M/s. Jagriti Coal & Minerals, Bhubaneswar V. ITO, Ward-1(2), Bhubaneswar

ITA 258/CTK/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3874 (ITAT-CUTTACK)
• Duration Of Justice: 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 05-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: SURESH CHANDRA SWAIN
• Keywords: Additional evidence
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NOS. 258 & 259 /CTK/2016 ASSESSMENT YEARS : 2011 - 12 & 2009 - 10 M/S. JAGRITI COAL & MINERALS, A - 52, PALLASHPALI, AERODRUM AREA, BHUBANESWAR. VS. ITO, WARD 1(2), BHUBANESWAR. PAN/GIR NO. AAFFJ 2603 R (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SURESH CHANDRA SWAIN, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 11 /04 / 2017 DATE OF PRONOUNCEMENT : 11 /04 / 2017 O R D E R ITA NO.258/CTK/2016 IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR, DATED 23.3.2016 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES: I) DISALLOWANCE OF RS.20,46,538/ - UNDER THE HEAD LIFTING AND LOADING EXPENSES II) DISALLOWANCE OF RS.3,76,976/ - UNDER THE HEAD SUNDRY CREDITORS FOR LIFTING AND LOADING EXPENSES III) DISALLOWANCE OF RS.93,106/ - U/S.43B OF THE ACT. 2 ITA NO. 258/CTK/2016 ASSESSMENT YEAR : 2011 - 12 IV) LEVY OF INTEREST U/S.234A, 234B & 234C OF RS.39,764/ - , RS.3,27,312 / - AND RS.10,559/ - , RESPECTIVELY. 3. AT THE OUTSET, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A), THE ASSESSEE COULD NOT PRODUCE THE EVIDENCES AND DOCUMENTS AND, THEREFORE, THE DISAL LOWANCE AND ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER WHICH HAS BEEN CONFIRMED BY THE CIT(A). HE SUBMITTED THAT THE ASSESSEE HAS FILED THE PAPER BOOK CONTAINING ADDITIONAL EVIDENCE COMPRISING OF THE FOLLOWING: I) AUTHORISATION LETTER ISSUED BY MR KAMALJEET SINGH AHLUWALIA TO THE GENERAL MANAGER OF MAHANADI COAL FIELD LIMITED. II) COPIES OF BILLS RAISED BY MR ANANTA SAHOO TO M/S. JAGRITI COAL & MINERALS. III) COPIES OF BILLS RAISED BY M/S. JAGRITI COAL & MINERALS TO MR KAMALJEET SINGH AHLUWALIA. 4. HE PRAYED THAT SAME CAN BE ADMITTED IN THE INTEREST OF SUBSTANTIAL JUSTICE AS THE ASSESSEE WAS NOT IN A POSITION OF THESE DOCUMENTS AT THE TIME OF ASSESSMENT PROCEEDINGS AS WELL AS AT THE TIME OF APPELLATE PROCEEDINGS BEFORE THE CIT(A) AND THAT THESE DOCU MENTS WERE ACQUIRED BY THE ASSESSEE LATER ON AND SAME COULD NOT BE FILED BEFORE THE ASSESSING OFFICER AND THE CIT(A). HE SUBMITTED THAT IN THE INTEREST OF RENDERING SUBSTANTIAL JUSTICE, THE ADDITIONAL DOCUMENTS SHOULD BE ADMITTED. 3 ITA NO. 258/CTK/2016 ASSESSMENT YEAR : 2011 - 12 5. LD DEPARTMENTAL REPRE SENTATIVE HAD NO OBJECTION TO THE ADMISSION OF ADDITIONAL EVIDENCES BY THE ASSESSEE BEFORE THE TRIBUNAL. THEREFORE, THE ADDITIONAL EVIDENCE FILED BY THE ASSESSE ARE ADMITTED. 6. AS THESE ADDITIONAL EVIDENCES FILED BEFORE THE TRIBUNAL FOR THE FIRST TIME, NEEDS VERIFICATION FROM THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATING THE ISSUE AFRESH AFTER TAKING INTO CONSIDERATION THE ADDITI ONAL EVIDENCES NOW FILED BEFORE THE TRIBUNAL. THE ASSESSEE IS ALSO DIRECTED TO FILE THE ADDITIONAL EVIDENCES NOW FILED BEFORE THE TRIBUNAL BEFORE THE ASSESSING OFFICER AS AND WHEN CALLED UPON TO DO SO. I ORDER ACCORDINGLY. 7. WITH THESE DIRECTIONS, THE APPEAL OF THE ASSESSEE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER. 8. IN THE RESULT, THE APPEAL F ILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. ITA NO.259/CTK/2016 IS DIRECTED AGAINST THE ORDER DATED 3.3.2016 OF THE CIT(A) - 1, BHUBANESWAR FOR THE ASSESSMENT YEAR 2009 - 10. 10. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS.2,82,220/ - U/S.271(1)(C) OF THE ACT. 4 ITA NO. 258/CTK/2016 ASSESSMENT YEAR : 2011 - 12 11. AT THE OUTSET, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS IMPOSED THE PENALTY U/S 271(1)(C) OF THE ACT WITHOUT MENTIONING AS TO WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OR CONCEALED THE PARTICULARS OF I TS INCOME. FURTHER, THE CIT(A) HAS HELD THAT IN RESPECT OF THREE ADDITIONS AS INCOME, THE ASSESSEE HAS CONCEALED AND/OR INACCURATE PARTICULARS OF INCOME HAVE BEEN FILED. LD A.R. SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. V CIT (2006) 282 ITR 642 (GUJ), IN WHICH THE HON'BLE HIGH COURT HAS CLEARLY HELD THAT IT IS INCUMBENT UPON THE ASSESSING OFFICER TO STATE WHETHER PENALTY HAS BEEN LEVIED FOR CONCEA LMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAD BEEN F URNISHED BY THE ASSESSEE. THE ASSESSING OFFICER IN THIS CASE HAS NOT CLEARLY LAID DOWN WHAT DEFECT HAS BE EN COMMITTED BY THE ASSESSEE. THEREFORE, HE P RAYED TO DELETE THE PENALTY IMPOSED BY THE ASSESSING OFFICER. 12. ON THE OTHER HAND, LD DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 13. AFTER HEARING THE RIVAL SUBMISSION AND PERUSING THE ORDERS OF LOWER AUTHORITIES, I FIND THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY U/S.271(1)(C) OF THE ACT BY OBSERVING AS UNDER: I DEEM IT A FIT CASE TO IMPOSE PENALTY U/S.271(1)(C) OF THE ACT. 5 ITA NO. 258/CTK/2016 ASSESSMENT YEAR : 2011 - 12 14. ON APPEAL, THE CITA) HAS CONFIRMED THE PENALTY BY OBSERVING AS UNDER: I N RESPECT OF THREE ADDITIONS AS INCOME, THE ASSESSEE HAS CONCEALED AND/ OR INACCURATE PARTICULARS OF INCOME HAVE BEEN FILED. 15. THE HONBLE GUJARAT HIGH COURT NEW SORATHIA ENGINEERING CO. V CIT (2006) 282 ITR 642 (GUJ) HAS HELD AS UNDER: - 11. IN THE CASE OF CIT VS. MANU ENGINEERING WORKS (SUPRA) THIS IS WHAT IS LAID DOWN BY THIS COURT AT PAGE NO. 310 OF THE REPORTS : '... WE FIND FROM THE ORDER OF THE IAC, IN THE PENALTY PROCEEDINGS, THAT IS, THE FINAL CONCLUSION AS EXPRESSED IN PARA 4 OF THE ORDER : 'I AM OF THE OPINION THAT IT WILL HAVE TO BE SAID THAT THE ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME'. NOW, THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CASE OR A QUASI CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDING AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURN ISHED BY THE ASSESSEE. NO SUCH CLEAR - CUT FINDING WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IAC WAS LIABLE TO BE STRUCK DOWN.' THE PENALTY ORDER AND THE ORDER OF CIT(A) SHOW THAT NO CLEAR - CUT FINDING HAS BEEN REACH ED. THE TRIBUNAL HAS FAILED TO APPRECIATE THIS LEGAL ISSUE. APPLYING THE RATIO TO THE FACTS OF THE CASE IT IS APPARENT THAT THE ORDER OF PENALTY CANNOT BE SUSTAINED AND THE TRIBUNAL COULD NOT HAVE SUSTAINED THE SAME. THE TRIBUNAL HAVING FAILED TO TAKE INTO CONSIDERATION AND DEAL WITH THE DECISION OF THE JURISDICTIONAL HIGH COURT IT WOULD CONSTITUTE AN ERROR IN LAW WHICH GOES TO THE VERY BASIS OF THE CONTROVERSY INVOLVED AND HENCE, THE IMPUGNED ORDER OF THE TRIBUNAL CANNOT BE UPHELD. 16. T HE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SSAS. EMARLD MEADOWS DATED 11 TH JANUARY, 2017 PASSED IN SPECIAL LEAVE TO APPEAL (CC NO.11485/2016) HAS HELD THAT OMISSION BY THE AO TO EXPLICITLY SPECIFY IN 6 ITA NO. 258/CTK/2016 ASSESSMENT YEAR : 2011 - 12 THE PENALTY NOTICE AS TO WHETHER PENALTY PROCEEDINGS ARE BEI NG INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OR FOR CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION. 17. THEREFORE, THE FACTS OF THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS OF THE CASE BEFORE THE HONBLE SUPREME COURT IN THE CASE OF S SAS. EMARLD MEADOWS(SUPRA) AND THE DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. (SUPRA). HENCE, RESPECTFULLY FOLLOWING THE SAME, I CANCEL THE LEVY OF PENALTY OF RS.2,82,217 / - U/S.271(1)(C) AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 1 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 11 /04 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 11 /04 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: M/S. JAGRITI COAL & MINERALS, A - 52, PALLASHPALI, AERODRUM AREA, BHUBANESWAR. 2. THE RESPONDENT. ITO, WARD 1(2), BHUBANESWAR. 3. THE CIT(A) - 1, BHUBANESWAR. 4. PR.CIT - 1, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY// 7 ITA NO. 258/CTK/2016 ASSESSMENT YEAR : 2011 - 12 BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK