CHEMO PHARMA LABORATORIES LTD, MUMBAI V. ITO 1(1)(2), MUMBAI

ITA 2413/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4191 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-07-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 11-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T ROUMUAN PAITE
• Assessee Lawyers: AJAY R SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI , ! ! ! ! '! !, $ BEFORE SHRI SANJAY ARORA, A. M. AND SHRI VIJAY PAL RAO, J. M. ./ I.T.A. NO. 2413/MUM/2012 ( ' ( !)( ' ( !)( ' ( !)( ' ( !)( / / / / ASSESSMENT YEAR: 2003-04) CHEMO PHARMA LABORATORIES LTD. EMPIRE HOUSE, 3 RD FLOOR, 214, D. N. ROAD, FORT, MUMBAI-400 001 ' ' ' ' / VS. ITO-1(1)(2), MUMBAI * ./ + ./ PAN/GIR NO. AAACC 2056 A ( *, / APPELLANT ) : ( -.*, / RESPONDENT ) *, / / APPELLANT BY : SHRI AJAY R. SINGH -.*, 0 / / RESPONDENT BY : SHRI T. ROUMUAN PAITE '! 0 12 / // / DATE OF HEARING : 02.07.2013 3) 0 12 / DATE OF PRONOUNCEMENT : 05 .07.2013 4 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, MUMBAI (CIT(A) FOR SHO RT) DATED 08.02.2012, CONFIRMING THE LEVY OF PENALTY IN THE SUM OF RS.60,47,659/- U/ S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEA R (A.Y.) 2003-04 BY THE ASSESSING OFFICER (A.O.) VIDE HIS ORDER DATED 23.03.2009. 2 ITA NO.2413/MUM/2012 (A.Y. 2003-04) CHEMO PHARMA LABORATORIES LTD. VS. ITO 2.1 OPENING THE ARGUMENTS FOR AND ON BEHALF OF THE ASSESSEE, IT WAS SUBMITTED BY THE LD. AR, THE ASSESSEES COUNSEL, THAT THE ASSESSEES APPEAL IN QUANTUM PROCEEDINGS HAS BEEN DISPOSED OF BY THE TRIBUNAL BY RESTORING ITS A SSESSMENT BACK TO THE FILE OF THE FIRST APPELLATE AUTHORITY. A COPY OF THE SAID ORDER (IN I TA NO.1469/MUM/2008 DATED 14.06.213) WAS PLACED ON RECORD, ADVERTING OUR ATTE NTION TO THE RELEVANT PART OF THE ORDER (PARA 3). IN THIS VIEW OF THE MATTER, IT WAS URGED BY HIM, THAT THE PENALTY PROCEEDINGS COULD NOT BE PROCEEDED WITH AND, THEREFORE, THE MAT TER MAY BE RESTORED BACK TO THE FILE OF THE A.O. FOR FRESH DETERMINATION IN THE LIGHT OF TH E APPELLATE ORDER. ON AN ENQUIRY BY THE BENCH, IT WAS CLARIFIED BY HIM THAT THE ASSESSEE HA D AGITATED BOTH THE ADDITIONS ON WHICH THE IMPUGNED PENALTY STANDS LEVIED. 2.2 THE LD. DR WOULD, ON THE OTHER HAND, SUBMIT THA T THE PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND, THEREFORE, WOULD NEED TO BE ADJUDICATED AS SUCH, I.E., INDEPENDENTLY. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE FIRSTLY OBSERVE THAT THE MATTER HAS BEEN RESTOR ED BY THE TRIBUNAL TO THE FILE OF THE FIRST APPELLATE AUTHORITY AND NOT TO THAT OF TH E A.O. THEREFORE, TO SAY THAT THE PRESENT PROCEEDINGS CANNOT BE PROCEEDED WITH MAY NOT BE LEG ALLY CORRECT. SO HOWEVER, WITHOUT DOUBT THE SAME REPRESENTS A RELEVANT CONSIDERATION INASMUCH THE TRIBUNAL WOULD ONLY HAVE SET ASIDE THE QUANTUM PROCEEDINGS FOR A REASON. AS A PERUSAL OF ITS ORDER SHOWS THAT THIS WAS DONE BY IT ONLY IN THE INTEREST OF JUSTICE; THE RE HAVING BEEN NO PROPER REPRESENTATION BY THE ASSESSEE BEFORE HIM, SO THAT THERE WAS NO PR OPER CONSIDERATION OF THE MATTER AT THE FIRST APPELLATE STAGE. THE ASSESSEE, IN VIEW OF ITS NEGLIGENT BEHAVIOR, LEADING TO AN EX PARTE ORDER BY THE FIRST APPELLATE AUTHORITY, WAS IMPOSE D UPON A COST OF RS.15,000/- BY THE TRIBUNAL VIDE ITS ORDER AFORE-REFERRED. EVEN IN THE PENALTY PROCEEDINGS, AS APPARENT FROM T HE PERUSAL OF THE PENALTY ORDER DATED 23.03.2009, THERE HAS BEEN NO REPRESENTATION BY THE ASSESSEE, SO THAT THE PENALTY ORDER IS ALSO AN EX PARTE ORDER. A SET SIDE IN THE QUANTUM PROCEEDINGS WOULD NORMALLY WARRANT A LIKE RESTORATION OF THE PENALTY PROCEEDIN GS, I.E., TO THE FILE OF THE FIRST APPELLATE 3 ITA NO.2413/MUM/2012 (A.Y. 2003-04) CHEMO PHARMA LABORATORIES LTD. VS. ITO AUTHORITY. THIS IS AS THE PROCEEDINGS HAVE ALREADY GOT CRYSTALLIZED AT THE STAGE OF THE ASSESSING AUTHORITY. HOWEVER, IN THE INSTANT CASE, IN THE GIVEN CIRCUMSTANCES, THE INTEREST OF JUSTICE WOULD BE MET BY A SET ASIDE TO THE FILE OF THE A.O. INASMUCH AS THE PENALTY STANDS LEVIED IN THE FIRST INSTANCE UNDER THE CONDI TION OF ABSENCE OF REPRESENTATION. CONSIDERATIONS OF EQUITY AS WELL AS FAIRNESS OF PRO CEDURE WOULD THEREFORE SUGGEST AN OPPORTUNITY BEFORE THE ASSESSING AUTHORITY. HOWEVER , IT IS ONLY THE ASSESSEE WHO IS RESPONSIBLE FOR ITS PREDICAMENT. IN FACT, THERE HAS BEEN NO EXPLANATION FOR THE NON REPRESENTATION BEFORE EITHER AUTHORITY. IT IS THIS RECALCITRANCE THAT LED THE TRIBUNAL, WHICH IS GENERALLY CONSERVATIVE AND RESERVED IN THE MATTER, AND LOATH TO LEVY COST, TO DO SO, SIGNIFYING ITS DISPLEASURE AT THE ASSESSEES CONDUC T. FURTHER, THE LD. AR HAS NOT EVEN, WHILE SEEKING A R ESTORATION, IMPLYING A SET ASIDE OF THE PENALTY ORDER, SO THAT THE ENTIRE PROCEEDING S IN THE MATTER STAND NULLIFIED, SHOWN THE ETIQUETTE OR REGARD IN INFORMING OF THE ASSESSEES CONDUCT AND NON REPRESENTATION IN THE PENALTY PROCEEDINGS, MUCH LESS OF THE REASONS FOR T HE SAME. SUCH CONDUCT CAN ONLY BE DEPRECIATED. NON REPRESENTATION BEFORE THE AUTHORIT IES BELOW, WHILE SEEKING A RESTORATION ON THE GROUNDS OF JUSTICE AND EQUITY, AMOUNTS TO A DISREGARD AND ABUSE OF THE PROCESS OF LAW, AND A DUBIOUSNESS WHICH WE CANNOT BUT TAKE A S TRICT VIEW OF. UNDER THE CIRCUMSTANCES, WE ONLY CONSIDER IT FIT A ND PROPER TO SET ASIDE THE PENALTY PROCEEDINGS TO THE FILE OF THE ASSESSING AU THORITY, SO AS TO ENABLE THE ASSESSEE AN OPPORTUNITY TO PRESENT ITS CASE BEFORE HIM, SUBJECT TO A PAYMENT OF COST OF RS.5,000/- (FIVE THOUSAND ONLY) TO THE DEPARTMENT. FURTHER, THOUGH S UCH IMPOSITIONS ARE NORMALLY PRONOUNCED IN THE OPEN COURT, INFORMING THE PARTIES OF THE SAME, SO THAT THEIR OBJECTIONS, IF ANY, ARE TAKEN NOTE OF, WE HAVE BEEN UNDER THE P ECULIAR CIRCUMSTANCES RECOUNTED ABOVE, CONSTRAINED TO AWARD THE COST TO THE DEPARTMENT. WE DECIDE ACCORDINGLY. 4 ITA NO.2413/MUM/2012 (A.Y. 2003-04) CHEMO PHARMA LABORATORIES LTD. VS. ITO 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 5 16 ' (51 0 70 89: ! ;1 0 1 <= ORDER PRONOUNCED IN THE OPEN COURT ON JULY 05, 2013 4 0 3) >'6 05, 2013 0 C SD/- SD/- (VIJAY PAL RAO) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; >' DATED : 05.07.2013 !.'. ./ ROSHANI , SR. PS 4 0 -1' D')1 4 0 -1' D')1 4 0 -1' D')1 4 0 -1' D')1/ COPY OF THE ORDER FORWARDED TO : 1. *, / THE APPELLANT 2. -.*, / THE RESPONDENT 3. E ( ) / THE CIT(A) 4. E / CIT CONCERNED 5. '!HC -1' , , / DR, ITAT, MUMBAI 6. CI( J / GUARD FILE 4' 4' 4' 4' / BY ORDER, 8 88 8/ // / < < < < (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUM BAI