Shipra Ocean Trade Pvt. Ltd., GANDHIDHAM V. The Income Tax Officer, Ward-2, GANDHIDHAM

ITA 174/RJT/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0129 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 06-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND N SONTAKKE
• Keywords: Opportunity of being heard; Question of law
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI S.S. GODARA, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SHIPRA OCEAN TRADE PVT. LTD. PLOT NO. 244/1, N.H. NO. 8A,GANDHIDHAM PAN: AACCS9888H (APPELLANT) VS THE ITO, WARD - 2, GANDHIDHAM (RESPOND ENT) REVENUE BY : S H RI ARVIND N. SONTAKKE , SR. D . R. ASSESSEE BY: S H RI CHETAN AGRAWAL , A.R. DATE OF HEARING : 06 - 10 - 2 016 DATE OF PRONOUNCEMENT : 24 - 10 - 2 016 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2001 - 02 , AR ISES FROM ORDER OF THE CIT(A) - 3, RAJKOT DATED 03 - 03 - 2015 IN APPEAL NO. CIT(A) - 3 / RJT/0057/12 - 13 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX AC T, 1961; IN SHORT THE ACT . I T A NO . 174 / RJT /20 15 A SSESSMENT YEAR 200 1 - 02 I.T.A NO. 1 7 4 /RJT /20 15 A.Y. 2001 - 02 PAGE NO SHIPRA OCEAN TRADE PVT. LTD. VS. ITO 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL: - 1. THAT, THE LEARNED CIT(A) HAS ERRED IN IMPOSING PENALTY U/S. 271(1)(C) OF RS. 48,650/ - IS NOT JUSTIFIED AND SHOULD BE CANCELLED. 3. THE ASSESSEE IS ENGAGED IN THE B USINESS OF TIMBER MERCHANT. THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 15 , 47 , 953/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 1,23,000/ - ON THE BASIS OF INFORMATION OBTAINED DUR ING SURVEY U/S. 133A THAT ASSESSEE HAD MADE PAYMENT OF RS. 1,23,000/ - TO GREEN GOLD TIMBER PVT. LTD. IN THIS CONNECTION , THE ASSESSEE HAS STATED THAT SEIZED MATERIAL BELONGED TO M/S. GREEN GOLD TIMBER PVT. LTD AND HE HAS NOT MADE CASH TRANSACTION WITH TH AT PARTY. THE LEARNED CIT(A) HAS CONFIRMED THE ADDITION STATING THAT THE ASSESSEE IS UNABLE TO GIVE ANY PLAUSIBLE EXPLANATION. DURING THE COURSE OF PENALITY PROCEEDING BEFORE THE ASSESSING OFFICER THE ASSESSEE HAS REQUESTED THE AO TO KEEP THE PENALITY PR OCEEDING IN ABEYANCE TILL THE DECISION OF ITAT AS THE ASSESSEE HAS PREFERRED FURTHER APPEAL BEFORE THE ITAT. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND IMPOSED PENALTY FOR THE CONCEALMENT OF INCOME U/S. 271(1)(C) OF THE I.T. ACT. THEREAFTER THE ASSESSEE HAS FILED APPEAL AGAINST THE PENALTY ORDER BEFORE THE LEARNED CIT(A) AND REQUESTED THAT THE PENALTY PROCEEDINGS MAY BE KEPT IN ABEYANCE TILL THE DECISION OF THE HIGH COURT OF GUJARAT AS HE HAD FILED APPEAL BEFORE THE HIGH COU RT OF GUJARAT AGAINST THE DECISION OF THE ITAT. T HE LD. COMMISSIONER OF I.T.A NO. 1 7 4 /RJT /20 15 A.Y. 2001 - 02 PAGE NO SHIPRA OCEAN TRADE PVT. LTD. VS. ITO 3 INCOME TAX(A) HAS CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER AND HIS DECISION IS REPRODUCED AS UNDER : - 4.3 I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE APPELLANT A ND THE VARIOUS ORDERS. THERE IS NO DISPUTE THAT ABOUT FACTS. AN ADDITION OF RS. 1,23,000/ - WAS MADE BY THE A.O. ON THE BASIS OF THE PAPERS FOUND IN THE PREMISES OF M/S. GREEN GOLD TIMBERS P. LTD. THE ADDITION WAS CONFIRMED BY THE LD. CIT (A) - II, RAJKOT WITH THE FOLLOWING OBSERVATIONS: - (BB) IT IS ALSO PERTINENT TO STATE HERE THAT GREEN GOLD TIMBER PVT. LTD. ADMITTED BEFORE THE HON BLE SETTLEMENT COMMISSION THE FACT OF RECEIPTS OF SALES PROCEEDS IN CASH FROM SEVERAL PARTIES, INCLUDING THE APPELLANT, AND ACCORDINGLY, THE SETTLEMENT COMMISSION FIXED THE INCOME OF THAT ASSESSEE. THE AO ALSO, AFTER PERUSAL OF THE IMPOUNDED MATERIAL FOUND IN THE CASE OF GREEN GOLD TIMBER PVT. LTD. FOUND OUT THAT CERTAIN CASH RECEIPTS NOTED IN THE IMPOUNDED DIARIES/NOTEBOOKS WERE NOT RECORDED IN THE REGULAR BOOKS. FURTHER, THE DOCUMENT A - 3, PAGE NO. 11 HAD A SPECIFIC ENTRY IMPLICATING M/S. SHIPRA OCEAN TRADE PVT. LTD, THE APPELLANT, AND GREEN GOLD TIMBER PVT. LTD., THE APPELLANT IS UNABLE TO GIVE ANY PLAUSIBLE EXPLANATION TO UNRAVEL HE NATURE OF TRANSACTION, THAT T OO, WHEN THE APPELLANT AND IT S GROUP CONCERNS WERE HAVING BUSINESS TRANSACTION WITH GREEN GOLD TIMBER PVT. LTD FOR SEVERAL YEARS. ALL THESE INDICATE THAT THE APPELLANT HAS NOT STRONG CASE. 4.4. THE SAME HAS BEEN CONFIRMED BY THE HON BLE ITAT STATING THAT THE EXPLANATION IN THIS REGARD SUBMITTED BEFORE THE DEPARTMENTAL AUTHORITIES IS NEITHER COMPLETE NOR SATISFACTORY. THE HIGHEST FACT FINDING AUTHORITY HAS ALSO CONFIRMED THE ADDITION MADE BY THE A.O. I DO NOT SEE ANY POINT IN ACCEDING TO THE REQUEST OF THE APPELLANT OF KEEPING THE MATTER IN ABEYANCE TILL THE DECISION OF THE HON BLE GUJARAT HIGH COURT. IT HAS BEEN PROVED WITHOUT DOUBT THAT THE APPELLANT HAD ADVANCED AN AMOUNT OF RS. 1,23,000/ - TO M/S. GREEN GOLD T IMBER P. LTD. AND THE SAID AMOUNT WAS NOT REFLECTED IN ITS BOOKS OF ACCOUNT AS HELD BY THE A.O. WELL AS THE APPELLATE AUTHORITIES. THIS CLEARLY POINTS TO CONCEALMENT ON PART OF THE APPELLANT AND THE CASE IS CLEARLY WITHIN THE AMBIT OF S. 271(1)(C). THE PENALTY HAS BEEN CORRECTLY LEVIED BY THE A.O. THE SAME IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. I.T.A NO. 1 7 4 /RJT /20 15 A.Y. 2001 - 02 PAGE NO SHIPRA OCEAN TRADE PVT. LTD. VS. ITO 4 4. IN THIS CASE REQUEST OF THE AR FOR ADJOURNMENT OF THE CASE WAS REJECTED. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF COMMISSIONER OF INCOME TAX(A). AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE AND GOING THROUGH MATERIAL ON RECORD, WE FIND THAT THE REQUEST OF THE ASSESSEE TO KEEP THE PENALTY PROCEEDING IN ABEYANCE TILL THE DECISION OF THE HON,BLE HIGH COURT OF GUJARAT RELATING TO THE QUANTUM ADDITION CONFIRMED BY THE ITAT AHMEDABAD HAS NOT BEEN CONSIDERED BY THE LD . CIT(A). IN THIS CONNECTION IN THE SIMILAR MATTER THE HON,BLE HIGH COURT OF BOMBAY [2014] 44 TAXMANN.COM 103 (BOMBAY) HAS REMANDED PENALTY PROCEEDINGS BACK TO ASSESSI NG OFFICER WITH A DIRECTION TO DISPOSE THE SAME SUBJECT TO ORDER PASSED IN QUANTUM PROCEEDINGS BY THE BOMBAY HIGH COURT . THE PART OF THE DECISION OF THE HON,BLE HIGH COURT OF BOMBAY IS REPRODUCED AS UNDER: - ' . THE ISSUES DO NOT GIVE RISE TO A SUBSTANTIAL QUESTION OF LAW. THE RESPONDENT'S APPEAL AGAINST THE ORDER OF THE TRIBUNAL IN THE QUANTUM PROCEEDINGS HAS BEEN ADMITTED BY THIS COURT. IN VIEW THEREOF, THE TRIBUNAL, INSTEAD OF DECIDING THIS ISSUE AS TO PENALTY UNDER SECTION 271, BY THE IMPUGNED ORDER REST ORED THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE OF LEVY OF PENALTY AFTER THE DECISION OF THIS COURT IN THE SAID APPEAL. THE TRIBUNAL ACCORDINGLY SET ASIDE THE ORDER OF THE CIT (A) AND DIRECTED THE AO TO GIVE THE RESP ONDENT A REASONABLE OPPORTUNITY OF BEING HEARD BEFORE PASSING THE ORDER UPON REMAND. AS NOTED EARLIER, THE APPEAL AGAINST THE QUANTUM PROCEEDINGS HAS BEEN ADMITTED AND IS PENDING HEARING IN THIS COURT. IF THE APPELLANT SUCCEEDS IN THE QUANTUM PROCEEDINGS, IT WOULD NOT EVEN BE NECESSARY TO CONSIDER THE PROCEEDINGS UNDER SECTION 271. IN THE CIRCUMSTANCES, NO PREJUDICE HAS BEEN CAUSED TO THE APPELLANT EVEN QUA THE PENALTY PROCEEDINGS. THE APPREHENSION THAT ANY ORDER IN THE PENALTY PROCEEDINGS MAY BE BARRED BY LIMITATION UNDER SECTION 275(1A), IS NOT WELL FOUNDED. IN ANY EVENT, THE APPREHENSION IS SET AT REST BY DIRECTING THAT IN THE EVENT THE SAME BEING HELD TO BE BARRED BY LIMITATION, THIS APPEAL SHALL STAND REVIVED AUTOMATICALLY AND WITHOUT FURTHER ORDERS OF THIS COURT. ' I.T.A NO. 1 7 4 /RJT /20 15 A.Y. 2001 - 02 PAGE NO SHIPRA OCEAN TRADE PVT. LTD. VS. ITO 5 5. IN THIS CASE A FTER PLACING RELIANCE ON THE ORDER OF H ON BLE B OMBAY HIGH COURT WE RESTORE THIS MATTER TO THE FILE OF THE AO WITH THE DIRECTION TO DECIDE THE ISSUE OF LEVY OF PENALTY AFTER THE DECISION OF THE H ON BLE H IGH COURT OF GUJARAT IN THE QUANTUM APPEAL FILED BY THE ASSESSEE. 6. IN THE END , THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 24 - 10 - 201 6 SD/ - SD/ - (S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBE R ACCOUNTANT MEMBER AHMEDABAD : DATED 24 /10 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT