Mustang Rice Mills Pvt.Ltd., Nadiad V. The Dy.CIT.,Kheda Circle, Nadiad

ITA 2769/AHD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72826 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-01-2014
• Assessment Year: 1997-1998
• Appeal Filed On: 07-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Keywords: Rectification of order
• Section: 143(3); 80HHC; 27; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 2769/AHD/2012 (ASSESSMENT YEAR: 1997-98) MUSTANG RICE MILLS PVT. LTD. AT-UTTARSANDA, TAL-DIST- NADIAD. V/S THE DY. COMM. OF INCOME TAX, KHEDA CIRCLE, NADIAD. (APPELLANT) (RESPONDENT) PAN: AABCM 3441 K APPELLANT BY : SHRI ASEEM THAKKAR RESPONDENT BY : SHRI J.P. JHANGID, SR. D.R. ( )/ ORDER DATE OF HEARING : 06-01-201 4 DATE OF PRONOUNCEMENT : 10 -01-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A)-IV, BARODA DATED 20.09.2012 FOR A.Y. 1997-98. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. IN THIS CASE, ASSESSEE FILED ITS RETURN OF INCOME F OR A.Y. 97-98 ON 30.11.1997 DECLARING TOTAL INCOME OF RS. 1,75,095/- . ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 21.03. 2000 AND THE TOTAL INCOME WAS DETERMINED AT RS. 98,83,210/- AFTER MAKI NG AN ADDITION ON ITA NO 2769/ AHD/2012 . A.Y. 1997- 98 2 ACCOUNT OF YIELD OF RS. 1,01,27,758/-. PENALTY UND ER SECTION 271(1)(C) OF THE ACT WAS INITIATED ON THE ADDITION MADE AND THER EAFTER VIDE ORDER DATED 30.03.2009, PENALTY U/S. 271(1)(C) OF THE ACT OF RS . 43,54,935/- WAS LEVIED BY THE A.O. AGAINST THE ADDITIONS MADE BY TH E A.O. IN QUANTUM PROCEEDINGS, ASSESSEE FILED APPEAL BEFORE CIT(A) WH ICH WAS ALLOWED IN FAVOUR OF ASSESSEE. AGAINST THE ORDER OF CIT(A), R EVENUE FILED APPEAL BEFORE ITAT WHEREBY THE HONBLE TRIBUNAL CONFIRMED THE ORDER OF A.O. A.O. PASSED ORDER UNDER SECTION 154 OF THE ACT ON 1 7.10.2011 WHEREIN AFTER GIVING THE APPEAL EFFECT OF THE ITAT ORDER, T HE DEDUCTION UNDER 80HHC WAS REWORKED AT RS. 89,85,982 AND ACCORDINGLY THE NET ADDITION OF RS. 11,41,776/- (RS. 1,01,27,758 89,85,982) WA S CONSIDERED AS CONCEALED INCOME LIABLE FOR PENALTY UNDER SECTION 2 71(1)(C) OF THE ACT AND THE REVISED PENALTY WAS WORKED AT RS. 4,91,023/ -. AGAINST THE ORDER OF A.O. PASSED U/S. 154 DATED 17.10.2011, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHICH WAS DISMISSED BY CIT(A) BY HOLD ING AS UNDER:- 7. THE ORDER U/S 154 OF THE IT ACT OF THE DCIT, KHEDA CIRCLE, NADIAD AS WELL AS THE ABOVE SUBMISSION OF THE AR OF THE APPELLANT HAS BEEN CONS IDERED. THE ABOVE SUBMISSION OF THE AR OF THE APPELLANT CANNOT BE CONSIDERED AGAINST THE ORDER U/ S 154 OF THE IT ACT DATED 17-10-2011. THE ABOVE ISSUES RAISED BY THE AR OF THE APPELLANT ON MERITS ARE NOT COMING OUT OF THIS RECTIFICATION ORDER U/S 154 OF THE IT ACT AS PASSED BY THE AO. SUCH ISSUES AS R AISED BY THE AR OF THE APPELLANT CAN BE RAISED ONLY AGAINST THE PENALTY ORDER U/S 271(L)(C) OF THE IT A CT AS PASSED BY THE AO IN THE CASE OF APPELLANT FOR THE YEAR UNDER CONSIDERATION AND SUCH ISSUES CAN BE CON SIDERED BY THE APPELLATE AUTHORITIES WHILE DECIDING THE PENALTY MATTER. IN THE CASE OF APPELLA NT THE ORDER U/S 154 OF THE IT ACT HAS BEEN PASSED BY THE AO ONLY TO RECTIFY A MISTAKE WHICH IS APPARENT FROM RECORD. IN THE CASE OF APPELLANT THE DEDUCTION U/S 80HHC OF THE ACT WAS NOT ALLOWED BY THE AO ON T HE BASIS OF ASSESSED INCOME, WHICH WAS HIGHER THAN THE RETURNED INCOME. THE APPELLANT HAD CLAIMED DEDUCTION U/S 80HHC IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION AT RS. 1,25, 688/-. HOWEVER, THE ADJUSTED PROFIT FROM BUSINESS WAS WORKED OUT AT RS. 1,12,39,171/- BY THE AO AS A RESULT OF GIVING EFFECT TO THE ORDER NO. IN ITA 2855/AHD/2002 DATED 30-05-2008 OF HON'BLE ITAT, AHM EDABAD. SUBSEQUENTLY, THE AO LEVIED THE PENALTY U/S 271(L)(C) OF THE IT ACT ON ADDITIONS MA DE I.E. WITHOUT CONSIDERING THE FURTHER DEDUCTION U /S 80HHC ON ASSESSED INCOME. IN VIEW OF THIS, THE APPE LLANT VIDE ITS APPLICATION DATED 18-12-2009 ITA NO 2769/ AHD/2012 . A.Y. 1997- 98 3 REQUESTED THE AO TO REVISE THE PENALTY ORDER U/S 27 1(L)(C) DATED 30-03-2009 IN VIEW OF DIRECTION OF LD . CIT(A)-LV, BARODA BY GRANTING DEDUCTION U/S 80HHC O N THE ASSESSED INCOME. ACCORDINGLY THE AO HAS PASSED THE ABOVE RECTIFICATION ORDER BY CALCULATING THE DEDUCTION U/S 80HHC AT RS. 89,85,982/- ON THE FINAL INCOME AS DETERMINED AS A RESULT OF GIVING EF FECT TO THE ABOVE ORDER OF HON'BLE ITAT, AHMEDABAD. AS PER THE AO THE ADDITION OF RS. 1,01,27,758/- AS MADE WAS REQUIRED TO BE REDUCED BY AN AMOUNT OF RS. 89,85,982/- BEING DEDUCTION U/S 80HHC ON ENHANC ED INCOME FROM BUSINESS. THUS, THE NET ADDITION OF RS. 11,41,776/- (I.E. RS. 1,01,27,758/- - RS. 89 ,85,982/-) WAS CONSIDERED BY THE AO AS CONCEALED INCOME LIABLE FOR PENALTY U/S 271(L)(C). ACCORDINGL Y, THE AMOUNT OF PENALTY OF RS. 43,54,935/- AS LEVI ED BY THE AO EARLIER ON THE ADDITIONS MADE AS PER PENA LTY ORDER U/S 271(L)(C) HAS BEEN REDUCED TO RS. 4,91,023/- DUE TO GRANTING OF DEDUCTION OF RS. 89,8 5,982/- U/S 80HHC. THUS, AS PER ABOVE RECTIFICATION ORDER U/S 154 OF THE IT ACT THE REVISED PENALTY U/S 271(L)(C) HAS BEEN WORKED OUT AT RS. 4,91,023/-. A S STATED ABOVE SINCE THE VARIOUS ISSUES AS RAISED BY THE AR OF THE APPELLANT IN HIS ABOVE SUBMISSION DATED 19-06-2012 CAN BE CONSIDERED ONLY AGAINST THE PENALTY ORDER ON MERITS AND NOT AGAINST THE RECTIFICATION ORDER U/S 154 OF THE IT ACT IN VIEW O F THIS THE ABOVE GROUND OF APPEAL OF THE APPELLANT IS HEREBY DISMISSED. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS N OW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN DISMISSING THE APPEAL F ILED BY THE APPELLANT AND CONFIRMING THE PENALTY OF RS. 4,91,023/- LEVIED BY THE ASSESSING O FFICER U/S. 271(1)(C) OF THE I.T. ACT, 1961 BY PASSING AN ORDER U/S. 154 OF THE INCOME TAX ACT, 19 61. 2. THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE VARIOU S ISSUES AS RAISED BY THE APPELLANT IN HIS SUBMISSIONS DATED 19.06.2012 CAN BE CONSIDERED ONLY AGAINST THE PENALTY ORDER ON MERITS AND NOT AGAINST THE RECTIFICATION ORDER U/S. 154 OF THE I.T . ACT. HE OUGHT TO HAVE CONSIDERED THE FACT THAT THE ORDER APPEALED AGAINST BEFORE HIM HAS BEEN PASS ED FOR RECTIFYING/LEVYING THE PENALTY LEVIED U/S. 271(1)(C) OF THE I.T. ACT, 1961. 5. BEFORE US, THE LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE CIT(A) AND SUBMITTED THAT THE PENALTY BE DELETED. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT AGAINST THE PENALTY ORDER DATED 30.03. 2009 PASSED BY THE A.O., ASSESSEE HAS NOT PREFERRED ANY APPEAL BUT HOW EVER THE ASSESSEE ITA NO 2769/ AHD/2012 . A.Y. 1997- 98 4 BEFORE US PRAYS FOR DELETION OF PENALTY U/S 271(1)( C). SINCE THE ASSESSEE HAD NOT APPEALED AGAINST THE PENALTY ORDER OF A.O., THE PRESENT APPEAL AGAINST PENALTY BEFORE US IS THEREFORE NOT MAINTAIN ABLE. WE THEREFORE DISMISS THE APPEAL OF THE ASSESSEE AS NOT MAINTAINA BLE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN OPEN COURT ON 10 - 01 - 2014. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD