Mudra Prints Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(3), Surat

ITA 2546/AHD/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50752 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-10-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 23-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. L. GEHL OT, AM) ITA NO. 2546/AHD/2010 A. Y.: 2002-03 MUDRA PRINTS LTD., PROP. OF SANTOSH TEXTILE MILLS, 238, SURAT BARDOLI ROAD, VILLAGE- JOLWA, TAL. PALSANA, DIST SURAT VS THE INCOME TAX OFFICER, WARD -1 (3), AAYAKAR BHAVAN, OPP. NEW CIVIL HOSPITAL, MAJURA GATE, SURAT PA NO. AABCM 6299D (APPELLANT) (RESPONDENT) APPELLANT BY NONE (WRITTEN SUBMISSION) RESPONDENT BY SHRI B. L. YADAV, SR. DR DATE OF HEARING: 17-10-2011 DATE OF PRONOUNCEMENT: 20-10-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ABOVE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)- I , SURAT DATED 23-06-2010, FOR ASSESSMENT YEAR 2002-03, CHALLENGIN G THE LEVY OF PENALTY U/S 271 (1) (C ) OF THE IT ACT. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF THE NOTICE. WRITTEN SUBMISSION IS FILED WHICH IS TA KEN INTO CONSIDERATION. 3. WE HAVE HEARD THE LEARNED DR AND PERUSED THE FIN DINGS OF THE AUTHORITIES BELOW. ITA NO.2546/AHD/2010 MUDRA PRINTS LTD. VS ITO, WARD- 1 (3), SURAT 2 4. IN THE PENALTY ORDER, THE AO HAS STATED THAT THE ASSESSMENT WAS REOPENED U/S 147 OF THE IT ACT AND COMPLETED U/ S 143(3) READ WITH SECTION 147 OF THE IT ACT BY MAKING ADDITION O F RS.74,25,225/- ON ACCOUNT OF UNACCOUNTED FINISHED FABRICS IN WHICH PE NALTY PROCEEDINGS U/S 271 (1) (C ) OF THE IT ACT WERE INITIATED FOR C ONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LEARNED CIT(A) VIDE HIS ORDER DATED 15-12-2008 DELETED THE ADDITION ON ACCOUNT OF COST OF FABRIC BUT CONFIRMED THE ADDITIO N OF RS.16,13,749/- ON ACCOUNT OF PROCESSING CHARGES AS THE ASSESSEE WA S ENGAGED IN JOB WORK. IN THIS REGARD, INQUIRY WAS CARRIED OUT B Y CENTRAL EXCISE & CUSTOM AUTHORITIES AT THE BUSINESS PREMISES OF M/S. SANTOSH TEXTILE MILLS, WHICH IS A PROPRIETARY CONCERN OF THE ASSESS EE COMPANY. DURING THE SAID INQUIRY, IT WAS NOTICED THAT THE GR EY FABRIC OF 483220 METERS HAD BEEN PROCESSED AND DYED IN THE PREMISES OF THE MILL AND FINISHED PRODUCTS MEASURING 458109 METERS HAD BEEN REMOVED FROM THE ASSESSEES PREMISES WITHOUT ISSUANCE OF ANY CEN TRAL EXCISE INVOICE AND WITHOUT PAYMENT OF CENTRAL EXCISE DUTY LEVIABLE THEREON. THE TOTAL VALUE OF FINISHED FABRICS WAS WORKED OUT AT RS.68,71,635/-. DURING THE COURSE OF INVESTIGATION BY THE CENTRAL E XCISE AUTHORITIES, SHRI SANDEEP A. KHAITAN, DIRECTOR OF THE ASSESSEE C OMPANY ACCEPTED THE OFFENCE OF ILLICITLY REMOVING THE FINI SHED FABRICS OF 458109 METERS. THE AO MADE THE ADDITION OF RS.68,71 ,635/- BY VALUING THE FABRIC AT RS.15/- PER METER AND ALSO W ORKED OUT THE PROCESSING CHARGES OF RS.16,13,749/- BY TAKING THE PROCESSING CHARGES AT RS.2.26 PER METER ON THE FINISHED FABRIC REMOVED. THE LEARNED CIT(A) DELETED THE ADDITION IN RESPECT OF C OST OF FABRIC BUT CONFIRMED THE ADDITION IN RESPECT OF PROCESSING CHA RGES OF ITA NO.2546/AHD/2010 MUDRA PRINTS LTD. VS ITO, WARD- 1 (3), SURAT 3 RS.16,13,749/-, AS THE SAME WAS REMOVED WITHOUT ENT ERING INTO THE BOOKS OF ACCOUNTS. THE AO, THEREFORE, ASKED THE AS SESSEE AS TO WHY PENALTY BE NOT LEVIED ON THE SAME. IN REPLY THE ASS ESSEE REQUESTED THE AO THAT PENALTY PROCEEDING MAY BE KEPT IN ABEYA NCE AS THE ASSESSEE HAS FILED APPEAL BEFORE THE ITAT AGAINST THE ORDER OF THE LEARNED CIT(A) WITHOUT GIVING ANY SUBMISSION ON ME RIT. THE AO LEVIED MINIMUM PENALTY AS THE ASSESSEE HAS CLANDEST INELY REMOVED THE FABRIC WITHOUT ENTERING INTO THE BOOKS OF ACCOU NTS THEREBY CONCEALING THE PROCESSING CHARGES OF RS.16,13,749/- ON THIS ISSUE. 5. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION O F THE ASSESSEE CONFIRMED THE PENALTY AND DISMISSED THE AP PEAL OF THE ASSESSEE. 6. THE ASSESSEE IN THE WRITTEN SUBMISSION STATED TH AT QUANTUM APPEAL HAS BEEN HEARD IN ITA NO.499/AHD/2009 AND C. O. NO. 50/AHD/2009 IN THE SAME ASSESSMENT YEAR IN THE CASE OF THE SAME ASSESSEE AND THE TRIBUNAL PASSED THE ORDER ON 22-07 -2011 AND THE MATTER ON WHICH PENALTY IS IMPOSED HAS BEEN RESTORE D TO THE FILE OF THE AO. COPY OF THE ORDER OF THE TRIBUNAL IS PLACED ON RECORD. THE ASSESSEE, THEREFORE, STATED THAT EITHER THE APPEAL MAY BE KEPT PENDING OR MAY BE RESTORED TO THE FILE OF THE AO. T HE LEARNED DR ALSO STATED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE AO. 7. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LIGHT OF THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE DATED 2 2-07-2011, WE ARE OF THE VIEW THAT PENALTY IS NOT LEVIABLE AT THIS ST AGE. SINCE ON THE QUANTUM THE TRIBUNAL HAS SET ASIDE THE ORDERS OF TH E AUTHORITIES AND ITA NO.2546/AHD/2010 MUDRA PRINTS LTD. VS ITO, WARD- 1 (3), SURAT 4 RESTORED THE ISSUE TO THE FILE OF THE AO FOR DEC IDING THE SAME DE NOVO, THEREFORE, THE BASIS OF LEVY OF PENALTY AT TH IS STAGE HAS DISAPPEARED AND AS SUCH THERE IS NO FOUNDATION TO L EVY PENALTY AGAINST THE ASSESSEE. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY AT THIS ST AGE. HOWEVER, THE AO IS AT LIBERTY TO INITIATE PENALTY PROCEEDINGS AG AINST THE ASSESSEE AFTER PASSING THE ASSESSMENT ORDER IN THE LIGHT OF THE ORDER OF THE TRIBUNAL DATED 22-07-2011 IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT 20/10/2011. SD/- SD/- (A. L. GEHLOT) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD