M/s. Ornet Intermediates Ltd., Ahmedabad V. The ACIT,Cent. Circle-2(2), Ahmedabad

ITA 1662/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0690 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT JHAVERI
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEF ORE SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER M/S. ORNET INTERMEDIATES LTD, 3 RD FLOOR, SURYARATH, B/H WHITE HOUSE, PANCHVATI, AHMEDABAD PAN: AAACO2744E (APPELLANT) VS THE ACIT, CENTRAL CIRCLE - 2(2), AHMEDABAD (RESPONDENT) REVENUE BY : DR. JAYANT JHAVERI , SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 22 - 08 - 2 016 DATE OF PRONOUNCEMENT : 23 - 08 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THESE THREE ASSESSEE S APPEALS FOR A.Y. 2004 - 05, 2005 - 06 & 2007 - 08 , AR ISE FROM A COMMON ORDER OF THE CIT(A) - III, AHMEDABAD DATED 15 - 03 - 2013 PASSED IN CASES NO . CIT(A) - III/9,7 & 8 / ACIT/CC - 2(2)/11 - 12, CONFIRMING PENALTIES OF RS. 4,73,970/ - , RS. 3 , 97 , 014/ - AND RS. 3,7 0,660/ - ; RESPECTIVELY, IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO S . 1661 TO 1663 / A HD/20 13 A Y 200 4 - 05, 05 - 06 & 2007 - 08 I.T.A NOS . 1661 TO 1663 /AHD/20 13 A.Y. 2004 - 05, 0 5 - 06 & 07 - 08 PAGE NO ORNET INTERMEDIATES LTD. VS. ACIT 2 2. WE COME TO BRIEF FACTS FIRST. THE ASSESSEE COMPANY DERIVES INCOME FROM MANUFACTURING OF INTERMEDIATE DYES AND CHEMICALS. THE DEPARTMENT CAR RIED OUT A SEARCH IN ITS GROUP CASES ON 21 - 03 - 2007. ALL THIS LED TO INITIATION OF SECTION 153A PROCEEDINGS IN THE FIRST TWO ASSESSMENT YEARS IN QUESTION FOLLOWED BY SECTION 143(3) PROCEEDINGS IN THE LAST ASSESSMENT YEAR BEFORE US. THE ASSESSING OFFICER CO MPLETED REGULAR ASSESSMENT ON 26 - 012 - 2008 IN ALL THE IMPUGNED ASSESSMENT YEARS MAKING CERTAIN DISALLOWANCES/ADDITIONS. 3. WE ADVERT TO FIRST TWO ASSESSMENT YEARS 2004 - 05 & 2005 - 06. THE ASSESSING OFFICER ASSESSED ASSESSEE S INCOME AT RS. 2,53,75,130/ - AS AGAINST THE RETURNED INCOME OF RS. 2,40,53,963/ - IN ASSESSMENT YEAR 2004 - 05. THIS DIFFERENTIAL SUM AROSE OUT OF THE FACT THAT THE ASSESSEE HAD SOUGHT TO SET OFF SHORT TERM CAPITAL GAINS OF RS. 66,87,757/ - AGAINST BROUGHT FORWARD SHORT TERM CAPITAL LOSS OF RS. 77,72,713/ - . THE ASSESSING OFFICER NOTICED THIS LATTER FIGURE TO HAVE BEEN RESTRICTED TO RS. 53,66,590/ - . THE ASSESSING OFFICER WAS OF THE VIEW THAT THE CORRESPONDING DIFFERENTIAL AMOUNT OF RS. 13,21,161/ - WAS LIABLE TO DISALLOWED. HE ACTED ACC ORDINGLY AND FURTHER INITIATED THE IMPUGNED PENALTY PROCEEDINGS ALLEGING FURNISHING OF INACCURATE PARTICULARS OF INCOME. LATTER ASSESSMENT YEAR 2005 - 06 INVOLVED SIMILAR ASSESSEE S CLAIM OF RS. 10,84,956/ - . THE ASSESSING OFFICER TOOK CUE FROM ASSESSMENT O RDER OF PRECEDING ASSESSMENT YEAR TO CONCLUDE THAT THERE WAS NO SHORT TERM LOSS CARRIED FORWARD SO AS TO SET OFF IN THE IMPUGNED ASSESSMENT YEAR. HE INITIATED SIMILAR PENALTY PROCEEDINGS IN THE LATTER ASSESSMENT YEAR AS WELL. I.T.A NOS . 1661 TO 1663 /AHD/20 13 A.Y. 2004 - 05, 0 5 - 06 & 07 - 08 PAGE NO ORNET INTERMEDIATES LTD. VS. ACIT 3 4. WE COME TO LAST ASSESSM ENT YEAR 2007 - 08. THE ASSESSING OFFICER MADE ADDITION OF EXCESS STOCK WEIGHING 1,10,579/ - AMOUNTING TO RS. 15,53,825/ - . HE INSTITUTED THE IMPUGNED PENALTY PROCEEDINGS FOR THIS ASSESSMENT YEAR UNDER SECTION 271(1) (C) OF THE ACT. 5. WE COME TO ASSESSING O FFICER PENALTY ORDER; ALL DATED 31 - 03 - 2011. THE ASSESS ING OFFICER OBSERVED IN FIRST T WO ASSESSMENT YEAR S QUA ASSESSEE S LOSS SET OFF CLAIM THAT IT HAD FURNISHED INACCURATE PARTICULARS OF INCOME FOR HAVING NOT FILED CORRECT CORRESPONDING CARRIED FORWARD FIGU RES. HIS VIEW IN THE LAST ASSESSMENT YEAR WAS THAT AS SESSEE S ACTION IN NOT DECLARING THE STOCK SUBJECT MATTER OF EXCESS STOCK ADDITION HEREINABOVE WAS AN ACT OF CONCEALMENT OF TAXABLE INCOME. THE ASSESSING OFFICER ACCORDINGLY LEVIED THE IMPUGNED PENALTIES A MOUNTING TO RS. 4,73,970/ - , RS. 3,97,014/ - AND RS. 3,70,660/ - SUBJECT MATTER OF CHALLENGE BEFORE US. THE CIT(A) CONFIRMS THE SAME BY AN EX - PARTE ORDER LEAVING THE ASSESSEE AGGRIEVED. 6. WE HAVE HEARD THE REVENUE. CASE FILE PERUSED. THERE IS NO DISPU TE THAT THE CIT(A) HAS PASSED AN EX - PARTE COMMON ORDER UNDER CHALLENGE. HE OBSERVES THAT ALL THESE CASES WERE FIXED ON 23 - 07 - 2012 AND 05 - 09 - 2012. THERE WAS NO COMPLIANCE ON SAID DATES. THE CIT(A) THEREAFTER ADJOURNED THE THREE CASES FOR 05 - 12 - 2012 AND 18 - 02 - 2013. AGAIN THERE WAS NO COMPLIANCE. THE CASES THEREAFTER CAME UP HEARING ON 14 - 03 - 2013. THE ASSESSEE S COUNSEL FILED AN ADJOURNMENT LETTER THAT HE WAS BUSY IN TIME BARRING ASSESSMENT AND I.T.A NOS . 1661 TO 1663 /AHD/20 13 A.Y. 2004 - 05, 0 5 - 06 & 07 - 08 PAGE NO ORNET INTERMEDIATES LTD. VS. ACIT 4 SOUGHT POSTPONEMENT OF HEARING FOR ONE MONTH. THIS MADE THE LD. CIT(A) TO PROCEED EX - PARTE AGAINST THE ASSESSEE. IT IS EVIDENT TO US THAT THE LOWER APPELLATE ORDER NOWHERE OBSERVES THAT THE ASSESSEE HAD IN FACT BEEN INTIMATED OR SERVED ON THE FIRST FOUR DATES OF HEARING IN QUESTION. IT HAS FURTHER COME ON RECORD THAT THE ASSESSEE HAD SOUGHT ONLY A MONTH S TIME FOR ARGUING ITS APPEALS. WE OBSERVE IN THESE PECULIAR FACTS THAT THE ASSESSEE DESERVES TO BE GRANTED ONE MORE EFFECTIVE OPPORTUNITY BEFORE THE CIT(A) IN LARGER INTEREST OF JUSTICE. IT IS MADE CLEAR THAT W HILST DOING SO, WE ARE NOT EXPRESSING WITH UNNECESSARY ADJOURNMENTS SOUGHT AS A MATTER OF ROUTINE AS OUR INSTANT REMAND DIRECTION SOLELY BASED ON THE FACTS THAT THE ASSESSEE DOES NOT SEEM TO HAVE INTIMATED ABOUT THE EARLIER DATES OF HEARINGS. ALL THE THR EE IMPUGNED PENALTIES ARE ACCORDINGLY SET ASIDE TO THE FILE OF THE CIT(A) FOR ADJUDICATION ON MERITS. 7. THESE THREE ASSESSEE S A PPEALS SUCCEED FOR STATISTICAL PURPOSES . ORDER PR ONOUNCED IN THE OPEN C OURT ON 23 - 08 - 201 6 SD/ - SD/ - ( MANISH BORAD) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 23 /08 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE I.T.A NOS . 1661 TO 1663 /AHD/20 13 A.Y. 2004 - 05, 0 5 - 06 & 07 - 08 PAGE NO ORNET INTERMEDIATES LTD. VS. ACIT 5 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,