M/s. Rutuja Ispat Pvt. Ltd., Jalna V. Income-tax Officer,

ITA 2070/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0412 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 18-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 207 0 /PN/20 1 4 / ASSESSMENT YEAR: 20 07 - 08 M/S. RUTUJA ISPAT PVT. LTD., P.NO.D - 67, MIDC, JALNA . / APPELLANT PAN: AA CCR8562P VS. THE INCOME TAX OFFICER, WARD 1(3), JALNA . / RESPONDE NT ASSESSEE BY : S HRI PRAMOD SHINGTE REVENUE BY : S/SHRI RAJEEV KUMAR, CIT & SUHAS KULKARNI / DATE OF HEARING : 22 . 1 1 .201 6 / DATE OF PRONOUNCEMENT: 30 . 1 1 .201 6 / ORDER PER SUSHMA CHOWLA, JM: TH I S APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF CIT( A ), AURANGABAD , DATED 2 7 . 0 8 .201 4 RELATING TO ASSESSMENT YEAR 20 07 - 08 AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . ITA NO . 207 0 / PN /201 4 M/S. RUTUJA ISPAT PVT. LTD. 2 2. THE ASSESSEE HAS RAISED THE F OLLOWING GROUND OF APPEAL : - GROUND NO. 1: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE CIT(A), AURANGABAD, ERRED IN CONFIRMING PENALTY OF RS. 5,67,512/ - VIDE ORDER DATED 27.08.2014. THE APPELLANT PRAYS THAT THE LEVYING OF PENALTY MAY PLEASE BE HELD AS BAD - IN - LAW AND LIABLE TO BE QUASHED. 3 . THE ONLY ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4 . BRIEFLY, IN THE FACTS OF THE CASE, THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT, WHEREIN THE INCOME WAS ASSESSED AT HIGHER FIGURE THAN THE ONE WRITTEN BY THE ASSESSEE ON ACCOUNT OF ESTIMATION OF PRODUCTION ON THE BASIS OF ERRATIC CONSUMPTION OF ELECTRICITY AND ADDITION BEING MADE ON ACCOUNT OF PROFITS A RISING ON SUCH GOODS WHICH HAD BEEN CLANDESTINELY REMOVED WITHOUT PAYMENT OF EXCISE DUTY. FURTHER, ADDITION WAS MADE ON ACCOUNT OF WORKING CAPITAL REQUIREMENT FOR MAKING SUCH SALES. THE ORDER OF ASSESSING OFFICER WAS APPEALED BEFORE THE CIT(A) AND THEREA FTER, BEFORE THE TRIBUNAL. THE TRIBUNAL HAD DECIDED THE APPEAL OF ASSESSEE IN ITA NO. 277/PN/2012, RELATING TO ASSESSMENT YEAR 2007 - 08 , VIDE ORDER DATED 12.08.2015 AND THE MATTER WAS SET ASIDE TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION OF FACTS AND FIGURES. THE ASSESSING OFFICER IN THE SECOND ROUND OF PROCEEDINGS HAS RE - COMPUTED THE INCOME IN THE HANDS OF ASSESSEE VIDE ASSESSMENT ORDER DATED 30.12.2010 . THE ASSESSING OFFICER HAD ALSO AFTER COMPLETION OF ORIGINAL ASSESSMENT INITIATED PENALTY PROCEED INGS UNDER SECTION 271(1)(C) OF THE ACT AND THE ASSESSEE HAD FILED FIRST APPEAL BEFORE THE CIT(A), WHO HAD DISMISSED THE APPEAL OF ASSESSEE. ITA NO . 207 0 / PN /201 4 M/S. RUTUJA ISPAT PVT. LTD. 3 5 . THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 6 . THE CASE OF THE LEARNED AUTHORIZED REPRESENTATIVE F OR THE ASSESSEE IS THAT THE PRESENT PENALTY ORDER PASSED IS CONSEQUENT TO THE ORIGINAL ASSESSMENT MADE IN THE HANDS OF ASSESSEE UNDER SECTION 144 OF THE ACT MERITS TO BE DELETED SINCE THE ASSESSING OFFICER AFTER SET ASIDE OF THE ISSUE HAD INITIATED AND LEV IED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE ASSESSED INCOME. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND THE APPE AL IS PENDING BEFORE THE CIT(A). HE STRESSED THAT THE PRESENT APPEAL IS AGAINST THE INITIAL ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT WHICH DOES NOT SURVIVE, HENCE, THE APPEAL MERITS TO BE DISMISSED. 7 . WE FIND MERIT IN THE CLAIM OF ASSESSEE. THE ORIGINAL ASSESSMENT WAS COMPLETED BY MAKING ADDITION ON ACCOUNT OF ENHANCED VALUE OF PRODUCTION ON PROFITS ARISING THEREFROM. THE SAID ADDITION WAS TO SOME EXTENT APPROVED BY THE CIT(A). HOWEVER, THE TRIBUNAL HAS ALLOWED CERTAIN RELIEFS IN THE HANDS OF A SSESSEE. MEANWHILE, WHEN THE APPEAL WAS PENDING BEFORE THE CIT(A), THE ASSESSING OFFICER HAS LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE INCOME ASSESSED GIVING EFFECT TO THE ORDER OF TRIBUNAL UNDER SECTION 250(4) OF THE ACT. THE FIRST ORDER OF PENALTY PASSED BY THE ASSESSING OFFICER HAS BEEN CONFIRMED BY THE CIT(A). IN SUCH CIRCUMSTANCES, IT DOES NOT SURVIVE AS THE BASIS ON WHICH THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED HAS GONE , S INCE FRESH ASSESSMENT ORDER HAS BEEN PASSED IN THE ORDER GIVING EFFECT TO THE ORDER OF TRIBUNAL AND ALSO PENALTY UNDER SECTION 271(1)(C) OF THE ACT HAS BEEN LEVIED ON THE ASSESSEE. ACCORDINGLY, WE FIND MERIT IN THE PLEA OF ASSESSEE A ND WE CANCEL ITA NO . 207 0 / PN /201 4 M/S. RUTUJA ISPAT PVT. LTD. 4 THE PENALTY ORDER LEVYING PENALTY UNDER SECTION 271(1 )(C) OF THE ACT. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS, ALLOWED. 8 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF NOVEM BER , 201 6 . SD/ - SD/ - ( AN IL CHATURVEDI ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 30 TH NOVEM BER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 2. / THE RESPONDENT; 3. ( ) / THE C I T (A), AURANGABAD ; 4. / THE C I T , AURANGABAD ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE