S.S. ENTERPRISES, MUMBAI V. ITO 16(2)(4), MUMBAI

ITA 2521/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1142 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VISHWAS MUNDHE LD
• Keywords: Opportunity of being heard
• Section: 143(3); 68

Judgement Text

ITA NO.2521/M/2014 S.S.ENTERPRISES ASSESSMENT YEAR: 2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.2521/MUM/2014 ( / ASSESSMENT YEAR: 2007-08) S.S.ENTERPRISES 6 EDWARD BUILDING 165/167 LAMINGTON ROAD MUMBAI 400 007 / VS. INCOME TAX OFFICER 16(2)(4) MATRU MANDIR MUMBAI !' ./ ./PAN/GIR NO. AAYFS-8696-J ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) '$ / APPELLANT BY : NONE %&'$ / RESPONDENT BY : SHRI VISHWAS MUNDHE, LD. DR / DATE OF HEARING : 24/04/2017 / DATE OF PRONOUNCEMENT : 25 /04/2017 ITA NO.2521/M/2014 S.S.ENTERPRISES ASSESSMENT YEAR:2007-08 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMEN T YEAR [AY] 2007-08 ASSAILS THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-27 [CIT(A)], MUMBAI DATED 28/01/2014 QUA CONFIRMATION OF PENALTY U/S 271(1)(C) FOR RS.3,85,6 10/- AND ENHANCING THE SAME FURTHER BY RS.8,41,500/- U/S 251(2) OF THE INCOME TAX ACT, 1961. NONE HAS APPEARED ON BEHALF OF ASSESSEE DESPITE BEING PROVID ED WITH SUFFICIENT OPPORTUNITY OF BEING HEARD AND THEREFORE, WE PROCEED TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 2. BRIEFLY STATED, THE ASSESSEE, BEING RESIDENT FIRM, WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT FOR THE IMPUGNED AY VID E ASSESSING OFFICER [AO] ORDER DATED 31/12/2009 WHEREIN THE TOTAL INCOME OF THE AS SESSE WAS DETERMINED AT RS.33,28,370/- AFTER CERTAIN ADJUSTMENTS / DISALLOW ANCES AS AGAINST LOSS RETURN OF RS.5,04,030/- FILED BY THE ASSESSE ON 29/02/2008. THE ASSESSE CLAIMED INTEREST OF RS.29,15,213 AGAINST INCOME FROM HOUSE PROPERTY AGA INST WHICH IT COULD PRODUCE EVIDENCES ONLY TO THE EXTENT OF RS.11,45,603/- WHIC H ULTIMATELY LED TO AN ADDITION OF RS.13,32,397/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY. RESULTANTLY, PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED IN THE QUA NTUM ASSESSMENT FOR FILING OF INACCURATE PARTICULARS OF INCOME AND THE ASSESSEE W AS SADDLED WITH A PENALTY OF RS.3,85,610/- VIDE AO PENALTY ORDER DATED 28/03/201 2. AGGRIEVED, THE ASSESSEE CONTESTED THE PENALTY BEFORE LD. CIT(A) WHO NOT ONLY CONFIRMED THE PENALTY BUT ALSO ENHANCED THE SAME BY RS.8,41,500/- U/S 251(2) AGAIN ST CERTAIN ADDITION U/S 68 FOR RS.25 LACS. AGGRIEVE, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD. DR PLACED RELIANCE ON THE CONCLUSIONS REA CHED BY LD. CIT(A) AND CONTENDED THAT THE ASSESSEE ACCEPTED THE QUANTUM AD DITIONS AND THEREFORE, RIGHTLY SADDLED WITH IMPUGNED PENALTIES. HOWEVER, PER QUERY FROM TH E BENCH, THE LD. DR FAIRLY CONCEDED THAT THE PENALTY WAS NOT INITIATED BY THE AO FOR ADDITIONS MADE U/S 68. ITA NO.2521/M/2014 S.S.ENTERPRISES ASSESSMENT YEAR:2007-08 3 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RELEVANT MATERIAL ON RECORD. SO FAR AS THE PENALTY OF RS. 3,85,610/- IS CONCERNED, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AS THE ONUS TO SUBSTANTIATE THE CLAIM OF INTEREST EXPENDITURE SQUARELY LIED ON THE ASSESSEE AND HE HAS FAILED TO DISCHARGE THE SAME. THE ASSESSEE WAS UNDER AN OBLIGATION TO OFFER TRUE AND CORRECT INCOME TO THE REVENUE AND COULD CLAIM ONLY LEGITIMATE EXPENDITURE / DEDUCTIONS AS STATUTORILY ADMISSIBLE TO HIM. THEREFORE, GROUND NUMBERS 1 TO 3 OF ASSESSEES APPEAL STANDS DISMISSED. 5. HOWEVER, WE FIND THAT A FRESH PENALTY OF RS.8,41 ,500/- HAS BEEN LEVIED BY LD. CIT(A) FOR ADDITION OF RS.25 LACS MADE U/S 68. A PERU SAL OF THE ORIGINAL ASSESSMENT ORDER REVEALS THAT THE AO HAS NOT INITIATED THE PEN ALTY AGAINST THIS ADDITION AND THEREFORE, PRIMA FACIE, TOOK A CONSCIOUS DECISION NOT TO INITIATE THE PENAL TY AGAINST THIS ADDITION. IN THE PRESENT CASE, THE LD. DR HAS STATED THAT THE ASS ESSEE HAS ACCEPTED THE QUANTUM ADDITIONS AND DID NOT CONTEST THE SAME BEFORE LD. CI T(A) AND THEREFORE, NO PROCEEDINGS THEREOF ARE PENDING BEFORE THE LD. CIT(A). IT IS JU DICIALLY SETTLED THAT THE ORDER INITIATING THE PENALTY PROCEEDINGS HAS TO BE DIFFERENT ORDER A ND HAS TO BE PASSED BY THE PERSON, WHO HAS MADE THE ADDITIONS / ASSESSMENT IN THE HANDS OF THE ASSESSEE. IN CASE THE SAID PERSON IS CIT(A), THEN HE IS COMPETENT TO INITIATE THE PENA LTY PROCEEDINGS AND ALSO COMPETENT TO LEVY THE PENALTY BY PASSING SEPARATE ORDER. HOWEVER , LD. CIT(A) IS NOT COMPETENT TO INITIATE AND LEVY THE PENALTY BY THE SAME ORDER WHI LE DECIDING THE APPEAL AGAINST THE ORDER LEVYING PENALTY PASSED BY THE AO. THEREFORE, LD. CIT(A) IN THE PRESENT CASE HAS EXCEEDED THE JURISDICTION AND THEREFORE, WAS NOT CO MPETENT TO LEVY THE PENALTY IN SUCH A MANNER. ACCORDINGLY, WE DELETE THE ENHANCED PENALTY OF RS.8,41,500/- AND THEREFORE, ALLOW GROUND NUMBER 4 TO 6 OF ASSESSEES APPEAL, BE ING ALTERATIVE AND CONNECTED GROUNDS. ITA NO.2521/M/2014 S.S.ENTERPRISES ASSESSMENT YEAR:2007-08 4 6. IN NUTSHELL, THE ASSESSEE APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH APRIL, 2017. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 25.04.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. %. , . , / DR, ITAT, MUMBAI 6. /0 / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI