MEHTAB ALAM KHAN, MUMBAI V. ADDL. C.I.T.-32, MUMBAI

ITA 1913/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79186 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 01-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Assessee Lawyers: DHIRENDRA M SHAH
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO.1913 /M/2011 ( AY: 2006 - 200 7 ) SHRI MEHTAB ALAM KHAN, BOMBAY STREET, 5/A, STENLY COMPOUND, KHERANI ROAD, SAKINAKA, MUMBAI - 400072. / VS. ADDL. CIT , RANGE - 21(3), MUMBAI. ./ PAN : AANPK5330N ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DHIRENDRA M. SHAH / RESPONDENT BY : SHRI B. YADAGIRI , DR / DATE OF HEARING :23.6.2014 / DATE OF PRONOUNCEMENT :23.6.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 8.3.2011 IS AGAINST THE ORDER OF THE CIT (A) - 32, MUMBAI DATED 2.12.2010 FOR THE ASSESSMENT YEAR 2006 - 2007. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A ) ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271D AMOUNTING TO RS. 2,20,000/ - WHICH BE DELETED. 2. THE LD CIT (A) ERRED IN REJECTING THE EXPLANATION AND CONFIRM THE PENALTY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE PENALTY PROCEEDING HAVIN G NOT BEEN INITIATED AND NO SATISFACTION RECORDED BY THE AO. THE PENALTY LEVIED BEEN BAD IN LAW AND IT BE CANCELLED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE PENALTY ORDER IS BARRED BY LIMITATION AND HENCE IT SHOULD BE CANCELLED. 5. THE L D CIT (A) FAILED TO APPRECIATE THAT THE LOAN BORROWED DO NOT RELATE TO THIS YEAR AND HENCE NO PENALTY SHOULD BE LEVIED. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT (A) ERRED IN REJECTING THE EVIDENCE PRODUCE IN SUPPORT OF THE LOANS BORR OWED AS ADDITIONAL EVIDENCE AND ERRED IN REJECTING THE SAME. 3. AT THE OUTSET, SHRI DHIRENDRA M SHAH, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ABOVE MENTIONED GROUNDS AND MENTIONED THAT THE GROUND NO.6 2 RELATES TO THE CIT (A) FAILURE TO APPRECIATE THE ADDITIONAL EVIDENCES FURNISHED BEFORE HIM. REFERRING TO THE MERITS OF THE CASE, LD COUNSEL MENTIONED THAT THE AO LEVIED PENALTY U/S 271D OF THE ACT IN RESPECT OF LOANS AMOUNTING TO RS. 2.2 LAKHS FROM A COUP LE OF CREDITORS RECEIVED IN CASH. REFERRING TO THE PAPER BOOK, LD COUNSEL MENTIONED THAT FACTUALLY THESE AMOUNTS WERE NOT RECEIVED IN THE YEAR UNDER CONSIDERATION. IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO THE COPIES OF THE BALANCE SHEETS FOR T HE AY 2005 - 06 AND 2006 - 07 TOGETHER WITH THE ANNEXURES SUCH AS BALANCE SHEET, STATEMENT OF INCOME AND RETURNS AT PAGE NOS. 1 AND 2 OF THE PAPER BOOK. REFERRING TO THE OTHER ANNEXURE AT PAGE 10 OF THE PAPER BOOK (COPY OF THE BALANCE SHEET) SHOWING THE OUTST ANDIN G LIABILITIES AS ON 31.3.2005, L D COUNSEL MENTIONED THAT THESE PAPERS INDICATE THE FACT OF RECEIVING THE LOANS IN THE EARLIER YEAR NOT UNDER THE CURRENT YEAR UNDER CONSIDERATION. HE ALSO BROUGHT OUR ATTENTION TO THE CONFIRMATION LETTERS AT PAGE 11 AN D 12 OF THE PAPER BOOK AND MENTIONED THAT THE LOANS UNDER CONSIDERATION WERE RECEIVED DURING THE FINANCIAL YEAR ENDING 31.3.2005. HE ALSO FURNISHED IDENTITY OF THE LOAN CREDITORS BY FILING A COPY IN SUPPORT OF THE SAME. CIT (A) DID NOT ADMIT THESE EVIDEN CES AND THEREFORE, HE CONFIRMED THE PENALTY AS PER THE DISCUSSION GIVEN IN PARA 3.5 OF THE IMPUGNED ORDER. AGGRIEVED, ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. DURING THE PROCEEDINGS BEFORE US, LD COU NSEL FOR THE ASSESSEE FILED A COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. BSN MEDICAL P. LTD VS. DCIT VIDE ITA NO.8830/M/2011 (AY 2006 - 2007), DATED 28.3.2014, WHEREIN ONE OF US (JM) IS A PARTY TO THE ORDER. BRINGING OUR ATTENTION TO PARA 5 OF TH E SAID ORDER OF THE TRIBUNAL (SUPRA) DATED 28.3.2014, LD COUNSEL MENTIONED THAT WHEN THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE GO TO THE ROOT OF THE MATTER, IT IS THE REQUIREMENT OF THE CIT (A) TO ADMIT THE SAME AND ADJUDICATE THE ISSUE VIDE POWER S GRANTED U/S 250 OF THE ACT. LD COUNSEL ALSO RELIED ON THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF SMT. PRABHAVATI S. SHAH VS. CIT (1998) 231 ITR 1 IN SUPPORT OF THE SAME. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE AO. 3 6. WE HAVE H EARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON HEARING BOTH THE PARTIES ON THE PRELIMINARY ISSUE OF REJECTION OF THE ADDITIONAL EVIDENCE BY THE CIT (A), WE FIND THAT THE SAID A DDITIONAL EVIDENCE IS REQUIRE D TO BE ADMITTED AND MADE USE IN THE ADJUDICATION PROCEEDINGS BEFORE THE LOWER AUTHORITIES. AFTER ADMITTING THE ADDITIONAL EVIDENCE, WHICH ARE REJECTED BY THE CIT (A), WE REMAND THE ISSUE TO THE FILE OF THE AO FOR CONSIDERING THE SAME AND TO EXAMINE THE ISSUE AFRESH BEFORE LEVYING THE PENALTY U/S 271D OF THE ACT. AO IS DIRECTED TO PASS A SPEAKING ORDER AS TO HOW THE PENALTY U/S 271D IS LEVYABLE IN THE YEAR UNDER CONSIDERATION IN RESPECT OF THE SAID LOANS AMOUNTING TO RS. 2.2 L AKHS WHICH ARE PRIMA FACIE FOUND RECEIVED IN EARLIER YEARS . AO SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE REMANDED TO THE FILE OF THE AO AND ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JUNE, 2014. S D / - S D / - (SANJAY GARG) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 23.6 .2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI