ACIT, V. Amar alloys (P) Ltd,

ITA 2035/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9899 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-08-2009
• Assessment Year: 1999-2000
• Appeal Filed On: 23-05-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Keywords: Bogus purchase; Set aside
• Section: 271(1)(c)

Judgement Text

ITA NO. 2035/DEL/2008 & C.O. NO. 101/DEL/2009 A.Y. 1999-2000 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2035/DEL/2008 A.Y. 1999-2000 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S AM AR ALLOYS (P) LTD. HISAR (HARYANA) INDUSTRIAL AREA, HISAR (HARYANA) C.O. NO. 101/DEL/2009 A.Y. 1999-2000 M/S AMAR ALLOYS (P) LTD. VS. ASSTT. COMMISSIONE R OF INCOME TAX, INDUSTRIAL AREA, HISAR (HARYANA) HISAR (HARYANA) [APPELLANT] (RESPONDENT) APPELLANT BY : MS. PRATIMA KAUSHIK, SR. DR RESPONDENT BY : SHRI HIREN MEHTA, CA ORDER PER SHAMIM YAHYA, AM THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECT ION FILED BY THE ASSESSEE EMANATES ARISING OUT OF THE ORDER OF THE CIT(A) DAT ED 20.4.2007 AND PERTAIN TO A.Y. 1999-2000. 2. THE ISSUE RAISED IN THE REVENUES APPEAL IS THAT CIT(A) HAS ERRED IN CANCELLING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE IT AC T. 3. IN THIS CASE PENALTY UNDER SECTION 271(1)(C) OF RS. 6,23,550/- WAS LEVIED ON ACCOUNT OF ADHOC ADDITIONS FOR THE PURCHASES FROM SOME PARTIES, WHO AT THE TIME OF ITA NO. 2035/DEL/2008 & C.O. NO. 101/DEL/2009 A.Y. 1999-2000 2 SEARCH /SURVEY ON THEIR PREMISES STATED THAT ALL TH E TRANSACTIONS ARE BOGUS. THE ASSESSEE DID NOT APPEAL AGAINST THE QUANTUM. 4. AGAINST THE PENALTY IMPOSED THE ASSESSEE APPEALE D BEFORE THE CIT(A). THE LD. CIT(A) NOTED THAT THE ASSESSEE HAD NOT MADE ANY SUB MISSIONS AS REGARDS THE MERITS OF THE CASE. HENCE IN THAT RESPECT, HE HELD THAT FIN DING OF THE ASSESSING OFFICER WAS IN ORDER. THE LD. CIT(A) FURTHER REFERRED THE ASSES SEES PLEA THAT PENALTY COULD NOT BE IMPOSED AS NO TAX WAS EVADED AS THE INCOME OF THE ASSESSEE WAS NET LOSS. THE LD. CIT(A) FOLLOWING THE DECISION OF HONBLE APEX COURT IN THE CASE OF VIRTUAL SOFT SYSTEMS LTD. VS. CIT 289 ITR 83 UPHELD THE ASSESSEES CONTE NTION AND ACCORDINGLY HE DELETED THE PENALTY. AGAINST THIS ORDER REVENUE HAS FILED THI S APPEAL. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE C OUNSELS AND PERUSED THE RECORDS. BOTH THE COUNSELS FAIRLY AGREED THAT CON SEQUENT UPON THE HONBLE APEX COURT DECISIONS IN THE CASE OF GOLD COIN HEALTH FOOD PVT. LTD. 304 ITR 308 (SC), THE DECISION FOLLOWED BY THE CIT(A) CANNOT BE APPLIED AND AS SUC H THE ORDER DELETING THE PENALTY IS TO BE SET ASIDE. 6. HOWEVER, THE LD. COUNSEL FOR THE ASSESSEEE SUBM ITTED THAT THE ASSESSEE IS AGGRIEVED BY THE CIT(A)S ORDER IN AS MUCH AS HE H AS UPHELD THE ASSESSING OFFICERS ACTION QUA THE ISSUE OF BOGUS PURCHASE AND CONDITIO NS FOR IMPOSING PENALTY. HE CONTENDED THAT THE LD. CIT(A) HAS NOT AT ALL GIVEN THE APPROPRIATE REASON FOR THE SAME. HIS ORDER IN THIS RESPECT IS LACONIC AND NON-SPEAKIN G ONE. HENCE, HE PLEADED THAT ON THIS ISSUE UNDER RULE 27 OF ITAT RULES, 1963, THE A SSESSEE IS AGGRIEVED MAY BE PERMITTED TO AGITATE. 7. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. ADMITTEDLY, THE CIT(A)S ORDER OF DELETION OF PENALTY IS LIABLE TO BE SET ASIDE IN VIEW OF THE HONBLE APEX COURT DECISION IN THE CASE OF GOLD COIN HEALTH FOOD PVT LTD. (SUPRA). HOWEVER, AS ITA NO. 2035/DEL/2008 & C.O. NO. 101/DEL/2009 A.Y. 1999-2000 3 REGARDS THE MERIT OF THE ISSUE I.E. WHETHER THE CON DITIONS FOR IMPOSING THE PENALTY UNDER SECTION 271(1)(C) WERE PREVALENT OR NOT I.E. WHETH ER THE ASSESSEE CAN BE SAID TO BE GUILTY OF CONCEALING THE PARTICULARS OF HIS INCOME OR FURNISHING INADEQUATE PARTICULARS OF SUCH INCOME HAS NOT BEEN PROPERLY DEALT WITH BY TH E LD. CIT(A). THE LD. CIT(A) WENT ON CONSIDERING THE ISSUE ON THE ANVIL OF ASSESSED INCO ME BEING LOSS AND HENCE HE DID NOT PROPERLY ADDRESS THIS ISSUE. WE FIND OURSELVES I N AGREEMENT WITH THE CONTENTION THAT RESPONDENT CAN AGITATE ON THIS ISSUE UNDER RULE 27 OF THE ITAT RULES. MOREOVER, WE FIND THAT THE HONBLE APEX COURT IN THE CASE OF HUKU MCHAND MILLS LTD. VS. CIT, CENTRAL BOMBAY IN 63 ITR 232 HAS HELD THAT IT IS WELL WITHI N THE JURISDICTION OF THE TRIBUNAL TO ALLOW NEW GROUND. IT WAS FURTHER HELD THAT THE T RIBUNAL HAS AUTHORITY TO DIRECT LOWER AUTHORITY TO HOLD A FURTHER ENQUIRY AND DISPOSE OF THE CASE ON THE BASIS OF SUCH ENQUIRY. THE RULES IN THIS REGARD ARE NOT EXHAUSTIVE OF THE POWERS OF THE TRIBUNAL. 8. IN THE BACKGROUND OF AFORESAID DISCUSSION, WE REM IT THIS ISSUE TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION TO PASS A SPEAKING ORDER O N THIS ISSUE ACCORDINGLY. NEEDLESS TO ADD THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTU NITY OF BEING HEARD. WE MAKE IT CLEAR THAT WE HAVE NOT CONSIDERED THE ISSUE ON THE MERITS IN ANY MANNER WHATSOEVER. THE ASSESSEE SHALL BE ENTITLED TO RAISE SUCH GROUND S AS HE IS ADVISED AND AS ENTITLED, AS PER LAW. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENU E STANDS ALLOWED FOR STATISTICAL PURPOSES. CROSS OBJECTION 101/DEL/2009 10. THE ISSUE OF THE ASSESSEE IS THAT CIT WAS NOT J USTIFIED IN HOLDING THE FINDINGS OF THE ASSESSING OFFICER TO THE EFFECT THAT CERTAIN PU RCHASES WERE PROVED TO BE BOGUS WARRANTING OF LEVY OF PENALTY. 11. AT THE THRESHOLD, IT IS NOTED THAT THERE IS A D ELAY IN FILING THE CROSS OBJECTION. ITA NO. 2035/DEL/2008 & C.O. NO. 101/DEL/2009 A.Y. 1999-2000 4 12. MOREOVER, WE FIND THAT GROUND OF APPEAL RAISED IN THE CROSS OBJECTION HAS ALREADY BEEN AGITATED BY THE ASSESSEE UNDER RULE 27 OF THE ITAT RULES, 1963. CONSIDERING THE SAME, WE HAVE ALREADY REMITTED THE ISSUE TO THE FILE OF THE CIT(A), AS SUCH THIS CROSS OBJECTION HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED AS SUCH. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENU E STANDS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION FILED BY THE ASSES SEE IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH AUGUST, 2009. SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 28 TH AUGUST, 2009 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES