keywords: Rectification of order; Retrospective amendment; Reason to believe
• Section: 54; 154; 143(3)

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , , , , ! ! ! ! , . .. . . .. .'#$% '#$% '#$% '#$%, , , , & & & & ! !! ! ' ' ' ' BEFORE S/SHRI T.K. SHARMA, JUDICIAL MEMBER AND SHRI A.K. GARODA, ACCOUNTANT MEMBER ITA NO.1643/AHD/2009 [ASSTT.YEAR : 2005-2006] DCIT, BHARUCH CIRCLE BHARUCH. ( /VS. M/S.PADMAVATI ENGINEERS (I) P. LTD. 11, JESSIKA, DR. N.R. KARODE MARG BORIVALI (WEST), MUMBAI 400 092. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) .! / 0 / REVENUE BY : SHRI SAMIR TEKRIWAL ( 23 / 0 / ASSESSEE BY : SHRI KIRAN P. KAPADIA 4(5 / 3&/ DATE OF HEARING : 10 TH OCTOBER, 2011 6#7 / 3&/ DATE OF PRONOUNCEMENT : 10 TH OCTOBER, 2011 / O R D E R PER T.K. SHARMA, JUDICIAL MEMBR : THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-VI, BARODA DATED 27.03.2009 CANCELLING LEVY OF PENALTY UNDER SECTION 271(1)(C) OF RS.10,27,940/- IMPOSED BY THE ASSESSIN G OFFICER. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY. FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.6,77, 270/;-. THE AO FRAMED ASSESSMENT UNDER SECTION 143(3) ON 31-12-200 7 WHEREIN THE AO MADE THE ADDITION OF RS.28,48,864/- AND RS.16,475/- IN RESPECT OF NON- DEDUCTION OF TDS FROM VARIOUS PAYMENTS AND NON-DEPO SIT OF PF CONTRIBUTION WITHIN THE TIME ALLOWED. AGAINST THES E ADDITIONS, THE ITA NO.1643/AHD/2009 -2- ASSESSEE HAS NOT PREFERRED ANY APPEAL. IN RESPECT O F THE DISALLOWANCES, THE AO ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) AND IMPOSED PENALTY OF RS.10,27,940/- HOLDING THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF ITS INCOME AND TRIED T O EVADE TAXABLE INCOME. 3. IN THE FIRST APPEAL BEFORE THE CIT(A), THE ASSES SEE CONTENDED THAT IN ANNEXURE-3 OF THE TAX AUDIT REPORT, THE AUDITOR HAD QUANTIFIED THE DISALLOWANCE UNDER SECTION 40(A)(IA) WHICH WERE BEF ORE THE AO. IT WAS POINTED OUT THAT THE AO HAS NOT AT HIS OWN EFFORT U NEARTHED ANY UNDISCLOSED INCOME OR ANY PARTICULARS OF INCOME AND IN FACT ALL THE FACTS WERE ALREADY STATED IN THE AUDITORS REPORT AND NOTH ING CAN BE ALLEGED TO BE CONCEALED. IT WAS FURTHER INDICATED THAT THE PROVI SIONS OF SECTION 40A(IA) WERE INTRODUCED W.E.F. AY 2005-06 AND THAT IT WAS T HE FIRST YEAR OF THE AMENDMENT. IT WAS ALSO STATED THE BEFORE THE CIT(A) THAT DISALLOWANCE ON EXPENSES COULD NOT MEAN THAT THE ASSESSEE HAD FURNI SHED INACCURATE PARTICULARS OF INCOME AND THAT ALL THE DETAILS AND FACTS RELATING TO THE ISSUE WERE BEFORE THE AO AND THEREFORE THERE IS NO JUSTIF ICATION ON THE PART OF THE AO TO IMPOSE THE IMPUGNED PENALTY. AFTER CONSI DERING THE SUBMISSIONS OF THE ASSESSEE, THE LEARNED CIT(A) OBS ERVED THAT THE ASSESSEE HAS NOT DEDUCTED TDS ON PAYMENTS OF RS.28, 48,864/- AND THIS FACT WAS ALSO MENTIONED IN THE AUDIT REPORT. SIMIL ARLY, THE FACT THAT PF WAS DEPOSITED LATE WAS ALSO AVAILABLE ON RECORD. T HUS, IT COULD NOT BE SAID THAT THE ASSESSEE HAD CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME AND THAT THE EXPENDITURE WAS NOT FOUND TO BE BOGUS. THE CIT(A) ACCORDINGLY DELETED THE PENALTY. THE A GGRIEVED REVENUE IS IN APPEAL BEFORE US. ITA NO.1643/AHD/2009 -3- 4. AT THE TIME OF HEARING BEFORE US, THE LEARNED DR SUBMITTED THAT THE AO HAS RIGHTLY IMPOSED THE PENALTY BASED ON THE FAC TS NARRATED IN THE ASSESSMENT ORDER. HE ALSO RELIED UPON THE DECISION OF THE ITAT, AHMEDABAD B BENCH IN THE CASE OF GUJARAT STATE FI NANCIAL SERVICES LTD. VS. ACIT, 39 SOT 570 (AHD) . PER CONTRA, THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO PAGE NO.37 OF TH E PAPER BOOK WHICH CONTAINED A LETTER DATED 28-6-2008 ADDRESSED TO THE AO REGARDING RECTIFICATION OF MISTAKE UNDER SECTION1 54 OF THE A CT ON ACCOUNT OF RETROSPECTIVE AMENDMENT MADE TO SECTION (A)(IA) OF THE ACT BY THE FINANCE ACT, 2008 WHEREIN IT HAS BEEN NOW PROVIDED THAT IF THE TAX WAS DEDUCTED IN THE LAST MONTH OF THE PREVIOUS YEAR AND IF THE SAME WAS PAID BEFORE DUE DATE OF FILING OF THE RETURN OF INCOME F OR THE RELEVANT ASSESSMENT YEAR, THEN THE SAID SUM SHALL BE ALLOWAB LE IN THE RELEVANT ASSESSMENT YEAR. THIS RETROSPECTIVE AMENDMENT IS M ADE W.E.F. 1 ST APRIL, 2005. HE ALSO POINTED OUT THAT ONE MORE APPLICATIO N DATED 8-8-2008 ADDRESSED TO THE AO FOR RECTIFICATION OF THE MISTAK E UNDER SECTION 154 WAS SUBMITTED BEFORE THE AO. AFTER CONSIDERING TH E PRAYER FOR RECTIFICATION, THE AO HAS NOT PRESSED FOR ADDITION THEREFORE THE ASSESSEE HAS REASON TO BELIEVE THAT NECESSARY RECTIFICATION HAS BEEN CARRIED OUT BY THE AO. AGAINST THIS, THE LEARNED DR POINTED OUT T HIS FACT NEEDS VERIFICATION AT THE END OF THE AO. 5. AFTER HEARING BOTH THE PARTIES, WE HAVE GONE THR OUGH THE ORDERS OF THE AUTHORITIES BELOW. WHETHER OR NOT NECESSARY RE CTIFICATION AS SOUGHT FOR BY THE ASSESSEE IN THE ABOVE REFERRED TO APPLIC ATIONS HAS BEEN CARRIED OUT NEEDS VERIFICATION AT THE END OF THE AO. THERE FORE, WE SET ASIDE ORDER OF THE CIT(A) ON THIS ISSUE AND DIRECT THE AO TO VE RIFY WHETHER ANY ORDER UNDER SECTION 154 HAS BEEN PASSED ON BOTH THE APPLI CATIONS CITED (SUPRA). ITA NO.1643/AHD/2009 -4- IF THESE APPLICATIONS ARE STILL PENDING, THE AO SHA LL DISPOSE OF THE SAME AT THE EARLIEST. AFTER DISPOSAL OF BOTH THE APPLICATI ONS, THE AO SHALL RE-WORK OUT THE PENALTY, IF ANY, UNDER SECTION 271(1)(C) OF THE ACT AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEA RD. 6. IN RESULT, THE APPEAL OF THE REVENUE IS DEEMED T O BE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 10 TH OCTOBER, 2011 SD/- SD/- ( . .. . . .. .'#$% '#$% '#$% '#$% /A.K.GARODIA & & & & ! !! ! /ACCOUNTANT MEMBER ( . .. . . .. . /T.K. SHARMA) ! ! ! ! /JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 10-10-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD