M/s Laurel Tradecom Pvt. Ltd., Kolkata V. ITO, WD-6(2), KOLKATA, Kolkata

ITA 1826/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9212 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 15-09-2016
• Court: TRIBUNAL
• Department Lawyers: SAURAV KUMAR CIT LD
• Assessee Lawyers: SUNIL SURA NA FCA LD
• Keywords: Business income; Application of stay; Wrong claim
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH KOLKAT A BEFORE : SHRI WASEEM AHMED, ACCOUNTANT MEM BER AND SHRI S.S.VISWANETHRA RAVI, JUD ICIAL MEMBER S.A NO. 14/KOL/2017 [IN ITA NO. 1826/KOL/2 02016 A.Y 2011-12] AND ITA NO. 1826/KOL/2016 A.Y 2011-12 M/S. LAUREL TRADECOM VS. INCOME TAX OFFICER PVT. LTD. WARD 6(2), KOLKATA PAN : AABCL9483A [APPLICANT/APPELLANT ] [RESPONDENT/DEPARTMENT ] APPLICANT/APPELLANT BY : SHRI SUNIL SURANA , FCA, LD.AR FOR THE ASSESSEE RESPONDENT/DEPARTMENT BY : SHRI SAURAV KUMAR, ADDL.CIT, LD.DR FOR THE REVENUE DATE OF HEARING : 17-03-2017 DATE OF PRONOUNCEMENT : 22-03-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: BY WAY OF THIS STAY PETITION THE ASSESSEE HAS REQUE STED FOR GRANTING OF STAY OF OUTSTANDING OF RS. 3,56,91,890/- IN SA 14/K OL/2017 IS ARISING OUT OF APPEAL IN ITA NO. 1826//KOL/2016. 2. SRI. SUNIL SURANA, FCA, LD. AR APPEARED ON BEHAL F OF ASSESSEE AND SRI SAURAV KUMAR, LD. DEPARTMENTAL REPRESENTATIVE APPEA RED ON BEHALF OF REVENUE. 3. AT THE OUTSET THE LD. AR FOR THE ASSESSEE BROUGH T TO OUR NOTICE THAT THE AO & THE CIT-A HAS PASSED THE EX-PARTE ORDER. THE A SSESSEE BEFORE THE CIT- A FAILED TO ATTEND THE HEARING BECAUSE IT COULD NOT RECEIVE THE NOTICE ISSUED S.P NO. 14/KOL/2017 & ITA NO. 1826/KOL/2016 M/S. LAUREL TRA DECOM PVT.LTD 2 FOR HEARING. THE LD. AR SUBMITTED THAT THERE WAS A CHANGE IN THE REGISTERED ADDRESS OF THE ASSESSEE AND THE SAME WAS COMMUNICAT ED TO THE AO WARD- 3(2) AND THE CIT-(A)5 HAVING JURISDICTION OVER THE ASSESSEE BY TWO SEPARATE LETTER DATED VIDE DATED 15.5.2015. THE NEW ADDRESS OF THE ASSESSEE WAS CHANGED TO 112, JAIGIRHAT ROAD, THAKURPUKAR, NEAR K AILASHPAL VIDYALAY/ DARGAHA CLUB, KOLKATA-700063 W.E.F. 31.12.2014. IN THIS CONNECTION THE LD. AR HAS PRODUCED BEFORE US FORM NO. INC 22 ISSUED BY THE REGISTRAR OF COMPANIES AND PLACED ON RECORD. 4. THE CIT-A IN HIS ORDER HAS GIVEN THE FINDING THA T THE NOTICE OF HEARING WAS SENT AT 7, GRANT LANE, 3 RD FLOOR, KOLKATA-700012 DATED 7.1.2016 TO THE ASSESSEE WHICH WAS RETURNED AS UNSE RVED WITH THE REMARK INSUFFICIENT ADDRESS. BESIDES THE CIT-A HA S ISSUED SEVERAL NOTICES TO THE AO IN CONNECTION WITH ISSUE OF NOTIC E TO THE ASSESSEE FOR HEARING DATED 20.1.2016, 26.2.2016, & 27.06.2016 AN D THE AO IN TURN ISSUED THE NOTICE & DEPUTED INSPECTOR FOR THE SERVI CE OF NOTICE AT THE OLD ADDRESS DESPITE OF HAVING THE INFORMATION OF TH E NEW ADDRESS OF THE ASSESSEE. THUS THE APPEAL OF THE ASSESSEE HAS N OT BEEN HEARD ON MERIT. IN VIEW OF ABOVE THE LD. AR REQUESTED TO RES TORE THE MATTER TO THE AO FOR FRESH ADJUDICATION TO THE AO. ON THE OTH ER HAND THE LD. DR RAISED NO OBJECTION IF THE MATTER IS RESTORED BACK TO THE AO. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE AT THE TIME OF HEARING FIND THAT BOTH PARTIES CONCEDED THAT STAY PETITION CAN BE REJECTED AND EARLY HEARING CAN BE GRANTED. ACCORDINGLY, IN TERMS OF ABOVE, WE DISMISS THE STAY PETITION FILED BY ASSESSEE, HOWEVER, LD. AR BEFORE US REQUESTED TO HE AR THE MATTER OF ASSESSEES APPEAL ON MERIT. LD. DR RAISED NO OBJECT ION IF THE APPEAL IS HEARD ON MERIT. AFTER HAVING CONSENT OF BOTH THE PARTIES WE PROCEED TO HEAR THE APPEAL ON MERIT. THUS ASSESSEES STAY PETITION STAN DS DISMISSED AS INFRUCTUOUS. S.P NO. 14/KOL/2017 & ITA NO. 1826/KOL/2016 M/S. LAUREL TRA DECOM PVT.LTD 3 COMING TO APPEAL IN ITA NO. 1826/KOL/2013 FOR A.Y 0 8-09 . 6. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DT: 18-07-2016 OF COMMISSIONER OF INCOME TAX (APPEALS)-6 OF KOLKATA F OR AY 2011-12 7. AT THE OUTSET, WE FIND THAT THE LOWER AUTHORITIE S HAVE PASSED THE EX-PARTE ORDER. THE REASONS FOR THE EX-PARTE ORDER HAVE ALREADY BEEN EXPLAINED IN EARLIER PARAGRAPH AND THE SAME IS NOT REPEATED FOR THE SAKE OF BREVITY. IN VIEW OF ABOVE & IN THE INTEREST OF JUSTICE, WE ARE INCLINED TO RESTORE THIS ISSUE TO THE FILE OF AO FO R FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW. IT IS ALSO IMPORTANT TO NO TE THAT THE ASSESSEE SHALL CO-OPERATE IN THE ASSESSMENT PROCEEDINGS TO T HE AO. WE ARE ALSO INCLINED TO FIX THE DATE OF HEARING ON 15-4-2017 BE FORE THE AO AND NO SEPARATE NOTICE SHALL BE ISSUED UPON THE ASSESSEE. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, STAY APPLICATION FILED BY THE AS SESSEE IS DISMISSED AND APPEAL OF ASSESSEE STANDS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AS DICTA TED ON 22-03-2017 SD/- SD/- WASEEM AHMED S.S.VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 22-03-2017 COPY OF THE ORDER FORWARDED TO: 1. APPLICANT/APPELLANT : M/S. LAUREL TRADECOM PVT. LTD, OMER MANSION, 29A, WESTON STREET, 3 RD FLOOR, R.NO.C-5, KOLKATA-12. 2 RESPONDENT /DEPARTMENT: THE I T O, W 6(2), AAYKAR BHAWAN, P-7 CHOWRINGHEE SQUARE, KOLKATA-69. 3. CIT, 4. CIT(A), 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPS TRUE COPY] BY ORDER, ASSTT REGIS TRAR. S.P NO. 14/KOL/2017 & ITA NO. 1826/KOL/2016 M/S. LAUREL TRA DECOM PVT.LTD 4 ALL THESE SEVEN STAY APPLICATIONS BY THE ASSESSEE A GAINST THE DEMAND OF ARREAR DATED 18-01-2017 SEEKING STAY OF R EALIZATION OF DISPUTED OUTSTANDING DEMAND FOR THE A.YS 2008-09 TO 2014-15. S.P NO. 14/KOL/2017 & ITA NO. 1826/KOL/2016 M/S. LAUREL TRA DECOM PVT.LTD 5 2. SINCE THE ASSESSEE AND THE ISSUES RAISED THEREIN ARE SAME IN ALL THE STAY APPLICATIONS EXCEPT TO THE VARIATIONS IN CALCU LATIONS, THEREFORE, ALL THE STAY APPLICATIONS CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED. IN ORDER TO AVOID REPETITION AND FOR THE SAKE OF CONVENIENCE, THE FACTS AS ARRAYED IN S.A NO.7 OF 2017 [ ITA NO.1 29/KOL/17 FOR THE AY 2008-09 BY THE ASSESSEE] ARE READ AND DISCUSSED HER EIN BELOW. SA NO. 07/KOL/2017 IN ITA NO.129/KOL/17 FOR AY 2008 -2009 3. AT THE TIME OF HEARING BEFORE US, IT IS NOTICED THAT NONE APPEARED ON BEHALF OF THE REVENUE. HOWEVER, SHRI RAJAT SUBHRA B ISWAS, CIT/DR(ITAT), FILED AN APPLICATION SEEKING ADJOURNMENT STATING TH AT THE SR. DR TO WHOM THE PRESENT APPEAL WAS ASSIGNED UNAVAILABLE AND HE WAS ON MEDICAL LEAVE, AND URGED TO ADJOURN THE SAID CASE TO ANOTHER DATE. THE LD.AR OF THE ASSESSEE HAS VEHEMENTLY OBJECTED TO THE SAME AND PL EADED URGENCY AND REFERRED TO PAGE NO. 2A OF THE PAPER BOOK AND SUBMI TTED THAT THE PETITIONER/ASSESSEE FILED AN APPLICATION DT. 03-02- 2017 BEFORE THE ACIT, CIR-34, KOLKATA TO KEEP THE SAID DEMAND FOR THE A.Y S 2008-09 TO 2014-15 IN ABEYANCE AS IT HAS FAIR CHANCES OF GETTING SUBST ANTIAL RELIEF IN MAIN APPEAL BEFORE THE TRIBUNAL AND ARGUED THAT THE SAI D AUTHORITY INSTEAD OF GRANTING THE STAY MADE AN ENDORSEMENT TO PAY THE OU TSTANDING DEMAND BY 10-02-2017 I.E. INCIDENTALLY TODAY. THE LD.AR FURTH ER SUBMITS BEFORE US THAT HE IS READY TO PROSECUTE THE SAID APPEALS FILED BY THE ASSESSEE CHALLENGING THE ORDERS OF THE CIT-A IN CONFIRMING THE PENALTY I MPOSED BY THE AO BEFORE THIS TRIBUNAL AT ANY DATE AS AND WHEN FIXED BY THE TRIBUNAL. HE FURTHER ARGUED THAT THE ASSESSEE HAS FAIR CHANCES IN SUCCEE DING IN ALL THE APPEALS. TAKING INTO CONSIDERATION THE SUBMISSIONS OF LD.AR AND THE ENDORSEMENT MADE BY THE ACIT, WHICH IS PLACED ON RECORD AT PAGE NO. 2A OF THE PAPER BOOK, WE PROCEED TO HEAR THE STAY APPLICATIONS BY R EJECTING THE SAID S.P NO. 14/KOL/2017 & ITA NO. 1826/KOL/2016 M/S. LAUREL TRA DECOM PVT.LTD 6 ADJOURNMENT APPLICATION DATED 10-02-2017 PLACED ON RECORD BY THE REVENUE. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A FIRM AND ENGAGED IN THE BUSINESS OF GROWING, MANUFACTURING A ND SALE OF TEA. THE ASSESSEE FILED ITS RETURN OF INCOME ON 25-09-2008 D ECLARING A TOTAL INCOME OF RS.25,88,157/-. UNDER SCRUTINY, NOTICES U/S. 143 (2) AND 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO WHICH, THE LD. AR OF THE ASSESSEE APPEARED BEFORE THE AO. IN THE SAID PROCEEDINGS THE AO TREATED THE INCOME DERIVED FROM MANUFACTURING AND PROCESSING OF TEA LEAVES AS BUSINESS INCOME AND REJECTED THE CLAIM OF ASSESSEE IN TREATING THE SAME AS AGRICULTURAL INCOME. THUS, THE AO ADDED AN AMOUNT O F RS.7,46,794/- TO THE TOTAL INCOME OF THE ASSESSEE AND TO THAT EFFECT AN ORDER U/S. 147/143(3) OF THE ACT WAS PASSED ON 27-08-2015. IT IS PERTINENT TO NOTE THAT THE ASSESSEE DID NOT PREFER ANY APPEAL CHALLENGING THE SAID ORDER OF THE AO BEFORE THE 1 ST APPELLATE AUTHORITY. THEREBY, THE ORDER PASSED BY THE AO U/SEC 143(3) OF THE ACT HAS BECOME FINAL. 5. THEREAFTER, THE AO INITIATED THE PENALTY PROCEED INGS U/S. 271(1) (C) OF THE ACT BY ISSUING A NOTICE U/SEC 274 OF THE ACT IN RESPECT OF ADDITION MADE AS DISCUSSED ABOVE. IN RESPONSE TO THE NOTICE AS ISSUED BY THE AO UNDER PENALTY PROCEEDINGS THE ASSESSEE CONTENDED TH AT PENALTY PROCEEDINGS CANNOT BE INITIATED ON THE BASIS OF MAK ING WRONG CLAIM, AS IT DOES NOT CONTAIN MALAFIDE INTENTION. HOWEVER, THE AO NOT SATISFIED WITH THE EXPLANATION IMPOSED THE PENALTY OF RS. 2,30,759 /- U/S. 271(1) (C) FOR A.Y 2008-09 AND RS.14,00,677/-, RS.37,84,201/-, RS. 65,87,490/-, RS.48,24,850/-,RS.68,24,700/- AND 79,47,350/- FOR A YS 2009-10 TO 2014- 15 RESPECTIVELY. 6. THE SAME WAS CHALLENGED BEFORE THE CIT-A, WHEREI N THE CIT-A DISMISSED THE ALL THE APPEALS OF ASSESSEE AND CONFI RMED THE IMPUGNED PENALTY AS IMPOSED BY THE AO. AGAINST WHICH THE ASS ESSEE FILED SEVEN S.P NO. 14/KOL/2017 & ITA NO. 1826/KOL/2016 M/S. LAUREL TRA DECOM PVT.LTD 7 APPEALS BEFORE THIS TRIBUNAL ON 25-01-2017 IN ITA N OS. 129 TO 135/KOL/2017 FOR THE AYS. 2008-09 TO 2014-15. AS MA TTER STOOD THUS, THE AO ISSUED A DEMAND OF ARREAR DT:18-01-2017 TO PAY T HE OUTSTANDING DEMAND WITHIN SEVEN DAYS AT PAGE NO- 43 . 7. IT IS NOTED FROM THE STAY PETITION AT PARA NO-5 AS FILED BY THE ASSESSEE THAT THE SEVEN APPEALS CHALLENGING THE ORD ER OF CIT-A WERE FILED ON 25-01-2017 BEFORE THIS TRIBUNAL IN ITA NOS. 129 TO 135/KOL/2017 ( BY THE ASSESSEE) FOR THE AYS. 2008-09 TO 2014-15 AND W E FIND THEY ARE YET TO BE FIXED FOR HEARING AND PENDING FOR ADJUDICATION. FURTHER, WE ALSO FIND FROM THE STAY PETITION THAT THE AO INITIATED THE PE NALTY PROCEEDINGS FOR CLAIM OF DEDUCTION UNDER RULE 8(1) OF THE I.T RULES 1962 IN RESPECT OF PURCHASE OF GREEN LEAF FROM THE MARKET. THE AO FOUN D THAT THE INCOME DERIVED THEREON FROM MANUFACTURING OF TEA DOES NOT FALL WITHIN THE AMBIT OF RULE 8(1) OF THE I.T RULES AND THEREBY HE IMPOSED T HE PENALTY AND CONFIRMED BY THE CIT-A. UNDER THESE CIRCUMSTANCES, WE DEEM IT FIT AND APPROPRIATE TO FIX THE SAID APPEALS OF ASSESSEE ON 03-04-2017 AND GRANT STAY IN SA 07/KOL/2017 IN ITA 129/KOL/2017 FOR AY.2 008-09 RESTRAINING THE RESPONDENT REVENUE AUTHORITY FROM REALIZATION OF OU TSTANDING DEMAND AS RAISED BY THE ACIT, CIR-34, KOLKATA DATED 18-01-201 7 TILL THE DISPOSAL OF THE SAID APPEALS. 8. IN VIEW OF THE DISCUSSION ABOVE AND DECISION REN DERED THEREIN, ALL THE STAY PETITIONS IN SA NOS 08/KOL/2017 TO 13/KOL/201 7 ARISING FROM ITA NOS 130/KOL/2017 TO 135/KOL/2017 FOR AYS 2009-10 TO 20 14-2015 FILED BY THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, ALL THE SEVEN STAY PETITIONS FI LED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AS DICTA TED ON 15-02-2017 SD/- SD/- DR. A.L. SAINI S.S.VISWANETHRA RAVI S.P NO. 14/KOL/2017 & ITA NO. 1826/KOL/2016 M/S. LAUREL TRA DECOM PVT.LTD 8 ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 15-02-2017 COPY OF THE ORDER FORWARDED TO: 1. APPLICANT : M/S. ATMARAM & CO. 4 INDIA EXCHANGE PLACE, 3 RD FLOOR, KOLKATA-700 001. 2 RESPONDENT : THE DCIT, CIR-34, KOLKATA. 3. CIT, 4. CIT(A), 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPS TRUE COPY] BY ORDER, ASSTT REGIS TRAR.