ROSELIN MERCANTILE LTD, MUMBAI V. ITO 4(3)(2), MUMBAI

ITA 2752/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3693 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 23-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI RAM LAL NEGI (JM) I.T.A. NO S . 2751 TO 2753 /MUM/201 2 ( ASSESSMENT Y EARS 200 2 - 200 3 TO 2004 - 05 ) M/S. ROSELIN MERCANTILE LIMITED, VITHAL SADAN, 5 TH FLOOR, 342, KALBADEVI ROAD, MUMBAI 400 002. VS. ITO 4(3)(2), MUMBAI ( APPELLANT ) .. ( RESPONDENT ) PAN NO.AA BCR4977K ASSESSEE BY : MS. AARTI SATHE DEPARTMENT BY : SHRI B.S. BIST (SR. DR) DATE OF HEARING : 29 .0 2 .2016 DATE OF PRONOUNCEMENT : 04 .03.2016 O R D E R PER B.R. BASKARAN, AM : - ALL THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A) - 8, MUMBAI FOR ASSESSMENT YEARS 2002 - 03, 2003 - 04 AND 2004 - 05 CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE FACTS ARE THAT THE ASSESSEE RECEIVED RENTAL INCOME FROM A CLUSTER OF TENEMENTS AND DECLARED THE SAME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE 2 M/S. ROSELIN MERCANTILE LTD. ITA NOS. 2751 TO 2753/MUM/2012 ASSESSEE APPEARS TO HAVE INCURRED EXPENSES F OR PROVIDING COMMON AMENITIES AND THE EXPENDITURE INCURRED THEREON WAS DEDUCTED FROM THE RENTAL INCOME AT SOURCE. THE ASSESSEE ALSO PAID CESS TO GOVERNMENT, BUT CLAIMED THE SAME AS DEDUCTION U/S 24. BOTH THE CLAIMS WERE DISALLOWED BY THE AO IN ALL THE THREE YEARS AND IT WAS ALSO CONFIRMED BY THE TRIBUNAL. THE ASSESSING OFFICER LEVIED PENALTY U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME IN RESPECT OF BOTH THE DISALLOWANCES REFERRED ABOVE AND THE LD CIT(A) ALSO CONFIRMED THE SAME IN ALL THE THREE Y EARS. AGGRIEVED, THE ASSESSEE HAS FILED THESE APPEALS BEFORE US. 3. THE LD A.R PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS (322 ITR 158) TO CONTEND THAT MERE DISALLOWANCE OF CLAIM MADE BY THE ASSESSEE WOULD NOT AMOUNT TO FURNISHING OF INACCURATE PARTI CULARS OF INCOME. HOWEVER, IT WAS POINTED OUT TO THE LD A.R THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY ON THE GROUND THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME AND ACCORDINGLY TH E LD A.R WAS ASKED AS TO WHETHER THE ASSESSEE HAS FILED ANY EXPLANATION TO THE ASSESSING OFFICER DURING THE COURSE OF PENALTY PROCEEDINGS IN TERMS OF EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF INCOME, SINCE THE AO HAS ONLY REJECTED THE CLAIM FOR DEDUCTION OF EXPENSES. SHE FURTHER SUBMITTED THAT THE CLAIM SO MADE BY THE ASSESSEE IS SUPPORTED BY THE DECISION RENDERED BY THE TRIBUNAL IN SHRI SAIF ALI KHAN (ITA NO.1653/MUM/2009) AND UNIVERSAL TEXTILE WATER PROOF CO. (INDIA) (2008)(20 SOT 0275). HOWEVER, THE LD A.R FAIRLY ADMITTED THAT THE ASSESSEE DID NOT FURNISH ANY EXPLANATION EITHER BEFORE THE AO OR BEFORE THE LD CIT(A). 3 M/S. ROSELIN MERCANTILE LTD. ITA NOS. 2751 TO 2753/MUM/2012 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE TRIBUNAL HAS CONFIRMED THE DISALLOWANCES AFTER CONSIDERING BOTH THE DECISIONS RELIED UPON BY LD A.R . HE FURTHER SUBMITTED THAT THE ASSESSEE HAS FAILED TO OFFER ANY EXPLANATION AS REQUIRED U/S 271(1)(C) OF THE ACT READ WITH EXPLANATION 1, WHICH IS MANDATORY AS PER THE DECISION OF HONBLE SUPREME COURT RENDERED IN THE CASE OF MAK DATA LTD (2014)(1 SCC 674). 5. IN THE REJOINDER, THE LD A.R SUBMITTED THAT THE ASSESSEE HAD, IN FACT, SOUGHT TIME TO FILE EXPLANATION S , BUT THE ASSESSING OFFICER HAS PASSED THE IMPUGNED PE NALTY ORDERS WITHOUT GRANTING TIME. ACCORDINGLY SHE PRAYED THAT THE ASSESSEE SHOULD BE PROVIDED WITH AN OPPO RTUNITY TO FURNISH EXPLANATIONS, SINCE THE ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF INCOME. 6. HAVING HEARD RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT, IN THE INTEREST OF NATURAL JUSTICE, THE ASSESSEE SHOULD BE PROVIDED WITH ONE MORE OPPORTUNITY TO FURNISH THE EXPLANATIONS WITH REGARD TO THE PENALTY LEVIED IN ALL THE THREE YEARS . ACCORDINGLY WE SET ASIDE THE ORDERS OF LD CIT(A) PASSED FOR THE YEARS UNDER CONSIDERATION AND RESTORE THEM TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THEM AFRESH IN ALL THE THREE YEARS AFTER DULY CONSIDERING THE EXPLANATIONS THAT MAY BE FURNISHED BY THE ASSESSEE. WE ALSO DIRECT THE ASSESSEE TO FURNISH THE EXPLANATIONS BEFORE THE ASSESSING OFFICER WITHIN TWO WEEKS FROM THE DATE OF RECEIPT OF THIS ORDER AND THE ASSESSING OFFICER SHALL DISPOSE OF THESE MATTERS EXPEDITIOUSLY, AFTER HEARING THE ASSESSEE. 4 M/S. ROSELIN MERCANTILE LTD. ITA NOS. 2751 TO 2753/MUM/2012 7. IN THE RESULT, ALL THE APPEALS FILED BY TH E ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 0 4 . 0 3.2016. S D / - S D / - (RAM LAL NEGI) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 0 4 / 0 3/2016 *SSL* COPY OF THE ORDER FORWARDED TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) 4) CIT 5) DR, ITAT, MUMBAI 6) GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI