Fem Carting Pvt. Ltd., Surat V. The Income Tax Officer, Ward 1(2), Surat

ITA 2160/AHD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8319 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-03-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 22-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: RASESH SHAH
• Section: 144

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH , ACCOUNTANT MEMBER ./ ITA NO. 2160 / AHD/20 1 3 / ASSTT. YEAR: 2005 - 2006 FEM CARTING PVT. LTD. 103, KRISHNA RESIDENCY OPP: KATHOR BUS STAND KAMREJ, SURAT 394 180 PAN : AAACF 6757 A. VS. ITO, WARD - 1(2) SURAT. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI RASESH SHAH REVENUE BY : MR.ALBINUS TIRKEY, SR.DR / DATE OF HEARING : 0 8 / 03 /201 7 / DATE OF PRONOUNCEMENT: 09 / 03 /201 7 / O R D E R PER RAJPAL YADAV , JUDICIAL MEMBER : A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF THE LD.CIT (A) - 1 , SURAT DATED 20.6.2013 PASSED FOR THE ASSTT.YEAR 2005 - 06. 2. SOLE G RIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN NOT CONDO N ING THE DELAY IN FILING APPEAL BEFORE THE ITA NO .2 160 /AHD/20 13 2 LD.CIT(A) AND CONFIRMIN G THE PENALTY AMOUNTING TO RS.14,10,367/ - . 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT ORDER WAS PASSED UNDER SECTION 144 OF THE INCOME TAX ACT, 1961 ON 30.11.2007. THE LD.AO HAS PASSED A PENALTY ORDER ON 29.5.2008. BOTH THESE ORDERS WERE EX PARTE . THE ASSESSEE HAS FILED APPEAL S AGAINST BOTH THESE O R DERS BEFORE THE LD.CIT(A). THERE WAS A DELAY OF ROUGHLY FOUR - AND - HALF YEARS IN FILING BOTH THE APPEALS. THE LD.CIT(A) HAS DISMISSED BOTH THE APPEALS ON THE GROUND THAT THE ASSESSEE FAILED TO DISCLOSE SU FFICIENT REASONS FOR NOT FILING THE APPEAL IN TIME. IN THE QUANTUM APPEAL, THE DELAY WAS ALMOST FOUR TO FIVE YEARS, WHEREAS IN THE PENALTY APPEAL, DELAY WAS ROUGHLY FOUR - AND - HALF YEARS. 4 . THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT THE ASSESSEE CHALLENGED THE ADDITION IN APPEAL BEFORE THE TRIBUNAL IN ITA NO.2158/AHD/2013. THE TRIBUNAL HAS CONDONED THE DELAY IN FILING THE APPEAL AND RES T ORE THE ISSUE REGARDING THE ADDITION TO THE FILE OF THE LD.CIT(A). ACCOR DING TO THE LD.COUNSEL F OR THE ASSESSEE, THE EXPLANATION OF THE ASSESSEE IS IDENTICAL FOR BOTH THE APPEALS. HE HAS PLACED ON RECORD COPY OF THE AFFIDAVIT AS WELL AS COPY OF THE APPLICATION FILED IN BOTH THE APPEALS. THE LD.DR WAS UNABLE TO CONTROVERT THE CONTENTIONS RAISED BY TH E LD.COUNSEL. ITA NO .2 160 /AHD/20 13 3 5. WE HAVE DULY CONSIDERED RIVAL CONTENTION S AND GONE THROUGH THE RECORD. WE FIND THAT MAIN REASON ASSIGNED BY THE ASSESSEE FOR NOT PROSECUTING ITS INCOME TAX PROCEEDINGS BEFORE THE AO AS WELL NOT FILING THE APPEAL IN TIME WAS THAT SON OF MANAGING DIRECTOR WAS SUFFERING FROM KIDNEY DISEASE. HE WAS UNDER MENTAL STRESS BECAUSE BOTH THE KIDNEYS OF HIS 17 YEARS OLD SON SHRI DIN E SH SINGH WERE FAILED AND ULTIMATELY HE DIED ON 1.3.2013. DURING THIS PERIOD, HE DID NOT PAY ATTENTION TOWARDS HIS BUSINESS AS WELL AS THESE PROCEEDINGS. THIS EXPLANATION O F TH E ASSESSEE WAS CONSIDERED BY THE ITAT AS PLAUSIBLE ONE FOR NOT FILING THE APPEAL IN TIME. I N THE PRESENT APPEAL, WE WISH TO CONDONE THE DELAY FOR TWO REASONS, VIZ. BASIS FOR VIS I TING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGUISHED, BECAUSE TRIBUNAL HAS AL READY SET ASIDE THE ISSUE AND RESTORED THIS ISSUE TO THE FILE OF THE LD.CIT(A) FOR RE - ADJUDICATION. 6 . WE FIND THAT S UB - CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT THE ASSESSEE WOULD BE DIRECT ED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN , BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. I N OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ITA NO .2 160 /AHD/20 13 4 ADDITION MADE TO THE INCOME OF THE ASSESSEE . SINCE ADDITION ON WHICH PENALTY WAS IMPOSED HAS BEEN SET ASIDE TO THE FILE OF THE LD.CIT(A) FOR RECONSIDERATION, CHARGING OF PENALTY AT THIS STAGE IS PREMATURE. IN VIEW OF THE ABOVE, IT IS TO BE OBSERVED THAT PENALTY WILL NOT BE IMPOSABLE UPON THE ASSESSEE ON MERIT UNLESS QUANTUM ADDITIONS ARE BEING SUSTAINED. IF WE DO NOT CONDONE THE DELAY, THEN WE WILL BE LEGALIZING INJUSTICE ON TECHNICAL GROUND. THE SECOND REASONS WHICH PREVAILED UPON US IS THAT THE TRIBUNAL IN THE QUANTUM PROCEEDINGS WAS CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THEREFORE, WITHOUT ANY STRONG RE A SON, WE SHOULD NOT DEVIATE OURSELVES FROM THE CONCLUSION OF COORDINATE BENCH. FOR THESE TWO REASONS, WE CON DONE THE D E LAY IN FLING THE APPEAL BEFORE THE LD.FIRST APPELLATE AU T HORITY, AND RESTORE TH E ISSUE INVOLVED IN THE APPEAL BEFORE THE LD.CIT(A) FOR RE - ADJUDICATION ON MERIT. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE COURT ON 9 T H MARCH, 2017 AT SURAT CAMP . S D / - S D / - ( AMARJIT SINGH ) ACCOUNTANT MEMBER ( RAJPAL YADAV) JUDICIAL MEMBER SURAT CAMP ; DATED 0 9 / 03 /201 7